Exhibit 10-1

                             SECURED LINE OF CREDIT
                                LENDING AGREEMENT
                   (ILX Resorts Incorporated-Global Facility)


          THIS SECURED LINE OF CREDIT LENDING  AGREEMENT  ("Agreement") is dated
this 12th day of June,  1998,  and is entered  into by and  between  ILX RESORTS
INCORPORATED,   an  Arizona   corporation,   LOS  ABRIGADOS   PARTNERS   LIMITED
PARTNERSHIP,   an  Arizona  limited   partnership,   and  PREMIERE   DEVELOPMENT
INCORPORATED, an Arizona corporation,  having their principal places of business
at 2111 East Highland Avenue,  Suite 210, Phoenix,  Arizona 85016 (collectively,
"Borrower"),  and LITCHFIELD FINANCIAL CORPORATION,  a Massachusetts corporation
having its  western  division  offices at 13701 West Jewell  Avenue,  Suite 200,
Lakewood, Colorado 80228 ("Lender"), under the following facts:

                                    RECITALS:

         WHEREAS,  the  Borrower is the owner,  developer  and  marketer of that
certain  timeshare  development  projects  located  in the  states  of  Arizona,
Colorado and Indiana; and

         WHEREAS,   the  Borrower  owns  and  will  subsequently  be  generating
portfolios of purchase money  receivables  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.
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         In  addition  to  the  definitions   set  forth  in  the   introductory
paragraphs,  the  following  terms  shall  have the  following  meanings  unless
otherwise agreed.

         "Account" means each and every promissory note,  installment land sales
contract, or other evidence of indebtedness, along with all security of whatever
nature securing the repayment of same including,  without limitation,  all deeds
of trust,  mortgages  and/or  other debt  securing  instruments  executed by any
Account  Debtor,  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.

         "Advance"  means  each and  every  advance  of  principal  by Lender to
Borrower.

         "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 the Maturity Date.

         "Borrowing  Base" means an amount equal to ninety  percent (90%) of the
then unpaid  total  aggregate  outstanding  principal  balance of all  Qualified
Pledged Accounts.

         "Borrowing  Period" means the forty-eight  (48) 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.

         "Club"  means  the  Premiere   Vacation  Club,  an  Arizona   nonprofit
corporation,  which is the owner of certain Timesharing Interests located within
the  Project and which  allows for the use of said  Timesharing  Interests  on a
first come, first served membership basis.

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

         "Collateral Assignment of Management, Marketing and Exchange Contracts"
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  management,  marketing and exchange  contracts which Borrower has
executed regarding the operation, management and administration of the Project.

         "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,
mortgages or debt  securing  instruments  which secure  repayment of the Pledged
Accounts.
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          "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  executed by and
between  Lender and  Borrower  pertaining  to the  establishment  of the lending
relationship described herein, including,  without limitation,  the Secured Line
of Credit Lending Agreement, Line of Credit Note, Pledge and Security Agreement,
Collateral  Assignment of Promissory  Notes,  Collateral  Assignment of Deeds of
Trust,  Collateral  Assignment of Management,  Marketing and Exchange  Contract,
Custodial Agreement, Servicing Agreement, and Escrow Agreement.

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

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

         "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  eighty-nine
(89) days or more contractually delinquent.

         "End-Loan  Documents" means those documents executed by Account Debtors
in connection  with their purchase of  Timesharing  Interests at the Project and
their  financing of the purchase  prices  thereof  which  include:  (a) original
promissory  note or contract for deed;  (b) original deed of trust,  mortgage or
debt securing  instrument,  if  applicable;  (c) copy of original  public report
receipt;  (d) proof of down payment;  (e) servicing and  delinquency  accounting
records; (f) along with all other documents which Lender may reasonably request.

         "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
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other  substances and materials which are classified as hazardous or toxic under
any local, state or federal statute, rule or regulation of any nature.

         "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 or 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  incurred  by Lender in  connection  with
work-out,  restructuring  or  related  discussions  or  litigation  incurred  in
connection with the enforcement of Lender's rights  hereunder and the protection
and liquidation of the Collateral;  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 Forty  Million  Dollars  ($40,000,000)  of even date  herewith  which
evidences  certain of the Obligations  associated with the Credit  Agreement and
which provides for the manner of the repayment of the principal,  interest, fees
and other sums evidenced thereby.

         "Maturity  Date"  means that date which is one  hundred and eight (108)
months from and after the date of the Line of Credit Note.

         "Maximum  Line  Amount"   means  the  sum  of  Forty  Million   Dollars
($40,000,000).

         "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,  Line of Credit Note, or by any instrument, or pursuant
to any other agreement between Lender and Borrower,  and irrespective of whether
for the payment of money),  whether direct of 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
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further  including  all interest not paid when due and all Lender  Expenses that
Borrower is required to pay or  reimburse  pursuant to the Line of Credit  Note,
the Credit Agreement, by law, or otherwise.

         "Person"  means  and  includes  natural  persons,   limited   liability
companies,   corporations,   limited  partnership,  general  partnership,  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.

         "Pledge and Security  Agreement"  means that agreement  executed by the
Borrower in favor of the Lender  pursuant to which the  Borrower  shall grant to
Lender a first and priority security interest in and to the Pledged Accounts and
the Collateral.

         "Pledged  Accounts"  means each and every Account which is delivered to
Lender pursuant to the terms of this Agreement.

         "Project"  collectively  means Los  Abrigados  Resort & Spa in  Sedona,
Arizona,  The Inn at Los  Abrigados  in Sedona,  Arizona,  Kohl's Ranch Lodge in
Payson, Arizona, Golden Eagle Resort in Estes Park, Colorado,  Roundhouse Resort
in Pinetop/Lakeside, Arizona, Varsity Clubs of America -- South Bend and Varsity
Clubs of America  -- Tucson,  along  with all  Timesharing  Interests  which are
deeded  to the Club and  which  form the  basis of the  Premiere  Vacation  Club
Membership Plan dated January 5, 1998, along with those other resort and Varsity
Clubs of America sites which  Borrower may develop  during the Borrowing  Period
and which may be  approved  by Lender  from time to time by means of  subsequent
written agreement.

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

         "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.

         "Servicer" means Concord Servicing Corporation.

         "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.

         "Timesharing  Interest" means a legally identifiable undivided interest
in real  property  which is located  within the Project,  which is sold in a fee
simple  manner to an  Account  Debtor or which has been  subjected  to those use
rights as set forth in the Club constituent  documents and has been subjected to
a timeshare form of ownership and which vests in the Account Debtor the right to
use the overnight lodging and common area facilities of the Project for at least
seven (7) nights including
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a weekend on either an annual or biennial basis or which  otherwise vests in the
Account Debtor  overnight  lodging and common area use rights for an alternative
period of time which Lender shall deem acceptable in Lender's sole discretion.

         "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 Forty Million Dollars  ($40,000,000).  Concurrently
herewith,  Borrower  shall execute and deliver to Lender the Line of Credit Note
in the face amount of Forty  Million  Dollars  ($40,000,000).  The  indebtedness
evidenced  by the Line of Credit Note shall be paid by, among other  sources,  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, among
other things,  the Deed of Trust,  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 at the  Maturity  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. Advances of Principal.  Subject to Borrower's  compliance  with
the required terms and conditions of the Credit  Agreement,  Lender,  during the
Borrowing  Period,  agrees to make loans and  advances of  principal to Borrower
upon the pledge and physical  delivery to Lender of Pledged Accounts by Borrower
so long as, and to the extent that, the  Obligations  outstanding  (inclusive of
all  Advances)  do not exceed  either the  Borrowing  Base or the  Maximum  Line
Amount.  Advances made  pursuant to this  Paragraph 2 (D) shall not be made more
frequently  than weekly,  or in amounts less than $25,000 per Advance.  Borrower
shall be allowed to reborrow principal during the Borrowing Period at an advance
rate,  however,  which shall not exceed  ninety  percent  (90%) of the principal
amount of any Qualified Pledged Account which is pledged to Lender as collateral
for said  reborrowing.  Any  reborrowings  (those occurring after new borrowings
have first  aggregated  the  Maximum  Line  Amount)  shall not be subject to the
Origination Fee specified in Paragraph 2(G) below.

              D.  Maximum  Line  Amount.  At no such time  shall the  collective
principal amount of all Advances exceed the Maximum Line Amount.

              E. Interest Rates, Payment and Calculation.  All Obligations shall
bear interest, on a 360 day basis in accordance with the terms and conditions of
the Line of Credit Note.  Interest  shall begin to accrue on the date of any and
all Advances hereunder.
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              Interest  hereunder  shall be due and  payable as  provided in the
Line of Credit Note.  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.

              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.

              F. Crediting Payments;  Application of Collections.  On the Friday
of each week,  commencing  with the week following the week in which the Closing
Date occurred,  Lender will apply 100% of the funds  collected under all Pledged
Accounts  as of said dates,  first to any unpaid  Lender  Expenses,  then to the
payment  of  accrued  and  unpaid  interest  and  then to the  reduction  of the
principal  balance of the  Obligations.  The  crediting of  collections  against
Obligations   outstanding   shall  not  be  considered  a  payment  against  the
Obligations  unless any 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
Account  payments  received  directly  by  the  Borrower  shall  be  immediately
forwarded to the Lender. 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.

              G.  Origination  Fee.  In  consideration  for  underwriting,   due
diligence and credit analysis services  rendered,  Borrower covenants and agrees
to pay Lender an origination  fee equal to one percent (1%) of each Five Million
Dollars  ($5,000,000),  or portion thereof,  of principal  advanced by Lender to
Borrower  pursuant to the terms of the Line of Credit Note, it being  understood
that Lender is  authorized  by Borrower  to deduct  this sum  directly  from any
Advance once the initial or any subsequent origination fee is earned if said sum
is not otherwise paid by Borrower.  In  illustration  of the  foregoing,  Lender
shall be  entitled  to  deduct  $50,000  from the  first  advance  of  principal
hereunder as its origination fee associated with the first $5,000,000 tranche of
principal  becoming subject to advance hereunder and Lender shall be entitled to
deduct  $50,000 once any principal is advanced from each  successive  $5,000,000
tranche of successive  principal becoming subject to advance  hereunder.  If not
otherwise paid in accordance  with the procedure  referenced  above,  the entire
origination  fee, or portion  thereof,  of one percent  (1%) of the Maximum Line
Amount  shall be due and  payable  in full at the  expiration  of the  Borrowing
Period. However, no Origination Fee
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is due for any $5,000,000 tranche not commenced.  Conversely, the entire $50,000
increment is due for any $5,000,000 tranche commenced, but not completed.

         3.   CONDITIONS TO ADVANCES.
              -----------------------

              Conditions  to  Advances.  The  obligation  of  Lender to make any
Advance is subject to the  fulfillment,  to the  satisfaction  of Lender and its
counsel,  of each of the  following  conditions  on or  before  the  date of any
Advance:

              (a) With respect to the initial Advance, all of those documents as
are more fully  described on that closing agenda  attached  hereto as EXHIBIT A,
which collectively  constitute and comprise portions of the Credit Agreement are
in form and substance  satisfactory  to Lender and shall have been duly executed
by  all  parties  thereto,  with  the  signatures  properly  notarized  and  the
instruments  in proper form for  recordation,  as required,  and shall have been
recorded and/or delivered to Lender or Lender's agent, as appropriate.

              (b) All  conditions  set forth herein to the making of the initial
Advance shall have been satisfied on or before the Closing Date.

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

              (d) Borrower shall have executed such certificates and resolutions
as are required by Lender and will perform such other acts as may be required to
perfect Lender's security interests in the Collateral.

              (e) 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.

              (f) Lender  reviewed  and  approved  sufficient  Pledged  Accounts
complying  with  the   requirements   of  Paragraph  8  herein  to  support  the
contemplated Advance.

              (g) Borrower  shall have  delivered and Lender shall have received
and approved all  certificates,  instruments and other 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.

              (h)  Lender  has or shall  have  received  copies of  articles  of
partnership  or  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.

              (i) With regard to the initial Advance, Lender shall have received
an executed  attorney opinion letter from legal counsel for Borrower in form and
substance satisfactory to Lender,
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addressed to Lender in form and scope  satisfactory  to Lender and covering such
matters relating to Borrower,  the Pledged Accounts as Lender and its counsel in
their discretion may require.

              (j) With regard to any subsequent Advance, if Lender has reason to
believe that any material  change in any legal issue  affecting  the Project has
arisen,  Lender shall have received a reaffirmation  of the legal opinion issued
by  Borrower's  Counsel  as of the  Closing  Date  verifying  that no changes in
condition to said opinion or the facts or legal  conclusion  referenced  therein
have occurred.

              (k) Lender  shall have  received  satisfactory  evidence  that the
Pledged  Accounts are (i) 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,  (ii)  Borrower is in good  standing  with all
applicable governmental authorities,  and (iii) 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.

              (m)  Lender or Escrow  Agent  shall  have  received  the  End-Loan
Documents  with  respect to each  Pledged  Account,  which shall have been fully
executed  by all  applicable  Account  Debtors,  and 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.  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 decrease below $17,500,000.

              (p) There shall have been no material adverse change or threatened
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  have  paid  Lender  all  Lender's   Expenses
including,  without  limitation,  legal fees (but not more than  $5,000 for such
fees,  plus necessary  costs incurred) and  disbursements  of Lender's  counsel,
incurred by Lender in connection  with the subject loan, and the  preparation of
the Credit Agreement. Any unpaid reimbursement as provided in this paragraph may
be deducted by Lender from any Advance.
                                       9
<PAGE>
              (s) 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.

              (t) Lender  must be  satisfied  that the  Project  is in  complete
accordance with all applicable zoning requirements.

              (u)  Borrower   shall   demonstrate   the  existence  of  adequate
Timesharing  Interest  inventory so as to meet all demands for usage as required
by Account Debtors.

              (v)  During  the  term of the  Credit  Agreement,  Borrower  shall
maintain a debt to equity ratio of not greater than 7 to 1.

         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.  Advances  shall  be made no more  than
weekly  in a minimum  amount  of  $25,000  upon  receipt  by Lender of a written
request  for an  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.

              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, subject to rebuttal by Borrower.

         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.

              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.   (RESERVED)

         7.   SECURITY.
              ---------
                                       10
<PAGE>
              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) a  first  lien  security  interest  in and to the  Pledged
                  Accounts;

                  (b) a collateral assignment of all Pledged Accounts along with
                  corresponding deed of trust;

                  (c) a collateral assignment of all of Borrower's rights, title
                  and interest in and to all marketing, management, exchange and
                  related  contracts in favor of Borrower or its  affiliates and
                  otherwise associated with the Project;

                  (d) that  other  collateral  and  security  which  Lender  may
                  reasonably require;

              After the Closing  Date,  upon request by Lender,  Borrower  shall
grant to and in favor of Lender a security and  collateral  interest in the form
of a "surety" deed of trust in and to all or a portion, in Lender's  discretion,
of The Inn at Los Abrigados and the 5000 Timesharing  Interests  currently owned
by Premiere  Vacation  Club (which  number may be increased  through  amendment)
which shall be subordinate to the interests of Timesharing  Interest  Purchasers
and  which  shall  otherwise  contain  nondisturbance  provisions  in  favor  of
Timesharing  Interest Purchasers to the reasonable  satisfaction of Borrower and
the  Arizona  Department  of Real  Estate.  It is  agreed  that the form of said
instrument  shall be similar to that form of surety  deed of trust  executed  by
Borrower in favor of Lender in the Kohl's Ranch Lodge lending facility which was
entered into  between the parties on or about June 27, 1997,  which form will be
used as a general guide only in fulfilling the goals of this  paragraph.  At any
time and from time to time, the surety deed of trust will contain  provisions to
automatically  release a Timesharing Interest from the encumbrance of the surety
deed of trust upon the closing of a purchase by a Timesharing Interest Purchaser
so that no recording of a release,  nor  execution of any release  document,  is
necessary. If requested by Borrower,  Lender will enter into inter-creditor pari
passu agreements with other lenders of Borrower which are fair and reasonable in
their terms and are not materially detrimental to Lender.

         8.   ELIGIBILITY OF ACCOUNTS.
              ------------------------

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

              (a) The  Account  must  relate to sale of fee  simple  Timesharing
Interests or the sale of Club  membership  interests in the Project to a citizen
of the United States or Canada.  However, not more than five percent (5%) of the
Pledged  Accounts  may be from  citizens  of  other  countries  if such  Pledged
Accounts meet Lender's reasonable underwriting criteria;

              (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;  provided that fully  amortizing  Accounts
possessing  an original  term of  eighty-five  (8 5) to one hundred and twenty (
120)
                                       11
<PAGE>
months or less are permissible so long as the monthly  payments  associated with
same or equal to or greater than $150. With regard to Accounts possessing a term
of eighty-four (84) or less months, then the minimum monthly installment payable
with regard thereto shall not be less than $80;

              (c) At the time of any Advance,  no installment on the Account may
be more than  twenty-nine  (29) days  contractually  past-due,  unless waived by
Lender.  Subsequent  to any  Advance,  any Pledged  Account  will be  considered
ineligible  for  Borrowing  Base  application   should  any  scheduled   monthly
installment  become  more than  eighty-nine  (89) days  contractually  past-due,
unless  waived by Lender  provided  Lender  shall accept  previously  delinquent
Accounts  which have been  reinstated  by  Borrower  and have been  amended,  in
writing,  to provide for the deferral of the  delinquent  payments to the end of
the contract payment  obligation  (thereby extending the term of said contract),
provided  (a) such  contract  otherwise  meets  the  requirements  hereunder  in
relation to an Advance;  (b) the agreement of extension or modification  must be
in writing and signed by the Account Debtor; (c) the Account Debtor has made the
three (3) successive payments immediately prior to submittal for Pledged Account
status  and (d)  such an  extension  accommodation  has not  been  made  between
Borrower  and Account  Debtor  more than three (3) times  during the life of the
Account.

              (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 of a Timesharing Interest;

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

              (f)  Lender is  satisfied  that all  dwelling  units and  promised
Project amenities have been completed and are ready for occupancy and usage;

              (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 along with  appropriate  scoring  matrix in that format that
Lender may reasonably request;

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

              j)  All  Timesharing  Interests  giving  rise  to  Accounts  to be
financed  hereunder  shall be  located  in  buildings  wherein  the  appropriate
governmental entity has issued a certificate of occupancy or similar document;

              (k) The obligor's  creditworthiness  must be reasonably acceptable
to Lender;
                                       12
<PAGE>
              (1) All monies to be paid under the pursuant to the accounts shall
be paid in United  States  Dollars;  Pledged  Accounts  may be paid by automatic
debit to an Account Debtor's bank account;

              (m) All  Timesharing  Interests  giving rise to Accounts must have
been registered with and approved by all applicable  regulatory entities and the
Project  in which the  Timesharing  Interest  is  located  along with all regime
documents pertaining thereto must have been reviewed and approved by Lender.

         Should any Pledged  Account become more than  eighty-nine  (89) days or
more  contractually  delinquent  or  fail to meet  or to  continue  to meet  the
above-noted eligibility criteria (an "Ineligible Account"),  then the cumulative
principal  of all  Pledged  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.

         9.   WEIGHTED AVERAGE COUPON.
              ------------------------

         The Pledged Accounts shall at all times possess and maintain a weighted
average  coupon rate ("WAC") of not less than the interest rate set forth in the
Line of Credit Note plus 100 basis  points.  If the WAC  requirements  hereunder
become out of balance  then Lender  shall have the right to take any action with
regard to  subsequently  Pledged  Accounts that it deems  reasonable in order to
bring the Pledged Accounts into compliance with the WAC standard.

        10.   (RESERVED)

        11.   BORROWING PERIOD.
              -----------------

        During the  Borrowing  Period,  payments of  interest  only at a minimum
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 within ten (10) days after notice. 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 period at Lender's sole discretion.
                                       13
<PAGE>
        13.   PRINCIPAL AMORTIZATION PERIOD.
              ------------------------------

        Equal fully amortizing  monthly payments of principal and interest shall
at a minimum 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.  Lender shall provide Borrower with
notice of the amount of such installment  payments. 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 on or before the
Maturity Date. The minimum monthly payment during the Amortization  Period shall
be an amount which will amortize the unpaid balance of the Obligations  over the
Amortization  Period.  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 within ten (10) days after
notice.

        14. VOLUNTARY PRE-PAYMENTS.
            -----------------------

        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 the Line of Credit 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 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 the Line of Credit Note and this 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
securitizations  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
                                       14
<PAGE>
Dollars  ($10,000,000) of principal  continues to be owed and outstanding  under
this Agreement after the closing and funding of the contemplated  securitization
or other like financing.

        15.   MANDATORY PREPAYMENT.
              ---------------------

        Should the Obligations  outstanding ever exceed the Borrowing Base, then
the Borrower  shall be required  within  twenty (20) days after notice to pledge
additional  eligible Accounts  sufficient to reinstate the Borrowing Base to its
prescribed  ratio.  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 the  Closing  Date.  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 and to fund all  reasonable  costs  incurred  by
Lender in performing 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 each and  every
Advance:

        (a) Borrower is a corporation or  partnership,  as the case may be, 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 have not been amended or modified in any manner,  except as
indicated in the copies  furnished to Lender.  There is no 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.
                                       15
<PAGE>
        (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 (i)
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
(ii) 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  (i) is 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 (ii)
accurately  present the financial  condition of Borrower as of the date on which
the same have been furnished. All balance sheets 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)  The  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.

        (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.
                                       16
<PAGE>
        (j) No authorization,  consent, approval,  license, exemption, filing or
registration  with any  court or  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.

        (l) 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,  except as may be disclosed
to Lender in writing.

        (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 material  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 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 any
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.
                                       17
<PAGE>
        (q) The purpose of this  transaction  is  exclusively  for commercial or
business purposes.

        (r)  Borrower  has (i)  undertaken  a  detailed  inventory,  review  and
assessment of all areas within its business  operations  that could be adversely
affected by the failure of Borrower to be year 2000 compliant on a timely basis,
(ii) developed a detailed plan and time line for becoming year 2000 compliant on
a timely basis and (iii) to date,  implemented that plan in accordance with that
time table in all material  respects.  Borrower  reasonably  anticipates that it
will be year 2000 compliant on a timely basis.

        (s) Borrower has made, or will make,  written inquiry of each of its key
suppliers,  vendors and  customers as to whether such persons  will, on a timely
basis, be year 2000 compliant in all material  respects and on the basis of such
inquiry  believes  that all  such  persons  will be so  compliant,  or  Borrower
believes  that such an inquiry  is not  necessary.  For  purposes  hereof,  "key
suppliers,  vendors  and  customers"  refers  to those  suppliers,  vendors  and
customers of Borrower whose business failure would, with reasonable probability,
result in a  material  adverse  change in the  business,  properties,  condition
(financial or otherwise), or prospects of Borrower.

        (t) At the time of the execution of this  agreement and  throughout  the
term of this credit facility, including any extensions hereto, Borrower shall at
all times  maintain a ratio of at least one deeded,  perpetual and  unencumbered
Timesharing  Interest per Club  membership  which has been sold to a third party
and is outstanding, all in accordance with the Club's recorded membership plan.

        18.   PROTECTIVE COVENANTS.
              ---------------------

        So long as any of the Obligations remains unpaid,  Borrower shall at all
times be in full and timely  compliance with all of the following  covenants and
perform all duties and obligations set forth below in a timely manner:

        (a) The  Borrower  shall at all times  insure  that the  Project and the
Pledged Accounts are in material compliance with all laws, rules and regulations
of whatever nature  associated with the Borrower's  operation of the Project and
its sale of Timesharing Interests or Club memberships 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 Timesharing Interests or Club memberships in and to
the  Project  have been  presented  to the Lender  for review  prior to the date
hereof.  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) The Borrower  shall comply with the  requirement  of all  applicable
laws, rules,  regulations and orders of any governmental  authority,  including,
without limitation,  applicable usury laws,  Truth-
                                       18
<PAGE>
in-Lending laws,  subdivisions law, consumer credit laws,  Timesharing  Interest
sales and registration laws and the Interstate Land Sales Full Disclosure Act.

        (d) The  Borrower  shall  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,  the Borrower shall 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) The  Borrower  shall 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  materially  and  adversely  affect the rights of Lender  under the Credit
Agreement.

        (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, with Lender's reasonable expenses to be reimbursed by Borrower.

        (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 Lender may reasonably
require to insure that  Borrower's  Pledged  Accounts  are  consistent  with its
available and  unencumbered  sales inventory and so as to insure that Borrower's
Club  membership  sales are consistent  with the  provisions of paragraph  17(t)
hereof.

        (k)  Borrower  shall  provide  Lender  with a schedule  of all  proposed
Accounts which may be subject to a contemplated  Advance hereunder at least five
(5) Business Days prior to the date of the contemplated Advance.

        (1) Borrower or Servicer shall furnish and deliver to Lender within five
(5) days after the end of each month a detailed  trial balance of the collection
and accounting status of each Pledged Account
                                       19
<PAGE>
which shall contain a monthly delinquency report, a cash transactions  report, a
collections  report,  and all other  reports as Lender may request,  all in form
acceptable to the Lender.

        (m) Borrower  shall submit to Lender at least  annually and as otherwise
requested  by Lender a detailed  annual  operating  budget for the  Project  and
financial  statements  regarding the operations of the Project's property owners
associations, certified by an appropriate officer of Borrower.

        (n) Borrower shall take all steps  necessary in order to insure that its
data  processing,  management  information and related computer systems are year
2000  compliant  and are  otherwise in  accordance  with year 2000  policies and
procedures which are routinely observed by publicly traded corporations.

        (o) Borrower shall at all times pay all personal and real property taxes
of whatever nature which are applicable to the Project and shall,  moreover,  at
all times insure that the Project  carries  liability and casualty  insurance in
amounts which Lender deems reasonable based upon objective  industry  standards.
Borrower  shall  provide  Lender with proof of payment of all real and  personal
property  taxes  applicable to the Project on an annual basis upon request,  and
shall additionally upon request,  provide Lender with a certificate of insurance
from a nationally  recognized  insurance company certifying the existence of the
required  casualty  and  liability   insurance,   which  without  request  shall
additionally specify Lender as a co-insured and co-loss payee thereon.

        19.   FINANCIAL STATEMENTS; REPORTS AND TAX RETURNS.
              ----------------------------------------------

        Accountings,  Tax  Returns  and  Financial  Statements.  Borrower  shall
deliver to Lender:  (a) monthly sales and  cancellation  reports,  (b) quarterly
financial  statements  within  forty-five (45) days after the end of each fiscal
quarter,  (c) annual audited  consolidated  financial statements for ILX Resorts
Incorporated  within ninety (90) days after the end of each fiscal year, and (d)
such other  information  as Lender might  reasonably  request from time to time.
With  regard  to  internally  generated  reports,  all  shall  be  certified  by
Borrower's chief financial officer as being true and correct.

        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.
              --------------------------------------

        Borrower  shall,  upon  request,  provide  to Lender  quarterly  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.
                                       20
<PAGE>
        23. CROSS-DEFAULT.
            --------------

        Any defaults under the Credit  Agreement,  Line of Credit Note,  Secured
Line of  Credit  Lending  Agreement  (ILX  Incorporated)  dated  April 9,  1996,
$2,000,000  Secured  Line  of  Credit  Promissory  Note  dated  April  9,  1996,
Receivables  Sale and Purchase  Agreement  dated  February 19, 1997,  $1,500,000
Secured Term  Promissory  Note dated June 27, 1997,  $5,000,000  Secured Line of
Credit  Promissory  Note dated June 27,  1997,  Secured  Line of Credit  Lending
Agreement (ILX  Incorporated  -- Kohl's Ranch Lodge  Facility) and all documents
referenced therein or pertaining thereto which have been previously  executed by
and between Lender and Borrower,  or any other  obligation  from Borrower or its
affiliates  to  Lender or its  affiliates  shall be  deemed  to  constitute  and
comprise an Event of Default hereunder and 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.

        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 the
Line of Credit Note,  this Secured Line of Credit Lending  Agreement,  or 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  provision of any  financial
covenant or any other covenant,  condition or obligation contained in the Credit
Argument;

        (c) Any warranty or  representation  contained herein at any time proves
to be false or misleading in any material 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;
                                       21
<PAGE>
        (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 or more,  which
obligation is not contested or defended by Borrower in good faith;

        (i) The occurrence of a monetary or non-monetary  event of default under
the Secured Line of Credit Lending Agreement (ILX  Incorporated)  dated April 9,
1996,  $2,000,000  Secured Line of Credit  Promissory  Note dated April 9, 1996,
Receivables  Sale and Purchase  Agreement  dated  February 19, 1997,  $1,500,000
Secured Term  Promissory  Note dated June 27, 1997,  $5,000,000  Secured Line of
Credit  Promissory  Note dated June 27,  1997,  Secured  Line of Credit  Lending
Agreement (ILX  Incorporated  -- Kohl's Ranch Lodge  Facility) and all documents
referenced  therein or  pertaining  thereto  which have been entered into by and
between Lender and Borrower.

        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 at law or in 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
                                       22
<PAGE>
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.

        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 out of pocket  costs  resulting  from  liability,  loss,
damage,  costs or expense,  including  court  costs and  attorney's  fees,  that
Indemnitee may hereafter suffer, incur,  reasonably pay or in any manner be held
liable for to third parties, by reason of any breach,  default,  misstatement or
misrepresentation of any of the statements, warranties
                                       23
<PAGE>
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  reasonably made by such person to a third
party  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  address 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  deposit  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).

        If to Borrowers:            ILX Resorts Incorporated
                                    Attn: Nancy Stone
                                    2111 East Highland Avenue
                                    Suite 210
                                    Phoenix, AZ 85016
                                    Facsimile: 602-957-2780

        If to Lender:               Litchfield Financial Corporation
                                    Attn: Wayne Greenholtz
                                    Senior Vice President
                                    13701 West Jewell Avenue, Suite 200
                                    Lakewood, Colorado 80228
                                    Facsimile: 303-985-5375

        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.
                                       24
<PAGE>
        (f)  Attorneys'  Fees.  Borrower does hereby  covenant and agree that it
shall  reimburse  Lender for any and all reasonable  litigation,  collection and
enforcement fees and costs of whatever nature,  including  attorneys  reasonable
fees and court costs,  which Lender may incur as a result of its  enforcement of
Borrower's obligations hereunder including, without limitation, all "workout" or
similar discussions and negotiations, and all reasonable fees and costs incurred
in connection with Lender's involvement in any bankruptcies arising therefrom.

        (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 conditions  and shall  recognize said assignee as
the lawful and enforceable successor in interest to Borrower.

        (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 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  transaction   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.
                                       25
<PAGE>
        (m) JURY WAIVER.  BORROWER HEREBY  KNOWINGLY AND VOLUNTARILY  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.
BORROWER 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  SECURED  LINE OF CREDIT  LENDING  AGREEMENT  SHALL REST
EXCLUSIVELY IN JEFFERSON COUNTY,  COLORADO AND MAKER WAIVES ALL RIGHTS TO ASSERT
OTHERWISE.

        (n) 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.

        (o)  Construction.  Unless the context of any provision of 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.

        (p) Financing Rights. In consideration for Lender's  establishing of the
subject credit  facility,  the  reservation of funds needed to fulfill  Lender's
obligations  hereunder,  and Lender's  underwriting of Borrower's operations and
the Project,  the Borrower  does hereby grant to Lender and its  successors  and
assigns  during the term of this Credit  Agreement  or any  extensions  hereof a
first  right of  refusal to  purchase,  hypothecate  or  otherwise  finance  all
Accounts  generated,  originated  or  otherwise  owned  by  Borrower  or  any of
Borrower's  affiliated entities from that project owned by Borrower and known as
the Inn at Los  Abrigados  and that  project  owned by Borrower  known as Kohl's
Ranch Lodge (subject to Tammac Financial  Corp.'s right to finance Accounts from
Kohl's Ranch Lodge in  accordance  with the  provisions  of that Secured Line of
Credit Lending  Agreement -- Kohl's Ranch Lodge Facility dated June 27, 1997 and
any agreement between Tammac and Lender). Except for projects specifically named
in this subparagraph,  Borrower further grants Lender the first right of refusal
to purchase, hypothecate or otherwise finance all Accounts generated, originated
or otherwise  owned by Borrower for any of its  affiliated  entities  from units
constructed at any project wherein Lender advances to Borrower in the future the
acquisition,  development or construction  financing for such units.  Except for
Tammac's  rights,  should  Borrower  consider  financing  or selling any Account
referred to above to a third party,  Borrower  shall first inform Lender of such
plan and shall provide  Lender with a definitive  written  commitment to provide
such  financing  from the  contemplated  finance  company  which  sets forth the
definitive  terms and  conditions  of the  contemplated  financing.  Thereafter,
Lender  shall  have a twenty  (20) day  period  in which to match  the terms and
conditions  as set forth in said  letter.  Should  Lender  match  said terms and
conditions,
                                       26
<PAGE>
then Borrower  covenants and agrees that  Borrower  shall utilize  Lender as its
exclusive financing source in connection with the subject financing. Recognizing
the difficulty in determining  Lender's damage or damages should Borrower breach
the terms and conditions hereof, Borrower agrees to pay as liquidated damages to
Lender a sum  equal to ten  percent  (10%) of the total  principal  value of all
accounts which Borrower  finances to a third party in violation of the terms and
conditions of this  Agreement.  Additionally,  subject to any existing rights of
lenders,  Borrower will offer to Lender the non-exclusive opportunity to finance
Accounts  generated from timeshare sales of Los Abrigados  Resort & Spa, Varsity
Clubs of America at South Bend and Tucson, and Premiere Vacation Club.

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

        (r) Other Credit  Facilities.  It is recognized that Lender and Borrower
have entered into previous credit facilities that continue to remain outstanding
and  enforceable  including that Secured Line of Credit  Lending  Agreement (ILX
Incorporated) dated April 9, 1996,  $2,000,000 Secured Line of Credit Promissory
Note dated April 9, 1996,  Receivable Sale and Purchase Agreement dated February
19,  1997,  $1,500,000  Secured  Term  Promissory  Note  dated  June  27,  1997,
$5,000,000  Secured Line of Credit Promissory Note dated June 27, 1997,  Secured
Line of  Credit  Lending  Agreement  (ILX  Incorporated  -- Kohl's  Ranch  Lodge
Facility)  and  all   documents   referenced   therein  or  pertaining   thereto
(collectively, the "Pre-existing Credit Facilities"). Nothing herein shall serve
to modify or amend any of the terms and  conditions of the  Pre-existing  Credit
Facilities.  As evidenced by Borrower's  signature  below,  Borrower  covenants,
agrees  and  acknowledges  that,  except  to the  extent a  Pre-Existing  Credit
Facility  is  retired by  proceeds  from this  transaction,  all  documents  and
agreements of every nature which evidence or pertain to the Pre-Existing  Credit
Facilities continue to remain in full force and effect,  completely  enforceable
in accordance with their terms and free from all set-off  rights,  counterclaims
or other defenses to payment and enforceability by Lender.

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

                              LENDER:

                              LITCHFIELD FINANCIAL CORPORATION,
                              a Massachusetts corporation

                              By: /s/ Wayne M. Greenholtz
                                 ---------------------------------

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

                         (Additional Signature Page Follows)
                                       27
<PAGE>
                              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
                                     -----------------------------
                                       28
<PAGE>
                                    EXHIBIT A

                                 CLOSING AGENDA

                                   $40,000,000
                        HYPOTHECATION LINE OF CREDIT LOAN
                                (GLOBAL FACILITY)
                                     BETWEEN
                        LITCHFIELD FINANCIAL CORPORATION
                                       TO
                            ILX RESORTS INCORPORATED


1.  Good Standing Certificates
    1.  ILX Resorts Incorporated
    2.  Los Abrigados Partners Limited Partnership
    3.  Premiere Development Incorporated
2.  Authorizing Resolutions
3.  Closing and Incumbency Certificates
4.  Secured Line of Credit Promissory Note
5.  Secured Line of Credit Lending Agreement
6.  Pledge and Security Agreement
7.  UCC-1 Financing Statements
    1.  Arizona Secretary of State
    2.  Pima County
8.  Collateral Assignment of Management, Marketing, Exchange and Other Contracts
9.  Collateral Assignment of Receivables
10. Collateral Assignment of Deeds of Trust
11. UCC Lien Search Updates
12. Custodial Agreement
13. Irrevocable Limited Power of Attorney
14. Form of Allonge
15. Opinion of Borrower's Counsel
                                       29