Exhibit 10.1










                           PURCHASE AND SALE AGREEMENT
                                       FOR
                                 121 PORTAL LANE
                                 SEDONA, ARIZONA
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                                LIST OF EXHIBITS


EXHIBIT        DESCRIPTION
-------        -----------

A              Property Legal Description

B              Existing Title Policy

C              New Lease
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                                TABLE OF CONTENTS

PURCHASE AND SALE AGREEMENT....................................................1

PRICE AND TERMS................................................................1

SECTION 1.  SALE AND PURCHASE..................................................2

SECTION 2.  PURCHASE PRICE: EARNEST MONEY......................................2

SECTION 3.  TITLE INSURANCE....................................................3

SECTION 4.  LOAN...............................................................3

SECTION 5.  DUE DILIGENCE......................................................4

SECTION 6.  PRORATIONS.........................................................4

SECTION 7.  REPRESENTATIONS AND WARRANTIES.....................................4

SECTION 8.  CLOSE OF ESCROW....................................................7

SECTION 9.  "AS IS CONDITION.".................................................8

SECTION 10. NOTICES............................................................8

SECTION 11. COMMISSIONS........................................................8

SECTION 12. SUCCESSORS AND ASSIGNS.............................................9

SECTION 13. REMEDIES...........................................................9

SECTION 14. CONDEMNATION/CASUALTY.............................................10

SECTION 15. INSPECTIONS AND DOCUMENTS.........................................11

SECTION 16. LEASEBACK.........................................................11

SECTION 17. MISCELLANEOUS.....................................................11

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                           PURCHASE AND SALE AGREEMENT

         This Purchase and Sale Agreement  ("Agreement")  is made with reference
to the following  definitions and terms, subject to such further  qualifications
as are expressly hereinafter set forth:

Name & Address     121 Portal Lane
of Property:       Sedona, Arizona

Agreement Date:    March 15, 2002

Seller Notice Address:        Name:  ILX Resorts Incorporated,
                                     an Arizona corporation
                           Address:  2111 E. Highland, Suite 210
                                     Phoenix, AZ 85016
                         Telephone:  (602) 957-2777
                         Facsimile:  (602) 957-2290

Buyer Notice Address:         Name:  Edward John Martori, a married man
                                     dealing with his sole and separate property
                                     c/o Joseph P. Martori
                           Address:  2111 E. Highland, Suite 210
                                     Phoenix, AZ 85016
                         Telephone:  (602) 957-2777
                         Facsimile:  (602) 957-2290

                                 PRICE AND TERMS

A.   PURCHASE  PRICE:  $1,650,000.00  ("Purchase  Price")  payable  by  Buyer at
     closing.

B.   OPENING OF ESCROW:  That date on which Buyer deposits with Escrow Agent all
     originals of this Agreement fully executed by Buyer and Seller ("Opening of
     Escrow Date")

C.   CLOSING DATE (SEE ALSO SECTION 8.1): On or before March 25, 2002.

D.   PERSONAL  PROPERTY:  This Agreement  includes none of the personal property
     owned by Seller  located on the Property  and used in the  operation of the
     Property as of the Agreement Date.

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E.   ESCROW AGENT:

     Jeannie Larson
     Pioneer Title
     112 N. Elden Street
     Flagstaff, AZ 86001
     Phone: (928) 779-0371
     Facsimile: (928) 779-4112

F.   TITLE COMPANY: Pioneer Title Agency, Inc. as agent for Stewart Title.

G.   BROKERS (SEE SECTION 11).

SECTION 1. SALE AND PURCHASE.

     1.1 PROPERTY.  Seller agrees to sell,  convey and assign to Buyer and Buyer
agrees to purchase and accept from Seller, for the Purchase Price and subject to
the terms and  conditions  herein set forth,  Seller's  entire right,  title and
interest in and to the real  Property  legally  described  in Exhibit A attached
hereto and further described below  (collectively the "PROPERTY").  The Property
includes no Personal Property.

     1.2 TITLE COMMITMENT.  Attached as Exhibit B is a copy of the Stewart Title
policy of Title Insurance (Title Policy) issued to Seller and dated December 21,
2000. The sale of this Property is subject to the matters shown in Schedule B of
the  Title  Policy  plus  the Loan (as  defined  in  Section  4);  zoning  laws,
restrictions,   stipulations,   subdivision   regulations  and  other  laws  and
ordinances regulating the use of or improvements to the Property.

SECTION 2. PURCHASE  PRICE:  EARNEST MONEY.  The Purchase Price shall be paid as
follows:

     2.1 EARNEST MONEY. There shall be no earnest money.

     2.2 ESCROW AGENT. The parties hereby  designate  Jeannie Larson and Pioneer
Title  Agency,  Inc.  (as agent for Stewart  Title) as the Escrow  Agent and the
Title Company, respectively.

     2.3 CLOSING FUNDS.  The cash funds necessary to close escrow (plus or minus
prorations  and credits as  expressly  provided for in Section 6 below) shall be
paid at Closing by Buyer in immediately  available  funds, by cashier's check or
federal wire transfer to the Escrow Agent  pursuant to  instructions  consistent
with this Agreement. The Closing Funds shall be adjusted for the following:

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     (a.) The outstanding balance,  including principal and interest, due on the
Loan as of the Close of Escrow.

     (b.) The amount of  $700,000  which is an amount  Seller owes Buyer under a
separate and distinct existing  Promissory Note (Note). Upon the Close of Escrow
the Note shall be marked "Paid in Full" and returned by Buyer to Seller.

     2.4 ESCROW AGENT DUTIES.  The parties  acknowledge that the Escrow Agent is
acting solely as a stakesholder at their request and for their convenience; that
the Escrow  Agent shall not be deemed to be the agent of either of the  parties;
and that the Escrow  Agent  shall not be liable to either of the parties for any
action or omission on its part taken or made in good faith, and not in disregard
of this Agreement,  but shall be liable for its negligent acts and for any loss,
cost or expense  incurred by Seller or Buyer  resulting  from the Escrow Agent's
mistake  of law  respecting  the  scope  or  nature  of  Escrow  Agent's  duties
hereunder.  Seller and Buyer shall jointly and severally  indemnify and hold the
Escrow Agent harmless from and against all costs, claims and expenses, including
reasonable  attorneys' fees,  incurred in connection with the performance of the
Escrow  Agent's  duties  hereunder,  except with respect to actions or omissions
taken or made by the Escrow Agent in bad faith,  in disregard of this  Agreement
or involving negligence on the part of the Escrow Agent.

SECTION 3. TITLE INSURANCE.

     3.1 TITLE  COMMITMENT.  Buyer accepts that it will receive the Title Policy
with the  Exceptions  reflected in Exhibit B to this Agreement plus an exception
reflecting the Loan.

     3.2 NO ADDITIONAL  LIENS.  Seller shall not place,  permit,  or cause to be
placed any liens or  encumbrances  on the title to the Property from the date of
this Agreement through Close of Escrow. If Seller places,  permits,  or causes a
lien or  encumbrance  on the Real  Property,  contrary to the provisions of this
Agreement,  which can be removed by the payment of money, Escrow Agent is hereby
expressly  authorized,  directed,  and instructed to pay such monies in order to
remove the lien or encumbrance at Close of Escrow from monies otherwise  payable
to Seller at Close of Escrow, and the net proceeds otherwise available to Seller
at Close of Escrow shall be reduced accordingly.

SECTION 4. LOAN.  The  property is subject to an existing  Loan in the amount of
approximately  $808,000 with Firstar Bank (Lender) as the holder of a first deed

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of trust on the  Property.  Buyer  will take  title  subject  to the Loan of the
Lender.  The  approximately  balance of the Loan at the Close of Escrow  will be
$795,000.  The Loan is due and payable on February 15, 2011.  At that time Buyer
shall make  arrangements  on its own to secure a new loan to pay off any balance
owed on the Loan.  Any new lender will enter into a Recognition  and  Attornment
Agreement with Seller (as Tenant) in a form reasonably acceptable to Buyer.

SECTION 5. DUE DILIGENCE. Buyer has performed its Due Diligence on the Property.

SECTION 6. PRORATIONS.

     6.1 SETTLEMENT STATEMENT. Escrow Agent shall prepare a pro forma settlement
statement and circulate same to the parties at least two (2) business days prior
to the Closing Date reflecting all proposed  prorations for mutual review by the
parties.

     6.2  TAXES  AND  ASSESSMENTS.  There  shall be no  proration  of taxes  and
assessments  since the  Seller,  as the tenant  under the Lease  referred  to in
Section 16, is responsible for payment of all taxes and assessments.

     6.3  ESCROW/TITLE/RECORDING  FEES. All escrow fees and recording fees shall
be shared equally by Buyer and Seller  provided,  however,  Seller shall pay for
the cost of recording the Warranty Deed.  Seller shall pay all fees and premiums
with  respect  to  issuance  of  preliminary  title  reports,   title  insurance
commitments and standard coverage owner's title insurance policy to be issued to
Buyer. Subject to compliance at Buyer's expense with all additional requirements
of Escrow Agent (subject to the good faith  cooperation of Seller regarding such
additional  requirements),  Buyer may request the issuance at Close of Escrow of
an extended  coverage  owner's  policy of title  insurance in lieu of that to be
provided by Seller hereunder.  Buyer shall be responsible for any excess premium
over standard coverage  required for extended coverage title insurance,  for the
cost of all endorsements, and for any lender's policy of title insurance.

     6.4  DEDUCTIONS AND DEPOSITS.  All closing costs and  prorations  otherwise
payable by Seller shall be deducted from  Seller's  proceeds at Close of Escrow.
Buyer  agrees to deposit with Escrow Agent an amount in addition to the Purchase
Price  sufficient  to pay all  closing  costs and  prorations  payable  by Buyer
hereunder.  Seller shall be responsible to pay, and there shall be deducted from
Seller's  proceeds at the Close of Escrow,  any and all prepayment  penalties or
other charges to pay off any existing loans on the Property.

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SECTION 7. REPRESENTATIONS AND WARRANTIES.

     7.1 BY BUYER.

     (a) This Agreement  constitutes a valid and legally  binding  obligation of
Buyer,  enforceable in accordance  with its terms.  Buyer will provide to Escrow
Agent and seller any  documents  reasonably  required by Escrow Agent  regarding
Buyer's  authority to enter into and close the transaction  contemplated by this
Agreement.

     (b) There are no legal or  administrative  proceedings  pending  or, to the
best of Buyer's  knowledge,  threatened  against or  affecting  Buyer that would
affect  Buyer's  legal  authority  or  financial  ability  to  comply  with this
Agreement and close the  transaction  described  herein in  accordance  with the
terms hereof.

     7.2 BY SELLER. Seller represents and warrants to Buyer as follows:

          (a) Seller, and each of the persons executing this Agreement on behalf
of Seller,  represent  and warrant that this  Agreement  constitutes a valid and
legally binding obligation of Seller,  enforceable in accordance with its terms.
Seller will provide to Escrow Agent and Buyer any documents  reasonably required
by  Escrow  Agent  regarding  Seller's  authority  to enter  into and  close the
transaction contemplated by this Agreement.

          (b)  Seller,  to the  best  of its  actual  knowledge  represents  and
warrants to Buyer as follows:

               (i) Seller has received no notice of  litigation,  including  any
action of condemnation  or eminent domain,  or violations of law, that would run
with the Property as of the Closing Date.

               (ii) There are no legal or administrative proceedings pending or,
to the best of Seller's  knowledge,  threatened against or affecting Seller that
would affect Seller's legal  authority or financial  ability to comply with this
Agreement and close the  transaction  described  herein in  accordance  with the
terms hereof.

               (iii) Seller has not disposed of or stored on the Property or any
part thereof any  "hazardous  material" as defined  below.  For purposes of this
Agreement, "hazardous material" means and includes any petroleum product and any
hazardous  substance or any pollutant or contaminant  defined as such in (or for
purposes  of)  the  Comprehensive   Environmental  Response,   Compensation  and

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Liability  Act,  any  so-called   "Superfund"  or  "Superlien"  law,  the  Toxic
Substances  Control  Act, or any other  federal,  state or local  statute,  law,
ordinance, code, rule, regulation,  order or decree regulating,  relating to, or
imposing  liability or standards of conduct  concerning any hazardous,  toxic or
dangerous waste,  substance or material, or any substance or compound containing
PCB's, or any other hazardous,  toxic or dangerous waste, substance or material.
Seller is not aware of any  environmental  issues which are not disclosed in the
Property condition report.

               Seller hereby  indemnifies  Buyer and agrees to pay, defend,  and
hold Buyer harmless from and against any and all losses,  liabilities,  damages,
injuries,  costs,  expenses,  and  claims  of any  and  every  kind  whatsoever,
including reasonable  attorneys' fees paid, incurred or suffered by, or asserted
against,  Buyer for, with respect to, or as a direct or indirect  result of, the
presence  on or under the  Property,  as of Close of  Escrow,  of any  hazardous
material, or the escape, seepage,  leakage,  spillage,  discharge,  emission, or
release  from  the  Property  into or upon  any  land,  the  atmosphere,  or any
watercourse,  body of water, or wetland of any hazardous material present on the
Property  as of Close of Escrow,  including,  without  limitation,  any  losses,
liabilities,  damages,  injuries, costs, expenses, or claims asserted or arising
under the Comprehensive Environmental Response,  Compensation and Liability Act,
any so-called  "Superfund" or "Superlien"  law, or any other federal,  state, or
local  statute,  law,  ordinance,  code,  rule,  regulation,   order  or  decree
regulating,   relating  to,  or  imposing  liability  or  standards  of  conduct
concerning any hazardous material.

          (c) Through the Close of Escrow,  Seller shall  maintain  property and
casualty  insurance in force on the Property  with policy limits of at least One
Million Dollars ($1,000,000.00).

          (d) Except as  disclosed  to Buyer in  writing,  Seller  does not have
knowledge  of  any  condemnation,   environmental,   zoning  or  other  land-use
regulation proceedings,  either instituted,  or planned to be instituted,  which
would  materially  affect the use and operation of the Property for its intended
purpose  or the value of the  Property,  nor has Seller  received  notice of any
special assessment proceedings affecting the Property.

          (e) At the time of  Close  of  Escrow,  there  will be no  outstanding
contracts  made by Seller for any  improvements  to the Property  which have not
been fully paid for and Seller shall cause to be  discharged  all  mechanics' or
materialmens'  liens  arising  from any  labor  or  materials  furnished  to the
Property  prior to the time of Close of Escrow  other  than  those  relating  to
obligations of Buyer hereunder.

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          (f) Seller will make available to Buyer at Seller's address  indicated
on page 1 hereof all of Seller's files and records relating to the Property.

          (g) There are no sites of historical or  archaeological  importance on
the  Property  that in any way would  impede,  curtail,  limit,  or restrict the
development of the Property.

          (h) There are no  leases  on the  Property  and will be none as of the
Close of Escrow, except a lease between Buyer as landlord and Seller as tenant.

     7.3. SURVIVAL.  All representations,  warranties and indemnifications given
by either party hereto  under this  Agreement  are true on and as of the date so
made, will be true in all material  respects as of the Close of Escrow and shall
survive  the Close of Escrow and  execution,  delivery  and  recordation  of the
Warranty Deed. In the event that any  representation or warranty is untrue,  the
other party shall have all rights and remedies available at law, in equity or as
provided in this Agreement.

SECTION 8. CLOSE OF ESCROW.

     8.1 DOCUMENTS.  Buyer and Seller shall pay all monies,  execute and deposit
all documents, and complete all other obligations required hereunder in order to
consummate  the purchase and sale of the Property on or before the Closing Date.
On the Closing  Date, as a condition of Closing,  Escrow Agent shall record,  or
cause to be  recorded,  all  necessary  documents,  issue  its  policy  of title
insurance,  and otherwise  accomplish the  provisions  hereof so as to close the
transaction  contemplated  hereby (herein sometimes referred to alternatively as
the  "Closing," or "Close of Escrow").  At the Closing,  Seller shall deliver or
cause to be delivered  the  following  properly  executed  and (where  required)
acknowledged documents:

          8.1.1 A Warranty Deed for the Property in the Arizona  statutory form,
subject only to (i) the title exceptions reflected in Schedule B of Exhibit B to
this to this Agreement and the Loan in the approximate amount of $795,000.

          8.1.2 A Certification of Non-Foreign Status stating,  under penalty of
perjury,  that  Seller is not a  "foreign  person"  as that term is  defined  in
Section 1445 of the Internal Revenue Code of 1986, as amended.

     8.2 FUNDS.  At the  Closing,  Buyer shall  deliver or cause to be delivered
funds  sufficient to close the  transaction  contemplated  hereby,  by cashier's
check or federal wire transfer of funds to Escrow Agent pursuant to instructions
given by Escrow Agent.

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     8.3 OTHER  DOCUMENTS.  The parties  shall  tender at the Closing such other
documents as may be reasonably necessary or appropriate to complete the Closing.

     8.4  RECORDATION.  All of the above  documents  will be delivered to Escrow
Agent as closing agent, which shall record the documents to be recorded, deliver
to Seller by cashier's check or wire transfer Seller's proceeds of Closing,  and
deliver the documents which are not to be recorded,  only when the Title Company
is prepared  to issue to Buyer the  Owner's  Title  Policy  subject  only to the
Permitted Exceptions.

     8.5 POSSESSION.  Upon recording of the Warranty Deed,  Seller shall deliver
to Buyer possession of the Property, subject only to the Permitted Exceptions.

     8.6  FURTHER  ACTS.  In addition  to the acts and  agreements  of Buyer and
Seller described herein, Buyer and Seller shall perform,  execute and deliver or
cause to be  performed,  executed  and  delivered  any and all further  acts and
agreements as Escrow Agent may reasonably  request to consummate the transaction
contemplated herein. This provision shall survive the Closing.

SECTION 9. "AS IS  CONDITION."  Buyer  shall  accept the  Property in an "AS IS"
condition as long as the Property is in the same  condition at the Closing as at
the end of the Due Diligence Period.

SECTION 10.  NOTICES.  Any notice  required or  permitted to be given under this
Agreement  must be in  writing  and  given by (a)  facsimile  transmission;  (b)
depositing  same  in the  United  States  mail,  addressed  to the  party  to be
notified,  postage  prepaid and  registered  or  certified  with return  receipt
requested;  (c) delivering  same in person to such party; or (d) depositing same
into the custody of a nationally recognized overnight delivery service addressed
to the party to be notified.  In the event of mailing,  notices  shall be deemed
effective  three (3) days after  posting;  in the event of  overnight  delivery,
notices shall be deemed  effective on the next  business day  following  deposit
with the delivery  service;  in the event of personal  service,  notice shall be
deemed effective when delivered;  in the event of facsimile  transmission,  upon
receipt (a written confirmation of successful transmission from the transmitting
facsimile  machine being prima facie evidence of such receipt).  For purposes of
notice, the addresses of the parties shall be as follows:

     If to Buyer, to:                   The address shown on Page 1 hereof

     If to Seller, to:                  The address shown on Page 1 hereof

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     With a copy to:                    Al Spector, Esq.
                                        Spector Law Offices, P.C.
                                        4020 N. Scottsdale Road, Suite 300
                                        Scottsdale, AZ 85251
                                        Telephone: (480) 941-0221
                                        Facsimile: (480) 990-9093

From time to time,  either party may designate  another or additional  addresses
for all purposes of this  Agreement by giving the other party no less than three
(3) business days' advance  notice of such change of address in accordance  with
the notice provisions hereof.

SECTION 11. COMMISSIONS.  Buyer and Seller each represent to the other that each
has not retained any real estate broker or any party entitled to a commission or
broker's fee in connection with the sale of the Property by Seller to Buyer, and
Buyer and Seller  each agree to  indemnify,  protect,  defend and hold the other
harmless  for,  from and against any  expense,  including,  without  limitation,
attorneys' and accountants' fees, claims,  actions, suits or demands for payment
of any commission, finder's fee or other sum initiated by any broker, commission
agent or other  person  which such party or its  representatives  has engaged or
retained.  Notwithstanding  anything  in this  Agreement  to the  contrary,  the
representations  and  indemnities  set forth in this paragraph shall survive any
termination of this Agreement.

SECTION 12. SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit of
and be  binding  on  the  parties  hereto  and  their  respective  heirs,  legal
representatives,  successors and assigns.  Notwithstanding the foregoing,  Buyer
shall have the right,  without the consent of Seller, to assign its rights under
this  Agreement  to  any  corporation,   partnership,   or  entity  controlling,
controlled  by, or under  common  control  with  Buyer,  or in which  Buyer is a
partner or member (which right shall  include,  but not be limited to, the right
to designate any such corporation,  partnership,  or entity as the party to take
title to the  Property  upon  Close of  Escrow).  Upon  any such  assignment  or
designation, the corporation,  partnership, or other entity to which such rights
are  assigned  (or which is  designated  to take  title to the  Property)  shall
succeed to all of Buyer's rights and  obligations,  and from the date of Buyer's
written notice to Seller of such  assignment or  designation,  all references in
this  Agreement to Buyer shall be deemed  thereafter  to be  references  to such
corporation,  partnership,  or other  entity.  Any other  assignment  of Buyer's
interest herein shall be subject to the prior written approval of Seller,  which
approval shall not be unreasonably withheld.

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SECTION 13. REMEDIES.

     13.1 BUYER DEFAULT.  If Buyer fails for any reason to close the transaction
described  herein or  otherwise  defaults in the payment or  performance  of any
obligation  set forth  herein,  Seller  shall give Buyer  written  notice of the
default.  If Buyer has not completely cured the default within five (5) business
days after the date of  Seller's  notice,  then  Seller  shall have the right to
terminate  this  Agreement by giving Buyer and the Escrow Agent  written  notice
thereof, in which event Seller shall be entitled to retain, as Seller's sole and
exclusive remedy, as liquidated damages, and not as a penalty, the Earnest Money
and all interest earned thereon;  such amounts shall be released from escrow and
delivered  immediately to Seller by the Escrow Agent without further instruction
from  Seller or Buyer,  and  neither  party  shall have any  further  obligation
whatsoever to the other.  Seller and Buyer  acknowledge  and agree that Seller's
damages in the event of any such  default or breach by Buyer would be  difficult
or  impossible  to determine  and that under the  circumstances  existing on the
Contract Date, the amount of the Earnest Money and interest  thereon is the best
and most  accurate  estimate  by the parties of the  damages  that Seller  would
suffer in the event of any such default or breach.

     13.2 SELLER  DEFAULT.  If Seller fails to perform any of its obligations or
agreements hereunder,  Buyer shall give Seller written notice of the default. If
Seller has not completely  cured the default within five (5) business days after
the date of Buyer's  notice,  then Buyer may (i)  terminate  this  Agreement  by
notifying  Seller  thereof,  in which event the Earnest  Money and all  interest
earned thereon shall be returned to Buyer; or (ii) bring legal action to enforce
specific performance of this Agreement.

     13.3 NO FURTHER DUTIES.  If Buyer  terminates this Agreement  pursuant to a
right granted to Buyer under this Agreement, neither party hereto shall have any
further rights,  duties or obligations  hereunder (except as otherwise expressly
provided  in this  Agreement)  and the  Earnest  Money and all  interest  earned
thereon shall be returned by Escrow Agent to Buyer.

     13.4  POST  CLOSING  DEFAULT.  In the  event  that  after  Closing  a party
("Defaulting  Party") breaches an obligation hereunder which is expressly stated
herein to survive  Closing,  the  Defaulting  Party shall be liable to the other
party  ("Non-Defaulting  Party") for the damages incurred by the  Non-Defaulting
Party as a result of such breach.

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SECTION 14. CONDEMNATION/CASUALTY.

     14.1  CONDEMNATION.  In the event that all or any  Substantial  Portion (as
defined in Section  14.3 below) of the Property is condemned or taken by eminent
domain  prior to Closing or conveyed in lieu  thereof,  Seller  shall give Buyer
written notice  thereof and Buyer may, at its option,  either (i) terminate this
Agreement by written  notice  thereof to Seller  within five (5)  business  days
after Seller notifies Buyer of such condemnation or conveyance;  or (ii) proceed
to close the purchase of the  Property  pursuant to the terms  hereof.  If Buyer
elects option (i) above,  Buyer shall receive an immediate refund of the Earnest
Money and all interest earned thereon.  If Buyer elects option (ii) above, Buyer
shall receive the condemnation  proceeds or a reduction in the Purchase Price of
an equal amount.  In the event Buyer fails to timely  deliver  written notice of
termination  as  described  in option (i) above,  Buyer  shall be deemed to have
elected option (ii) above.

     14.2  CASUALTY.  In the event  that all or any  Substantial  Portion of the
Property is damaged or  destroyed  by fire or other  casualty  prior to Closing,
Buyer may, at its option,  either (i) terminate this Agreement by written notice
thereof to Seller within five (5) business days after Seller  notifies  Buyer of
the casualty;  or (ii) proceed to close the purchase of the Property pursuant to
the terms hereof. If Buyer elects option (i) above, Buyer shall receive a refund
of the Earnest  Money and all interest  earned  thereon.  If Buyer elects option
(ii) above,  Seller shall deliver to Buyer at the Closing all insurance proceeds
actually  received by Seller arising from such casualty and  attributable to the
Property and/or assign to Buyer all of Seller's right, title and interest in any
claim under any  applicable  insurance  policies with respect to such  casualty,
there shall be no  reduction in the  Purchase  Price and Seller shall  cooperate
with Buyer in its  efforts to be paid  insurance  proceeds.  In the event  Buyer
fails to timely deliver written notice of termination as described in option (i)
above, Buyer shall be deemed to have elected option (ii) above.

     14.3  SUBSTANTIAL  PORTION.  For purposes of this Section 14, a Substantial
Portion of the Property  shall mean any taking or casualty loss which  decreases
the  value  of the  Property  by Fifty  Thousand  Dollars  ($50,000.00)  or more
("Substantial Portion"). If, within ten (10) business days after Seller's notice
to Buyer described above,  Seller and Buyer are unable to reasonably agree after
good  faith  efforts  upon  whether  the  taking or  casualty  loss  involves  a
Substantial  Portion of the Property,  then this Agreement  shall be deemed null
and void and the Earnest  Money and all  interest  thereon  shall be refunded to
Buyer.

SECTION 15. INSPECTIONS AND DOCUMENTS.

     15.1.  ACCESS.  Buyer has had and shall continue to have, during the entire
term of this  Agreement,  access to (i) all  information  Buyer is  entitled  to

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hereunder;  and (ii) the Property for purposes of inspections and investigations
of the Property. Seller agrees it will not make or cause to be made any material
changes to the Property after such  inspection.  Notwithstanding  the foregoing,
Buyer and its agents  shall not disrupt the  operation  of the  Property.  Buyer
shall  defend and  indemnify  Seller from,  for,  and against any loss,  cost or
liability  which may arise or result from any  activities of Buyer or its agents
on or with  respect to the  Property,  except to the extent  caused by  Seller's
negligence or willful misconduct.

     15.2. INFORMATION.  Seller shall deliver the original and all copies of the
information,  data, documents,  and materials in Seller's possession relating to
the  Property  to Buyer at Close of Escrow and  Seller's  interest in them shall
pass to Buyer as of Close of Escrow.

SECTION  16.  LEASEBACK.  Contemporaneous  with the  signing of this  Agreement,
Seller and Buyer shall enter into a leaseback of the  Property  where the Seller
shall be the Tenant and the Buyer shall be the  Landlord.  The lease shall be in
the form  attached  as  Exhibit C. The Close of Escrow is  conditioned  upon the
Seller and Buyer having signed this Lease Agreement.

SECTION 17. MISCELLANEOUS.

     17.1.  ENTIRE  AGREEMENT.  This Agreement is the entire  agreement  between
Seller and Buyer concerning the sale of the Property and no modification  hereof
or subsequent  agreement  relating to the subject matter hereof shall be binding
on either  party  unless in  writing  and  signed by the party or  parties to be
bound.

     17.2 CONTINUING VALIDITY. If any one or more of the provisions contained in
this Agreement shall for any reason be held invalid, illegal or unenforceable in
any respect,  such invalidity,  illegality or unenforceability  shall not affect
any other  provisions  hereof,  and this Agreement shall be construed as if such
invalid, illegal or unenforceable provisions had never been contained herein.

     17.3 ATTORNEYS FEES.  Should either party employ an attorney to enforce any
of the provisions hereof or to recover damages for the breach of this Agreement,
the  non-prevailing  party in any final judgment agrees to pay the other party's
reasonable  expenses,  including  attorneys'  fees  and  expenses,  expended  or
incurred  in  connection  therewith,  as  determined  by a  court  of  competent
jurisdiction.

     17.4 LAW AND VENUE.  This  Agreement  shall be governed  and  construed  in
accordance with the laws of the State of Arizona.  Exclusive  jurisdiction shall
be the Coconino County Superior Court.

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     17.5 TIME OF  ESSENCE.  Time is of the essence in the  performance  of each
party's obligations hereunder.


SELLER:                                 BUYER:


ILX RESORTS INCORPORATED


----------------------------------      ----------------------------------------
By: Nancy J. Stone                      Edward John Martori
Its: President

Date: March ____, 2002                  Date:  March ____, 2002

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<PAGE>
ESCROW AGENT:

Received  this _______ day of March 2002 Escrow Agent hereby  agrees to be bound
by the  provisions  hereof  applicable  to Escrow Agent,  and to perform  Escrow
Agent's obligations as set forth herein.

     PIONEER TITLE AGENCY, INC.

     ___________________________________
     By: Jeannie Larson
     Title:  ___________________________


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