Exhibit 10-2

                             SECURED LINE OF CREDIT
                                 PROMISSORY NOTE


$40,000,000                                                        June 12, 1998


         FOR VALUE RECEIVED,  ILX RESORTS INCORPORATED,  an Arizona corporation,
LOS ABRIGADOS PARTNERS LIMITED PARTNERSHIP, an Arizona limited partnership,  and
PREMIERE  DEVELOPMENT  INCORPORATED,   an  Arizona  corporation   (collectively,
"Borrower"),  whose address is 2111 East Highland  Avenue,  Suite 210,  Phoenix,
Arizona 85016,  do hereby  jointly and severally  covenant and promise to pay to
the order of  LITCHFIELD  FINANCIAL  CORPORATION,  a  Massachusetts  corporation
"Lender'),  at its  principal  office at 13701 West  Jewell  Avenue,  Suite 200,
Lakewood,  Colorado 80228, or its assigns,  or at such other place as the Lender
may  designate to the Borrower in writing from time to time,  in legal tender of
the United States,  the sum of Forty Million  Dollars  ($40,000,000)  or so much
thereof as may be advanced by Lender to Borrower  hereunder  along with interest
as provided herein.

         Definitions.  As used throughout  this  Promissory  Note, the following
capitalized terms shall have the following meanings:

         "Amortization  Period"  shall mean that sixty (60) month period of time
         beginning  upon the first month after the  expiration  of the Borrowing
         Period.

         "Borrowing  Period"  shall  mean that  forty-eight  (48)  month  period
         beginning the first month after the date of this Promissory Note.

         "Change  Date"  shall  mean  that date  upon  which  any  change in the
         Reference Rate occurs.

         "Credit  Agreement" shall collectively mean that Secured Line of Credit
         Lending  Agreement  executed by and between Lender and Borrower of even
         date herewith along with all documents  referenced  therein or executed
         in connection therewith.

         "Event of Default"  shall mean the  Borrower's  failure to pay when due
         any required payment of principal, interest or other sums due hereunder
         or upon the  occurrence  of an event of default  as  defined  under the
         Credit Agreement.

         "Interest  Rate"  shall  mean,  with  regard to the first Five  Million
         Dollars  ($5,000,000) of principal  advanced  hereunder,  the Reference
         Rate plus one and  three-quarters  percent (1.75%) per annum;  and with
         regard to all other principal  advanced  hereunder,  the Reference Rate
         plus one and one half percent (1.50%) per annum if (a) borrowings under
         this  Promissory  Note which have not previously  been the subject of a
         principal advance by Lender (i.e.  previous  borrowings being paid with
         funds from this transaction) total at least Five

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         Million Dollars  ($5,000,000)  and are advanced within eight (8) months
         from the date of this Promissory Note (the "Initial Five Million"), and
         (b) at least Ten Million  Dollars  ($10,000,000)  in new  principal  is
         advanced and outstanding under this Promissory Note for each subsequent
         twelve (12) month  period  (commencing  the day  following  the date on
         which the Initial Five Million has been advanced)  occurring during the
         Borrowing  Period. If at the end of any such twelve (12) months period,
         the foregoing  requirements have not been fulfilled,  then the Interest
         Rate on all Advances  thereafter  shall be the Reference  Rate plus one
         and three-quarters percent (1.75%) per annum.

         "Maturity  Date"  shall mean that date which is one  hundred  and eight
         (108) months from and after the date of this Promissory Note.

         "Reference  Rate" shall mean that rate of interest  which is designated
         by the Wall Street Journal,  Eastern  Edition,  as the nation's average
         "prime  interest'  rate on corporate  loans at large U.S.  money center
         commercial banks. If more than one rate is published by the Wall Street
         Journal as the "prime rate," the highest of the  published  rates shall
         be used.  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. or its  successors as its "prime rate" of
         interest.

         Interest  Rate.  The principal  amount due hereunder  shall bear annual
interest  from the date of each advance of  principal  hereunder at the Interest
Rate.  Interest shall accrue on a 360 day per year basis.  The Interest Rate may
increase or decrease as provided  herein as and when the Reference Rate changes.
With regard to the initial advance of principal hereunder,  interest shall begin
to accrue as of the date of said  advance.  Interest  shall  similarly  begin to
accrue against subsequent advances of principal hereunder as of the date of said
subsequent advance.

         Adjustments to Interest Rate. The initial  Interest Rate shall be based
upon the Interest Rate  calculated  on the date of execution of this  Promissory
Note. The Interest Rate in effect  hereunder shall be adjusted as of each Change
Date to reflect the Reference Rate then in effect. No adjustment that results in
a decrease in the  Interest  Rate shall take  effect  during any period in which
Borrower  is in default  under the terms of this  Promissory  Note or the Credit
Agreement.  Any such decrease shall not become  effective until the next regular
adjustment  in the Interest Rate after the date that all such defaults have been
cured.

         Usury. The Lender does not intend to violate any applicable usury laws.
Accordingly, all agreements between Borrower and Lender are expressly limited so
that in no contingency or event whatsoever,  whether by reason of advancement of
the proceeds hereof,  acceleration of maturity of the unpaid  principal  balance
hereof,  or otherwise,  shall the amount paid or agreed to be paid to the Lender
hereunder  exceed the  maximum  rate  allowed by  applicable  law.  If, from any
circumstances whatsoever,  fulfillment and payment of Borrower's obligations, at
the time  performance of such obligation shall be due, shall cause the effective
rate of interest  upon the sums  evidenced  hereby to exceed the maximum rate of
interest allowed by applicable law, then, the obligation to be fulfilled
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shall be reduced automatically to the extent necessary to prevent that effective
rate of interest from exceeding the maximum rate allowable under  applicable law
and to the extent that the Lender shall  receive any sum which would  constitute
excessive  interest,  such sum shall be applied to the  reduction  of the unpaid
principal  balance due  hereunder and not to the payment of interest or, if such
excessive interest exceeds the unpaid balance of principal,  the excess shall be
refunded to Borrower.  This provision shall control every other provision of all
agreements between Borrower and the Lender including,  without  limitation,  the
Credit Agreement.

         Borrowing Period.  During the Borrowing  Period,  Borrower shall pay to
Lender at a minimum installment payments of interest only which shall be due and
payable on the first (1st) day of the month  following the month of execution of
this  Promissory Note and on the first (1st) day of each month  thereafter.  All
payments  received by Lender from  Borrower  and the Pledged  Accounts  shall be
applied first to amounts,  fees,  costs and Lender Expenses due under the Credit
Agreement,  then to interest due hereunder,  then to principal due hereunder or,
upon the occurrence and  continuation  of an Event of Default,  at the option of
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 or otherwise  are less than the  required  monthly  payment  hereunder,
Borrower shall pay the difference immediately upon demand by Lender.

         Amortization  Period.  Upon commencement of the Amortization Period and
throughout said period,  Borrower shall pay to Lender at a minimum equal monthly
payments of principal  and interest and, if applicable  Lender  Expenses,  of an
amount which at least will fully amortize the unpaid balance of this  Promissory
Note and all the Obligations over the Amortization  Period. All such installment
payments shall be due and payable  beginning on the first (1st) day of the month
following the beginning of the Amortization Period and on the first (1st) day of
each month thereafter.  Such payment shall be due and payable on the first (1st)
day of the first (1st) month of the  Amortization  Period and on the first (1st)
day of each month  thereafter.  If not  otherwise  paid during the  Amortization
Period,  all principal,  accrued but unpaid  interest and all other  Obligations
outstanding under the Credit Agreement and this Promissory Note shall be due and
payable on or before the Maturity  Date.  All  payments  received by Lender from
Borrower  and the  Pledged  Accounts  during the  Amortization  Period  shall be
applied first to amounts,  fees,  costs and Lender Expenses due under the Credit
Agreement,  then to interest due hereunder, then to principal due hereunder, or,
upon the occurrence and  continuation  of an Event of Default,  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  or  otherwise  are less  than the  required  monthly  payment
hereunder, Borrower shall pay the difference immediately upon demand by Lender.

         Voluntary  Prepayment.   The  Borrower  is  prohibited  from  prepaying
principal during the Borrowing Period.  Thereafter, at any time and from time to
time,  subject to the following  prepayment  fees,  Borrower may prepay all or a
portion of this Promissory Note commencing upon the termination of the Borrowing
Period and  continuing  for a twelve (12) month period  thereafter  by tendering
with such prepayment a prepayment fee of three percent (3%) of the amount of the
prepayment. Commencing at the beginning of the thirteenth (13th) month after the
termination of
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the  Borrowing  Period and for a twelve (12) month period  thereafter,  any such
prepayment  shall be  accompanied by a prepayment fee of two percent (2%) of the
amount of the prepayment. Commencing at the beginning of the twenty-fifth (25th)
month after the termination of the Borrowing  Period and continuing for a period
of twelve (12) months thereafter,  any such prepayment shall be accompanied by a
prepayment fee of one percent (1%) 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 this Promissory Note and the Credit Agreement.  Any such
prepayments  shall not delay or reduce the next-due  monthly  installments.  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.  The
prepayment  penalties  hereunder shall not apply to principal payments which are
collected  by the Servicer  through the natural  payment or  pre-payment  of the
Pledged  Accounts  by the Account  Debtors  during the  Borrowing  Period or the
Amortization  Period,  nor shall it apply to the relocation of Pledged  Accounts
from this  credit  facility  to any other  credit  facility  between  Lender and
Borrower. Such prepayments on Pledged Accounts by Account Debtors shall apply to
Borrower's installments in the order of their maturity. Moreover, the prepayment
penalties   hereunder   shall  not  apply  to   prepayments   from   receivables
securitization  or other like financing  proceeds so long as (a) Lender has been
engaged by Borrower to negotiate and effectuate the contemplated  securitization
or other  like  financing,  (b) the  receivables  which are the  subject  of the
contemplated  securitization  or other like  financing  are aged at least twelve
(12)  months or more,  and (c) at least Ten  Million  Dollars  ($10,000,000)  of
principal  continues to be owed and outstanding under this Promissory Note after
the  closing  and  funding  of the  contemplated  securitization  or other  like
financing.

         Term and Maturity.  If not  otherwise  paid,  all unpaid  principal and
accrued  but  unpaid  interest  plus  any  other  sums  due  hereunder  shall be
immediately due and payable on or before the Maturity Date. This Promissory Note
is subject to acceleration  upon the occurrence of an Event of Default or as set
forth below and in the Credit Agreement.

         Default and Acceleration. This Promissory Note shall be payable in full
and all of the Obligations  outstanding shall immediately become accelerated and
due and  payable  in  full  without  notice,  demand  or  presentment  upon  the
occurrence  of an Event of Default.  Time is of the essence in  connection  with
Borrower's   obligations  under  this  Promissory  Note  and  under  the  Credit
Agreement.  Provided,  however, that with regard to events referenced above that
involve  the  payment  of cash or  funds  by  Borrower  pursuant  to the  Credit
Agreement, Lender shall not assert its remedies under this Promissory Note until
Lender provides  Borrower with notice of the occurrence of said Event of Default
and Borrower  fails to cure such within four (4) Business Days after the receipt
of said notice.  Provided,  further, that with regard to events referenced above
that do not involve  the payment of funds to Lender by Borrower  pursuant to the
Credit  Agreement,  Lender shall not assert its remedies  under this  Promissory
Note 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.  Borrower  covenants and agrees that Borrower  shall pay
all costs and expenses
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incurred by Lender and its successors and assigns in enforcing and/or collecting
this  Promissory Note and/or the  Obligations,  including,  without  limitation,
reasonable  attorneys'  fees, and court and litigation  costs,  whether incurred
out-of-court,  in  work-out  discussions,  in  restructuring  and  renegotiation
discussions or in litigation, including appeals and bankruptcy proceedings.

         Default  Interest.  Upon the  occurrence  of an Event  of  Default  and
continuing  until Lender  acknowledges in writing that said Event of Default has
been cured or waived,  all principal and interest  owing and  outstanding  under
this Promissory Note or otherwise shall immediately begin bearing interest until
paid in full at a rate equal to the lesser of four  hundred  (400) basis  points
above the otherwise  applicable  interest  rate, or the maximum rate of interest
which Borrower may by law pay or Lender may charge and collect.

         Security and Collateral for Repayment.  This Promissory Note is secured
by Pledged  Accounts,  and the Collateral as set forth and defined in the Credit
Agreement and Pledge and Security Agreement of even date herewith.

         Waivers.  All  parties  to  this  Promissory  Note,  whether  Borrower,
principal,  surety,  guarantor,  endorser,  or any  other  party,  hereby  waive
presentment  for  payment,   demand,  protest,  notice  of  protest,  notice  of
non-payment,  and notice of dishonor,  impairment of recourse and  impairment of
security.  The failure of the holder of this  Promissory  Note to  exercise  any
right  hereunder  shall not preclude the holder from  exercising any other right
which the holder may be entitled to exercise  upon the  happening  of such event
and the failure to exercise any right hereunder which the holder may be entitled
to exercise shall not constitute a waiver of the right to exercise said right or
any other right upon the  subsequent  occurrence of any such event nor shall any
waiver by the Lender of any such right or rights on any one occasion be deemed a
bar to or  waiver  of the same  right or  rights  on any  future  occasion.  All
endorsers,  guarantors,  sureties or other  persons who may now or  hereafter be
liable for the payment of this  Promissory  Note, by endorsing,  guaranteeing or
assuming this Promissory Note, consent to all of the terms and conditions herein
contained  and agree that this  Promissory  Note may be  modified,  extended  or
renewed  in whole or in part,  without  notice,  including  (a) the  impairment,
substitution, exchange or release at any time or times of all or any part of any
security or collateral security now or hereafter furnished,  (b) the release of,
or the  impairment  of the right of recourse  against  Borrower or any endorser,
guarantor,  surety or any other person now or hereafter  liable hereon,  (c) the
substitution  of,  renewal  or  extension  of  this  Promissory  Note,  (d)  the
modification  of any terms hereof,  or other agreement now or hereafter given in
connection with or as security for this  Promissory  Note, and (e) any change in
the rate of  interest,  if any,  hereon or the  imposition  of any fees  whether
authorized  under  this  Promissory  Note,  or  any  note,  mortgage,   security
agreement,  loan  agreement,  or any other  agreement now or hereafter  given in
connection with or as security for this Promissory Note.

         Choice of Laws. This Promissory Note is to be construed and enforced in
accordance  with the laws of the State of Colorado.  In the event of any dispute
concerning the  interpretation,  application  or enforcement of this  Promissory
Note,  or any other  document  executed  in  connection  herewith,  the sole and
exclusive  venue for same shall be the  District  Court in and for the County of
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Jefferson,  State of Colorado.  Borrower hereby consents to the  jurisdiction of
said Court.

         Severability.  In the  event  that  any one or  more of the  provisions
contained  in this  Promissory  Note or in any other loan  document  executed in
connection  herewith  shall for any  reason be held to be  invalid,  illegal  or
unenforceable in any respect,  such invalidity,  illegality or  unenforceability
shall not affect any other  provision of this  Promissory Note or any other loan
document executed in connection herewith and in lieu of such invalid, illegal or
unenforceable  provision  there  shall  be added  automatically  as part of this
Promissory  Note a  provision  as similar in terms to such  invalid,  illegal or
unenforceable provision as may be possible and be valid, legal and unenforceable
thereafter.

         Binding Effect.  This  Promissory Note and all covenants,  promises and
agreements  contained  herein or associated  herewith  shall be binding upon and
inure  to  the  benefit  of  the  respective  legal  representatives,   personal
representatives,  devisees,  heirs, successors and assigns of the Lender and the
Borrower.  The  term  "Lender"  shall  be  deemed  to mean  the  holder  of this
Promissory Note from time to time.

         Authorization.  The individual who is executing this Promissory Note on
behalf of the Borrower personally covenants,  warrants and represents that he or
she has the full power,  authority  and legal right to execute and deliver  this
Promissory  Note and all other  documents  executed and  delivered in connection
herewith, that all requisite authority and action necessary to bind the Borrower
has  previously  been taken,  and that this  Promissory  Note and all  documents
executed in connection  herewith constitute legal, valid and binding obligations
of the Borrower.

         No Joint  Venture.  The  parties  hereto  covenant  and agree  that the
relationship  between  Lender and  Borrower  shall be  strictly  construed  as a
relationship  between a debtor and a secured  party and never as a joint venture
or  similar  relationship  between  Lender  and  Borrower.  Lender  shall not be
obligated  to perform or  discharge  any  obligation  or duty of  Borrower  with
respect to (a) the operation of the mortgaged property or (b) the performance of
any  obligations  under any leases  affecting the mortgaged  property.  Borrower
covenants and agrees to hold harmless,  defend and indemnify the Lender from and
against any liability  arising with respect to (a)  Borrower's  operation of the
mortgaged  property or (b)  Borrower's  performance  of any of its  covenants or
obligations under any of the leases pertaining to the mortgaged property.

         Multiple  Borrower.  Should more than one entity or individual  execute
this Promissory  Note, then each and every such entity or individual  recognizes
and  agrees  that  they  shall be  jointly  and  severally  responsible  for all
financial or other  obligations of whatever nature evidenced hereby or under any
other document executed by and between Borrower and Lender.

         Capitalized Terms. Capitalized terms not otherwise defined herein shall
have  those  meanings  assigned  to them in the  Credit  Agreement  of even date
herewith.

         JURY WAIVER.  MAKER HEREBY WAIVES  MAKER'S RIGHT TO A JURY TRIAL IN THE
EVENT OF ANY DISPUTE OR LITIGATION ARISING HEREUNDER OR UNDER ANY
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RELATED DOCUMENTS  EXECUTED IN CONNECTION  HEREWITH.  MAKER COVENANTS AND AGREES
THAT THE SOLE AND EXCLUSIVE JURISDICTION AND VENUE FOR ALL LITIGATION ARISING IN
CONNECTION WITH THE ENFORCEMENT, COLLECTION OR ADMINISTRATION OF THIS PROMISSORY
NOTE SHALL REST EXCLUSIVELY IN JEFFERSON  COUNTY,  COLORADO AND MAKER WAIVES ALL
RIGHTS TO ASSERT OTHERWISE.

                                "Borrower":

                                ILX RESORTS INCORPORATED,
                                an Arizona corporation

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

                                Title: President
                                       ---------------------

                                LOS ABRIGADOS PARTNERS LIMITED
                                PARTNERSHIP, an Arizona limited partnership

                                By: ILE SEDONA INCORPORATED,
                                an Arizona corporation, its sole general partner

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

                                Title: Vice President
                                       ---------------------

                                PREMIERE DEVELOPMENT INCORPORATED,
                                an Arizona corporation

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

                                Title: President
                                       ---------------------
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