Document:

PROMISSORY NOTE

$600,000.00                                                    February 23, 2000

     The undersigned, ILX RESORTS INCORPORATED, AN ARIZONA CORPORATION
("Borrower"), jointly and severally in the case of more than one Borrower)
promises to pay to THE STEELE FOUNDATION, INC., AN ARIZONA NON-PROFIT
CORPORATION ("Lender"), or order, the principal sum of SIX HUNDRED THOUSAND
DOLLARS ($600,000.00) with interest from the date hereof on the unpaid principal
balance (the "Loan"). This Promissory Note (the "Note") is secured in part by a
Pledge Agreement granting Lender a security interest in all assets, including
stock, held in the Wedbush Morgan Securities, account no. 43983106 (the "Stock"
) and by the collateral assignment of Borrower's / Consenting Parties' right in
each of the Resort Funding Inc. contracts ("Contracts"). Borrower promises to
pay the principal and interest evidenced hereby in accordance with the terms and
conditions herein contained and set forth.

1. PROMISE TO PAY PRINCIPAL AND INTEREST. Borrower promises to and shall pay
Lender in monthly installments of principal and interest in an amount of
$23,248.87 beginning on April 1, 2000, and continuing through September 1, 2002
("maturity" or the "Maturity Date"). Pursuant to the terms of the Loan
Commitment Letter dated February 23, 2000 (the "Commitment"), interest is
charged at the rate of TWELVE PERCENT (12%) PER ANNUM (the "Contract Rate"). On
or before September 1, 2002, Borrower shall have repaid all principal due
hereunder, totaling an amount of SIX HUNDRED THOUSAND AND NO/100 DOLLARS
($600,000.00) plus all interest due thereon. In the event the Stock or Contracts
are liquidated or otherwise transferred or encumbered as prohibited under the
Commitment and Pledge Agreement, Borrower promises to and shall immediately pay
Lender the principal sum and all accrued interest then outstanding. In the event
Borrower breaches any term or condition of the Loan Commitment Letter dated
February 23, 2000 between Borrower and Lender, Lender may, at the Lender's
option, declare all sums due hereunder immediately due and payable. The entire
unpaid balance of the principal and interest, if not sooner paid, shall be and
become due and payable at maturity.

2. PLACE OF PAYMENT. All payments shall be made by Borrower to Lender at
Lender's home office, which is located at 702 East Osborn Road, Suite #200,
Phoenix, Arizona 85014, or at such other place or places as Lender may designate
in writing from time to time. All payments made under this Note, including any
permitted prepayments or release payments, shall be applied first to interest
and then to principal.

3. LAWFUL MONEY. All payments shall be in lawful money of the United States of
America or in such other form which is acceptable to Lender. Lender's acceptance
of payment in any form other than lawful money of the United States of America
for any partial payment required or permitted under t he provisions of this Note
shall not be a waiver of the requirement that any future payments be made in
lawful money of the United States of America.

4. PREPAYMENT PENALTY. Borrower shall have the privilege to prepay the Loan in
full or in part, at any time without penalty or premium, subject to the terms of
the Note. In the event Borrower elects such prepayment privilege, Lender shall
be provided with sixty (60) days prior written notice of such intent to prepay.

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5. ACCELERATION UPON DEFAULT. If Borrower shall default:

     a.   in the payment when due of any payment or payments as herein provided;

     b.   in the payment when due of any other sum or sums payable to Lender by
          Borrower pursuant to terms hereof or under the Pledge Agreement and
          any other loan document; or,

     c.   in the performance of any of the other terms, agreements, covenants or
          conditions in any of the Loan Documents, as defined below; then,
          subject to the notice and cure provision of paragraph 19 hereof, the
          entire unpaid principal and interest of this Note, irrespective of the
          Maturity Date specified herein, together with all the then accrued,
          but unpaid, interest thereon and all other sums owed hereunder or
          under the other Loan Documents, shall, at the election of the Lender,
          and subject to paragraph 19, hereof, without further notice of such
          election, become immediately due and payable and Lender may exercise
          any remedy set forth herein, under any of the other Loan Documents, or
          otherwise available at law or in equity. "Loan Documents" as used
          herein shall be those documents listed in paragraph 15 of the
          Commitment.

6. LATE CHARGE. Should any payment not be paid within ten (10) days after the
same becomes due and payable (other than at maturity or by acceleration), it is
recognized by Borrower that Lender will incur extra expenses for the handling of
delinquent payments, the exact amount of such extra expense being impossible to
ascertain, but that a charge of five percent (5%) of the delinquent payment
would be a fair approximation of the expense so incurred by Lender. Therefore,
in such event, upon written notice of the same from Lender to Borrower, and
without prejudice to the right of Lender to collect any other amounts provided
to be paid herein or to declare a default hereunder, and as Lender's monetary
recovery to cover such expense incurred in handling delinquent payments, a late
charge in that amount shall either be deducted from the amount of such
delinquent payment when made or shall be paid by Borrower to Lender in addition
to such delinquent payment.

7. DEFAULT RATE OF INTEREST. If any payment provided for herein is not paid when
due, each and every such delinquent payment, including the entire principal
balance and accrued interest in the event of an acceleration or maturity of the
principal amount due hereunder, and including any late charges assessed as
provided herein, may, in Lender's sole discretion, bear interest to the extent
permitted by law at the rate (the "Default Rate") of eighteen percent (18%) per
annum commencing with the latter to occur of the expiration of the cure period
described in paragraph 19 or the date of Lender's written notice to Borrower as
provided below, which rate shall be in lieu of the Contract Rate, and which
outstanding interest shall be added to principal and compounded monthly until
paid in full. Should Lender elect to initiate the Default Rate as permitted by
this paragraph, written notice to that effect shall be given Borrower at any
time.

8. REMEDIES CUMULATIVE. The rights or remedies of Lender as provided in this
Note and the other Loan Documents shall be cumulative and concurrent, and may be
pursued singularly, successively, or together against Borrower, any guarantor
hereof, and any other funds, property or security held by Lender for the payment
hereof or otherwise at the sole, absolute and uncontrolled discretion of Lender.
The failure to exercise any such right or remedy shall in no event be construed
as a waiver or release of said rights or remedies or of the rights to exercise
them at any later time.

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9. CONSENT AND WAIVER OF DEFENSES. Except as otherwise required by law, Borrower
(including the Consenting Parties as defined in the Pledge Agreement) and all
indemnitors, endorsers, guarantors, sureties, accommodation parties, assuming
parties hereof, and all persons liable or to become liable on this Note waive
presentment, protest and demand, notice of protest, demand and dishonor and
nonpayment of this Note; all applicable appraisement, valuation exemption
rights, notices of whatsoever kind or nature, including, but not limited to,
notice of intention to accelerate, notice of acceleration, notice of dishonor or
other notice which Lender might otherwise be obligated to provide Borrower
following an Event of Default, specifically excepting such notice requirements
as are expressly set forth in this Note or in the Loan Documents; and they also
jointly and severally hereby consent to any and all renewals, extensions or
modifications of the terms hereof, including time of payment, or of the terms of
the Loan Documents or any other document, agreed upon by Borrower, and further
agree that any such renewal, extension or modification of the terms hereof or of
the terms of the Loan Documents or any other document, or the release or
substitution of any security for the indebtedness evidenced hereby or any other
indulgences, as agreed upon by Borrower, shall not affect the liability of any
of said parties for the indebtedness evidenced by this Note. Any such renewals,
extensions or modifications which have been agreed upon by Borrower may be made
without notice to any of said parties.

10. FEES AND EXPENSES. Borrower, indemnitors, endorsers, guarantors, sureties,
accommodation parties, assuming parties hereof and all other persons liable or
to become liable on this Note, agree, jointly and severally, to pay all
reasonable and customary costs of collection, including trustee's fees, title
fees, reasonable attorneys' fees and all reasonable costs of suit, in case the
unpaid principal sum of this Note, or any payment of interest or principal and
interest thereon or premium, is not paid when due, or in case it becomes
necessary to protect the security for the indebtedness evidenced hereby, or for
the foreclosure or other enforcement by Lender or lender of any of the Loan
Documents, in which Lender shall be successful, or in the event Lender is made
party to any litigation because of the existence of the indebtedness evidenced
by this Note, or because of the existence of the other Loan Documents, whether
suit be brought or not, and whether through courts of original jurisdiction, as
well as courts of appellate jurisdiction, or through a bankruptcy court or other
legal proceedings.

11. AMENDMENT. This Note and the other Loan Documents may not be amended,
modified or changed, nor shall any waiver of any provision hereof be effective,
except only by an instrument in writing and signed by the party against whom
enforcement of any waiver, amendment, change, modification or discharge is
sought; provided, however, that this paragraph shall in no way be a limitation
on the provisions of the consents and waivers set forth in paragraph 9, except
that the terms of this Note and the other Loan Documents may not be amended
without Borrower's execution thereof.

12. NOTE SECURED BY PLEDGE AGREEMENT. This Note is secured by the Pledge
Agreement and other Loan Documents which contain additional provisions for the
acceleration of the maturity of the obligation to pay under the provisions of
this Note.

13. INTEREST NOT TO EXCEED LEGAL MAXIMUM. Notwithstanding any provision herein
or in any instrument now or hereafter securing this Note, the total liability
for payments in the nature of interest shall not exceed the limits imposed by
the usury laws of the State of Arizona. If Lender receives as interest an amount
which would exceed such limits, such amount which would be excessive interest
shall be applied to the reduction of the unpaid principal balance and not to the
payment of interest; and if a surplus remains after full payment of principal
and lawful interest, the surplus shall be remitted to Borrower by Lender, and
Borrower hereby agrees to accept such remittance. If this paragraph becomes
operative, the total Loan shall at the option of Lender become immediately due
and payable and shall bear interest at the maximum rate then permitted by the
usury laws of the State of Arizona until all the then obligations of this Note,
as modified by this paragraph, are paid and performed in full. The acceleration
provided for in this paragraph may be avoided by Borrower and all parties liable
to Lender on the Note by then waiving any and all usury claims and defenses they
then have, if permitted by law, and by paying all interest then and thereafter
due and payable at the lesser of the Contract Rate or highest rate then
permitted by law.

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14. ADDITIONAL SUMS. All fees, charges, goods, things in action or any other
sums or things of value (collectively, the "Additional Sums") paid by Borrower
to Lender, whether pursuant to this Note or otherwise howsoever with respect to
the Loan or indebtedness evidenced hereby, or with respect to the other Loan
Documents, which, under the law of the State of Arizona may be deemed to be
interest with respect to such loan or indebtedness, shall, for the purpose of
any laws of the State of Arizona which may limit the maximum rate of interest to
be charged with respect to such loan or indebtedness, be payable by Borrower as,
and shall be deemed to be, additional interest, and for such purposes only, the
agreed upon and contracted rate of interest described above shall be deemed to
be increased by the Additional Sums.

15. SUCCESSORS AND ASSIGNS. Whenever used herein, the words "Borrower" and
"Lender" shall be deemed to include their respective heirs, personal
representatives, successors and assigns. This paragraph shall not be a consent
by Lender for Borrower to assign or transfer any property securing payment
hereof or any rights, powers, obligations or duties of Borrower.

16. CHOICE OF LAW. Except where preempted by the laws of the United States, or
regulations promulgated thereunder, this Note shall be governed by the laws of
the State of Arizona.

17. NOTICE. All notices or other communications required or permitted to be
given or delivered under this Note shall be in writing and may be hand
delivered, deposited in the United States Mail, postage prepaid, or forwarded by
facsimile transmission with the original to follow by United States Mail
addressed to said party or parties at the addresses shown below, or to such
other address as Borrower or Lender may designate by giving notice in the
foregoing manner, which notices shall be deemed effective pursuant to paragraph
4.03 of the Deed of Trust. Any notice hand-delivered or sent by facsimile shall
be deemed effective when received and any notice sent United States Mail shall
be deemed effective two (2) days following the date of mailing.

       If intended for Borrower:

       Joseph P. Martori
       ILX Resorts Incorporated
       2111 E. Highland Ave., Suite #210
       Phoenix, AZ 85016
       Facsimile telephone number: 602-957-2780

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       If intended for Lender and mailed:

       Daniel Cracchiolo, President
       The Steele Foundation, Inc.
       702 East Osborn Road, Suite #200
       Phoenix, AZ 85014
       Facsimile telephone number: 602-234-0341

       With a copy, to:

       Andrew Abraham, Esq. Burch & Cracchiolo, P.A.
       702 East Osborn Road, Suite #200
       Phoenix, AZ 85014
       Facsimile telephone number: 602-234-0341

18.  INTEGRATED  CONTRACT.  This Note and the other  documents  and  instruments
described and referred to in the Commitment and executed in connection  with the
Loan  (the  Note  and such  other  documents  may be  referred  to as the  "Loan
Documents")  shall  be  and  become  an  integrated  contract,  and  all  terms,
conditions  and  provisions  hereof and thereof shall survive the closing of the
Loan and the  recording  of the Loan  Documents.  In the  event of any  conflict
between this Note and the other Loan Documents, then this Note shall control.

19. EXERCISE OF REMEDIES. Lender will not exercise any of the rights or remedies
authorized or permitted herein or in the other Loan Documents which are
exercisable upon the occurrence of a default by Borrower unless and until Lender
has given notice to Borrower pursuant to paragraph 17 hereof and Borrower shall
have failed to cure the default specified within said notice within a period of
(a) ten (10) days after receipt of such notice, as to any default occurring as a
result of the nonpayment of any sum of principal or interest which shall be or
become payable by Borrower to Lender, or (b) thirty (30) days after receipt of
such notice as to any other default occurring under the terms of the Note or the
other Loan Documents, unless such default cannot be cured within thirty (30)
days. If the default specified is not a result of the nonpayment of principal
and interest and cannot be cured within thirty (30) days and Borrower shall have
initiated action to cure the same within said period and shall proceed with due
diligence, Lender shall not exercise any right or remedy which is exercisable as
a result of such default until the expiration of a reasonable time, which in no
event shall exceed sixty (60) days without written consent of the Lender.

20. ATTORNEYS' FEES. Notwithstanding any provision hereof to the contrary, if
any dispute arising under the terms of this Note or the other Loan Documents
shall result in litigation, the successful party shall, in addition to any other
relief granted or awarded by the court, be entitled to an award of reasonable
attorneys' fees.

21. HEADINGS. The paragraph headings used herein are for convenience only and
are not to be used to interpret or construe this Note.

22. TIME IS OF THE ESSENCE. Time is of the essence of this Note and each and
every provision hereof. Any extension of time granted for the performance of any
duty under this Note shall not be considered an extension of time for the
performance of any other duty under this Note.

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23. SEVERABILITY. In case any one or more of the provisions contained in this
Note shall for any reason be held to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect any
other provision hereof and this Note shall be construed as if such invalid,
illegal or unenforceable provision had never been contained herein.

Borrower has executed this Note on the day first hereinbefore written.

                                BORROWER:

                                ILX RESORTS INCORPORATED, AN ARIZONA CORPORATION

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

                                Its: Chairman
                                     -------------------------------------------

                                      -6-LEASE AGREEMENT

Edward John Martori, hereafter "Landlord", agrees to lease to ILX Resorts
Incorporated, an Arizona corporation, hereafter "Tenant", and Tenant agrees to
lease from Landlord, the real property situated in Maricopa County, Arizona,
more particularly described in Exhibit "A" attached hereto located at 3840 N.
16th Street, Phoenix, Arizona, hereafter "the premises", upon the following
terms and conditions:

1.   TERM: The term of this Lease shall commence on the 1st day of January, 2000
     and shall terminate on the 31st day of December 2001. Tenant shall have
     three options to extend the term, each for a successive additional one
     calendar year period, by giving written notice thereof to Landlord at least
     thirty (30) days in advance of the commencement of such extended term.

2.   POSSESSION: Tenant shall take possession of the premises on January 1,
     2000. Tenant shall be bound by all provisions of this Lease, including the
     payment of rent, at all times Tenant is in possession of the premises.

3.   RENT: Tenant agrees to pay Landlord as base rent FOUR THOUSAND DOLLARS
     ($4,000) per month for each month of the Lease. Rent is due on or before
     the last day of each month and is payable at Landlord's offices or at such
     other place as Landlord may designate in writing. Rent shall be prorated on
     the basis of a thirty (30) day month for each partial month during the term
     of this Lease or during which Tenant is in possession of the premises. All
     other monetary obligations of Tenant under this Lease shall constitute
     additional rent and shall be due as specified in each instance.

4.   TAXES AND ASSESSMENTS: Tenant agrees to pay directly as additional rent
     during each lease year or partial lease year of the term of this Lease, all
     real estate taxes and assessments levied and assessed for any such year
     upon the premises and the underlying realty. For any partial lease year of
     the term hereof such amount shall be pro rated on a daily basis.

     Tenant shall pay to Landlord, in addition to and along with the rental
     otherwise payable hereunder, any excise, transaction, sales or privilege
     tax now or hereafter imposed by any government or agency upon Landlord and
     attributed to or measured by rent or prorations payable by Tenant.

5.   OPERATING EXPENSES: The operating expenses of the premises shall be paid by
     Tenant. The operating expenses of the Project include without limitation:
     property taxes, special assessments, utilities, maintenance, supplies,
     management fees, janitorial services, trash removal, fire and liability
     insurance premiums, repairs and all other costs which can properly be
     considered expenses of operating and maintaining the building and
     surrounding property of which the premises are a part, including necessary
     capital expenditures. Without limiting the generality of the foregoing,
     Tenant shall at its own expense and at all times maintain the premises in
     good and safe condition, including plate glass, heating and air
     conditioning units, roof, exterior walls, electrical wiring, plumbing and
     any other systems or equipment upon the premises. Tenant will promptly pay
     when due all electric, water, gas and other similar charges directly
     attributable to the premises.

6.   USE OF PREMISES: Tenant shall use the premises for the purpose of
     office/warehouse use and shall not use or allow the premises to be used for
     any illegal or objectionable purpose. Tenant shall at its own cost and
     expense obtain all licenses and permits necessary for such use. Tenant
     shall use its best efforts to comply with all governmental laws, ordinances

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     and regulations applicable to the use of the demised premises, and shall
     use its best efforts to promptly comply with all governmental orders and
     directives for the correction, prevention and abatement of nuisances in or
     upon, or connected with, the use of the demised premises all at Tenant's
     sole expense. Tenant shall not operate its business in such manner so as to
     constitute an annoyance to other tenants and shall endeavor to control its
     customers so as to maintain an orderly premises. Tenant shall not do or
     permit anything to be done which would increase the cost of any fire,
     extended coverage or any other insurance covering the premises.

7.   REPAIR: Tenant shall at its own expense keep the premises in good condition
     and repair.

8.   ASSIGNMENT: Tenant shall not assign or hypothecate this Lease, or enter
     into a sublease relating to all or any portion of the premises, without
     Landlord's prior written consent, which consent shall not be unreasonably
     withheld. It is understood by Landlord that Sedona Worldwide Incorporated,
     a former subsidiary of Tenant, will occupy a portion of the premises. Any
     other assignment or subletting without consent shall be void. Landlord's
     approval of any such assignment or sublease shall not release Tenant from
     its obligations under this Lease or constitute assent to any subsequent
     assignment or sublease.

9.   RETURN OF PREMISES: Upon the termination of this Lease, Tenant shall return
     the premises to Landlord in its original condition, ordinary wear and tear
     and alterations or improvements not designated to be removed excepted.

10.  INSURANCE: Tenant, during the term hereof, at its own expense, will provide
     and keep in force for the benefit of Landlord and Tenant, as their
     respective interests may appear, fire, comprehensive, plate glass and
     general and public liability insurance protection with respect to the
     premises and for claims for personal injury or death or property damage in
     and about the premises with limits not less than $1,000,000 in the event of
     bodily injury or death of any number of persons in any one accident and
     limits of not less than $1,000,000 for damage to property, and shall
     provide Landlord with a copy of the policy upon Landlord's written request.
     Tenant shall name Landlord as an additional insured under the policy and
     provide Landlord a certificate of insurance. The insurance shall be primary
     insurance and shall provide that any right of subrogation against Landlord
     is waived. The policy shall further provide that no act or omission by
     Tenant shall impair the rights of the insured to receive the proceeds of
     the policy and that the policy shall not be canceled except upon thirty
     (30) days prior written notice to each named insured.

11.  INDEMNIFICATION: Tenant shall indemnify, defend and hold Landlord harmless
     from all actions, claims, demands, penalties or liabilities arising out of
     events occurring in or about the premises or caused in whole or in part by
     Tenant or Tenant's agents, servants, employees or invitees, except for
     matters attributable to Landlord's willful misconduct or gross negligence.
     This indemnification shall include all costs and expenses and reasonable
     attorney's fees which Landlord may expend in connection with any of the
     foregoing.

12.  LIMITATION OF LIABILITY: Landlord shall not be liable to Tenant for damages
     nor shall Tenant be entitled to a reduction in rent by reason of any of the
     following: (i) Landlord's failure to provide utilities or services when
     such failure is caused by accident, repairs, strikes, disturbances or any
     other cause beyond the reasonable control of Landlord; (ii) disruption to
     Tenant's business caused by Landlord's repairs or improvements to the

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     project; (iii) damages to the premises or Tenant's property unless caused
     by Landlord's gross negligence or willful misconduct.

13.  NOTICE: All notices or demands under this Lease or required to be given by
     law are to be made in writing by registered or certified mail, return
     receipt requested, and are deemed given when deposited in the United States
     mail postage prepaid and addressed to Landlord or Tenant at the addresses
     set forth on the signature page of this Lease. Each party shall have the
     right, from time to time, to designate a different address to which notices
     and demands are to be sent by giving notice in the manner provided for
     above except that Landlord may in any event use the premises as Tenant's
     address for notice purposes.

14.  ENTRY BY LANDLORD: Landlord shall have the right to enter the premises at
     all reasonable times for the purposes of inspecting, repairing or
     maintaining the premises, determining whether the terms of the Lease are
     being complied with, posting such notices as Landlord deems advisable for
     its protection, and showing the premises to prospective tenants, purchasers
     or lenders. Landlord may at any time within ninety (90) days prior to the
     expiration of this Lease place upon the premises any customary "For Lease"
     signs, and reasonably permit persons desiring to lease the same to inspect
     the premises.

15.  DEFAULT & REMEDIES:

     (a)  The occurrence of one or more of the following events shall constitute
          a default of this Lease by Tenant:

          (1)  The abandonment of the premises by Tenant or absence of Tenant
               from premises for thirty (30) days or longer while failing to
               comply with any provision of this Lease.

          (2)  The failure by Tenant to make any payment of rent or other
               payment required to be made by Tenant under this Lease when due.

          (3)  The failure by Tenant to observe or perform any provision of this
               Lease other than the payment of money where such failure
               continues for a period of thirty (30) days after written notice
               thereof from Landlord to Tenant. This notice shall be in lieu of,
               and not in addition to, any notice required under Arizona law.

          (4)  (i) The making by Tenant of any general assignment for the
               benefit of creditors; (ii) the filing by or against Tenant of a
               petition under the United States Bankruptcy Code unless dismissed
               within thirty (30) days; (iii) the appointment of a receiver or
               trustee to take possession of substantially all of Tenant's
               assets located at the premises or of this Lease where possession
               is not restored to Tenant within thirty (30) days; (iv) the
               attachment, execution or other judicial seizure of substantially
               all of Tenant's assets located on the premises where such seizure
               is not discharged within thirty (30) days.

     (b)  In the event of any default by Tenant as defined above, Landlord may
          exercise one or more of the following remedies in addition to any
          remedy provided for at law or equity:

          (1)  With or without notice or process of law and using such force as
               Landlord may deem reasonably necessary under the circumstances,
               and without terminating this Lease or relieving Tenant of any

                                      -3-
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               obligation hereunder, Landlord may re-enter and take possession
               of the premises and of all property located therein. Under no
               circumstances shall Landlord be liable in damages or otherwise by
               reason of the exercise by Landlord of any such re-entry or
               eviction, or by reason of the exercise by Landlord of any other
               remedy provided in this subparagraph (b).

          (2)  In the event that Landlord recovers possession of the premises
               without termination of this Lease, Tenant shall pay to Landlord
               all sums due under this Lease on the dates due as if Tenant
               remained in possession-of the premises.

          (3)  Landlord may recover from Tenant, and Tenant shall pay upon
               demand, all expenses incurred in recovering possession of the
               premises, repairing and altering the premises for reletting, and
               attempting to relet the premises, including commissions and
               attorney fees.

     (c)  The remedies described in subparagraph (b) are cumulative and in
          addition to any remedy at law or in equity. The filing of an action by
          Landlord against Tenant requesting under one or more remedies shall
          not be deemed an election of that remedy or remedies to the exclusion
          of all others.

     (d)  Landlord shall be under no obligation to observe or perform any duty
          imposed by this Lease which accrues after the date of any default by
          Tenant.

     (e)  The failure or delay of Landlord in exercising any right or remedy
          shall not be construed as a waiver of any such right or remedy or of
          any default by Tenant.

16.  ATTORNEY'S FEES: In the event any action or proceeding is brought by either
     party against the other under this Lease, the prevailing party shall be
     entitled to recover from the other party its reasonable costs, expenses and
     attorneys' fees.

17.  WAIVER: The waiver by Landlord of Tenant's breach by any provision of this
     Lease shall not constitute a continuing waiver of any subsequent breach by
     Tenant of the same or other provision.

18.  DEFAULT BY LANDLORD: Landlord shall not be in default unless Landlord fails
     to perform its obligations under this Lease within thirty (30) days after
     written notice by Tenant to Landlord specifying the obligations which the
     Landlord has failed to perform. If an obligation is such that it cannot
     reasonably be completed within such thirty (30) day period, Landlord shall
     not be in default if Landlord commences performance within thirty (30) days
     and thereafter diligently prosecutes the same to completion.

19.  SURRENDER OF PREMISES: The surrender of this Lease by Tenant to Landlord
     shall not work a merger and shall, at the option of Landlord, operate as an
     assignment to it of any subleases affecting the premises.

20.  ESTOPPEL CERTIFICATE:

     (a)  Tenant shall upon not less than five (5) days prior written notice
          from Landlord execute, acknowledge and deliver to Landlord a statement
          in writing (i) certifying that this Lease is unmodified and in full
          force and effect and if modified, stating the nature of such
          modification and certifying that this Lease as modified is in full

                                      -4-
<PAGE>
          force and effect; (ii) specifying the dates to which rental and other
          charges are paid in advance; and (iii) acknowledging that there are no
          uncured defaults on the part of Landlord or specifying such defaults
          if any are claimed. Any such statement may be relied upon by any
          prospective purchaser or encumbrancer of the real property of which
          the premises are a part.

     (b)  Tenant's failure to deliver such a statement within the time specified
          above shall be conclusive upon Tenant (i) that this Lease is in full
          force and effect and without modification except as may be represented
          by Landlord; and (ii) that there are no uncured defaults by Landlord.

21.  CONDITION OF PREMISES: Tenant acknowledges that neither the Landlord nor
     any of the Landlord's agents has made any representation or warranty with
     respect to the premises or building or with respect to the suitability of
     either for the conduct of Tenant's business. Taking possession of the
     premises by Tenant shall conclusively establish that the premises and
     building were in good, sanitary order, condition and repair at such time.

22.  DESTRUCTION OF PREMISES: In the event that the premises or the building of
     which the premises are a part are destroyed in whole or in part by fire or
     other casualty, Landlord may terminate this Lease at its option. If
     Landlord does not terminate this Lease and elects to repair the damage,
     this Lease shall remain in full force and effect.

23.  CONDEMNATION: If all or a portion of the leased premises are appropriated
     by a public or quasi-public authority under the power of eminent domain or
     are transferred by Landlord in lieu thereof, Landlord may terminate this
     Lease without liability to Tenant for any unexpired term of this Lease. If
     this Lease is not terminated as a result of such appropriation or transfer,
     base rent shall be equitably reduced. In either event, Landlord shall be
     entitled to the entire condemnation award or settlement except that Tenant
     shall be entitled to any award made by such authority specifically to
     Tenant for moving expenses or damages for disruption to Tenant's business.

24.  LATE CHARGES: All sums due under this Lease not paid by Tenant within ten
     (10) days from the date such payment is due shall be subject to a late
     charge of the greater of Twenty Dollars ($20.00) or Five Percent (5%) of
     the amount due and shall bear interest at a rate of Eighteen Percent (18%)
     per annum until paid.

25.  SALE BY LANDLORD: In the event of a sale or conveyance by Landlord of the
     premises, the same shall operate to release Landlord from any future
     liability upon any of the covenants or conditions, express or implied,
     herein contained in favor of Tenant (so long as the purchaser expressly
     assumes such liability), and in such event Tenant agrees to look solely to
     the responsibility of the successor in interest of Landlord in and to this
     Lease. This Lease shall not be affected by any such sale, and Tenant agrees
     to attorn to the purchaser or assignee.

26.  LANDLORD'S CONSENT: Except as otherwise provided herein, where Landlord's
     consent is required under this Lease, such consent shall not be
     unreasonably withheld.

27.  APPLICABLE LAW: This Lease shall be governed by the laws of the State of
     Arizona.

                                      -5-
<PAGE>
28.  TIME OF ESSENCE: Time is of the essence with respect to the performance of
     every provision of this Lease in which time of performance is a factor.

INTENDING TO BE LEGALLY BOUND, the parties have executed this Lease agreement
effective as of the 1st day of January, 2000.

LANDLORD:                                  TENANT:

                                           ILX Resorts Incorporated
/s/ Edward John Martori
-----------------------------------        By: /s/ Joseph P. Martori
Edward John Martori                            ---------------------------------
                                           Its: Chairman
4740 East Sunrise Drive, #394
Tucson, Arizona 85718                      2111 East Highland Avenue, Suite 210
                                           Phoenix, Arizona 85016

                                      -6-
<PAGE>
                                   EXHIBIT "A"

                          LEGAL DESCRIPTION OF PREMISES

The North 106 feet of Lots 4 and 5, of DUNDEE SUBDIVISION, according to the plat
of record in the office of the County Recorder of Maricopa County, Arizona,
recorded in Book 10 of Maps, Page 5.

EXCEPT the East 7 feet of the North 106 feet of Lot 5.

                                      -7-

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