Document:

Exhibit 10.1

                           PURCHASE AND SALE AGREEMENT
                                       FOR
                                 121 PORTAL LANE
                                 SEDONA, ARIZONA
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                                TABLE OF CONTENTS

Purchase and Sale Agreement....................................................1

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

Section 1. Sale and Purchase ..................................................2

Section 2. Purchase Price: Earnest Money.......................................3

Section 3. Title Insurance.....................................................3

Section 4. Survey..............................................................4

Section 5. Due Diligence.......................................................4

Section 6. Prorations..........................................................4

Section 7. Representations and Warranties......................................5

Section 8. Close of Escrow.....................................................8

Section 9. "AS IS Condition."..................................................9

Section 10. Notices............................................................9

Section 11. Commissions.......................................................10

Section 12. Successors and Assigns............................................10

Section 13. Remedies..........................................................10

Section 14. Condemnation/Casualty.............................................11

Section 15. Inspections and Documents.........................................12

Section 16. Miscellaneous.....................................................12

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                          PURCHASE AND SALE AGREEMENT

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

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

Agreement Date:                   October __, 2000  (to  be  completed  by Buyer
                                  only upon  signing of  this Agreement by Buyer
                                  which will sign this Agreement  after  each of
                                  the Sellers have signed it).

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

Seller Notice Address:                 Name: John L. Fox, M.D.
                                    Address: 1801 Champlin Drive, Apartment 1507
                                             Little Rock, AR 72223
                                  Telephone: (501) 821-7662
                                  Facsimile: (501) 821-7663

                                       Name: Carol Fox
                                    Address: P.O. Box 2093
                                             Sedona, AZ 86339
                                  Telephone: (520) 203-9921
                                  Facsimile: (520) 282-2010

PRICE AND TERMS

A. PURCHASE PRICE:  $1,010,000.00 ("Purchase Price") payable by Buyer at closing
in cash, by certified check or wire transfer of good funds.

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

C. DUE DILIGENCE PERIOD: A period expiring 10 business days after the Opening of
Escrow Date ("End of the Due Diligence Period").

D. CLOSING DATE (SEE ALSO SECTION 8.1):  Thirty (30) business days after the end
of the Due Diligence Period ("Closing Date").

E. PERSONAL  PROPERTY:  This Agreement  includes all personal  property owned by
Seller  located on the Property and used in the  operation of the Property as of
the Agreement Date.

F. ESCROW AGENT:
   Gene Keefover
   Capital Title Agency
   1725 W. Highway 89A, Suite D
   Sedona, AZ 86336
   Phone: (520) 282-6700
   Facsimile: (520) 204-2155

G. TITLE COMPANY: Capital Title Agency, Inc.

H. BROKERS (see Section 11).

SECTION 1. SALE AND PURCHASE.

     1.1 Property.  Seller agrees to sell,  convey and assign to Buyer and Buyer
agrees to purchase and accept from Seller, for the Purchase Price and subject to
the terms and  conditions  herein set forth,  Seller's  entire right,  title and
interest in and to the real  Property  legally  described  in Exhibit A attached
hereto and further described below  (collectively the "Property").  The Property
includes all  improvements  of each and every kind located on the Property which
is a part of the  Property.  All  tangible  and  intangible  personal  property,
including all equipment,  trade name and telephone numbers, and contracts of any
kind owned by Seller on the Closing Date and  attached to or used in  connection
with  the land or  improvements  and the  ownership,  maintenance  or  operation
thereof (collectively the "Personal  Property").  The two bronze statues located
at the Property  courtyards are included in Personal  Property.  Seller's office
furniture,  files,  web-site,  miscellaneous  cleaning  supplies  and the  items
reflected  on  Exhibit B to this  Agreement  are not  included  in the  Personal
Property  and such  items  shall be removed by Seller  from the  Property  on or
before the Closing Date.

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     1.2 TITLE COMMITMENT.  The sale of the Property is subject to matters shown
in Schedule B, Section 2 of the Title  Commitment of Capital Title Agency,  Inc.
("Commitment")  (see Section 3);; zoning laws,  restrictions,  and stipulations,
subdivision  regulations and other laws and ordinances  regulating the use of or
improvements to the Property.

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

     2.1.EARNEST MONEY. Within one (1) business day of signing this Agreement by
Buyer,  it shall  deliver to the Escrow  Agent the sum of $70,000 as the earnest
money  deposit by cashier's  check or federal wire  transfer of funds payable to
the Escrow Agent ("Earnest Money").

     2.2 ESCROW AGENT.  The parties  hereby  designate Gene Keefover and Capital
Title Agency, Inc. as the Escrow Agent and the Title Company,  respectively. The
Escrow  Agent  shall hold the  Earnest  Money in  escrow,  invest the same in an
interest-bearing account, and pay or apply the same in accordance with the terms
hereof.

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

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

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SECTION 3. TITLE INSURANCE.

     3.1 TITLE COMMITMENT. Buyer accepts the Commitment attached as Exhibit C to
this Agreement.

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

SECTION 4. SURVEY. No survey required.

SECTION 5. DUE DILIGENCE.

     5.1 DUE DILIGENCE PERIOD. Buyer shall have ten (10) business days after the
Opening of Escrow Date to review and inspect the  Property  and accept or reject
the Property for any reason  whatsoever  including  but not limited to the Buyer
arranging financing on terms solely acceptable to Buyer at its discretion.

     5.2 PHASE ONE ENVIRONMENTAL REPORT. During the first five (5) business days
of the Due  Diligence  Period,  Seller shall provide Buyer with an exact copy of
the most recent Phase One  Environmental  Report prepared for the benefit of the
Seller, if one exists.

     5.3 REAL  ESTATE  TAX  BILLS.  During  the  first  five (5) days of the Due
Diligence  Period,  Seller  shall  provide  Buyer with exact  copies of the most
recent real estate tax bills.

SECTION 6. PRORATIONS.

     6.1 SETTLEMENT STATEMENT. Escrow Agent shall prepare a pro forma settlement
statement  and  circulate  same to the parties at least five (5)  business  days
prior to the Closing Date  reflecting all proposed  prorations for mutual review
by the parties.

     6.2  TAXES  AND  ASSESSMENTS.  All real  property  taxes,  if any,  and all
occupancy  taxes,  shall be prorated between the parties as of the Closing Date.
For the tax year in which escrow closes, Seller shall be charged and Buyer shall

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be  credited at the Close of Escrow  with an amount  equal to Seller's  prorated
share for such tax year  (based on the number of days the  Property  is owned by
Seller in such tax year) of all Property taxes  applicable to the Property based
upon  the  actual  figures,  and  based  on the  most  recent  tax  rate as then
determined. If the actual real estate taxes are later determined to be different
from those upon which the proration provided for herein was based, within thirty
(30) days following the written request of either party,  Seller and Buyer shall
subsequently  adjust the difference with a reconciling payment to be made by one
party to the other outside of escrow based upon the actual figures. Seller shall
pay all assessments in full from its sales proceeds.

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

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

SECTION 7. REPRESENTATIONS AND WARRANTIES.

     7.1 BY BUYER. Buyer represents and warrants to Seller as follows:

          (a) Buyer,  and each of the persons  executing  this  Agreement  on of
Buyer,  represent and warrant that (i) Buyer is a duly  authorized  and existing
entity (e.g., corporation,  partnership, limited liability company, or trust) in
good  standing;  (ii) Buyer is qualified to do business in the State of Arizona;
(iii) Buyer has full right and  authority  to enter into this  Agreement  and to
consummate  the  transactions  contemplated  herein;  (iv)  each of the  persons

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

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

          (c) Buyer has received from Seller a Flood Hazard Status Report in the
form attached as Exhibit D to this Agreement. During the Due Period, Buyer shall
investigate  the floor hazard status.  If Buyer does not terminate the Agreement
on or before the end of the Due  Diligence  Period,  Buyer shall have waived any
claim arising out of the facts reflected on the Flood Hazard Status Report.

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

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

          (b) Seller, to the best of its actual knowledge, without due diligence
or further inquiry, represents and warrants to Buyer as follows:

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

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

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               (iii) Seller has not disposed of or stored on the Property or any
part thereof any  "hazardous  material" as defined  below.  For purposes of this
Agreement, "hazardous material" means and includes any petroleum product and any
hazardous  substance or any pollutant or contaminant  defined as such in (or for
purposes  of)  the  Comprehensive   Environmental  Response,   Compensation  and
Liability  Act,  any  so-called   "Superfund"  or  "Superlien"  law,  the  Toxic
Substances  Control  Act, or any other  federal,  state or local  statute,  law,
ordinance, code, rule, regulation,  order or decree regulating,  relating to, or
imposing  liability or standards of conduct  concerning any hazardous,  toxic or
dangerous waste,  substance or material, or any substance or compound containing
PCB's, or any other hazardous,  toxic or dangerous waste, substance or material.
Seller is not aware of any  environmental  issues which are not disclosed in the
Property condition report.

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

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

               (v) Except as disclosed to Buyer in writing, Seller does not have
knowledge  of  any  condemnation,   environmental,   zoning  or  other  land-use
regulation proceedings,  either instituted,  or planned to be instituted,  which
would  materially  affect the use and operation of the Property for its intended
purpose  or the value of the  Property,  nor has Seller  received  notice of any
special assessment  proceedings  affecting the Property.  Specifically  excluded
from this  representation  is a "shared parking" license  currently in existence
between  Seller and Buyer  without  which the Property  may not have  sufficient
parking to satisfy City of Sedona parking requirements.

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

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

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

               (ix) The only lease on the Property is a lease with "Said" ("Said
Lease"),  a true and  accurate  copy of which is attached to this  Agreement  as
Exhibit E.  Within  five (5)  business  days after the  Opening of Escrow  Date,
Seller  shall  provide  a  fully-signed  Said  Lease to  Buyer.  So long as this
Agreement has not been terminated, Seller shall not (a) amend, waive any default
under,  or in any way change the Said Lease or (b) enter into any new lease with
a tenant on the Property.

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

SECTION 8. CLOSE OF ESCROW.

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

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          8.1.1 A Warranty Deed for the Property in the Arizona  statutory form,
subject only to (i) the title  exceptions  reflected in Schedule B, Section 2 of
Exhibit B to this Agreement; and (ii) the Said Lease.

          8.1.2 A Bill of Sale for the Personal Property in the standard Capital
Title form.

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

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

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

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

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

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

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

SECTION 10.  NOTICES.  Any notice  required or  permitted to be given under this
Agreement  must be in  writing  and  given by (a)  facsimile  transmission;  (b)

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

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

         With a copy to:                    Al Spector, Esq.
                                            Spector Law Offices, P.C.
                                            6900 E. Camelback Road, Suite 640
                                            Scottsdale, AZ 85251
                                            Telephone: (480) 941-0221
                                            Facsimile: (480) 990-9093

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

         With a copy to:                    Adrienne C. Hanley, Esq.
                                            Frankel & Hanley, PPLC
                                            2155 West Highway 89A, Suite 202
                                            Sedona, AZ 86336
                                            Telephone: (520) 282-4511
                                            Facsimile: (520) 282-4748

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

SECTION 11. COMMISSIONS.  Buyer and Seller each represent to the other that each
has not retained any real estate broker or any party entitled to a commission or
broker's fee in connection with the sale of the Property by Seller to Buyer, and
Buyer and Seller  each agree to  indemnify,  protect,  defend and hold the other
harmless  for,  from and against any  expense,  including,  without  limitation,
attorneys' and accountants' fees, claims,  actions, suits or demands for payment

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of any commission, finder's fee or other sum initiated by any broker, commission
agent or other  person  which such party or its  representatives  has engaged or
retained.  Notwithstanding  anything  in this  Agreement  to the  contrary,  the
representations  and  indemnities  set forth in this paragraph shall survive any
termination of this Agreement.

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

SECTION 13. REMEDIES.

     13.1 BUYER DEFAULT.  If Buyer fails for any reason to close the transaction
described  herein or  otherwise  defaults in the payment or  performance  of any
obligation  set forth  herein,  Seller  shall give Buyer  written  notice of the
default.  If Buyer has not completely cured the default within ten (10) business
days after the date of  Seller's  notice,  then  Seller  shall have the right to
terminate  this  Agreement by giving Buyer and the Escrow Agent  written  notice
thereof, in which event Seller shall be entitled to retain, as Seller's sole and
exclusive remedy, as liquidated damages, and not as a penalty, the Earnest Money
and all interest earned thereon;  such amounts shall be released from escrow and
delivered  immediately to Seller by the Escrow Agent without further instruction
from  Seller or Buyer,  and  neither  party  shall have any  further  obligation
whatsoever to the other.  Seller and Buyer  acknowledge  and agree that Seller's
damages in the event of any such  default or breach by Buyer would be  difficult
or  impossible  to determine  and that under the  circumstances  existing on the
Contract Date, the amount of the Earnest Money and interest  thereon is the best
and most  accurate  estimate  by the parties of the  damages  that Seller  would
suffer in the event of any such default or breach.

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     13.2 SELLER  DEFAULT.  If Seller fails to perform any of its obligations or
agreements hereunder,  Buyer shall give Seller written notice of the default. If
Seller has not completely  cured the default within ten (10) business days after
the date of Buyer's  notice,  then Buyer may (i)  terminate  this  Agreement  by
notifying  Seller  thereof,  in which event the Earnest  Money and all  interest
earned thereon shall be returned to Buyer; or (ii) bring legal action to enforce
specific performance of this Agreement.

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

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

SECTION 14. CONDEMNATION/CASUALTY.

     14.1  CONDEMNATION.  In the event that all or any  Substantial  Portion (as
defined in Section  14.3 below) of the Property is condemned or taken by eminent
domain  prior to Closing or conveyed in lieu  thereof,  Seller  shall give Buyer
written notice  thereof and Buyer may, at its option,  either (i) terminate this
Agreement by written  notice  thereof to Seller  within ten (10)  business  days
after Seller notifies Buyer of such condemnation or conveyance;  or (ii) proceed
to close the purchase of the  Property  pursuant to the terms  hereof.  If Buyer
elects option (i) above,  Buyer shall receive an immediate refund of the Earnest
Money and all interest earned thereon.  If Buyer elects option (ii) above, Buyer
shall receive the condemnation  proceeds or a reduction in the Purchase Price of
an equal amount.  In the event Buyer fails to timely  deliver  written notice of
termination  as  described  in option (i) above,  Buyer  shall be deemed to have
elected option (ii) above.

     14.2  CASUALTY.  In the event  that all or any  Substantial  Portion of the
Property is damaged or  destroyed  by fire or other  casualty  prior to Closing,
Buyer may, at its option,  either (i) terminate this Agreement by written notice
thereof to Seller within ten (10) business days after Seller  notifies  Buyer of
the casualty;  or (ii) proceed to close the purchase of the Property pursuant to
the terms hereof. If Buyer elects option (i) above, Buyer shall receive a refund
of the Earnest  Money and all interest  earned  thereon.  If Buyer elects option
(ii) above,  Seller shall deliver to Buyer at the Closing all insurance proceeds
actually  received by Seller arising from such casualty and  attributable to the
Property and/or assign to Buyer all of Seller's right, title and interest in any

                                       12
<PAGE>
claim under any  applicable  insurance  policies with respect to such  casualty,
there shall be no  reduction in the  Purchase  Price and Seller shall  cooperate
with Buyer in its  efforts to be paid  insurance  proceeds.  In the event  Buyer
fails to timely deliver written notice of termination as described in option (i)
above, Buyer shall be deemed to have elected option (ii) above.

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

SECTION 15. INSPECTIONS AND DOCUMENTS.

     15.1.  ACCESS.  Buyer has had and shall continue to have, during the entire
term of this  Agreement,  access to (i) all  information  Buyer is  entitled  to
hereunder;  and (ii) the Property for purposes of inspections and investigations
of the Property. Seller agrees it will not make or cause to be made any material
changes to the Property after such  inspection.  Notwithstanding  the foregoing,
Buyer and its agents  shall not disrupt the  operation  of the  Property.  Buyer
shall  defend and  indemnify  Seller from,  for,  and against any loss,  cost or
liability  which may arise or result from any  activities of Buyer or its agents
on or with  respect to the  Property,  except to the extent  caused by  Seller's
negligence or willful misconduct.

     15.2. INFORMATION.  Within three (3) days after the Opening of Escrow Date,
Seller  shall  allow Buyer to inspect  and copy any and all  information,  data,
documents, and other materials in Seller's possession or reasonably available to
Seller relating to the Property including all reports, engineering and/or survey
work,  preliminary  and  final  plats  relating  to the  Property,  all land use
planning  and  marketing  information   pertaining  to  the  Property,  and  all
contractor's  bids and cost estimates  pertaining to the Property.  Seller shall
deliver the original and all copies of the  information,  data,  documents,  and
materials  in  Seller's  possession  to Buyer at Close of  Escrow  and  Seller's
interest in them shall pass to Buyer as of Close of Escrow.

                                       13
<PAGE>
SECTION 16. MISCELLANEOUS.

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

     16.2 REVIEW BY  COUNSEL.  Each party  acknowledges  that it and its counsel
have reviewed this Agreement,  and the parties hereby agree that the normal rule
of construction  to the effect that any  ambiguities are to be resolved  against
the drafting party shall not be employed in the interpretation of this Agreement
or any amendments or exhibits hereto.

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

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

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

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

                                       14
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day first
above written.

BUYER:                                        SELLER:
                                              Carol Fox
ILX RESORTS INCORPORATED                      Tax ID:
                                              Date:

----------------------------------
By: Joseph P. Martori
Its: Chairman of the Board                    John L. Fox
                                              Tax I.D.:
Date: October ____, 2000                      Date:

                                       15
<PAGE>
ESCROW AGENT:

Received  this _______ day of , 2000 Escrow  Agent hereby  agrees to be bound by
the provisions  hereof applicable to Escrow Agent, and to perform Escrow Agent's
obligations as set forth herein.

                                        CAPITAL TITLE AGENCY, INC.

                                        ----------------------------------------
                                        By: Gene Keefover
                                        Title: _________________________________

                                       16Exhibit 10.2

When recorded, return to:

Andrew Abraham, Esq.
Burch & Cracchiolo, P.A.
702 East Osborn Road, #200
Phoenix, Arizona 85014

                          FIRST MODIFICATION AGREEMENT

DATE:    September _________, 2001

PARTIES: The Steele Foundation, Inc., an Arizona non-profit corporation
         702 East Osborn Road, #200
         Phoenix, Arizona 85014
         ("Lender")

         ILX Resorts Incorporated
         2111 E. Highland Ave., Suite #210
         Phoenix, AZ  85016
         ("Borrower")

     This  Modification  Agreement (the "Agreement") made effective the date and
year set forth above,  is entered into by and between  Lender and  Borrower,  as
identified above.

RECITALS:

A. On or about  February 23, 2000,  Borrower  executed and delivered to Lender a
Promissory  Note in the original  principal  amount of Six Hundred  Thousand and
NO/100 Dollars ($ 600,000.00) (the "Note").  The Note is secured by, among other
things:  (i) a Pledge  Agreement dated February 23, 2000 (the  "Pledge"),  which
Pledge  grants a security  interest in Wedbush  Morgan  Securities,  Account No.
4398-3106    (the    "Stock")   and   by   the    collateral    assignment    of
Borrower's/Consenting  Parties'  right  in  each  of  the  Resort  Funding  Inc.
contracts (`Contracts");  and (ii) other security documents executed by Borrower
and  delivered to Lender in connection  with the loan (the "Loan")  evidenced by
the Note (for purposes of this  Agreement,  the Note,  Pledge and other security
documents  described  herein may  collectively  be referred  to as the  "Related
Agreements").

                                       1
STEELE/ILX
First Modification Agreement
<PAGE>
B. Borrower has  requested an  additional  advance in the amount of Five Hundred
Thousand  Dollars  ($500,000.00)  and an extension  of the Maturity  Date of the
Loan,  and Lender has agreed to advance the  additional  funds and to extend the
Maturity Date of the Loan, provided the other terms hereof are complied with.

C. It is the  desire of the  parties  to permit a  modification  of the Note and
Pledge upon the terms and conditions hereinafter contained.

     NOW,  THEREFORE,  in consideration of the mutual covenants,  conditions and
promises  contained  herein,  and for the  purposes  set forth in the  foregoing
recitals which are  incorporated  herein by reference,  the parties covenant and
agree as follows:

     1. REPRESENTATIONS AND WARRANTIES. By signing this Agreement:

          a. Borrower  represents  and warrants to Lender that:  (i) Borrower is
     authorized  and empowered to enter into this  Agreement;  and (ii) Borrower
     has  had a full  and  complete  opportunity  to  review  and  examine  this
     Agreement.

          b. Borrower  acknowledges that, as of the date of this Agreement,  the
     outstanding principal balance under the Loan is $ 261,667.79, that interest
     and  principal  have been paid  through  September  1,  2001,  and that the
     present Maturity Date of the Loan is September 1, 2002.

          c. Borrower  confirms  that no Event of Default,  as defined under the
     Related  Agreements,  has occurred under the Loan and no event has occurred
     or condition  exists that,  with notice  and/or the passage of time,  would
     constitute an Event of Default under the Loan.

          d.  Borrower  ratifies,  reaffirms and  acknowledges  that the Related
     Agreements  represent its valid,  enforceable and collectible  obligations,
     and that there are no existing claims,  defenses (personal or otherwise) or
     rights of set-off with respect to the Note or the other Related Agreements.

          e. Borrower acknowledges that this Agreement does not act as a release
     or relinquishment of, or otherwise affect, the lien,  security interest and
     rights  created  by or  arising  under the  Pledge  and the  other  Related
     Agreements,  or the priority thereof, except as expressly described herein.
     Such lien,  security  interest and rights are hereby  ratified,  confirmed,
     renewed and extended in all respects.

          f.  Borrower  acknowledges  and agrees  that,  without  affecting  its
     liability,  obligations  and agreements  under the Note, the Pledge and the
     other Related Agreements, as modified hereby, the Lender, at its option, at
     any time and from time to time,  may extend or further modify the terms and
     amounts  of  payments  under  the  Note,  accept  a  renewal  note or notes

                                       2
STEELE/ILX
First Modification Agreement
<PAGE>
     therefor,  modify  the  provisions  of the  Pledge  and the  other  Related
     Agreements,  release  any of the  Collateral,  or take or release  other or
     additional  security  for the Note,  without  consent from or notice to the
     Borrower  except to the extent  that its  signature  may be  required  as a
     matter of law on the documents  evidencing such of the foregoing actions as
     may be taken.

     2.  MODIFICATION  OF PROMISSORY  NOTE.  Effective as of the date hereof the
terms of the Note are modified as follows:

          a. The  principal  amount of the Note as set forth on the face thereof
     is hereby  increased  to $  761,667.79,  which  represents  an  increase of
     $500,000 over the current outstanding principal balance of $ 261,667.79.

          b.  Paragraph 1 of the Note shall be deleted in its  entirety  and the
     following substituted in lieu thereof:

          " 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 October 1, 2001, and continuing
          on the first day of each month through December 1, 2004 ("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  December  1,  2004,  Borrower  shall  have  repaid  all
          principal due hereunder,  totaling an amount of $ 761,667.79, 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. "

All  references  to the Related  Agreements  are hereby  amended to refer to the
Related Agreements as amended by this Agreement. All other terms, conditions and
provisions of the Related  Agreements are continued in full force and effect and

                                       3
STEELE/ILX
First Modification Agreement
<PAGE>
shall remain  unaffected and unchanged  except as  specifically  amended by this
Agreement. The Related Agreements will continue to secure the obligations of the
Borrower under the Loan as amended hereby.

     3.  CONDITIONS OF LOAN  MODIFICATION.  This Agreement  shall not be binding
upon or enforceable against Lender, until:

          a. All parties identified herein execute this Agreement.

          b.  Borrower  shall  pay legal  expenses  of  Lender  incurred  in the
     negotiation and  documentation of this Agreement in an amount of $2,500.00;
     and,

          c. Lender shall have received and approved such other documentation as
     may be reasonably requested by Lender or its legal counsel,  which shall be
     in all respects  satisfactory to Lender and its counsel,  in their sole and
     absolute discretion.

     4.  MISCELLANEOUS.  Nothing  contained  herein  shall in any way impair the
Note, the Pledge,  any of the other Related  Agreements or any other document or
instrument which evidences or secures the same, nor alter,  waive,  annul, vary,
or affect any  provision,  condition or covenant  therein  contained,  except as
expressly provided herein, nor affect nor impair any rights,  powers or remedies
under the Note,  the Pledge,  any of the other  Related  Agreements or any other
document  now or hereafter  held by Lender,  it being the intent of Borrower and
Lender  that all of the terms and  provisions  of the Note,  the  Pledge and the
other  Related  Agreements  shall  continue  in full force and effect  except as
expressly  modified by this  Agreement or any other  instrument  executed by and
between the parties hereto.  In the event of a conflict between the terms of the
Note,  the Pledge,  and/or the other  Related  Agreements  and the terms of this
Agreement,  the terms of this Agreement  shall prevail.  This Agreement shall be
governed by the laws of the State of Arizona.  Paragraph  headings  are inserted
herein for  convenience  only and shall not limit the content of any  paragraph.
This Agreement shall be construed in accordance with its plain meaning and shall
not be strictly  construed against either of the parties hereto.  The provisions
hereof shall be binding  upon and inure to the benefit of  Borrower,  Lender and
their heirs, devisees, successors in interest and assigns. This Agreement may be
executed in counterparts  and each such counterpart when taken together with all
other counterparts shall be deemed one and the same original document.

                                       4
STEELE/ILX
First Modification Agreement
<PAGE>
     IN WITNESS WHEREOF,  the parties hereto have entered into this Agreement as
of the day and year first above written.

                                        LENDER:

                                        THE STEELE FOUNDATION, INC., AN ARIZONA
                                        NON-PROFIT CORPORATION

                                        By:
                                           -------------------------------------
                                           DANIEL CRACCHIOLO, PRESIDENT

                                        BORROWER:

                                        ILX RESORTS INCORPORATED, AN ARIZONA
                                        CORPORATION

                                        By:
                                           -------------------------------------
                                        Its:
                                            ------------------------------------

     The following, as Consenting Partners hereby acknowledge and consent to the
terms set forth above:

                                        LOS ABRIGADOS PARTNERS LIMITED
                                        PARTNERSHIP, AN ARIZONA LIMITED
                                        PARTNERSHIP

                                        By: ILE SEDONA INCORPORATED, AN ARIZONA
                                            CORPORATION, ITS GENERAL PARTNER

                                        By:
                                           -------------------------------------
                                        Its:
                                            ------------------------------------

                                        PREMIERE DEVELOPMENT INCORPORATED,
                                        AN ARIZONA CORPORATION

                                        By:
                                           -------------------------------------
                                        Its:
                                            ------------------------------------

                                       5

STEELE/ILX
First Modification Agreement
<PAGE>
                                        VCA SOUTHBEND INCORPORATED, AN ARIZONA
                                        CORPORATION

                                        By:
                                           -------------------------------------
                                        Its:
                                            ------------------------------------

                                        VCA TUCSON INCORPORATED, AN ARIZONA
                                        CORPORATION

                                        By:
                                           -------------------------------------
                                        Its:
                                            ------------------------------------

STEELE/ILX
First Modification Agreement

                                       6

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