EXHIBIT 10-1
                              AMENDED AND RESTATED
                             SECURED LINE OF CREDIT
                                LENDING AGREEMENT
                               (ILX Incorporated)

         THIS AMENDED AND  RESTATED  SECURED  LINE OF CREDIT  LENDING  AGREEMENT
("Agreement")  is dated this 17th day of  September  1998,  by and  between  ILX
RESORTS  INCORPORATED,  an Arizona  corporation;  LOS ABRIGADOS PARTNERS LIMITED
PARTNERSHIP, an Arizona limited partnership; ILE SEDONA INCORPORATED, an Arizona
corporation;  VCA TUCSON INCORPORATED,  an Arizona  corporation;  VCA SOUTH BEND
INCORPORATED,  an Arizona corporation; and PREMIERE DEVELOPMENT INCORPORATED, an
Arizona  corporation,  all having their principal  places of business at 2777 E.
Camelback  Road,  Phoenix,   Arizona  85016  (collectively,   "Borrower"),   and
LITCHFIELD FINANCIAL CORPORATION, a Massachusetts corporation having its western
division  offices  at  13701  West  Jewell  Avenue,  Lakewood,   Colorado  80228
("Lender"), under the following facts:

                                    RECITALS:

         WHEREAS,  the Borrower is the owner,  developer and marketer of certain
timeshare development projects located in or around Sedona, Arizona, Estes Park,
Colorado,  Tucson,  Arizona and South Bend, Indiana and marketed under the names
Sedona Vacation Club at Los Abrigados,  The Golden Eagle Resort,  The Inn at Los
Abrigados,  Varsity  Club -- Tucson,  Varsity  Club -- South Bend,  and Premiere
Vacation Club, along with other timeshare  development projects which Lender may
subsequently approve; and

         WHEREAS,   the  Borrower  owns  and  will  subsequently  be  generating
portfolios of installment  sales promissory notes and contracts  originated from
its timeshare sales operations which it desires to pledge to Lender,  along with
other collateral as is more fully described herein,  which shall serve to secure
Borrower's  repayment of a loan of even date  herewith to be advanced by Lender;
and

         WHEREAS, the parties hereto desire to be legally bound by the terms and
conditions of this Agreement along with all exhibits attached hereto and related
contractual  agreements referenced herein, the terms and conditions of which are
incorporated herein by this reference;

         NOW, THEREFORE, for and in consideration of the foregoing Recitals, and
the covenants and agreements  hereinafter  set forth and other good and valuable
consideration,   the  legal   adequacy  and   sufficiency  of  which  is  hereby
acknowledged,  the parties hereto,  intending to be legally bound hereby, hereby
agree:

         1. DEFINITIONS.

         In  addition  to  the  definitions   set  forth  in  the   introductory
paragraphs,  the  following  terms  shall  have the  following  meanings  unless
otherwise agreed.

          "Account"  means that form of installment  land sales contract  and/or
promissory  note and  related  deed of trust or other debt  securing  instrument
which is originated by Borrower in connection  with its  development and sale of
Timesharing  Interests  to Account  Debtors  within the Project at retail and in
Borrower's ordinary course of business.
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         "Account  Debtor"  means any Person who is or who may become  obligated
under, with respect to, or on account of an Account whether as the maker thereof
or as a guarantor thereto.

         "Amortization  Period" means that period of time which begins after the
expiration of the Borrowing Period during which all Obligations  shall be repaid
in sixty (60) equal and fully amortizing  monthly  installments,  with the first
such installment  becoming due and payable one month after the expiration of the
Borrowing  Period and with  successive  installments  becoming  due and  payable
monthly thereafter until all Obligations  hereunder are paid in full;  provided,
however,  that  all  Obligations  owing  hereunder,  if not paid  sooner,  shall
immediately  become due and payable in full on or before  ninety-six (96) months
from and after the date of Closing.

         "Borrowing  Base" means an amount equal to seventy percent (70%) of the
then unpaid  total  aggregate  outstanding  principal  balance of all  Qualified
Pledged  Accounts.  On the first day of each month,  beginning  the fourth month
after closing,  the Borrowing Base shall be adjusted downward in accordance with
that formula described below if the total principal balance of all Accounts that
are thirty (30) through  sixty (60) days  contractually  delinquent,  based on a
three  (3)  month  rolling  average,  exceeds  eight  percent  (8%) of the total
principal balance of all Qualified Pledged Accounts pledged to Lender under this
Credit  Agreement  (any  such  status  is  referred  to below  as a  "Delinquent
Percentage").  Only during that  period of time when the  Delinquent  Percentage
exists, the Borrowing Base formula shall be amended to reflect a figure which is
equal to the product of 100% minus the sum  realized by  multiplying  3.75 dines
the  Delinquent  Percentage.  In  illustration  of  the  foregoing,  should  the
Delinquent  Percentage equal ten percent (10%), then the Borrowing Base would be
reduced to 62.5%  pursuant to the  following  formula:  Borrowing  Base = 100% -
(3.75 X 10%). During all periods in which no Delinquent  Percentage  exists, the
Borrowing Base shall return to the seventy percent (70%) formula as first stated
above.

         "Borrowing Period" means the thirty six (36) month period following the
Closing Date.

         "Business  Day" means any day which is not a Saturday,  Sunday or other
day on which national banks are authorized or required to close.

         "Closing Date" means the date of this agreement.

         "Collateral"   means  the  Pledged  Accounts;   the  Credit  Agreement;
Borrower's  books and records as they pertain to the Pledged  Accounts;  and the
proceeds and products, whether tangible or intangible, of any of the foregoing.

         "Collateral Assignment of Deeds of Trust" means that agreement executed
by Borrower in favor of Lender in which Borrower  collaterally assigns to Lender
all of the Borrower's rights,  title and interest in and to those deeds of trust
which secure repayment of the Pledged Accounts.

         "Collateral  Assignment  of  Promissory  Notes"  means  that  agreement
executed by Borrower in favor of Lender in which Borrower  collaterally  assigns
to Lender all of the Borrower's rights, title and interest in and to the Pledged
Accounts.

         "Credit Agreement"  collectively means all agreements pertaining to the
establishment of the lending relationship described herein,  including,  without
limitation,  the Amended and Restated Secured Line of Credit Lending  Agreement,
Amended and Restated Secured Line of Credit Promissory Note, Pledge and Security

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Agreement,  Collateral Assignment of Promissory Notes,  Collateral Assignment of
Deeds of Trust, Custodial Agreement,  Servicing Agreement, Escrow Agreement, and
all documents referenced therein or pertaining thereto.

         "Custodian"  means  that  party  designated  as such  in the  Custodial
Agreement.

         "Custodial  Agreement" means that agreement of even date herewith which
has been executed by the Borrower and the Lender and the Custodian.

         "Cut-Off Date" means __________________, 1998.

         "Daily  Balance" means the amount of an Obligation owed at the end of a
given day.

         "Delinquent Account" means any Pledged Account which is sixty (60) days
or more contractually delinquent.

         "End-Loan Documents" means those documents executed by Account Obligors
in connection  with their purchase of Timesharing  Interests and their financing
of the  purchase  prices  thereof as are more fully  defined  and  described  in
Paragraph 3 herein.

         "Escrow Agent" means Litchfield Financial Corporation.

         "Escrow  Agreement" means that agreement of even date herewith executed
by and between Lender, Borrower and Escrow Agent.

         "Event of Default"  means the  occurrence  of those  events as are more
fully described in Paragraph 24, hereof.

         "GAAP" mean generally accepted accounting  principals as in effect from
time to time in the United States, consistently applied.

         "Hazardous   Materials"  means  (a)  those  substances  as  defined  as
"hazardous  substances,"  "hazardous  materials," "toxic  substances," or "solid
waste" in CERCLA,  RCRA,  and the  Hazardous  Materials  Transportation  Act, 49
U.S.C.  Section  1801 et.  seq.,  and in the  regulations  promulgated  pursuant
thereto;  (b)  those  substances  designated  as a "hazard  substance'  under or
pursuant to the Federal  Water  Pollution  Control Act, 33 U.S.C.  ss.1257,  et.
seq., and in the regulations  promulgated pursuant thereto; (c) those substances
listed in the United States Department of  Transportation  Table (40 CFR 172.101
and  amendments  thereto)  or by the  Environmental  Protection  Agency  (or any
successor  agency)  as  hazardous  substances  (40 CFR Part  302 and  amendments
thereto);  and (d) such other substances,  materials and classified as hazardous
or toxic under any Act.

         "Initial  Advance" means that initial advance of principal by Lender to
Borrower after the  application  of the Borrowing Base to the Initially  Pledged
Accounts as is more fully described in Paragraph 2(C) hereof.

         "Initially  Pledged  Accounts" means each and every  Qualified  Pledged
Account along with the debt securing  instruments securing the repayment of same
which when  applied  to the  Borrowing  Base serve as the

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basis for the Initial  Advance  and which are more  specifically  identified  on
EXHIBIT A, attached hereto and incorporated herein by this reference.

         "Lender   Expenses"   means   costs  or  expenses   (including   taxes,
photocopying,  notarization,  telecommunication and insurance premiums) required
to be paid by Borrower  under the Credit  Agreement that are paid or advanced by
Lender;  documentation,  filing,  recording,  publication,  appraisal, lock box,
custodial,  loan servicing fees paid to Servicer, costs and expenses incurred by
Lender  in the  disbursement  of funds  incurred  by Lender  resulting  from the
dishonor of checks; costs and expenses paid or incurred by Lender to correct any
default  or  enforce  any  provision  of the  Credit  Agreement,  or in  gaining
possession of, maintaining,  handling,  preserving,  storing, shipping, selling,
preparing  for sale,  or  advertising  the  Collateral  for sale,  regardless of
whether a sale is  consummated;  costs and  expenses  paid or  expenses of third
party  claims  or any other  suit paid or  incurred  by Lender in  enforcing  or
defending the Credit  Agreement;  and Lender's  reasonable  attorney's  fees and
expenses incurred in advising, structuring, drafting, reviewing,  administering,
amending,  terminating,   enforcing  (including  attorney's  fees  and  expenses
incurred in  connection  with a "workout,"  a  restructuring,  or an  insolvency
proceedings concerning Borrower or any guarantor of the Obligations), defending,
or concerning  the Credit  Agreement,  irrespective  of whether suit is brought.
Provided,  however,  in all  instances,  Lender  Expenses  shall be  limited  to
reasonable expenses which are reasonably  necessitated by Lender's  transactions
with  Borrowers  or as may  otherwise  be required in order to protect  Lender's
rights in and to the Collateral.

         "Line of Credit Note" means that  promissory  note in the original face
amount of Three Million Five Hundred Thousand Dollars  ($3,500,000)  which shall
be in  substantially  that form as is  appended  hereto as EXHIBIT B which shall
evidence  certain of the Obligations  associated  with the Credit  Agreement and
which shall provide for the manner of the repayment of the principal,  interest,
fees and other sums evidenced thereby and, moreover,  which shall serve to amend
and  restate  the terms and  conditions  of that  promissory  note  executed  by
Borrower and delivered to Lender on or about April 9, 1996,

         "Maximum  Line  Amount"  means the sum of Three  Million  Five  Hundred
Thousand Dollars ($3,500,000).

         "Obligations" means all loans,  advances,  debts,  principal,  interest
(including any interest  that,  but for the  provisions of the Bankruptcy  Code,
would have accrued),  premiums,  liabilities  (including all amounts  charged to
Borrower's loan account pursuant to any agreement  authorizing  Lender to charge
Borrower's   loan   account),    obligations,    fees   (including   pre-payment
entitlements),  lease  payments,  guarantees,  covenants,  and  duties  owing by
Borrower to Lender of any kind and description (whether pursuant to or evidenced
by the Credit Agreement,  by any instrument,  or pursuant to any other agreement
between  Lender and  Borrower,  and  irrespective  of whether for the payment of
money),  whether direct or indirect,  absolute or  contingent,  due or to become
due, now existing or hereafter arising,  and including any debt,  liability,  or
obligation owing from Borrower to third parties that Lender may have obtained by
assignment  or otherwise,  and further  including all interest not paid when due
and all Lender  Expenses  that  Borrower is required to pay or  reimburse by the
Credit Agreement, by law, or otherwise.

         "Person"  means and includes  natural  persons,  corporations,  limited
partnerships,   general  partnerships,  joint  ventures,  trusts,  land  trusts,
business trusts, or other organizations,  irrespective of whether they are legal
entities, and governments and agencies and political subdivisions thereof.

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         "Pledge and Security  Agreement"  means that agreement  executed by the
Borrower in favor of the Lender  which is dated April 9, 1996  pursuant to which
the Borrower granted to Lender a first and priority  security interest in and to
the Pledged Accounts and the Collateral.

         "Pledged  Accounts" means each and every Initially  Pledged Account and
Subsequently Pledged Account.

         "Project" collectively means the Los Abrigados Resort & Spa, The Inn at
Los Abrigados,  The Golden Eagle Resort, Varsity Club -- Tucson, Varsity Club --
South Bend and Premiere Vacation Club real property  developments  located in or
around Sedona,  Arizona, Estes Park, Colorado,  Tucson, Arizona, and South Bend,
Indiana along with those other timeshare  development  projects which Lender may
subsequently  approve in writing,  from which Timesharing  Interests are created
and sold to Timesharing Interest Purchasers and which generate Accounts.

         "Qualified  Pledged Account" means those Pledged Accounts that meet the
criteria set forth in Paragraph 8, hereof.

         "Reference Rate" means that rate of interest which is designated by the
Wall Street Journal,  Western  Edition,  as the nation's  average prime interest
rate. Should the Wall Street Journal cease reporting said rate of interest, then
the Reference Rate shall be deemed that rate of interest designated by Citibank,
N.A. as its prime interest rate.

         "Servicer" means Concord Servicing Corporation, or any other entity, as
Lender may designate from time to time which is also agreed to by Borrower, such
agreement not to be unreasonably withheld.

         "Servicing  Agreement" means any loan servicing  agreement entered into
between Servicer,  Borrower,  and Lender respecting the agreement of Servicer to
serve as servicing agent for the Pledged Accounts.

         "Subsequent  Advance"  means any  subsequent  advance of  principal  by
Lender  to  Borrower  after  the  application  of  the  Borrowing  Base  to  the
Subsequently Pledged Accounts.

         "Subsequently  Pledged Account" means each and every Qualified  Pledged
Account  which may be  originated  by Borrower  from and after the Closing Date,
each of which meets the standards  set forth in Paragraph 8, hereof,  along with
the  security  securing  the  repayment  of  same,  and  which  are  offered  as
collateral, for the Obligations and pledged to secure subsequent advances.

         "Timesharing  Interest"  means a  legally  identifiable  parcel of real
property which is located within,  or constitutes an undivided  interest in, the
Project and which is sold in a fee simple manner to an Account Debtor.

         "Timesharing  Interest  Purchaser" means the purchaser of a Timesharing
Interest at the Project.

         2. THE LOAN AND TERMS OF PAYMENT.

                 A. Line of Credit Note.  Upon  Borrower's  compliance  with all
conditions precedent and terms and conditions as are set forth herein and in the
Credit  Agreement,  Lender  hereby  agrees to extend  credit  to  Borrower  in a
collective  sum not to  exceed  Three  Million  Five  Hundred  Thousand  Dollars
($3,500,000).  Concurrently  herewith,  Borrower  shall  execute  and deliver to
Lender the Line of Credit Note in the face amount

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of Three Million Five Hundred  Thousand Dollars  ($3,500,000).  The indebtedness
evidenced by the Line of Credit Note shall be paid by a collateral assignment of
the principal, interest, late charges and all other sums payable from and on the
Pledged Accounts and shall be secured by a collateral pledge of Pledged Accounts
and that other  Collateral and security as is more fully described in the Credit
Agreement.

                  B.  Term  of  Credit  Facility.  All  Obligations  outstanding
hereunder shall be due and payable ninety-six (96) months from the Closing Date,
subject to earlier  payment  through  amortization,  voluntary or mandatory call
and/or  acceleration  as  provided  in the Credit  Agreement  and in the Line of
Credit Note. The Obligations shall bear interest at the rate and pursuant to the
terms and conditions of the Line of Credit Note.

                  C. Initial Advance.  Subject to Borrower's compliance with the
required terms and conditions of the Credit Agreement, Lender agrees to make and
loan an Initial  Advance of  principal  to  Borrower  in an amount  equal to the
principal balance  outstanding under that Secured Line of Credit Promissory Note
dated  April 9,  1996  which is being  amended  and  restated  contemporaneously
herewith  upon  receipt  and  perfection  of and the  pledge  to  Lender  of the
Initially  Pledged Accounts and the other  Collateral.  Disbursements  hereunder
shall be made through the Escrow Agent  pursuant to the provisions of the Escrow
Agreement  and  after the  Borrower's  review  and  execution  of a closing  and
settlement statement.

                  D. Subsequent  Advances.  In addition to the Initial  Advance,
and subject to Borrower's  compliance  with the required terms and conditions of
the Credit  Agreement,  Lender,  during  the  Borrowing  Period,  agrees to make
further loans and advances of principal to Borrower upon the pledge to Lender of
Subsequently  Pledged  Accounts by Borrower so long as, and to the extent  that,
the Obligations  outstanding (inclusive of the Subsequent Advance) do not exceed
either the Borrowing Base or the Maximum Line Amount.  Notwithstanding  anything
herein to the contrary, Lender may reduce its advance rates if it determines, in
its reasonable  discretion,  that there is a material impairment of the prospect
of repayment of all or any portion of the  Obligations or a material  impairment
of the value or priority  of  Lender's  security  interests  in the  Collateral.
Advances made pursuant to this Paragraph 2 (D) shall not be made more frequently
than weekly, or in amounts less than $50,000 per advance.

                  E.  Maximum  Line  Amount.  At no such time shall the  Initial
Advance and all Subsequent Advances collectively exceed the Maximum Line Amount.

                  F. Interest Rates,  Payment and  Calculation.  All Obligations
shall  bear  interest,  on the  average  Daily  Balance,  at a rate equal to the
Reference Rate Plus Three Percent (3%) per annum,  it being  understood that the
Reference  Rate is  variable in nature and shall be adjusted on the first day of
each  calendar  quarter  during  that  period of time when the  Obligations  are
outstanding  all as more fully  described in the Line of Credit  Note.  Interest
shall  begin  to  accrue  on the  date of any and all  advances  hereunder.  All
Obligations  shall bear  interest,  from and after the occurrence and during the
continuance of an Event of Default, at a rate of interest equal to eight hundred
(800) basis points above the otherwise applicable Reference Rate. Interest shall
be calculated based upon a 365 day calendar year,

                  Interest hereunder shall be due and payable on the first (1st)
day of each month during the term hereof.  Lender may charge such interest,  all
Lender Expenses (as and when incurred),  and all  installments or other payments
due hereunder or under the Credit  Agreement to Borrower's  loan account,  which
amounts  shall  thereafter  accrue  interest  at the  then  applicable  rate  of
interest.  Any interest not paid when due shall be compounded by becoming a part
of the Obligations,  and such interest shall  thereafter  accrue interest at the
rate then applicable hereunder.

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                  In no event shall the interest rate or rates payable under the
Credit  Agreement  and the Line of Credit Note,  plus any other  amounts paid in
connection  herewith,  exceed the highest rate permissible  under any law that a
court  of  competent   jurisdiction  shall,  in  a  final  determination,   deem
applicable.  Borrower and Lender, in executing the Credit Agreement and the Line
of Credit Note,  intend to legally  agree upon the rate or rates of interest and
manner of payment stated within it; provided,  however, that, anything contained
herein or in the Line of Credit Note to the  contrary  notwithstanding,  if said
rate or rates of  interest or manner of payment  exceeds  the maximum  allowable
under  applicable law, then,  ipso facto as of the date of the Credit  Agreement
and the Line of  Credit  Note,  Borrower  is and  shall be  liable  only for the
payment of such maximum rate of interest as allowed by law, and payment received
from  Borrower  in excess of such legal  maximum,  whenever  received,  shall be
applied to reduce the principal balance of the Obligations to the extent of such
excess.

                  G. Crediting Payments; Application of Collections.  Weekly, on
Thursday,  Servicer  shall  forward  to  the  Lender,  via  wire  transfer,  all
collections  received from the Pledged Accounts held by Servicer for the benefit
of Lender, so that the funds will be credited to Lender's account that same day.
The receipt of any wire  transfer of funds,  check,  or other item of payment by
Lender immediately shall be applied to provisionally reduce the Obligations, but
shall not be considered a payment on an account  unless such wire transfer is of
immediately  available  federal  funds  and is made to the  appropriate  deposit
account  of Lender or unless  and until  such  check or other item of payment is
honored  when  presented  for payment.  Any Pledged  Account  payments  received
directly by the Borrower shall be immediately forwarded to the Servicer.  Should
any check or item of payment not be honored when  presented  for  payment,  then
Borrower  shall be deemed not to have made such payment,  and interest  shall be
recalculated   accordingly.   Anything   to  the   contrary   contained   herein
notwithstanding,  any wire  transfer,  check,  or other item of payment shall be
deemed received by Lender only if it is received into Lender's operating account
as identified on or before 12:00 noon, Williamstown,  Massachusetts time. If any
wire  transfer,  check,  or other  item of  payment is  received  into  Lender's
operational account after 12:00 noon, Williamstown,  Massachusetts time it shall
be deemed to have been  received  by Lender as of the opening of business on the
immediately following business day. The Lender reserves the right at any time to
require the  implementation  of a reasonably  agreeable  lock box agreement upon
reasonable notice to Borrower.

                  H.  Advance Fee.  Borrower  shall pay to Lender a fee equal to
one percent (1%) of the gross amount of each  subsequent  advance which is to be
paid out of the proceeds of each subsequent advance. Lender will directly deduct
these fees from each Subsequent Advance-

         3. CONDITIONS TO INITIAL AND SUBSEQUENT ADVANCES.

                  Conditions  Precedent to Initial  Advance.  The  obligation of
Lender  to make the  Initial  Advance  is  subject  to the  fulfillment,  to the
satisfaction of Lender and its counsel,  of each of the following  conditions on
or before the Closing Date:

                  (a)  Assuming  compliance  by  Borrower  of all the  terms and
conditions  of the Credit  Agreement,  the Initial  Advance is  scheduled  to be
tendered by Lender to Borrower on or before 1998 unless an  alternative  date is
mutually agreed to;

                  (b) Borrower shall  have executed and delivered to Lender this
Amended and Restated Secured Line of Credit Lending  Agreement,  the Amended and
Restated Secured Line of Credit  Promissory Note and such other documents as the
Lender and its counsel may reasonably require, it being recognized that

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Borrower  has  previously  executed  certain  documents in favor of Lender on or
about  June 6, 1996  which  shall  continue  to  evidence,  support,  secure and
collateralize the loans being advanced by Lender to Borrower notwithstanding the
modification,  amendment and restatement of the Credit Agreement and the Line of
Credit Note.

                  (c) All  conditions  set  forth  herein  to the  making of the
Initial  Advance  shall have been  satisfied  within  five (5) days of  Lender's
submission  of all of the documents  which  collectively  constitute  the Credit
Agreement to Borrower for execution.

                  (d) All representations and warranties  contained herein shall
be true and correct as of the date of the execution of the Credit  Agreement and
as of the Closing Date.

                  (e)  Borrower  shall  have  executed  such   certificates  and
resolutions as are required by Lender.

                  (f) There shall be no Event of Default, then in existence,  or
any event or occurrence  which with notice,  the passage of time or both,  would
constitute an Event of Default.

                  (g) Escrow  Agent  shall have  advised  Lender that Lender has
obtained a properly  perfected first and prior security  interest in the Pledged
Accounts.

                  (h) Lender shall have  reviewed and approved the  existence of
sufficient  Pledged  Accounts  complying  with the  requirements  of Paragraph 8
herein to support the contemplated advance.

                  (i) Lender shall have  received and approved  such  additional
documents and  assurances as Lender may reasonably  require and shall,  have the
on-going  right to receive all other  documents  from Borrower  which Lender may
reasonably require and which shall be in furtherance of the intentions and goals
of this agreement.

                  (j)  Lender  has or shall  have  received,  where  applicable,
copies of articles of  incorporation  of Borrower and a current  Certificate  of
Good Standing for Borrower issued by the appropriate  governmental  authority as
well as copies, if any, of Borrower's licenses or qualifications to do business.

                  (k) Lender shall have received  satisfactory evidence that the
Pledged  Accounts are (a) exempt from or in compliance with applicable  statutes
and  regulations  governing  the sale of  timeshare  interests  or  operation of
timeshare  projects,  or that the business of Borrower  fully  complies with all
such  statutes  and  regulations,  (b)  Borrower  is in good  standing  with all
applicable  governmental  authorities,  and (c) the Pledged Accounts comply with
all applicable federal, state, and local statutes, regulations and ordinances.

                  (l) Lender  shall have  received and  reasonably  reviewed and
approved  all  documents  relating to the sale of  Timesharing  Interests in the
Project  including  without  limitation  all  regime  documents  and  amendments
thereto,  applicable  state timeshare  registrations,  forms of sales contracts,
disclosure  documents and property owner association  constituent  documents and
budgets. Lender shall be deemed to approve the form of any such documents unless
Lender  provides  Borrower with  Lender's  objections no less than five (5) days
prior to the Closing Date.

                  (m) Lender or Escrow Agent shall have  received the  following
documents and  assurances  ("End-Loan  Documents")  with respect to each Pledged
Account:

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                            (i)     Purchase     Agreement    (which    includes
                                    promissory note);
                           (ii)     Deed of Trust executed by Account Debtor;
                          (iii)     Owner's Understanding and Acknowledgment;
                           (iv)     Warranty   Deed  (for  Arizona)  or  special
                                    Warranty Deed (for Colorado);
                            (v)     Required Receipt for Public Report;
                           (vi)     HUD-1 Uniform Settlement Statement;
                          (vii)     Credit Application;
                         (viii)     Credit Report
                           (ix)     Statement  showing the unpaid balance of the
                                    Account,   the   amount   of  its   periodic
                                    installments  and  its  present  collections
                                    status.

                  Any  cross-outs,   erasures,   write-outs  and   modifications
regarding any of the foregoing shall be initialed by the Timeshare Purchaser.

                  (n)  Borrower  shall have  provided  Lender  with  evidence of
insurance in place in an amount  sufficient to restore the improvements upon the
property  constituting the Project to a usable state and in an amount sufficient
to  compensate  the  Timeshare  Purchasers  for their  inability  to utilize the
Project during any period of  reconstruction.  At the time of execution  hereof,
Lender acknowledges that Borrower has provided proof of insurance satisfying the
foregoing requirements.

                  (o) Borrower's net worth shall not collectively decrease below
$10,000,000.

                  (p) There  shall have been no material  adverse  change to the
financial  condition of Borrower nor shall there be any material  adverse change
in Borrower's business operations or the Project.

                  (q) Lender shall have received  verification  that the Project
remains in continuing compliance with all local, state, and federal laws.

                  (r)  Borrower  shall  be  in  material   compliance  with  all
financial and protective  covenants and warranties and  representations of every
nature as may be found in Borrower's lending agreements with third party lenders
and  Borrower  shall not be in material  default in any term or condition of any
other agreement of whatever nature to which Borrower is a party.

                  CONDITIONS PRECEDENT TO SUBSEQUENT ADVANCES. The obligation of
Lender to make any or all subsequent  advance(s) is subject to the  fulfillment,
to the satisfaction of Litchfield and its counsel,  of the following items on or
before the date of the scheduled subsequent advance:

                  (a) All representations and warranties  contained herein shall
be true and  correct  as of the  Closing  Date  and the  date of each and  every
Subsequent Advance.

                  (b) There shall be no Event of Default, then in existence,  or
any event or occurrence  which with notice,  the passage of time or both,  would
constitute an Event of Default.

                  (c) Escrow Agent shall have advised Lender all requirements as
set forth in the  Escrow  Agreement  and which  pertain to the taking of certain
actions and the receipt and delivery of  documents  associated  with  Subsequent
Advances have been satisfied in full.

                                       9
<PAGE>
                  (d) Lender shall have  reviewed and approved the  existence of
sufficient  Pledged  Accounts  complying  with the  requirements  of Paragraph 8
herein to support the contemplated advance.

                  (e) All End-Loan  Documents shall have been received by Lender
and shall have been fully executed by all applicable Account Debtors.

                  (f) Borrower's net worth shall not collectively decrease below
$10,000,000.

                  (g) There  shall have been no material  adverse  change to the
financial condition of Borrower,  nor shall there be any material adverse change
in Borrower's business operations or the Project.

                  (h)  Borrower   shall  have  delivered  to  Lender  all  other
documents, certificates and instruments which Lender may reasonably require.

                  (i)  Borrower  shall  be  in  material   compliance  with  all
financial and protective  covenants and warranties and  representations of every
nature as may be found in Borrower's lending agreements with third party lenders
and  Borrower  shall not be in material  default in any term or condition of any
other agreement of whatever nature to which Borrower is a party.

         4. ADVANCES.

         Subject to the terms, limitations, and conditions herein, in the Credit
Agreement  and in the Line of Credit  Note,  Lender  agrees to advance  funds to
Borrower as follows:

                  Procedures for Advances.  Subsequent Advances shall be made no
more than once per week in a minimum amount of $50,000 upon receipt by Lender of
a written request for a Subsequent  Advance from Borrower  received by Lender at
least five (5)  Business  Days prior to the  requested  date of the  advance and
Borrower's  compliance  with  all  requirements  as set  forth  herein  and  the
satisfaction of all criteria set forth herein regarding qualifying Accounts. All
advances  shall be  funded  to  Escrow  Agent  in  accordance  with  the  Escrow
Agreement.

                  Principal  of Note.  Upon  making an  advance or  receiving  a
repayment  of  principal  or  interest,  Lender  shall make such  entries in its
records as Lender may deem  necessary  or  appropriate  to  indicate  the amount
outstanding  under the Line of Credit Note and the Credit  Agreement as adjusted
for all advances hereunder.  In the absence of manifest error,  Lender's records
shall be conclusive proof of the amount outstanding.

                  Reborrowing.  Amounts  advanced  under the Line of Credit Note
and repaid may not be reborrowed  during the Borrowing Period unless approved by
Lender in Lender's sole discretion.

         5. SERVICER AND CUSTODIAN.

                  Servicer.  Servicer  shall  act as  servicer  of  all  Pledged
Accounts.  The duties of the Servicer are set forth in the Servicing  Agreement,
which among other  things,  shall limit the amount of  servicing  fees and costs
which may be imposed by Servicer. In the event Servicer fails to comply with its
duties under the Servicing Agreement or if Lender reasonably and with just cause
is otherwise dissatisfied with the Servicer, in Lender's

                                       10
<PAGE>
sole discretion,  and if Servicer does not correct the items of  dissatisfaction
within ten (10) days of Lender's written notice to Servicer and Borrower,  then,
and in that event,  Lender may terminate  the Servicing  Agreement and Lender or
its agent may immediately  commence  servicing of the Pledged Accounts.  In that
event,  Borrower  will pay  Lender  or its agent its  reasonable  and  customary
charges for servicing charges.

                  Custodian.  Lender  shall  serve as  custodian  of the Pledged
Accounts and all books and records  pertaining thereto pursuant to the terms and
conditions of the Custodial Agreement.

         6. ESCROW AGENT.

         An Escrow  Agent will be  appointed  by Lender and  Borrower to perform
certain  duties with respect to the Pledged  Accounts as set forth in the Escrow
Agreement. All advances shall be funded to Escrow Agent or as otherwise provided
in the Escrow Agreement.

         7. SECURITY.

         As security to collateralize the Borrower's duty to pay and perform all
Obligations hereunder, Borrower shall and does hereby give and grant to Lender a
first lien security interest in the Collateral, and the Pledged Accounts.

         8. ELIGIBILITY OF ACCOUNTS.

         In order to be  considered  Qualified  Pledged  Accounts and  therefore
subject to having the  applicable  Borrowing Base applied  thereto,  an Account,
Pledged  Account  Or  Subsequently  Pledged  Account  must  meet  the  following
underwriting standards:

                  (a)  All  Accounts  must  relate  to  sale  of fee  simple  or
fractional share interest Timesharing  Interests in the Project to a resident of
the United States or Canada;

                  (b) The Accounts must be fully amortizing and have an original
term of no more  than  eighty-four  (84)  months  and a  minimum  cash (or other
immediate  funds)  down  payment of ten percent  (10%) or paid-in  equity of ten
percent (10%), less closing costs;

                  (c) At the time of any advance,  no installment on the Account
may be more than fifty-nine (59) days contractually past-due.  Subsequent to any
Advance,   any  Account  will  be  considered   ineligible  for  Borrowing  Base
application  should any scheduled monthly  installment become sixty (60) days or
more contractually past-due;

                  (d) The maker or  guarantor  of the Account  shall not claim a
defense, set-off or counterclaim with respect to the Account or dispute, contest
or repudiate its purchase or a Timesharing Interests;

                  (e) The Account is secured by a lien or  interest  encumbering
the Timesharing Interest subject only to (i) the lien of real property taxes not
yet due or payable, and (ii) such other non-monetary  exceptions to title as are
acceptable to the Lender;

                  (f) All promised Project  amenities have been completed or, if
not completed, adequate financial assurance for completion are in place;

                                       11
<PAGE>
                  (g) All monies to be paid under and  pursuant  to the  Account
are to be paid in United States Dollars;

                  (h)  Borrower  shall  furnish  to  Lender an  executed  credit
application with respect to each Account  submitted to Lender for  underwriting,
and a credit report;

                  (i)  Lender  may  reject  any  Account  which,   in  its  sole
discretion,   reasonably  fails  to  meet  Lender's  underwriting  criteria  and
conditions.

         Should any Account  demonstrate  any of the following  characteristics,
then said  Account  will not be  capable  of being  deemed a  Qualified  Pledged
Account:

                  (a) bankruptcy, foreclosure or repossession (unless said event
occurred  more than three  years  previously  and there have been no  subsequent
negative credit incidents);

                  (b) unsatisfied judgement or charge off greater than $500;

                  (c) more than two (2) nonmedical or non-institutional accounts
or loans have been referred to collection  agencies or similar credit  reporting
entities;

                  (d)  nonconsenual  liens  over  $500  individually  or in  the
aggregate;

                  (e) current  delinquencies of greater than $500 on any two (2)
accounts or loan installment payments;

                  (f) no credit history.

         Notwithstanding the foregoing, Lender may consider an Account be become
deemed a Qualified Pledged Account if either of the following characteristics is
found:

                  (a) credit  score of 600 and the Account is aged for a minimum
of one (1) timely  payment  with the  understanding  that if two or more debtors
pertain to the Account, the higher debtor credit score will be relied upon; or

                  (b) aged a minimum of three (3) timely payments.

         Should any Account fail to meet or to continue to meet the  above-noted
eligibility  criteria,  the cumulative principal of all Pledge Accounts to which
the Borrowing Base is applied in  determining  Borrower's  prospective  advances
hereunder shall be reduced by the principal value of the ineligible Account even
if the Account had  previously  qualified for inclusion in  determining  advance
availability.

         Accounts  pledged under the subject  credit  facility shall qualify for
relocation under that Secured Line of Credit Lending Agreement (Global Facility)
which has been entered into by and between  Lender and Borrower after the debtor
has made four (4) timely payments pursuant to his Account obligations.

                                       12
<PAGE>
         9. WEIGHTED AVERAGE COUPON.

         The Pledged Accounts shall at all times possess and maintain a weighted
average  coupon rate  ("WAC") of not less than 13.5% during the term of the Line
of  Credit  Note.  If the  WAC is less  than  13.5%  Borrower  shall  submit  or
Substitute  additional  Pledged  Accounts in order to bring the Pledged Accounts
into compliance with the WAC standard.

         10. WEIGHTED AVERAGE MATURITY.

         The  Pledged  Accounts  shall,  from  the date of  origination,  have a
weighted  average  maturity  ("WAM") as of the Closing Date of not more than 180
months and not less than 84 months, provided that the Pledged Accounts delivered
by  Borrower  to Lender  after the  Closing  Date shall  have a minimum  average
monthly payment of at least $100 with no individual Account possessing a minimum
monthly payment of less than $85.

         11. BORROWING PERIOD.

         During the Borrowing Period, payments of interest only shall be due and
payable on the first (1st) day of the first month following the Closing Date and
on the first (1st) day of each month  thereafter.  All payments  received on the
Pledged  Accounts  shall be applied  first to  amounts,  fees,  costs and Lender
Expenses due under the Credit Agreement,  then to interest due thereunder,  then
to  principal  due  thereunder  or,  at the  option  of  holder,  to  any  other
indebtedness or Obligations  owed by Borrower or its affiliates to Lender or its
affiliates.  In the event the funds received by Lender from the Pledged Accounts
are less than the required  monthly  payment  hereunder,  Borrower shall pay the
difference  immediately.  In the event that  payments  received  from and on the
Pledged  Accounts and forwarded to Lender exceed the amount required to fund the
then-due  interest,  the excess  amounts and payments shall be applied to reduce
the  principal  outstanding  under  the Line of  Credit  Note  and  this  Credit
Agreement.

         12. EXTENSION OF BORROWING PERIOD.

         Upon request of the Borrower,  the Borrowing Period may be extended for
an additional twelve month period at Lender's sole discretion.

         13. PRINCIPAL AMORTIZATION PERIOD.

         Equal fully amortizing monthly payments of principal and interest shall
be due  and  payable  beginning  on the  first  (1st)  day  of the  first  month
immediately  following  the end of the  Borrower  Period and monthly  thereafter
during the  Amortization  Period.  If not otherwise paid during the Amortization
Period,  all Obligations  outstanding under the Credit Agreement and the Line of
Credit Note shall be due and payable in full  ninety-six  (96) months  after the
Closing Date. The minimum monthly payment during the  Amortization  Period shall
be an amount which will amortize the unpaid  balance of the  Obligations  over a
term of sixty (60)  months.  All  payments  received  by Lender  from and on the
Pledged  Accounts  shall be applied  first to  amounts,  fees,  costs and Lender
Expenses  due under the  Agreement,  then to  interest  due  hereunder,  then to
principal  due  hereunder,  or at  the  option  of  the  holder,  to  any  other
indebtedness owed by Borrower or its affiliates to Lender or its affiliates.  In
the event the funds  received by Lender from the Pledged  Accounts are less than
the  required  monthly  payment  hereunder,  Borrower  shall pay the  difference
immediately and the Borrower shall  additionally pay to Lender a fee which shall
compensate Lender for its accounting services rendered in such a situation which
shall equal one percent (1%) of the deficit between the required monthly payment
and the underfunded

                                       13
<PAGE>
status of Borrower's  account which fee in no  circumstances  shall be less than
one hundred dollars ($100) per instance.

         14. VOLUNTARY PRE-PAYMENTS.

         Borrower  may prepay all or a portion of the Line of Credit Note within
twenty-four  (24)  months  of the  Closing  Date  by  tendering  with  any  such
prepayment a fee of five percent (5%) of the amount of prepayment.  Borrower may
prepay all or a portion of the Line of Credit Note commencing  twenty-five  (25)
months from the Closing  Date  through  thirty-six  (36) months from the Closing
Date hereof by tendering  with any such  prepayment  a  prepayment  fee of three
percent  (3%) of the  amount of the  prepayment.  Commencing  thirty-seven  (37)
months from the Closing  Date through  sixty (60) months from the Closing  Date,
any such prepayment shall be accompanied by a prepayment fee of two percent (2%)
of the amount of the prepayment.  Thereafter,  there shall be no prepayment fee.
In the event  Borrower  does not tender a  prepayment  fee as  required  herein,
Lender may deduct same from the amount of any tendered  prepayment and apply the
remainder of the payment against the Obligations  owing under the Line of Credit
Note and this Credit  Agreement.  Any such prepayments shall not delay or reduce
the next-due monthly installments.  The prepayment penalties hereunder shall not
apply to principal  payments  during the  Borrowing  Period or the  Amortization
Period which are  collected by the Servicer  through the natural  payment of the
Accounts by the Account  Debtors.  The  prepayment  fees  referenced  herein are
understood to compensate the Lender for its costs  associated  with the Lender's
commitment  of funds and other  expenses  associated  with the providing of this
credit facility to Borrower.

         15. MANDATORY PREPAYMENT.

         Should the obligations outstanding ever exceed the Borrowing Base, then
the  Borrower  shall be  required  to  immediately  pledge  additional  eligible
Accounts  sufficient to reinstate the Borrowing Base to its  prescribed  ratios.
Borrower may also, or in the  alternative,  repay in cash an amount equal to the
deficit  under  the  Borrowing  Base.  No  prepayment  fee  will be  payable  in
connection with prepayments in such  circumstances.  Mandatory  prepayment shall
also arise should an Event of Default occur hereunder. Upon the occurrence of an
Event of Default, all Obligations outstanding hereunder shall immediately become
due and payable.

         16. CONFIRMATION AUDIT OF PLEDGED ACCOUNTS.

         Lender  shall  have  the  right  to  audit  the  Pledged   Accounts  by
confirmatory  letters at any time prior to or after  Closing.  Lender shall have
the right to perform confirmatory  telephone audits.  Borrower agrees to furnish
or to cause Servicer to furnish Lender all  information  necessary for Lender to
conduct such audits.

         17. REPRESENTATIONS AND WARRANTIES.

         Borrower makes the following  representations and warranties to Lender,
each of which shall be deemed  made again as of the date of the Initial  Advance
and any Subsequent Advance:

                  (a) Borrower is a corporation or partnership,  duly organized,
validly existing, and fully qualified and authorized to do business in the State
of Arizona,  and Borrower and its business and operations are in full compliance
with all applicable federal,  state and local laws,  ordinances and regulations.
Borrower  is  governed  by  the  terms  of  its  Articles  of  Incorporation  or
constituent  documents,  true copies of which have been delivered to Lender. The
Articles of Incorporation or constituent  documents are in full force and effect
and has not been  amended or modified in any manner,  except at indicated in the
copies  furnished  to Lender.  There is no

                                       14
<PAGE>
agreement of any kind other than as provided  Lender which  governs  Borrower or
the relative rights and duties of the parties holding interests in Borrower.

                  (b) Borrower has taken all action to permit  Borrower to enter
into this Agreement or any other agreement or transaction  contemplated  herein,
and the same is valid and binding upon  Borrower.  No officer or agent of Lender
shall be required to make any inquiry concerning the validity of any transaction
purported  to be  made by  Borrower  or the  authenticity  of any  signature  or
endorsements  relating to same,  and Lender may  conclusively  assume that every
obligation,  agreement,  instrument  or act or thing done and  executed  by such
person  purportedly  on behalf of Borrower  has been so executed or done in this
official capacity as an agent of Borrower.

                  (c)  Borrower  is not subject to any  disciplinary  actions or
proceedings by any governmental  authority or trade organization with respect to
any licenses or permits held by Borrower.

                  (d)  Borrower's  execution,  delivery and  performance of this
Agreement,  the Credit  Agreement  and the  borrowing  evidenced  by the Line of
Credit  Note  (a)  will  not  violate  any  indenture,  agreement  or any  other
instrument  to which  Borrower  is a party or by  which  Borrower  or any of its
property is bound;  and (b) will not be in conflict with,  result in a breach of
or  constitute  (with due notice  and/or lapse of time) a default under any such
indenture,  agreement  or  other  instrument,  or  result  in  the  creation  or
imposition of any lien,  charge or encumbrance of any nature whatsoever upon any
of its property or assets,  except as  contemplated  by the  provisions  of this
Agreement.  Each of the  documents  which  collectively  constitute  the  Credit
Agreement,  when executed and delivered to Lender,  will  constitute  the legal,
valid and binding  obligations of respective  signatories thereto enforceable in
accordance with their terms.

                  (e) All  financial  data and  other  information  of  whatever
nature that have been given to Lender with  respect to Borrower (a) are complete
and correct in all material  respects and do not omit to state any material fact
necessary in order to make the statements herein or therein not misleading;  and
(b)  accurately  present the  financial  condition of Borrower as of the date on
which the same have been  furnished.  All balance  sheets and footnotes  thereto
disclose all known  liabilities,  direct and contingent,  as of their respective
dates.  There has been no adverse change in the financial  condition of Borrower
since  the date of the most  recent of each such  financial  statement  given to
Lender  other than changes in the  ordinary  course of  business,  none of which
changes has been materially adverse.

                  (f)  Borrower is not a party to any  agreement  or  instrument
materially and adversely affecting its present or proposed business,  properties
or assets,  operations  or  condition,  financial  or  otherwise;  and is not in
material  default  in  performance,  observance  or  fulfillment  of  any of the
material  obligations,  covenants or  conditions  set forth in any  agreement or
instrument to which it is a party.

                  (g) All other reports,  papers,  data and information given by
Borrower to Lender with respect to Borrower and other persons and entities,  are
accurate  and  correct  in  all  material   respects  and  complete  insofar  as
completeness  may be necessary  to give Lender a true and accurate  knowledge of
the subject matters.

                  (h) Borrower has filed all required federal, state, county and
municipal  income  tax  returns  and has paid all taxes  which  have  become due
pursuant to such returns or pursuant to any assessments received by it. Borrower
knows of no basis for a material  additional  assessment  in respect of any such
taxes.

                                       15
<PAGE>
                  (i) There is not now pending against or affecting Borrower nor
to its knowledge is there threatened any action, suit or proceeding at law or in
equity or by or before any administrative agency which, if adversely determined,
would  materially  impair or affect the  financial  condition  or  operation  of
Borrower.

                  (j) Other than the  approval of the  creation  of  Timesharing
Interests  real  property  interests by the  applicable  state in which the real
property interest is located,  no  authorization,  consent,  approval,  license,
exemption,  filing or registration  with any court of  governmental  department,
commission,  board, bureau,  agency or instrumentality,  domestic or foreign, or
securities  exchange,  is or will be  necessary  to the  validity  of the rights
created under this Agreement.

                  (k) This  Agreement,  the documents  relating  thereto and all
aspects of the transactions  contemplated  therein do not violate any federal or
state laws or  regulations,  including  without  limitation  laws or regulations
relating to usury and the Truth-in-Lending Act.

                  (1)  Borrower  has not made an  assignment  for the benefit of
creditors;   has  not  suspended  business  or  commenced  proceedings  for  its
dissolution; has not filed bankruptcy,  reorganization,  arrangement, insolvency
or liquidation proceedings, or other proceedings for relief under the bankruptcy
laws for the relief of  debtors,  instituted  by or against it or has  consented
thereto: or has any judgment, writ or warrant or attachment, or similar process,
entered or filed  against it or any of its property or assets  which  renders it
insolvent  or impairs  its  ability to  continue  doing  business  and which has
remained unvacated, unbonded or unstayed for a period of 30 days.

                  (m) Borrower has good and marketable legal title to and is the
sole owner of the Pledged Accounts and the Pledged Accounts are not subject to a
security interest or other claim from third parties.

                  (n) The real  property  which is the  subject of each  Pledged
Account  is free and clear from all  material  encumbrances  which  might have a
substantive  negative  impact upon the use of said real property as contemplated
by the Credit  Agreement  and,  during the term of the Credit  Agreement,  shall
remain free and clear of all such material encumbrances.

                  (o) Borrower and the Project are in compliance  with all state
laws and  regulations,  concerning  the  operation of the Project from which the
Pledged Accounts arise and the sale of interests therein.  The Project possesses
the presence of no Hazardous Materials to Borrower's knowledge nor is Borrower's
current or proposed  operation of the Project  likely to cause the production or
location upon the Project of Hazardous Materials.  The Borrower's  operations of
the Project and the  Project's  current  status are all in  accordance  with all
state,  federal  or other  environmental  rules,  regulations  and laws of every
nature.

                  (p) Borrower is not insolvent  nor has made an assignment  for
the benefit of creditors;  has not suspended  business or commenced  proceedings
for   dissolution   or  become   insolvent;   has  not  filed  any   bankruptcy,
reorganization,  arrangement,  insolvency or liquidation  proceedings,  or other
proceedings for relief under bankruptcy, insolvency or receivership laws for the
relief of debtors,  instituted by or against it or has consented thereto; or has
no judgment, writ or warrant of attachment, or similar process, entered or filed
against it or any of its  property  or assets,  which  renders it  insolvent  or
impairs its ability to continue doing business and which has remained unvacated,
unbonded or unstayed for a period of 30 days;  has  generally  not failed to pay
its debts as they become due; has not taken any action,  nor has any  intentions
to take any action,  which would  constitute  an "act of  bankruptcy"  under the
Federal Bankruptcy Code or in contemplation thereof.

                                       16
<PAGE>
                  (q)  The  purpose  of  this  transaction  is  exclusively  for
commercial or business purposes.

         18. PROTECTIVE COVENANTS.

         So long as any of the Obligations remains unpaid, and to the extent the
failure  to do so would  have a material  adverse  effect  upon the value Of the
Property,  or upon  Borrower's  business,  operations  or  financial  condition,
Borrower shall:

                  (a) The  Borrower  shall at all times  insure that the Project
and the Pledged  Accounts are in compliance with all laws, rules and regulations
of whatever nature  associated with the Borrower's  operation of the Project and
its sale of real property interests therein including,  without limitation,  all
laws  pertaining to timeshare sales and marketing  activities,  the providing of
consumer credit to third parties, the manner in which real property transactions
are closed,  and all other laws and regulations  that serve as a condition to or
might  otherwise have a negative impact upon the  enforceability  of the Pledged
Accounts as represented in the Credit Agreement.

                  (b) True and correct pro-forma copies of all end-loan consumer
documents  which  pertain to the sale of real  property  interests in and to the
Project  have been  submitted  by Borrower to Lender for review and the Borrower
shall not use documents that  materially  differ form those as submitted  absent
notification  to Lender.  All such  documents are and will always be in complete
compliance with all rules and regulations  applicable  thereto and will continue
to so remain in compliance during the term of the Credit Agreement.

                  (c) Comply with the requirement of all applicable laws, rules,
regulations  and  orders  of  any  governmental  authority,  including,  without
limitation,  applicable usury laws,  Truth-in-Lending  laws,  subdivisions  law,
consumer credit laws,  Timesharing  Interest sales and registration laws and the
Interstate Land Sales Full Disclosure Act.

                  (d) Keep adequate records and books of account  reflecting all
financial  transactions  in conformity  with (i) generally  accepted  accounting
practices applied on a consistent basis, and (ii) all applicable requirements of
any  governmental  agency  having  jurisdiction  over  Borrower  or  any  of its
businesses.

                  (e) Borrower acknowledges that the placement of any additional
liens upon the Pledged Accounts described in the Credit Agreement may impair the
ability of Lender to obtain  assurance that its security  interest  remains in a
prior position and that the  Obligations  will be repaid in accordance  with the
Credit  Agreement.  Accordingly and to facilitate the purposes of this Agreement
and to avoid causing damage to Lender,  Borrower agrees that it shall not create
or suffer to be created any  additional  lien upon any of the  Pledged  Accounts
without Lender's prior written consent which will not be unreasonably withheld.

                  (f)  Upon  the  request  of  Lender,   execute  or  cause  the
execution,  acknowledgment and delivery of such further instruments  (including,
without limitation,  declarations of no set-off) and do such further acts as may
be necessary,  desirable or proper to carry out more effectively the purposes of
this Agreement or the other Credit Agreement.

                  (g) Not take any action  with  respect to any of the  security
for the Obligations held by Lender from time to time which is inconsistent  with
the provisions and the purpose of this Agreement or which would adversely affect
the rights of Lender under the Credit Agreement.

                                       17
<PAGE>
                  (h) Lender  shall have the right to make  reasonable  periodic
audits of Borrower's  books and records and those of the Project,  and to verify
the Pledged Accounts.

                  (i) Borrower  shall not use Lender's  name, or the name of any
of Lender's affiliates,  in connection with its business  activities,  except as
necessary  in  Borrower's   dealing  with   governmental   agencies,   financial
institutions, and Borrower's internal business matters.

                  (j) Borrower  shall supply  Lender on a monthly basis with all
forms of  Timeshare  Interest  inventory  reconciliation  reports  as Leader may
reasonably  require to insure that  Borrower's  Pledged  Accounts are consistent
with its available and unencumbered sales inventory.

         19. FINANCIAL STATEMENTS: REPORTS AND TAX RETURNS.

                  Audits, Tax Returns and Financial  Statements.  Borrower shall
furnish  to  Lender on an annual  basis  the audit of ILX  Resorts  Incorporated
within  ninety  (90)  days  after the end of its  fiscal  year.  Borrower  shall
additionally supply Lender with copies of the ILX Resorts  Incorporated  federal
income tax returns  within ten (10) days of the filing of same.  Borrower  shall
supply  evidence  of the  filing of tax  deadline  extensions  when  applicable.
Borrower  shall  supply  Lender  with copies of all other  records,  reports and
accountings  that  Lender may  reasonably  request.  Borrower  shall give Lender
prompt  notification  of  any  event  which  has,  or  the  commencement  of any
litigation which if adversely determined would have a material adverse effect on
Borrower's financial condition. On a quarterly basis, Borrower shall also supply
Lender with a copy of ILX Incorporated's internally prepared unaudited financial
and operating statement along with a certificate from Borrower's chief financial
officer  that said  statements  are true and correct  and have been  prepared in
accordance with GAAP.

         20. AUDIT.

         Lender shall have the right to inspect  and/or audit  Borrower's  books
and records at Borrower's  place of business during business hours upon ten (10)
days notice to Borrower.

         21. TIMESHARING INTEREST SALES PRICE LIST.

         Upon Lender's  request,  Borrower  shall provide  Lender with a current
Timesharing  Interests  sales price list and minimum sales prices  regarding the
sale of Timesharing Interests to third party retail purchasers.

         22. SERVICING REPORTS.

         Servicer  and/or  Borrower  shall provide Lender upon request by Lender
with copies of all reports  produced  by  Servicer  with  respect to the Pledged
Accounts.

         23. CROSS-DEFAULT.

         Any defaults under this loan or any other  obligation  from Borrower or
its affiliates to Lender or its  affiliates  shall be deemed a default under any
and/or all of the other loans or agreements  with Lender or its  affiliates  and
any  collateral  under any or all of the above shall be deemed to be  collateral
for the  others.  Lender,  at its  option  may  exercise  any of its  rights and
remedies under these  agreements to cure a default under any of

                                       18
<PAGE>
the agreements,  including but not limited to retention of and/or application of
payments on the Pledged Accounts, and/or any other collateral.

         24. DEFAULT.

         The  occurrence  of any  one or  more of the  following  events  and/or
occurrences shall constitute an "Event of Default" hereunder:

                  (a) Default in the  performance  of any obligation by Borrower
under any of the documents which constitute the Credit Agreement, whether or not
such default is with respect to the payment of money or otherwise;

                  (b)  Borrower's  failure to comply with the  provisions of any
financial covenant or any other covenant,  condition or obligation  contained in
the Credit Agreement;

                  (c) Any  warranty or  representation  contained  herein at any
time proves to be false or misleading in any respect;

                  (d) The levy of an attachment, execution or other such process
against  Borrower's  property  or any of its assets  with  respect to a claim or
claims  aggregating  $100, 000 or more and the failure by Borrower to obtain the
discharge  thereof or provide  adequate  bond  acceptable  to Lender as security
therefor within 30 days after attachment;

                  (e)  Default in the  performance  of any other  obligation  of
Borrower to Lender under any other agreement between Borrower and Lender;

                  (f) Borrower's entry into or granting of a general  assignment
for the benefit of its creditors,  the voluntary or involuntary appointment of a
receiver for all or substantially  all of its assets,  Borrower's  bankruptcy or
Borrower  admits in writing its  inability to make payments on its debts as they
mature;

                  (g) The  occurrence  of any  material  adverse  change  in the
financial conditions or operations of Borrower;

                  (h) The  occurrence  of a default  in the  performance  of any
other  payment  obligation  of  Borrower,  whether  owed to  Lender or any other
person,  firm, or entity, which default gives rise to a liability of $100,000.00
or more,  which  obligation  is not  contested  or  defended by Borrower in good
faith;

                  (i) The occurrence of a monetary event of default in any other
agreement material to Borrower's business to which Borrower is a party;

                  (j) The  occurrence of any event of default under this loan or
any other obligation from Borrower or its affiliates to Lender or its affiliates
shall be deemed a default  under any and/or all of the other loans or agreements
with Lender or its affiliates  and any collateral  under any or all of the above
shall be deemed to be  collateral  for the  others.  Lender,  at its  option may
exercise any of its rights and remedies under these agreements to cure a default
under any of the  agreements,  including  but not limited to retention of and/or
application of payments on the Pledged Accounts, and/or any other collateral.

                                       19
<PAGE>
                  Provided, however, that with regard to events referenced above
that do not involve  the payment of funds to Lender by Borrower  pursuant to the
Credit  Agreement,  it shall not be considered an event of default hereunder and
Lender shall not assert its remedies under this agreement  until Lender provides
Borrower  with notice of the  occurrence  of said event of default and  Borrower
fails to cure such  within  twenty (20) days after the receipt of said notice or
such longer  period of time as may  reasonably  be required due to the nature of
the event of default.

         25. REMEDIES.

         Upon the occurrence of any Event of Default, Lender may:

                  (a)  Declare  all  of  the  Obligations  immediately  due  and
payable;

                  (b) Commence  foreclosure or otherwise enforce Lender's rights
against any security  then held by Lender for the  Obligations  in such order as
Lender may determine;

                  (c)  Terminate  Lender's  agreement to make  further  Advances
under this Agreement;

                  (d) Offset any  indebtedness  from any  amounts  due  Borrower
under any other agreement between Borrower and Lender;

                  (e) Exercise any and all other rights  and/or  remedies  which
may be available to Lender either in law or at equity.

         Marshalling.  Borrower  specifically  waives,  to  the  fullest  extent
permitted  by  law,  any  right  to  require  marshalling  of any of the  assets
encumbered  to secure  the  Obligations  and to direct  the order in which  such
assets are sold.

         Disposition  of Proceeds.  Subject to the  provisions of all applicable
law, the net cash proceeds  resulting from the sale or other  disposition of all
or any part of the  security  held by Lender  shall be applied in the  following
order:  (i)  first,  to the costs and  expenses  (including  any  trustee's  and
attorney's  fees) of retaking,  holding,  storing,  processing and preparing for
sale, selling, collecting,  liquidating the Collateral securing the repayment of
the  Obligations  and the like,  including  all costs  associated  with work-out
negotiations,  litigation and bankruptcy  proceedings,  legal and administrative
costs;  (ii) then to the  satisfaction of the  Obligations,  with application to
principal,  interest,  charges  and  expenses  to be in such order and manner as
determined by Lender in its sole  discretion;  and (iii) then to satisfaction of
any  remaining  obligations  of  Borrower  hereunder.  Any  surplus  after  such
application  shall be delivered to Borrower,  and Borrower  shall be liable for,
and  shall  pay to  Lender  on  demand,  any  deficiency  remaining  after  such
application.

         Remedies  Cumulative.  The remedies  provided for herein are cumulative
and shall be in addition to any and all other  rights or remedies  provided  for
herein or at law or in equity  including  any banker's lien and right of offset.
The exercise of any right or remedy by Lender  hereunder  shall not constitute a
cure or waiver of any default in connection  with the Obligations nor invalidate
any notice of default or act done  pursuant to any such  notice,  nor  prejudice
Lender in the exercise of any of its other rights.

                                       20
<PAGE>
         26. MISCELLANEOUS.

                  (a)  Waiver.  No waiver by Lender of any  default or breach by
Borrower  hereunder shall be implied from any omission by Lender to take, or any
delay in  taking,  action on  account of such  default  other  than the  default
expressly  made the subject of the waiver and any such  express  waiver shall be
operative only for the time and to the extent therein stated.  Any waiver of any
covenant,  term or condition contained herein shall not be construed as a waiver
of any subsequent breach of the same covenant, term or condition. The consent or
approval by Lender to or of any act by  Borrower  requiring  further  consent or
approval  shall  not be deemed to waive or render  unnecessary  the  consent  or
approval to or of any subsequent similar act. Notwithstanding anything set forth
herein  to the  contrary,  if no notice  of a  default  or  waiver  is  required
hereunder and none has been given, Lender shall not be deemed to have waived any
rights which it may have hereunder until seven (7) days following  receipt by it
of written  notice from Borrower  alerting  Lender to the fact that the time for
exercising any right or remedy  hereunder has elapsed without  exercise  thereof
and such time for  exercise  shall  automatically  be extended to seven (7) days
following notice, said right shall conclusively be deemed to have been waived by
Lender. The intent of this paragraph is to avoid unintentional waivers by Lender
of any of its rights hereunder.

                  (b) No Duty of Lender.  Nothing in this Agreement shall impose
or imply any duty or  obligation  whatsoever  upon  Lender,  and Lender shall be
under no duty to take any action to preserve  rights of Borrower with respect to
any of the security held by Lender for the Obligations.  Borrower waives any and
all impairment of recourse and/or impairment of collateral defenses which it may
possess against the Lender.

                  (c) Amendment. The Agreement and the Credit Agreement, and the
terms of each of them, is the entire  agreement  between the parties and may not
be changed,  waived,  discharged or terminated orally, but only by an instrument
or instruments  in writing signed by the party against which  enforcement of the
change, waiver, discharge or termination is asserted.

                  (d)  Indemnification.  To the fullest extent permitted by law,
Borrower agrees to indemnify and hold harmless  Lender,  and Lender's  officers,
directors,   shareholders,   agents,   attorneys  and  employees   (collectively
"Indemnitee"),  from and against any and all liability,  loss, damage,  costs or
expense,  including  court  costs  and  attorney's  fees,  that  Indemnitee  may
hereafter suffer,  incur, pay or lay out or in any manner be held liable for, by
reason of any breach,  default,  misstatement or misrepresentation of any of the
statements,  warranties or  representations  of Borrower contained in the Credit
Agreement  or any  related  agreement,  or by reason of any breach or default by
Borrower, or any of Borrower's employees, officers or agents, in the performance
of any  duties,  covenants  or  obligations  arising  under this or any  related
agreement.  In this  connection,  but  without  limitation,  Borrower  agrees to
reimburse  any  Indemnitee  promptly upon demand for any payments made or losses
suffered by such person with respect to any liability,  damage, loss or claim to
which the foregoing indemnity relates.

                  (e)  Notices.  Any  notice,  demand  or  request  which may be
permitted,  required or desired to be given in connection  herewith  shall be in
writing and directed to the parties at the respective  addresses set forth below
(or at such other  addressed  as a party  hereto may  designate  in writing) and
shall be  tendered  by  personal  delivery  or by  facsimile  transmission  with
verifiable  transmission capability or be deposited in the U.S. mail, registered
or certified, return receipt requested. Such notice, if forwarded by mail, shall
be deemed effective  seventy-two (72) hours after deposited in the U.S. mail, or
if personally  delivered,  upon  delivery.  A registered  mail or certified mail
receipt  will be prima facie  evidence of the giving of such notice and the date
thereof.  If such notice is  personally  served,  such notice shall be effective
upon delivery or if such notice is sent by facsimile  transmission,  such notice
shall be effective upon the completion of the  transmission of the same (so long
as the sender retains evidence of the recipient's(s') receipt).

                                       21
<PAGE>
                  If to Borrowers:    ILX Incorporated
                                      2111 East Highland, Suite 210
                                      Phoenix, AZ 85016
                                      Attention: Nancy J. Stone
                                      Facsimile: 602-957-2780

                                      Los Abrigados Partners Limited Partnership
                                      2111 East Highland, Suite 210
                                      Phoenix, AZ 85016
                                      Attention: Nancy J. Stone
                                      Facsimile: 602-957-2780

                                      ILE Sedona Incorporated
                                      2111 East Highland, Suite 210
                                      Phoenix, AZ 85016
                                      Attention: Nancy J. Stone
                                      Facsimile: 602-957-2780

                                      VCA Tucson Incorporated
                                      2111 East Highland, Suite 210
                                      Phoenix, AZ 85016
                                      Attention: Nancy J, Stone
                                      Facsimile: 602-957-2780


                                      VCA South Bend Incorporated
                                      2111 East Highland, Suite 210
                                      Phoenix, AZ 85016
                                      Attention: Nancy J. Stone
                                      Facsimile: 602-957-2780

                                      Premiere Development Incorporated
                                      2111 East Highland, Suite 210
                                      Phoenix, AZ 85016
                                      Attention: Nancy J. Stone
                                      Facsimile: 602-957-2780

                  With a Copy To:     General Counsel
                                      ILX Incorporated
                                      2111 East Highland, Suite 210
                                      Phoenix, AZ 85016
                                      Facsimile: 602-957-2780

                                       22
<PAGE>
                  If to Lender:       Litchfield Financial Corporation
                                      13701 West Jewell Avenue
                                      Lakewood, CO 80228
                                      Attention: Wayne M. Greenholtz,
                                      Senior Vice President
                                      Facsimile: 303-985-5375

                  With a copy to:     Litchfield Financial Corporation
                                      789 Main Road
                                      Stamford, VT 05352
                                      Attention: Jim Shippee
                                      Facsimile: 802-694-1237

                  With a copy to:     Heartsill Ragon III
                                      Gill Law Firm, P.A.
                                      3801 TCBY Tower
                                      Little Rock, Arkansas 72201
                                      Facsimile: 501-372-3359

                  Nothing herein  contained shall be construed as preventing the
                  parties hereto, respectively, from changing the place to which
                  notice shall be  addressed,  but no such change shall be valid
                  unless  it is  given  in  accordance  with  the  terms of this
                  paragraph.

                  (f) Attorney's Fees. After an Event of Default, Borrower shall
promptly  indemnify and hold harmless the Lender and its  successors and assigns
from and against all reasonable and necessary legal fees and related costs which
are incurred by Lender  and/or its  successors  and assigns  which pertain to or
arise from participation in "work-out" or similar  discussions and negotiations,
participation  in  all  litigation  or  bankruptcy  proceedings  and  all  other
discussions,  negotiations or involvement associated with the enforcement of the
Credit  Agreement  or  Lender's  attempts  to  realize  and  foreclose  upon the
Collateral.

                  (g) Binding Effect; Assignment. This Agreement may be assigned
by Lender.  Borrower may not assign its interest in, or obligation  under,  this
Agreement  except with the written  consent of Lender.  Subject to the forgoing,
all of the terms, covenants,  conditions,  representations and warranties hereof
shall inure to the benefit of, and be binding upon,  the  successors and assigns
of Lender and Borrower. Borrower hereby consents to the Collateral Assignment of
Lender's  interests in and to the Credit  Agreement to third party  creditors of
Lender without the need for any further  consent of whatever nature by Borrower.
Should  Lender's  assignee  assume  rights  under the Credit  Agreement,  Lender
covenants  and agrees that it will  continue to perform the Credit  Agreement in
accordance with its terms and condition and shall recognize said assignee as the
lawful and enforceable successor in interest to Lender.

                  (h) Interpretation and Venue. This Agreement shall be governed
and interpreted  under Colorado law.  Whenever the context  requires,  all words
used in the singular will be construed to have been used in the plural, and vice
versa,  and each  gender  will  include any other  gender.  The  captions of the
paragraph of this Agreement are for convenience  only and do not define or limit
any terms or  provisions.  Time is of the  essence  in the  performance  of this
Agreement by Borrower.  The  invalidity or  unenforceability  of any one or more
provisions of this Agreement will in no way affect any other provision.

                  (i) Preparation of Agreement.  The parties hereto  acknowledge
that  this  Agreement  has  been  negotiated  and  prepared  in  an  arms-length
transaction  and that both Lender and  Borrower  have  negotiated  all

                                       23
<PAGE>
the terms contained  herein.  Accordingly,  the parties agree that neither party
shall be deemed to have drafted the  Agreement  and the  Agreement  shall not be
interpreted against either party as the draftsman.

                  (j) Other Acts and  Documents.  The parties agree to undertake
such other acts and execute such other documents as may be reasonably  necessary
to effect the purpose and intent of this Agreement.

                  (k) Merger.  This Agreement  represents the culmination of all
prior  negotiations,  representations,  and agreements  between the parties with
respect  to  the  purchase  and  sale  contemplated   hereby.   All  such  prior
negotiations, representations, and agreements are merged herein.

                  (1) Advice of Counsel.  Each party  acknowledges  to the other
that  such  party has been  advised  by legal  counsel  in  connection  with the
negotiation and execution of this Agreement and that each party  understands the
terms  and  conditions  contained  herein  and that each has  entered  into this
Agreement voluntarily.

                  (m) JURY WAIVER.  BORROWER  HEREBY  WAIVES ITS RIGHT TO A JURY
TRIAL IN THE EVENT OF ANY DISPUTE OR LITIGATION  ARISING  HEREUNDER OR UNDER ANY
RELATED DOCUMENT EXECUTED IN CONNECTION HEREWITH.

                  (o) Accounting  Terms.  All accounting  terms not specifically
defined herein shall be construed in accordance with GAAP. When used herein, the
term "financial statement" shall include all notes and schedules thereto.

                  (p)  Construction.  Unless the  context  of any this  document
clearly  requires  otherwise,  references  to the plural  include the  singular,
references  to the  singular  include the plural,  the term  "including"  is not
limiting, and the term "or" has, except where otherwise indicated, the inclusive
meaning  represented  by the  phrase  "and/or".  The words  "hereof,"  "herein,"
"hereby,"  "hereunder,"  and  similar  terms  in this  Agreement  refer  to this
Agreement  as a whole and not to any  particular  provision  of this  Agreement.
Section, paragraph,  exhibit and similar references are to this Agreement unless
otherwise specified.  Any reference in this agreement to the Credit Agreement or
any other  Agreement to which Lender and Borrower are a party shall  include all
alterations,   amendments,   changes,   extensions,   modifications,   renewals,
replacements, substitutions and supplements thereto.

                  (q) Schedules and Exhibits.  All of the schedules and exhibits
attached  to  this  Agreement  shall  be  deemed  incorporated  herein  by  this
reference.

                  (r) Amendment and Restatement.  It is recognized and agreed by
and between Lender and Borrower that this document  constitutes an amendment and
restatement of the terms and  conditions of that certain  Secured Line of Credit
Lending  Agreement  entered into between said parties on or about April 9, 1996.
As evidenced by the signatures of the Borrower below,  the Borrower  jointly and
severally do hereby  covenant and agree that the Credit  Agreement,  as amended,
continues to remain in full force and effect and free from all  counterclaim  or
set off rights or other defenses to payment of every nature.

                   (Signature Blocks Found on Following Page)

                                       24
<PAGE>
         IN WITNESS WHEREOF,  the parties hereto have executed this Agreement on
the day and year set forth above.

                                               LENDER:

                                               LITCHFIELD FINANCIAL CORPORATION

                                               By: /s/ Wayne M. Greenholtz
                                                   -----------------------------
                                                   Wayne M. Greenholtz,
                                                   Senior Vice President

                                               BORROWER:

                                               ILX RESORTS INCORPORATED

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

                                               ILE SEDONA INCORPORATED

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

                                               LOS ABRIGADOS PARTNERS
                                               LIMITED PARTNERSHIP
                                               By: ILE Sedona Incorporated,
                                                   General Partner
                                                   By: /s/ Joseph P. Martori
                                                      --------------------------
                                                   Title: Chairman
                                                         -----------------------

                                               VCA TUCSON INCORPORATED

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

                                               VCA SOUTH BEND INCORPORATED

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

                                               PREMIERE DEVELOPMENT INCORPORATED

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

                                       25