AGREEMENT

     This  Agreement is made and entered into as of the 26th day of July,  1999,
by and among  the  following  parties:  ILX  Resorts  Incorporated,  an  Arizona
corporation ("ILX"),  Martori Enterprises  Incorporated,  an Arizona corporation
("MEI"),  Los  Abrigados  Partners  Limited  Partnership,   an  Arizona  limited
partnership ("LAP") and Edward John Martori, a married man dealing with his sole
and separate property ("EJM").

                                    RECITALS

     A. The  parties  desire  to effect  certain  transactions  whereby  certain
existing  agreements  will be  modified  or  otherwise  affected;  namely  those
transactions represented by the following documents and/or described below:

     Installment Promissory Note in the face amount of $909,078 dated January 1,
     1996 made by ILX payable to EJM (the "EJM/LAP Note"), which note is secured
     by ILX's Class A limited partnership interest in LAP.

     The sale by MEI to ILX and/or its  nominee  of certain  vacation  ownership
     interests in ILX Premiere Vacation Club, an Arizona non-profit  corporation
     and VCA South Bend Incorporated, an Arizona non-profit corporation.

     B. The  parties  desire  to  memorialize  said  transactions  by this  one,
all-inclusive agreement.

                                    AGREEMENT

     1. MODIFICATION OF EJM NOTE.  Effective on August 1, 1999, the EJM/LAP Note
shall be  amended  and  restated  by the  form of  Installment  Promissory  Note
attached hereto as EXHIBIT A so as to be modified to read as follows:

     Principal  payments  of  $94,078.00  on  or  before  August  15,  1999  and
     $100,000.00 on or before  December 15, 1999.  Installments of interest only
     at ten percent (10%) per annum shall be payable  quarterly on the first day
     of  January,  April,  July and October of each year  commencing  October 1,
     1999. The entire unpaid  principal  balance,  together with all accrued and
     unpaid interest thereon and other costs payable hereunder, shall be paid in
     full on December 15, 2003.

Except as  specifically  provided  herein,  the  EJM/LAP  Note (as  amended  and
restated)  and  security  therefor  shall  remain in full  force and  effect and
unamended hereby.

     2. SALE OF VACATION  OWNERSHIP  INTERESTS.  Effective  August 1, 1999,  MEI
shall sell and convey to ILX and/or its nominee,  a total of sixty (60) vacation
ownership interests for a purchase price of $500,000.00. Such vacation ownership
interests consist of four (4) ILX Premiere  Vacation Club Platinum  memberships;
fifty (50) ILX Premiere Vacation Club Gold memberships and six (6) Varsity Clubs
of America - South Bend  Chapter  Alumni  House (3  bedroom)  extended  football
weekend  memberships.  ILX shall issue to MEI a Promissory  Note ("MEI Note") in
the form attached  hereto as EXHIBIT B in the amount of  $500,000.00  payable as
follows:

     Principal  payments  of  $100,000.00  on or before  August  15,  1999,  and
     $100,000.00 on or before December 15, 2000 and December 15, 2001.  Payments
     of interest only at eight percent (8%) per annum shall be payable quarterly
     on the  first  day of  January,  April,  July  and  October  of  each  year
     commencing October 1, 1999. The entire unpaid principal  balance,  together
     with all  accrued  and unpaid  interest  thereon  and other  costs  payable
     hereunder, shall be paid in full on December 15, 2002.

     This MEI Note shall be secured by a Security Agreement, dated July 1, 1994,
also securing the EJM/LAP Note.

                                      -1-
<PAGE>
     3. MISCELLANEOUS PROVISIONS. Any notice hereunder shall be given in writing
and  hand-delivered.  The  provisions  of this  Agreement  shall be governed and
interpreted in accordance with the laws of the State of Arizona.  This Agreement
shall be binding  upon and inure to the benefit of the parties  hereto and their
respective successors and assigns. This instrument contains the entire agreement
of the parties and may not be modified except by a writing signed by the parties
affected  thereby.  Should one or more of the  provisions  of this  Agreement be
determined to be illegal,  wholly or partially  unenforceable,  or unreasonable,
the parties  hereby  empower the Court to enforce  any other  provision  of this
Agreement to the fullest  extent being  possible  under Arizona law. Each of the
parties  hereto  agrees in good faith to  execute  such  further  or  additional
documents as may be necessary or  appropriate  to fully carry out the intent and
purpose of this  Agreement.  Time shall be of the essence in the  performance of
each and every term of this Agreement.  If any action is brought by either party
in respect of its rights  under this  Agreement,  the  substantially  prevailing
party  shall be entitled to recover  from the other party its court  costs,  and
reasonable  attorneys'  fees as determined by the Court,  to the maximum  extent
permitted  by law. No waiver by any party to insist upon the strict  performance
of any covenant,  duty, agreement, or condition of this Agreement or to exercise
any right or  remedy  upon a breach  hereof  shall  constitute  a waiver of such
remedy.  No waiver shall effect or alter the  remainder of this  Agreement,  but
each and every covenant, agreement, term and condition thereof shall continue in
full force and effect with respect to any then existing or subsequent  breach of
this Agreement.  This Agreement may be executed in several counterparts,  all of
which taken  together  shall  constitute  one Agreement  binding upon all of the
parties,  notwithstanding  that all of the  parties are not  signatories  to the
original or the same counterpart.

Effective as of the date and year first written above.

ILX Resorts Incorporated


By: /s/ Nancy J. Stone
    ---------------------------------------
Its: President
    ---------------------------------------

Martori Enterprises Incorporated


By: /s/ Joseph P. Martori
    ---------------------------------------
Its: Chairman
    ---------------------------------------

Los Abrigados Partners Limited Partnership

By: ILE Sedona Incorporated, General Partner


By: /s/ Joseph P. Martori
    ---------------------------------------
Its: Chairman
    ---------------------------------------


/s/ Edward John Martori
-------------------------------------------
Edward John Martori

                                      -2-
<PAGE>
                                    EXHIBIT A

                  $909,078 EJM/LAP NOTE (AMENDED AND RESTATED)

































                                      A-1
<PAGE>
                           INSTALLMENT PROMISSORY NOTE
                             (AMENDED AND RESTATED)

$894,078.00                                                       August 1, 1999
                                                                Phoenix, Arizona

     FOR VALUE RECEIVED, the undersigned,  ILX Resorts Incorporated,  an Arizona
corporation  (the  "undersigned"),  promises  to pay to the  order of  Edward J.
Martori  ("Payee"),  at Tucson,  Arizona,  or at such other  place as the holder
hereof  may from time to time  designate,  the  principal  sum of Eight  Hundred
Ninety-Four  Thousand and Seventy  Eight  Dollars  ($894,078.00),  together with
interest thereon as computed below, as follows:

     Principal  payments  of  $94,078.00  on  or  before  August  15,  1999  and
     $100,000.00 on or before  December 15, 1999.  Installments of interest only
     shall be payable  quarterly  on the first day of January,  April,  July and
     October  of each  year  commencing  October  1,  1999.  The  entire  unpaid
     principal  balance,  together with all accrued and unpaid interest  thereon
     and other costs  payable  hereunder,  shall be paid in full on December 15,
     2003.

     Interest shall be charged on the unpaid  principal  balance of this Note to
the date of maturity on a daily basis for the actual  number of days any portion
of the principal is  outstanding,  computed on the basis of a 360-day year, at a
per annum rate (the "Note Rate") equal to ten percent (10%).

     The undersigned acknowledges that the undersigned has agreed to the rate of
interest  represented by the Note Rate, and any  additional  charges,  costs and
fees arising out of or related to the  transaction of which this Note is a part,
to the extent deemed to be interest under applicable law.

     Each and every payment due under this Note shall be made in lawful money of
the United States of America and in immediately  available  funds, and when made
shall be first  applied to accrued  costs,  expenses and fees,  if any,  then to
accrued  interest  that has not yet been  added  to  principal,  and then to the
reduction of the  principal  amount of this Note.  This Note may be prepaid,  in
whole or in part,  without penalty or premium,  provided that each such payments
shall be applied as set forth above.

     At the option of the holder hereof, any of the following shall constitute a
"default"  hereunder,  and,  upon the  occurrence of any of the  following,  all
obligations  hereunder  shall,  at the  option  of  the  holder  hereof,  become
immediately due and payable, without presentment for payment,  diligence, grace,
exhibition of this Note,  protest,  further demand or notice of any kind, all of
which are hereby  expressly  waived:  (i) any sum owing hereunder or under other
indebtedness  of the  undersigned  to  Payee  is not  paid as  agreed;  (ii) any
petition or application  for any form of relief under any provision of Title 11,
United States Code, as amended from time to time (the "Bankruptcy  Code") or any
other law pertaining to  reorganization,  insolvency or readjustment of debts is
filed  by  or  against  the  undersigned,  its  assets  or  affairs;  (iii)  the
undersigned  makes an  assignment  for the benefit of  creditors,  is not paying
debts as they become due, or is granted an order for relief under any chapter of
the Bankruptcy Code; (iv) a custodian,  as defined by the Bankruptcy Code, takes
charge of any property of the undersigned; (v) garnishment,  attachment, levy or
execution is issued  against any of the property or effects of the  undersigned;
(vi) there is a termination, failure to exist or dissolution of the undersigned;
or (vii)  there is any  default  or breach of any  representation,  warranty  or
covenant,  or  there  is  any  false  statement  or  material  omission,  by the
undersigned  under any document  forming part of the  transaction  in respect of
which this Note is made or forming part of any other transaction under which the
undersigned is indebted to Payee.

     The  undersigned  hereby agrees:  (i) to any and all extensions  (including
extensions  beyond the original term hereof) and renewals  hereof,  from time to
time,  without notice, and that no such extension or renewal shall constitute or
be deemed a release of any  obligation of the  undersigned to the holder hereof;
(ii) that any written modification,  extension or renewal hereof executed by the
undersigned  shall constitute a  representation  and warranty of the undersigned
that the unpaid balance of principal, interest and other sums owing hereunder at
the time of such modification,  renewal or extension are owed without adjustment
for offset, counterclaim or other defense of any kind by the undersigned against

                                      A-2
<PAGE>
Payee;  (iii) that the acceptance by the holder hereof of any performance  which
does not  comply  strictly  with the  terms  hereof  shall not be deemed to be a
waiver or bar of any right of said holder,  nor a release of any  obligation  of
the  undersigned to the holder  hereof;  (iv) to offsets of any sums or property
owed to the  undersigned  by the holder  hereof at any time;  (v) that this Note
shall be governed by the laws of the State of Arizona  applicable  to promissory
notes  made and to be paid in the State of  Arizona;  and (vi) to pay the holder
hereof upon demand any and all costs,  expenses and fees  (including  reasonable
attorneys'  fees) incurred in enforcing or attempting to recover  payment of the
amounts due under this Note,  including  negotiating,  documenting and otherwise
pursuing or consummating modifications,  extensions,  compositions,  renewals or
other  similar  transactions  pertaining  to  this  Note,  irrespective  of  the
existence  of an  event of  default,  and  including  costs,  expenses  and fees
incurred before, after or irrespective of whether suit is commenced,  and in the
event suit is brought to enforce payment hereof,  such costs,  expenses and fees
and all other  issues  in such  suite  shall be  determined  by a court  sitting
without a jury.

     This Note is secured by a Security Agreement dated July 1, 1994.

     This Note is executed to be effective as of the date set forth above.


                                ILX RESORTS INCORPORATED, an Arizona corporation


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

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

ATTEST:


By:
     -------------------------------
Its:
     -------------------------------

                                      A-3
<PAGE>
                                    EXHIBIT B

                                $500,000 MEI NOTE

































                                      B-1
<PAGE>
                           INSTALLMENT PROMISSORY NOTE

$500,000.00                                                       August 1, 1999
                                                                Phoenix, Arizona

     FOR VALUE RECEIVED, the undersigned,  ILX Resorts Incorporated,  an Arizona
corporation  (the  "undersigned"),  promises  to  pay to the  order  of  Martori
Enterprises Incorporated, an Arizona corporation ("Payee"), at Phoenix, Arizona,
or at such other place as the holder hereof may from time to time designate, the
principal  sum of Five Hundred  Thousand  Dollars  ($500,000.00),  together with
interest thereon as computed below, as follows:

     Principal  payments  of  $100,000.00  on or  before  August  15,  1999  and
     $100,000.00  on  or  before  December  15,  2000  and  December  15,  2001.
     Installments  of interest only shall be payable  quarterly on the first day
     of  January,  April,  July and October of each year  commencing  October 1,
     1999. The entire unpaid  principal  balance,  together with all accrued and
     unpaid interest thereon and other costs payable hereunder, shall be paid in
     full on December 15, 2002.

     Interest shall be charged on the unpaid  principal  balance of this Note to
the date of maturity on a daily basis for the actual  number of days any portion
of the principal is  outstanding,  computed on the basis of a 360-day year, at a
per annum rate (the "Note Rate") equal to eight percent (8%).

     The undersigned acknowledges that the undersigned has agreed to the rate of
interest  represented by the Note Rate, and any  additional  charges,  costs and
fees arising out of or related to the  transaction of which this Note is a part,
to the extent deemed to be interest under applicable law.

     Each and every payment due under this Note shall be made in lawful money of
the United States of America and in immediately  available  funds, and when made
shall be first  applied to accrued  costs,  expenses and fees,  if any,  then to
accrued  interest  that has not yet been  added  to  principal,  and then to the
reduction of the  principal  amount of this Note.  This Note may be prepaid,  in
whole or in part,  without penalty or premium,  provided that each such payments
shall be applied as set forth above.

     At the option of the holder hereof, any of the following shall constitute a
"default"  hereunder,  and,  upon the  occurrence of any of the  following,  all
obligations  hereunder  shall,  at the  option  of  the  holder  hereof,  become
immediately due and payable, without presentment for payment,  diligence, grace,
exhibition of this Note,  protest,  further demand or notice of any kind, all of
which are hereby  expressly  waived:  (i) any sum owing hereunder or under other
indebtedness  of the  undersigned  to  Payee  is not  paid as  agreed;  (ii) any
petition or application  for any form of relief under any provision of Title 11,
United States Code, as amended from time to time (the "Bankruptcy  Code") or any
other law pertaining to  reorganization,  insolvency or readjustment of debts is
filed  by  or  against  the  undersigned,  its  assets  or  affairs;  (iii)  the
undersigned  makes an  assignment  for the benefit of  creditors,  is not paying
debts as they become due, or is granted an order for relief under any chapter of
the Bankruptcy Code; (iv) a custodian,  as defined by the Bankruptcy Code, takes
charge of any property of the undersigned; (v) garnishment,  attachment, levy or
execution is issued  against any of the property or effects of the  undersigned;
(vi) there is a termination, failure to exist or dissolution of the undersigned;
or (vii)  there is any  default  or breach of any  representation,  warranty  or
covenant,  or  there  is  any  false  statement  or  material  omission,  by the
undersigned  under any document  forming part of the  transaction  in respect of
which this Note is made or forming part of any other transaction under which the
undersigned is indebted to Payee.

     The  undersigned  hereby agrees:  (i) to any and all extensions  (including
extensions  beyond the original term hereof) and renewals  hereof,  from time to
time,  without notice, and that no such extension or renewal shall constitute or
be deemed a release of any  obligation of the  undersigned to the holder hereof;
(ii) that any written modification,  extension or renewal hereof executed by the
undersigned  shall constitute a  representation  and warranty of the undersigned
that the unpaid balance of principal, interest and other sums owing hereunder at
the time of such modification,  renewal or extension are owed without adjustment
for offset, counterclaim or other defense of any kind by the undersigned against

                                      B-2
<PAGE>
Payee;  (iii) that the acceptance by the holder hereof of any performance  which
does not  comply  strictly  with the  terms  hereof  shall not be deemed to be a
waiver or bar of any right of said holder,  nor a release of any  obligation  of
the  undersigned to the holder  hereof;  (iv) to offsets of any sums or property
owed to the  undersigned  by the holder  hereof at any time;  (v) that this Note
shall be governed by the laws of the State of Arizona  applicable  to promissory
notes  made and to be paid in the State of  Arizona;  and (vi) to pay the holder
hereof upon demand any and all costs,  expenses and fees  (including  reasonable
attorneys'  fees) incurred in enforcing or attempting to recover  payment of the
amounts due under this Note,  including  negotiating,  documenting and otherwise
pursuing or consummating modifications,  extensions,  compositions,  renewals or
other  similar  transactions  pertaining  to  this  Note,  irrespective  of  the
existence  of an  event of  default,  and  including  costs,  expenses  and fees
incurred before, after or irrespective of whether suit is commenced,  and in the
event suit is brought to enforce payment hereof,  such costs,  expenses and fees
and all other  issues  in such  suite  shall be  determined  by a court  sitting
without a jury.

     This Note is secured by a Security Agreement dated July 1, 1994.

     This Note is executed to be effective as of the date set forth above.


                                ILX RESORTS INCORPORATED, an Arizona corporation


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

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

ATTEST:


By:
     -------------------------------
Its:
     -------------------------------