MEGO FINANCIAL CORP
EXHIBIT 10.226
<DOCUMENT>
<TYPE>EX-10.226
<SEQUENCE>3
<FILENAME>a69978ex10-226.txt
<DESCRIPTION>EXHIBIT 10.226
<TEXT>

<PAGE>   1

                                                                  EXHIBIT 10.226

             FIRST AMENDMENT TO GENERAL LOAN AND SECURITY AGREEMENT
                                (Inventory Loan)

       THIS First Amendment to General Loan and Security Agreement (Inventory
Loan) (the "Amendment"), made as of 1st day of February, 2001, by and between
STEAMBOAT SUITES, INC., a Colorado Corporation, and PREFERRED EQUITIES
CORPORATION, each having an address of 4310 Paradise Road Las Vegas, Nevada
89109 (hereinafter collectively referred to as "Debtor"); and

       TEXTRON FINANCIAL CORPORATION, a Delaware Corporation, having an address
of 333 East River Drive, East Hartford, CT 06108 (hereinafter referred to as
"Lender")

                                    RECITALS

       This Amendment modifies and amends that certain General Loan and Security
Agreement (Inventory Loan) dated as of December 17, 1999 which effectively
restated the original loan agreement dated October 4, 1994 as amended
(collectively the "Existing GLSA", the Existing GLSA, as amended hereby and as
further amended from time to time is referred to herein as the "Agreement")

Debtor has requested that Lender modify certain terms of the Loan upon the terms
and provisions hereinafter set forth in order to provide for a re-advice of
certain inventory proceeds and to extend the Receivables Maturity Date and to
repledge certain inventory under the duration loan as well as other certain
provisions.

       NOW THEREFORE, in consideration of the foregoing recitals, and in further
consideration of the mutual covenants contained herein, and intending to be
legally bound hereby, the parties hereto mutually agree as follows:

I.     INTERPRETATION OF AMENDMENT

A. Terms Defined

       Capitalized terms used in this Amendment and not defined herein shall
have the respective meanings specified in the Existing GLSA, as amended hereby.
As used in this Amendment, the following terms have the respective meanings
specified below:

Agreement - as defined in the Recitals hereto.

Amendment or this Amendment - as defined in the Recitals hereto.

B. Directly or Indirectly

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

C. Headings


<PAGE>   2

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


II.    AMENDMENTS

       A.     Definitions.

              1. The definitions set forth below are hereby added to Section 1.1
of the Existing GLSA so as to preserve the alphabetical ordering of the
definitions set forth therein:

              "First Inventory Loan Amendment Effective Date - means February 1,
              2001."

              "First Inventory Loan Amendment means that certain amendment of
              this Agreement dated as of February 1, 2001.

              "First Amendment Commitment Fee" means the amount equal to 1% of
              the principal amount of the Inventory Re-advance on or about
              February 1, 2001 or $3,000 as of February 1, 2001 and $15,000,000.

              "First Amendment Transaction Fee" means the amount equal to 1% of
              the principal amount of the Inventory Re-advance on or about
              February 1, 2001 or $3,000 as of February 1, 2001.

              "First Amendment Commitment Letter means that certain letter dated
              January 18, 2001 from Lender to Debtor which Letter was accepted
              on January 22, 2001."

              "Inventory Re-advance" means the principal amount up to $300,000
              based on the current unsold Inventory Timeshare Intervals at the
              Steamboat Resorts. The principal amount of the Inventory Loan plus
              Inventory Re-advance shall not exceed an amount equal to 14%
              advance against the retail value of the remaining unsold inventory
              at the Steamboat Resort.

              2. The parties hereto mutually agree that Section 2.1(c) shall be
added to the Agreement.

              2(c) Inventory Re-advance. The Lender agrees pursuant to the terms
              of the First Inventory Loan Amendment to make a special-one-time
              Inventory Re-advance in the principal amount not to exceed
              $300,000 be made by Lender to Debtors in accordance with the terms
              of the Agreement and the First Inventory Loan Amendment, such
              advance to occur not later than March 1, 2001. Upon issuance of
              such Inventory Re-advance the principal balance outstanding under
              the Inventory Loan shall be $1,570,205. The Inventory Promissory
              Note, the Inventory Deed of Trust and other documents shall
              continue to secure the Inventory Loan. In addition, the
              undersigned hereby confirm and represent that


                                       2
<PAGE>   3

              the Collateral pledged for the Inventory Loan has a Fair Market
              Value sufficient to continue to secure and repay the Inventory
              Loan.

              The terms of repayment set forth under Section 2.1(a) shall remain
              in full force and effect.

              3. The parties hereto mutually agree that Section 2.4(c) shall be
modified to delete subsection (c) in its entirety and in lieu thereof, the
following provision to be inserted:

              (c) Mandatory Prepayment. Debtor shall make payments in addition
to the Release Payments on or before the following anniversary dates to the
extent necessary so that the principal balance of the Inventory Loan does not
exceed the following levels:

<TABLE>
<CAPTION>
               Date                                Principal Balance Remaining
               ----                                ---------------------------
<S>                                                <C>
        December 1, 2000                                  $6,200,000
        February 28, 2001                                  4,500,000
        February 28, 2002                                  2,500,000
        February 28, 2003                                  1,000,000
        February 28, 2004                                      0
</TABLE>

              2. The parties hereto mutually agree that the definition of
"Inventory Maturity Date " is hereby deleted in its entirety and in lieu
thereof, the following provision is inserted:

       "INVENTORY MATURITY DATE" means February 28, 2004.


III.   REAFFIRMATIONS

       1. Nothing contained herein shall be construed in any manner so as to
affect the validity or prior time lien of any security interest held by Lender,
its successors and assigns, in any Collateral described in the Agreement.

       2. To ensure that the Inventory Loan is paid by the Inventory Maturity
Date of February 28, 2004, the Debtor is pledging all unsold previously released
Intervals under an Amendment to the Inventory Deed of Trust. Debtor acknowledges
and agrees that the Notes, Agreement, Inventory Deed of Trust, assignment of
Pledged Notes Receivable, Pledged Notes Receivable Deeds of Trust and Pledged
Contracts, Guaranty Agreement, Subordination Agreements, Agency Agreement and
all other Security Documents (as modified herein) shall remain in full force and
effect, unimpaired by this Amendment and that they are valid, binding and
enforceable documents, duly executed and delivered by Debtor, and that Debtor
has no offsets or defenses to the enforcement of the terms and provisions
contained therein.

       3. Except as provided in Schedule 1 hereto, Debtor, and as applicable,
the Guarantors, hereby reaffirm, restate and incorporate by this reference all
of their respective representations, warranties and covenants as updated
hereunder made in the Agreement


                                       3
<PAGE>   4

(including, as amended hereby), as if the same were made as of this date and
with reference to the Agreement as amended hereby. In addition, Debtor (and, as
applicable, the Guarantors) represents and warrants as follows:

              a. This Amendment has been duly authorized by Debtor and is the
legal, valid and binding obligation of Debtor, enforceable against it in
accordance with its terms subject to applicable bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium or other similar laws affecting
creditor's rights and remedies generally and to general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law); and, as applicable with respect to the Guarantors, this
Amendment is the legal, valid and binding obligation of the Guarantors,
enforceable against them in accordance with its terms subject to applicable
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or other
similar laws affecting creditor's rights and remedies generally and to general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).

              b. The execution, delivery and performance of this Amendment and
the documents, instruments and materials to be delivered in connection herewith
and the transactions contemplated hereby do not and will not result in any
breach of, or constitute a default, or result in the creation of any lien,
charge or encumbrance upon the Collateral, under any provision of law, or any
indenture, agreement or instrument to which Debtor or any Guarantor is a party
or by which the Debtor or Guarantors may be bound or affected except for liens
in favor of Lender and the Pledged Notes Receivable Deeds of Trust.

              c. There are no Defaults or Events of Default pursuant to the
Security Documents; Lender has fully performed its obligations under the
Security Documents which Lender is required to perform as of the date hereof,
and neither Debtor nor the Guarantors have any defense, set-offs, claims,
counterclaims or recoupments against Lender or with respect to the Loan.

       3. Debtor and the Guarantor hereby reaffirm their respective obligations,
agreements and undertakings as set forth in the Security Documents, and
acknowledge that the Obligations, or with respect to the Guarantors, the
guaranteed Indebtedness defined in the Guaranty and as amended herein, are the
valid, legally binding and enforceable obligations of Debtor, and the
Guarantors, respectively.


IV.    CLOSING CONDITIONS AND ADDITIONAL TERMS

       1. The obligation of Lender to enter into this Amendment and, in addition
to all of the other conditions precedent set forth in the Agreement or the other
Loan Documents, to fund any further Advance pursuant to the terms hereof, shall
be subject to the satisfaction of each of the following conditions precedent by
no later than March 30, 2001.

              a. Debtor shall pay Lender (i) the First Amendment Commitment Fee
and (ii) the First Amendment Transaction Fee and (iii) Two Thousand Five Hundred
Dollars ($2,500) as payment in full for attorney's fees and costs incurred by
Lender in connection with the preparation of this Amendment and related
documentation.


                                       4
<PAGE>   5

              b. Lender shall have received from Debtor fully executed original
or executed counterpart originals of this Amendment.

              c. Except for information contained in certificates provided
pursuant to Article IV(1)(g) and (h) hereof or any schedule to this Amendment,
the representations and warranties contained in the Agreement and in this
Amendment, and in the certifications and closing documents delivered in
connection herewith, shall be true and correct in all material respects, and all
covenants and agreements to have been complied with and performed by Debtor (or
Guarantor), shall have been fully complied with and performed to the
satisfaction of Lender.

              d. Neither Debtor nor Guarantors shall have taken any action or
permitted any condition to exist which would have been prohibited by any
provision of the Security Documents.

              e. No Default or Event of Default shall exist immediately prior to
the closing hereof, or after giving effect to such closing, or immediately after
the making of any Advance requested in connection with such closing.

              f. Lender shall have received a certificate or certificates in
form and substance satisfactory to it, dated as of the First Inventory Amendment
Effective Date and signed by the president or other authorized officer of the
Debtor, certifying that the conditions specified in this Amendment have been
fulfilled, and "bringing down" the representations and warranties contained in
the Agreement.

              g. Debtor shall deliver to Lender, and Lender shall have approved,
by no later than March 30, 2001:

                     i. A certificate of current good standing for Debtor,
       together with copies of any amendments to the certificate of
       incorporation or bylaws of Debtor since November 1, 2000, certified to be
       true, correct and complete by the Debtor, its secretary or assistant
       secretary, or the Colorado Secretary of State;

                     ii. Evidence satisfactory to Lender that all taxes and
       assessments, including without limitation, those specified in Section 7.1
       (a) of the Agreement, owed by or for which Debtor is responsible for
       collection have been paid or will be paid prior to delinquency;

                     iii. A certificate of the secretary or assistant secretary
       of Debtor certifying the adoption by the Board of Directors thereof of a
       resolution authorizing specified officers of Debtor to enter into and
       execute this Amendment and all other documents, certificates and
       instruments to be executed and delivered in connection with the Amendment
       closing, and to consummate the transactions contemplated hereunder;

                     iv. A certificate of the secretary or assistant secretary
       of Debtor certifying the incumbency of, and verifying the authenticity of
       the signatures of, the officers of


                                       5
<PAGE>   6

       Debtor authorized to sign this Amendment and the other documents,
       instruments and materials to be executed and delivered in connection
       herewith;

                     v. A certificate of the secretary or assistant secretary of
       each Guarantor certifying the adoption by the Board of Directors thereof
       of a resolution authorizing specified officers of the Guarantor to enter
       into and execute this Amendment and all other documents, certificates and
       instruments to be executed and delivered in connection with the Amendment
       closing, and to consummate the transactions contemplated hereunder; and

                     vi. A certificate of the secretary or assistant secretary
       of each Guarantor certifying the incumbency of, and verifying the
       authenticity of signatures of, the officers of each Guarantor authorized
       to sign this Amendment and the other documents, instruments and materials
       to be executed and delivered in connection herewith.

              i. All actions taken in connection with the execution or delivery
of this Amendment, and all documents, certificates, instruments and materials
relating hereto, shall be reasonably satisfactory to Lender and its counsel.
Lender and its counsel shall have received copies of such documents and papers
as Lender or such counsel may reasonably request in connection herewith all in
form and substance satisfactory to Lender and its counsel.

              j. Debtor shall have paid all fees and expenses required to be
paid prior to or at the closing pursuant to this Amendment.


V.     GUARANTORS' OBLIGATIONS

       1.     Each Guarantor:

              a. has reviewed this Amendment with counsel of it's choice, and
accepts and consents to the terms of this Amendment and the transactions
provided for herein;

              b. acknowledges and agrees that it receives material benefit and
valuable consideration as a result of the transactions provided for herein or
contemplated hereunder;

              c. ratifies and reaffirms the terms of its Guaranty Agreement, and
all of the terms provisions, agreements, conditions and undertakings contained
in the Guaranty Agreement or any of the Security Documents (as applicable to the
Guarantor), all of which remain unmodified, except as modified herein and in
full force and effect;

              d. acknowledges and confirms (i) its continuing obligations under
the Guaranty Agreement and agrees to be bound by the terms thereof, and (ii)
that it has been since December 17, 1999 and remains liable with respect to the
guaranteed Indebtedness as defined and provided in its Guaranty Agreement;


                                       6
<PAGE>   7

              e. acknowledges and agrees that the guaranteed Indebtedness
encompasses and apply to all Advances, including Advances from and after the
Amendment closing date, and to all Indebtedness, including Indebtedness arising
pursuant to this Amendment;

              f. is fully aware of the financial and other conditions of the
Debtor and is executing and delivering this Amendment based solely upon its own
independent investigation and not upon any representation or statement of
Lender;

              g. except for information contained in certificates provided
pursuant to V(1)(i) hereof reaffirms, restates and incorporates by this
reference all of the representations, warranties and covenants made in its
Guaranty Agreement as if the same were made as of this date;

              h. acknowledges that its agreements, consents and acknowledgments
contained herein, and the provisions of its Guaranty Agreement (which are
reaffirmed by Guarantor), are a material inducement to Lender to enter into this
Amendment, and that, but for the Guaranty Agreement, and the Guarantor's
agreements as set forth herein, Lender would decline to enter into this
Amendment; and

              i. shall deliver to Lender a certificate or certificates in form
and substance satisfactory to it, dated as of February 1, 2001 and signed by the
president or other authorized officer of the Guarantor, certifying that the
conditions specified in this Amendment have been fulfilled, and "bringing down"
the representations and warranties contained in the Guaranty Agreement.


VI.    MISCELLANEOUS

              a. This Amendment is entered into for the benefit of the parties
hereto, and is binding on the respective heirs, successors or assigns; provided
that Debtor may not transfer or assign any of its rights or obligations under
this Amendment without the prior written consent of Lender. Guarantors are a
party to this Amendment solely for the purposes of affirming their respective
obligations in accordance with Article V hereof.

              b. This Amendment may be executed in counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument. This Amendment shall become effective upon Lender's receipt
of one or more counterparts hereof timely executed by Debtor and the Guarantors.
This Amendment may not be amended or modified, and no term or provision hereof
may be waived, except by written instrument signed by all of the parties hereto.

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

              d. TO THE FULLEST EXTENT NOT PROHIBITED BY APPLICABLE LAW WHICH
CANNOT BE WAIVED, EACH OF DEBTOR, THE GUARANTORS AND LENDER HEREBY KNOWINGLY,
VOLUNTARILY, INTENTIONALLY AND IRREVOCABLY


                                       7
<PAGE>   8

WAIVE ANY AND ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO
ENFORCE OR DEFEND OR CLARIFY ANY RIGHT, POWER, REMEDY OR DEFENSE ARISING OUT OF
OR RELATED TO THIS AMENDMENT, THE OTHER SECURITY DOCUMENTS, OR THE TRANSACTIONS
CONTEMPLATED HEREIN OR THEREIN, WHETHER SOUNDING IN TORT OR CONTRACT OF
OTHERWISE, OR WITH RESPECT TO ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY; AND EACH AGREES
THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A JUDGE AND NOT BEFORE
A JURY. EACH OF DEBTOR, THE GUARANTORS AND LENDER FURTHER WAIVES ANY RIGHT TO
SEEK TO CONSOLIDATE ANY SUCH LITIGATION IN WHICH A JURY TRIAL HAS BEEN WAIVED
WITH ANY OTHER LITIGATION IN WHICH A JURY TRIAL CANNOT OR HAS NOT BEEN WAIVED
UNLESS SUCH FAILURE TO CONSOLIDATE WOULD RESULT IN INABILITY TO ENFORCE A CLAIM.
FURTHER, DEBTOR AND THE GUARANTORS HEREBY CERTIFY THAT NO REPRESENTATIVE OR
AGENT OF LENDER, NOR LENDER'S COUNSEL, HAS REPRESENTED EXPRESSLY OR OTHERWISE,
THAT LENDER WOULD NOT, IN THE EVENT OF SUCH LITIGATION, SEEK TO ENFORCE THIS
WAIVER OF RIGHT TO JURY TRIAL PROVISION. DEBTOR AND THE GUARANTORS ACKNOWLEDGE
THAT THE PROVISIONS OF THIS SECTION ARE A MATERIAL INDUCEMENT TO LENDER'S
ACCEPTANCE OF THIS AMENDMENT AND THE OTHER SECURITY DOCUMENTS.

              e. This Amendment and all other Security Documents shall be
governed by the laws of the State of Colorado in all respects, including matters
of construction, performance and enforcement.

              f. Whenever possible, the terms of this Amendment and the terms of
the Agreement and all prior amendments shall be read together, but to the extent
of any irreconcilable conflict, the terms of this Amendment shall govern.

       IN WITNESS WHEREOF, and intending to be legally bound hereby, the parties
hereto have set their hands and seals the day and year first above written.


ATTEST:                            DEBTOR:
                                   STEAMBOAT SUITES, INC.

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


                                   DEBTOR:
                                   PREFERRED EQUITIES CORPORATION

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


                                   LENDER:
                                   TEXTRON FINANCIAL
                                   CORPORATION


                                       8
<PAGE>   9

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

                                   ---------------------------------------------
                                   on behalf of Lender


                                       9
<PAGE>   10

                                   ACKNOWLEDGED AND AGREED:

                                   GUARANTOR:
                                   MEGO FINANCIAL CORP.


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


                                       10
<PAGE>   11

                            CORPORATE ACKNOWLEDGMENT

STATE OF ____________:
COUNTY OF ___________:

       ON THIS, the ___ day of ___________, 2001 before me, a Notary Public in
and for the State and County aforesaid, the undersigned officer, personally
appeared _________________, who acknowledged himself to be the
_____________________ of STEAMBOAT SUITES, INC., being authorized to do so,
executed the foregoing instrument for the purposes therein contained by signing
the name of the corporation by himself/herself as such officer.

       IN WITNESS WHEREOF, I hereunto set my hand and official seal.



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

My commission expires:


                            CORPORATE ACKNOWLEDGMENT

STATE OF ____________:
COUNTY OF ___________:

       ON THIS, the ___ day of ___________, 2001 before me, a Notary Public in
and for the State and County aforesaid, the undersigned officer, personally
appeared _________________, who acknowledged himself to be the
_____________________ of PREFERRED EQUITIES CORPORATION, being authorized to do
so, executed the foregoing instrument for the purposes therein contained by
signing the name of the corporation by himself/herself as such officer.

       IN WITNESS WHEREOF, I hereunto set my hand and official seal.



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

My commission expires:


                                       11
<PAGE>   12

                            CORPORATE ACKNOWLEDGMENT

STATE OF ____________:
COUNTY OF ___________:

       ON THIS, the ___ day of ___________, 2001 before me, a Notary Public in
and for the State and County aforesaid, the undersigned officer, personally
appeared _________________, who acknowledged himself to be the
_____________________ of MEGO FINANCIAL CORP., being authorized to do so,
executed the foregoing instrument for the purposes therein contained by signing
the name of the corporation by himself/herself as such officer.

       IN WITNESS WHEREOF, I hereunto set my hand and official seal.



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

My commission expires:


                            CORPORATE ACKNOWLEDGMENT

STATE OF ____________:
COUNTY OF ___________:

       ON THIS, the ___ day of ___________, 2001 before me, a Notary Public in
and for the State and County aforesaid, the undersigned officer, personally
appeared _________________, who acknowledged himself to be the
_____________________ of TEXTRON FINANCIAL CORPORATION, being authorized to do
so, executed the foregoing instrument for the purposes therein contained by
signing the name of the corporation by himself/herself as such officer.

       IN WITNESS WHEREOF, I hereunto set my hand and official seal.



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

My commission expires:


                                       12
<PAGE>   13

                  COMBINATION DEED OF TRUST, SECURITY AGREEMENT
                         AND FIXTURE FINANCING STATEMENT
                                SECOND AMENDMENT

              This COMBINATION DEED OF TRUST, SECURITY AGREEMENT AND FIXTURE
FINANCING STATEMENT SECOND AMENDMENT (this "Second Amendment") is made as of the
1st day of February, 2001, by and between STEAMBOAT SUITES, INC., a Colorado
corporation and PREFERRED EQUITIES CORPORATION, (collectively "Grantor"), whose
local address is 1485 Pine Grove Road, Steamboat Springs, Colorado 80477, and
the Public Trustee of the County of Routt, Colorado ("Trustee") for the benefit
of TEXTRON FINANCIAL CORPORATION, a Delaware corporation ("Beneficiary"), whose
address is 333 East River Drive, Suite 305, East Hartford, Connecticut 06108.


                                   WITNESSETH:

       WHEREAS, Grantor heretofore duly executed and delivered that certain
Combination Deed of Trust, Security Agreement and Fixture Financing Statement
(the "Existing Deed of Trust," and as amended and/or supplemented hereby and
from time to time, the "Deed of Trust"), dated as of December 17, 1999; and

       WHEREAS, the Existing Deed of Trust was recorded with the Routt County
Clerk and Recorder on December 23, 1999 in Book 765 at Page 1060;

       WHEREAS, Grantor and Beneficiary have entered into a First Amendment to
General Loan and Security Agreement (Inventory Loan) (the "Inventory Loan First
Amendment"), dated as of February 1, 2001 and attached hereto as EXHIBIT A,
which modifies and amends the General Loan and Security Agreement (the "Existing
Loan Agreement"), dated as of December 17, 1999, by and between Grantor and
Beneficiary; and

       NOW THEREFORE, in consideration of the mutual covenants and agreements
hereinafter contained and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, it is agreed as follows:

       1. Capitalized terms used in this Second Amendment and not defined herein
have the respective meanings specified in the Existing Loan Agreement, as
amended by the Inventory Loan First Amendment.

       2. All references to the term "Loan Agreement" in the Deed of Trust are
hereby amended and modified to mean the Existing Loan Agreement, as amended by
the Inventory Loan First Amendment.

       3. EXHIBIT A-1 attached hereto is hereby made a part of Exhibit A-1 to
the Existing Deed of Trust and is incorporated therein for all purposes and,
pursuant thereto and in


                                       1
<PAGE>   14

accordance with the terms thereof, amends and modifies said Exhibit A to the
Existing Deed of Trust.

       4. Grantor warrants that it is seized of an indefeasible estate in fee
simple in, and has good and marketable title to, the Mortgaged Property (as
defined in the Existing Deed of Trust, as amended hereby), free and clear of all
claims, liens, charges, encumbrances, and exceptions to title except for those
set forth in Exhibit C to the Existing Deed of Trust.

       5. The Existing Deed of Trust, as amended hereby, shall be and hereby is
made subordinate to the Amended and Restated Declaration.

       6. Grantor and Beneficiary acknowledge and agree that, except as provided
in this First Amendment, the Existing Deed of Trust has not been modified,
amended, cancelled, terminated or superseded and remains in full force and
effect.

       7. The Existing Deed of Trust is hereby ratified and confirmed by Grantor
and Beneficiary, and every provision, covenant, condition, obligation, right and
power contained therein and thereunder, as modified by this First Amendment,
shall continue in full force and effect.

       8. All provisions of this First Amendment shall be binding upon and inure
to the benefit of the respective heirs, legal representatives, successors and
assigns of Grantor and Beneficiary and shall be effective as of the date set
forth above.

       9. This First Amendment may be executed in two or more counterparts, each
of which shall be deemed an original and all of which, taken together, shall
constitute and be taken as one and the same instrument.

      [Remainder of Page Intentionally Blank; Next Page is Signature Page]


                                       2
<PAGE>   15

       IN WITNESS WHEREOF, the parties have hereto executed this First Amendment
as of the date first written above.


Signed and Acknowledged            STEAMBOAT SUITES, INC.
in the Presence of:



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

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



STATE OF                 )
                         )ss.
COUNTY OF                )

              The foregoing instrument was acknowledged before me this _____ day
of February, 2001 by _________________________, the _______________ of Steamboat
Suites, Inc., a Colorado corporation, on behalf of such corporation.

              Witness my hand and official seal.

              My commission expires:_____________________.



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

[SIGNATURE PAGE OF COMBINATION DEED OF TRUST, SECURITY AGREEMET AND FIXTURE
FINANCING STATEMENT SECOND AMENDMENT BETWEEN STEAMBOAT SUITES, INC. AND TEXTRON
FINANCIAL CORPORATION DATED AS OF FEBRUARY 1, 2001]


                                       3
<PAGE>   16

Signed and Acknowledged            TEXTRON FINANCIAL CORPORATION

in the Presence of:



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

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




STATE OF  CONNECTICUT       )
                            )ss.
COUNTY OF HARTFORD          )


              The foregoing instrument was acknowledged before me this ___ day
of February, 2001 by _________________, an Assistant Vice President of Textron
Financial Corporation, a Delaware corporation, on behalf of such corporation.

              Witness my hand and official seal.

              My commission expires:_____________________.



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

[SIGNATURE PAGE OF COMBINATION DEED OF TRUST, SECURITY AGREEMET AND FIXTURE
FINANCING STATEMENT SECOND AMENDMENT BETWEEN STEAMBOAT SUITES, INC. AND TEXTRON
FINANCIAL CORPORATION DATED AS OF FEBRUARY 1, 2001]


                                       4
</TEXT>
</DOCUMENT>
