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                         RECEIVABLES PURCHASE AGREEMENT



                                      among



                          TRI FUNDING COMPANY I, L.L.C.
                                ("Prior Issuer")



                                       and



                             TRENDWEST RESORTS, INC.
                                  ("Trendwest")



                                       and



                                TW HOLDINGS, INC.
                                     ("TWH")



                                       and



                           TRENDWEST FUNDING II, INC.   
                                     ("TFI")



                            Dated as of March 1, 1998




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                                TABLE OF CONTENTS

                              SECTION HEADING PAGE

ARTICLE 1      DEFINITIONS...................................................2

       Section 1.01.  Defined Terms..........................................2

ARTICLE 2      ACQUISITION OF ASSETS.........................................3

Section 2.01. [Reserved.]....................................................3
Section 2.02. Initial Acquisition............................................3
Section 2.03  Subsequent Acquisitions........................................4
Section 2.04  Delivery of Contracts..........................................4
Section 2.05. Servicing of Contracts and Related Credits.....................4
Section 2.06. Review of Contracts............................................4

ARTICLE 3      REPRESENTATIONS AND WARRANTEES................................5

Section 3.01. Representations and Warranties of the Sellers..................5
Section 3.02. Representations and Warranties of TFI.........................12
Section 3.03. Purchase or Substitution Required upon Breach of Certain
              Representations and Warranties................................14
Section 3.04. Requirements for Purchase or Substitution of Contracts........14

ARTICLE 4     SELLER COVENANTS..............................................16

Section 4.01. Seller Covenants..............................................16
Section 4.02. TFI Covenants.................................................20
Section 4.03. Assignment of Assets..........................................20
ARTICLE 5     CONDITIONS PRECEDENT..........................................21

Section 5.01. Conditions to TFI's Initial Obligations.......................21
Section 5.02. Conditions to the Sellers' Obligations........................22

ARTICLE 6     TERM AND TERMINATION..........................................22
 .
Section 6.01. Term..........................................................22
Section 6.02. Default by Sellers............................................22

ARTICLE 7     MISCELLANEOUS.................................................23

Section 7.01. Amendments....................................................23
Section 7.02. Governing Law.................................................23
Section 7.03. Notices.......................................................23
Section 7.04. Separability Clause...........................................23
Section 7.05. Assignment....................................................23
Section 7.06. Further Assurances............................................24
Section 7.07. No Waivers; Cumulative Remedies...............................24
Section 7.08. Binding Effect; Third Party Beneficiaries.....................24
Section 7.09. Set-Off.......................................................24
Section 7.10. Counterparts..................................................24

Signature Page..............................................................25


ANNEX A   --  FORM OF SUPPLEMENT FOR SUBSTITUTE CONTRACTS AND UPGRADE CONTRACTS
EXHIBIT A --  FORM OF CONTRACT
EXHIBIT B --  FORM OF ASSET ASSIGNMENT
EXHIBIT C --  FORM OF SUBSEQUENT ASSET ASSIGNMENT




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         THIS RECEIVABLES  PURCHASE  AGREEMENT,  dated as of March 1, 1998 (this
"Agreement"),  by and among TRI Funding  Company I, L.L.C.,  a Delaware  limited
liability company (herein,  together with its permitted  successors and assigns,
the "Prior Issuer"),  Trendwest Resorts,  Inc., an Oregon  corporation  (herein,
together with its permitted successors and assigns,  "Trendwest"),  TW Holdings,
Inc., a Nevada corporation  (herein,  together with its permitted successors and
assigns, "TWH"), and Trendwest Funding II, Inc., a Delaware corporation (herein,
together with its permitted successors and assigns, "TFI").


                              PRELIMINARY STATEMENT

         TRI Funding II,  Inc.,  a Delaware  special  purpose  corporation  (the
"Issuer") has entered into an  Indenture,  dated as of March 1, 1998 (as amended
and  supplemented  from time to time, the  "Indenture"),  with LaSalle  National
Bank, as trustee  (herein,  together with its permitted  successors and assigns,
the "Trustee"),  and Trendwest, as servicer (herein, together with its permitted
successors and assigns, the "Servicer"), pursuant to which the Issuer intends to
issue its notes,  issuable in one or more  Series as  provided in the  Indenture
(the "Notes"), limited as to principal amount as set forth in the related Series
Supplement.

         In furtherance thereof, the Prior Issuer, Trendwest, TWH (collectively,
the  "Sellers")  and TFI have entered into this  Agreement to provide for, among
other things,  the acquisition by TFI of all of the right, title and interest in
and to certain  Assets which will be sold (or,  with  respect to the  Contracts,
pledged)  by TFI to the  Issuer  pursuant  to that  certain  Purchase  and  Sale
Agreement,  dated as of even date herewith,  by and among TFI, Trendwest and the
Issuer (the "Sale  Agreement").  The Issuer will be pledging and granting to the
Trustee a security  interest in the Issuer's interest in the Assets, as security
for the Notes. As a precondition  to the  effectiveness  of this Agreement,  the
Issuer,  the  Trustee,  the  Subservicer  and the  Servicer  will enter into the
Servicing Agreement, dated as of March 1, 1998 (as amended and supplemented from
time to time, the "Servicing Agreement"),  to provide for the administration and
servicing of the Assets. In connection with the issuance of each Series of Notes
and  pursuant to this  Agreement,  the  Sellers  from time to time will sell the
Assets  to TFI.  Such  sales  shall  be  effected  on the  Closing  Date by this
Agreement  and an Asset  Assignment  among  the  Sellers  and  TFI,  and on each
subsequent  Series Closing Date by this Agreement and the applicable  Subsequent
Asset Assignment among Trendwest,  TWH (collectively,  the "Subsequent Sellers")
and TFI, and the list of Contracts so conveyed  shall be listed on Schedule I to
such Asset Assignment or the applicable Subsequent Asset Assignment.

         In order to further  secure the Notes,  TFI is  granting to the Issuer,
pursuant to the Sale Agreement,  and the Issuer  subsequently  will grant to the
Trustee pursuant to the Indenture,  a security  interest in, among other things,
TFI's  rights  derived  under this  Agreement,  and the  Sellers  agree that all
representations,  warranties,  covenants  and  agreements  made  by them in this
Agreement  with respect to the Assets shall also be for the benefit and security
of the  Issuer  and  the  Trustee  and  all  holders  from  time  to time of the
applicable   Series  of  Notes.  In  consideration  for  the  Assets  and  their
representations,   warranties,   covenants  and  other   agreements  under  this
Agreement,  on the Closing Date TWH and the Prior Issuer will receive cash,  and
Trendwest will receive cash,  inter-company debt, and all of the common stock of
TFI, and on each subsequent  Series on each subsequent  Series Closing Date, TWH
will receive cash and Trendwest will receive cash and inter-company debt.


                              ARTICLE 1DEFINITIONS

            Section  1.01.  Defined  Terms.  For purposes of this  Agreement the
following terms shall have the meanings specified herein. Capitalized terms used
herein but not otherwise defined shall have the respective  meanings assigned to
such terms in the Indenture or the Sale Agreement.

         "Acquisition  Consideration"  shall mean, with respect to any Contracts
and the related Receivables,  the cash which shall be paid by TFI to the Sellers
on the  applicable  Series  Closing Date and an interest in payments to TFI from
the  Issuer in an  aggregate  amount  equal to 100% of the  aggregate  principal
amount outstanding on the Contracts as of the related Series Cut-Off Date.

         "Asset  Assignment" shall mean the Asset  Assignment,  substantially in
the form attached hereto as Exhibit B, which shall be entered into in connection
with the conveyance of Assets from the Sellers to TFI on the Closing Date.

         "Assets"  shall mean all of the Sellers'  right,  title and interest in
and to (a) the Contracts and the related Receivables,  including the proceeds of
the Contracts and the related  Receivables and all payments  received on or with
respect to the Contracts and the related  Receivables  and due after the related
Series  Cut-Off Date, (b) the Contract  Files and the Custodian  Files,  (c) the
Sellers' rights and interests in the related Credits,  (d) the Servicing Charges
with respect to the  Contracts  and (e) all income and proceeds of the foregoing
or relating thereto.

         "Contract  File"  shall  mean,  with  respect  to  each  Contract,  the
following documents:

     (i) a copy of the Contract;

     (ii) notice of assignment; and

     (iii) any other documents or papers relating to servicing the Receivables.

     "Custodian" shall mean Sage Systems,  Inc. and its permitted successors and
assigns.

         "Custodian  File"  shall  mean,  with  respect  to each  Contract,  the
following documents:

     (i) the original Contract; and

     (ii) notice of assignment.

         "Electronic  Ledgers" shall mean the  electronic  master records of all
contracts of the Sellers or the Issuer similar to and including the Contracts.

         "Eligible  Contract" shall mean a Contract that satisfies the selection
criteria  set forth in  Section  3.01(a)  hereof and which is aged at least four
months,  provided that with respect to any Substitute Contract, any reference in
such  Section to Series  Cut-Off Date shall be deemed to refer to the date as of
which such  Substitute  Contract is conveyed  to the Seller in  accordance  with
Section 3.04 hereof.

         "Indenture" shall mean the Indenture, dated as of March 1, 1998, by and
among the Issuer, the Trustee and the Servicer, as amended and supplemented from
time to time.

         "Seller  Address" with respect to Trendwest  shall mean 12301 N.E. 10th
Place, Bellevue, Washington 98005, with respect to TWH shall mean 245 E. Liberty
Street, 3rd Floor, Reno, Nevada 89520 and with respect to the Prior Issuer shall
mean 3250 Lakeport Boulevard, Klamath Falls, Oregon 97601.

       "Series Cut-Off Date" shall have the meaning set forth in the Indenture.

         "Subsequent   Asset   Assignment"   shall  mean  the  Subsequent  Asset
Assignment,  substantially in the form attached hereto as Exhibit C, which shall
be entered to in connection  with the  conveyance of Assets from the  Subsequent
Sellers to TFI on each subsequent Series Closing Date.

     "Substitute  Contract"  shall have the meaning set forth in Section 3.04(b)
hereof.

     "Substitute  Receivable" shall mean the Receivable  related to a Substitute
Contract.

     "Substitution  Criterion"  shall  have the  meaning  set  forth in  Section
3.04(b) hereof.

     "TFI Address" shall mean 3250 Lakeport  Boulevard,  Klamath  Falls,  Oregon
97601.

     "Upgrade" shall have the meaning set forth in the Indenture.

     "Upgrade Contract" shall have the meaning set forth in the Indenture.


                         ARTICLE 2ACQUISITION OF ASSETS

            Section 2.01.    [Reserved.]

            Section  2.02.  Initial   Acquisition.   In  return  for  the  Asset
Consideration  and other rights created by this  Agreement,  each of the Sellers
hereby transfers,  assigns,  sells and grants to TFI, without recourse except as
provided in Section 3.03 of this Agreement,  on the Closing Date, any and all of
such Seller's  respective right,  title and interest in and to all of the Assets
relating to the Contracts set forth on Schedule I to the Asset Assignment.  Each
of the Sellers  hereby  acknowledges  that its  transfer of the Assets to TFI is
absolute  and  irrevocable,  without  reservation  or  retention of any interest
whatsoever by such Seller.

            Section 2.03. Subsequent Acquisitions.  TWH and Trendwest, in return
for cash and for cash and  inter-company  debt,  respectively,  shall  transfer,
assign,  sell and grant to TFI,  without  recourse except as provided in Section
3.03 of this  Agreement,  on each  Series  Closing  Date,  any and all of  their
respective right, title and interest in and to all of the Assets relating to the
Contracts  set  forth  on  Schedule  I  to  the  respective   Subsequent   Asset
Assignments.  Each of TWH and  Trendwest  acknowledges  that its transfer of the
Assets to TFI will be absolute and irrevocable, without reservation or retention
of any interest whatsoever by it.

            Section 2.04. Delivery of Contracts; Filing of Financing Statements.
(a) In connection with TFI's acquisition of the Assets,  Trendwest, on behalf of
the Sellers,  TFI and the Issuer,  shall deliver,  or cause the delivery of, the
original  Contracts to the Custodian so that the Custodian may retain possession
thereof as provided in the Transaction Documents. In addition, the Sellers agree
to execute, and Trendwest agrees to record and file prior to each Series Closing
Date  at  its  own  expense,   financing   statements  (and  thereafter   timely
continuation  statements with respect to such financing statements) with respect
to the Assets transferred on such date, in accordance with Section 3.01(a)(viii)
and Section 4.01(c) hereof.

           (b) In connection  with such  acquisition,  each of the Sellers shall
promptly, at its own expense, cause any Electronic Ledger maintained by it to be
marked to show which Assets have been  acquired by TFI in  accordance  with this
Agreement and  transferred or pledged,  as the case may be, by TFI to the Issuer
and  pledged by the Issuer to the  Trustee in  accordance  with the  Transaction
Documents.

           (c) It is the  intention of the Sellers and TFI that TFI is acquiring
full and absolute title to the Assets.  If it is determined,  however,  that the
Sellers have  transferred  to TFI a security  interest in the Assets,  then this
Agreement shall  constitute a security  agreement under applicable law, and each
of the Sellers does hereby pledge,  grant and assign to TFI a security  interest
in the Assets.

            Section  2.05.  Servicing  of  Contracts  and Related  Credits.  The
Servicer shall service the Contracts and the other Assets for the benefit of the
Issuer  (and its  successors  and  assigns)  in  accordance  with the  terms and
conditions  of  the  Transaction   Documents.   Notwithstanding  the  foregoing,
Trendwest  acknowledges and agrees that its obligations under this Agreement are
independent of any  obligations it may have as Servicer and that its obligations
under this Agreement  will continue in full force and effect,  whether or not it
is acting as Servicer,  until  termination of this Agreement in accordance  with
Section 6.01 hereof, unless otherwise provided herein.

            Section  2.06.  Review of  Contracts.  If any of the  Sellers or the
Custodian (who shall thereupon notify TFI,  Trendwest and the Trustee) discovers
that any  Contracts  are  missing or  defective  (that is,  mutilated,  damaged,
defaced,  incomplete,  improperly dated, forged or otherwise physically altered)
in any material respect,  Trendwest shall correct or cure such omission,  defect
or other  irregularity  within 30 days from the date Trendwest  discovered  such
omission or defect,  or from the date  Trendwest is notified by the Custodian of
such  omission or defect.  In the event  Trendwest  is unable to correct or cure
such omission,  defect or irregularity within the 30-day period described in the
preceding  sentence,  Trendwest shall purchase or replace such Contract from TFI
in accordance with Section 3.03 hereof.


                    ARTICLE 3 REPRESENTATIONS AND WARRANTEES

            Section 3.01. Representations and Warranties of the Sellers. Each of
Trendwest,  with respect to all of the  Contracts and related  Receivables,  the
Prior Issuer, with respect to the Contracts and related Receivables  transferred
by the  Prior  Issuer,  and TWH,  with  respect  to the  Contracts  and  related
Receivables transferred by TWH, hereby and by the Asset Assignment, hereby makes
the following  representations  and warranties to TFI and for the benefit of the
Issuer,  the Trustee and Holders of each Series of Notes, on which TFI relies in
acquiring  the Assets and on which the Holders  rely in  purchasing  such Notes;
provided,  however,  that with  respect to the  representations  and  warranties
relating  to the  Assets,  the  Holders of Notes of any Series only rely on such
representations and warranties to the extent such Assets are part of the related
Series Trust  Estate.  Such  representations  and  warranties  shall survive any
subsequent transfer, assignment, contribution or conveyance of the Contracts and
related  Receivables  and  interest in the related  Credits and any  issuance of
Notes.

     (a) As to each Contract, as of the related Series Closing Date:

     (i) The information  set forth in the related Series  Contract  Schedule is
true and correct as of the related Series Cut-Off Date.

     (ii) The rights with respect to the Contract are  assignable  by the lender
thereunder and its successors and assigns without the consent of any Person.

     (iii) The applicable  Seller has  heretofore  provided to the Custodian the
sole original counterpart of the Contract, together with any and all amendments,
waivers and modifications thereto, except for any original executed counterparts
which have been marked to show that they have been  pledged by the Issuer to the
Trustee  under  the  Indenture,  and the  terms of such  Contract  have not been
further  amended,  waived or modified  subsequent to the above being provided to
the Custodian.

     (iv) The Electronic Ledgers have been marked as provided in Section 2.04(b)
hereof.

     (v) The Contract was not  originated  in, nor is it subject to the laws of,
any  jurisdiction,  the laws of which would make unlawful the sale,  transfer or
assignment of such document under any of the  Transaction  Documents,  including
any repurchase in accordance with the Transaction Documents.

     (vi) The  Contract is, and on the related  Series  Closing Date will be, in
full force and effect in accordance with its respective  terms,  and none of the
Sellers or any Obligor  has or will have  suspended  or reduced any  payments or
obligations  due or to become due thereunder by reason of a default by the other
party to such  Contract;  as of the related  Series  Cut-Off  Date, no Scheduled
Payment with respect to such Contract has not been  received and remains  unpaid
for a period of 30 or more days (without regard to advances, if any, made by the
Servicer), and there are no proceedings pending, or to the best of the knowledge
of any Seller,  threatened asserting insolvency of such Obligor;  there has been
no other  default,  breach or violation  and no event other than  relating to an
Upgrade,  permitting acceleration under such Contract;  there are no proceedings
pending, or to the best of the knowledge of any Seller, threatened, wherein such
Obligor or any governmental  agency has alleged that such Contract is illegal or
unenforceable;  and none of the related  Scheduled  Payments  are subject to any
set-off or credit of any kind.

     (vii) The Contract is the valid, binding and legally enforceable obligation
of the parties thereto, enforceable in accordance with its terms, subject, as to
enforcement,  to applicable  bankruptcy,  insolvency,  reorganization  and other
similar laws of general applicability relating to or affecting creditors' rights
generally and to general principles of equity regardless of whether  enforcement
is sought in a court of law or equity.

     (viii) All actions,  filings  (including UCC filings) and recordings as are
required by the Indenture and that may be necessary to perfect,  with respect to
the applicable  Series Trust Estate, a first priority  security  interest of the
Issuer and the Trustee in, and the sale by the applicable  Seller to TFI of, the
Contract and the related  Receivables and the sale from TFI to the Issuer of the
related Receivables, being acquired and the transfer of the security interest in
the related Credits  hereunder have been  accomplished and are in full force and
effect.

     (ix) The  Contract is identical  to one of the form  contracts  attached as
Exhibit A  hereto,  except  for  either  (i) such  immaterial  modifications  or
deviations  from  the  form  contract  which  appear  in  such  Contract,  which
immaterial  modifications  or deviations will not have a material adverse effect
on the  Holders of the Notes or (ii) such  modifications  or  deviations  as set
forth on Schedule I to the Asset Assignment or Subsequent Asset  Assignment,  as
the case may be, related to such Contract.

     (x) The Contract was originated by Trendwest in Trendwest's ordinary course
of business and meets Trendwest's qualifications for originating vacation credit
installment  contracts.   The  origination  and  collection  practices  used  by
Trendwest and the  applicable  Seller with respect to such Contract have been in
all  respects  legal,  proper,  prudent and  customary  in the  vacation  credit
financing and servicing business.

     (xi)  The  Receivable  is  under a  Contract  that  has a term to the  last
Scheduled Payment Date of not more than 84 months (except for Contracts relating
to the Eagle Crest resort,  which have a term to the last Scheduled Payment Date
of not more than 120 months) and not less than one month.

     (xii) The  Contract  obligates  the related  Obligor to make all  Scheduled
Payments  thereunder in full  notwithstanding  the  collection by Trendwest of a
security deposit with respect  thereto.  The calculation of the Collateral Value
of the related  Receivable  does not include  any  security  deposits or similar
payments  collected by or on behalf of Trendwest  which are applied to Scheduled
Payments.

     (xiii) All  requirements of applicable  federal,  State and local laws, and
regulations thereunder,  including,  without limitation,  usury laws, if any, in
respect of the Contract have been complied  with in all material  respects,  and
such Contract complied in all material respects at the time it was originated or
made and now complies in all material  respects with all legal  requirements  of
the jurisdiction in which it was originated.

     (xiv)  The  Contract  is not  and  will  not be  subject  to any  right  of
rescission,  set-off,  counterclaim or defense,  including the defense of usury,
whether arising out of transactions  concerning such Contract or otherwise,  and
the  operation  of any of the  terms of such  Contract  or the  exercise  by the
applicable  Seller or the  Obligor  of any right  under such  Contract  will not
render such  Contract  unenforceable  in whole or in part,  and no such right of
rescission,  set-off,  counterclaim  or defense has been  asserted  with respect
thereto,  except that certain rights or defenses may exist under  applicable law
which,  individually or in the aggregate,  do not make the remedies available to
the  Seller  with  respect  to  such  Contract   inadequate  for  the  practical
realization of the benefits provided thereby.

     (xv) Each of the Sellers has duly fulfilled all obligations on the lender's
part to be  fulfilled  under  or in  connection  with the  Contract,  including,
without  limitation,  giving any  notices or  consents  necessary  to effect the
acquisition  of the  Assets by TFI and has done  nothing to impair the rights of
TFI in such Contract or payments with respect thereto.

     (xvi) The Contract and the related Seller's interest in the related Credits
have not been sold, transferred, assigned or pledged by the Seller to any Person
other than the Issuer (except for such  interests in the Purchased  Assets which
shall be terminated on or prior to the related Series  Closing  Date),  and upon
execution and delivery hereof and of the Asset  Assignment by the related Seller
and the payment by the Issuer of the related Acquisition Consideration, TFI will
have all of the right,  title and interest in and to such  Seller's  interest in
the Contract and the related  Receivable and a security  interest in the related
Credits, free and clear of all liens and encumbrances,  except for the interests
of the Obligor pursuant to such Contract.  Such Contract has not been satisfied,
subordinated or rescinded.

     (xvii) The relevant Seller has no specific knowledge that the Contract will
not be fully performed in accordance with its terms.

     (xviii)  The Obligor has made the first  payment  (which  payment may be an
advance  payment under such Contract) due under the Contract within the time set
forth in such Contract.

     (xix) The  related  Obligor is  located in the United  States of America or
Canada, and the related Scheduled Payments are payable in U.S. dollars.

     (xx) Except for changes due to  Upgrades,  the related  Scheduled  Payments
were established at the time such Contract was originated.

     (xxi)  There are no unpaid  brokerage  or other fees owed to third  parties
relating to the origination of the Contract.

     (xxii) The Contract  cannot be rescinded  pursuant to  applicable  consumer
finance laws.

     (xxiii) The contract was originated in compliance with the  requirements of
all  federal,  state and local laws,  rules and  regulations  applicable  to the
origination  of  the  Contract  (including,   without  limitation,  the  Federal
Truth-in-Lending  Act, the Equal Credit Opportunity Act, the Fair Credit Billing
Act, the Fair Credit Reporting Act, the Fair Debt Collection  Practices Act, the
Federal  Trade  Commission  Act,  the  Magnuson-Moss  Warranty  Act, the Federal
Reserve Board's Regulations "B" and "Z", the Soldiers' and Sailors' Civil Relief
Act of 1940, and any other  federal,  state and local laws relating to interest,
usury,  consumer  credit,  equal  credit  opportunity,  fair  credit  reporting,
privacy, consumer protection, false or deceptive trade practices and disclosure,
the Mail Fraud statute and any timeshare disclosure),  non-compliance with which
could  have a  material  adverse  effect on the  enforceability  or value of the
Contract.

     (xxiv) All  Scheduled  Payments are due and payable on a monthly  basis and
such  Scheduled  Payments  are  level  payments  throughout  the  terms  of  the
Contracts.

     (b) As to the aggregate  pool of Contracts  supporting a Series of Notes as
of the related Series Closing Date, no Seller used any selection procedures that
identified  the  Contracts  as being  less  desirable  or  valuable  than  other
comparable vacation credit installment contracts owned by such Seller.

     (c) As to each  Seller  as of the  Closing  Date and as to each  Subsequent
Seller as of each subsequent Series Closing Date:

     (i) Such Seller has been duly organized and is validly existing and in good
standing as a corporation or limited liability company, as applicable, under the
laws of the State in which such Seller was organized  with  corporate  power and
authority to own its  properties and to transact the business in which it is now
engaged,  and such  Seller is duly  qualified  to do  business in and is in good
standing under the laws of each State in which its business is located or is not
required under applicable law to effect such qualification, except where failure
to so qualify  would not have a material  adverse  effect on the ability of such
Seller to perform its obligations  under the Transaction  Documents or on any of
the Contracts,  the Receivables or the related Credits or on the ability of such
Seller, TFI, the Issuer or the Trustee to realize upon or enforce the same.

     (ii) The performance of the obligations of such Seller under this Agreement
and the other  Transaction  Documents and the  consummation of the  transactions
herein and therein  contemplated  will not conflict with or result in any breach
of any of the terms or  provisions  of, or  constitute  with or without  notice,
lapse of time or both, a default  under the Articles of  Incorporation,  Bylaws,
Certificate of Formation or Limited Liability Company Agreement,  as applicable,
of such Seller, or any material indenture, agreement, mortgage, deed of trust or
other  instrument  to which such  Seller is a party or by which it is bound,  or
result in the creation or imposition of any lien, charge or encumbrance  (except
the lien  created by the  Transaction  Documents)  upon any of the  property  or
assets of such Seller pursuant to the terms of such indenture, mortgage, deed of
trust,  or other  agreement or  instrument to which such Seller is a party or by
which such Seller is bound or to which any of such  Seller's  property or assets
is subject,  nor will such action result in any  violation of the  provisions of
such Seller's  Articles of Incorporation,  By-laws,  Certificate of Formation or
Limited Liability Company Agreement, as applicable, or any statute or any order,
rule  or  regulation  of  any  court  or  any  regulatory   authority  or  other
governmental  agency or body having  jurisdiction over such Seller or any of its
properties;  and no consent,  approval,  authorization,  order,  registration or
qualification  of or with or other action of any court,  or any such  regulatory
authority or other  governmental  agency or body is required for consummation of
the  transactions  contemplated  by this  Agreement  and the  other  Transaction
Documents  except such consents,  approvals and  authorizations  which have been
obtained or such registrations or qualifications which have been made.

     (iii)  This  Agreement  and any other  Transaction  Document  to which such
Seller is a party have been duly  authorized,  executed  and  delivered  by such
Seller by all necessary  corporate  action and such agreements are the valid and
legally binding  obligations of such Seller,  enforceable against such Seller in
accordance with their respective terms,  subject as to enforcement to applicable
bankruptcy,  insolvency,  reorganization  and  other  similar  laws  of  general
applicability  relating  to or  affecting  creditors'  rights  generally  and to
general  principles of equity  regardless of whether  enforcement is sought in a
court of law or equity.

     (iv) The relevant Seller Address is the chief executive  office,  principal
place of business and the office where such Seller keeps its records  concerning
the Contracts, Receivables and the related Credits. Such Seller has not used any
address other than its Seller Address and 4010 Lake Washington Boulevard,  Suite
300, Kirkland, Washington 98033, in the previous five-year period. Such Seller's
legal name is as set forth in this  Agreement.  Such Seller has not used or done
business under any other name in the previous six-year period.

     (v) Such Seller does not believe,  nor does it have any reasonable cause to
believe,  that it cannot  perform  each and  every  covenant  contained  in this
Agreement.

     (vi) The transactions  contemplated by the Transaction  Documents are being
consummated  by such Seller in furtherance  of its ordinary  business  purposes,
with no  contemplation  of  insolvency  and with no intent to  hinder,  delay or
defraud any of its present or future creditors.

     (vii) The consideration  received by such Seller pursuant to this Agreement
is fair consideration having value reasonably  equivalent to or in excess of the
value of the performance of such Seller's obligations hereunder.

     (viii)  Neither  on  the  date  of  the  transactions  contemplated  by the
Transaction Documents or immediately before or after such transactions, nor as a
result of the transactions, will such Seller:

     (A) be insolvent  such that the sum of its debts is greater than all of its
respective property, at a fair valuation;

     (B) be engaged  in, or about to engage in,  business or a  transaction  for
which any  property  remaining  with such Seller will be an  unreasonably  small
capital or the  remaining  assets of such Seller will be  unreasonably  small in
relation to its respective business or the transaction; and

     (C) have intended to incur, or believed it would incur, debts that would be
beyond its  respective  ability to pay as such debts mature or become due.  Such
Seller's  assets and cash flow enable it to meet its present  obligations in the
ordinary course of business as they become due.

     (ix) Both immediately before and after the transactions contemplated by the
Transaction Documents (a) the present fair salable value of such Seller's assets
was or will be in excess of the amount that will be required to pay its probable
liabilities as they then exist and as they become absolute and matured;  and (b)
the sum of such  Seller's  assets  was or will be  greater  than  the sum of its
debts, valuing its assets at a fair salable value.

     (x) The  acquisition of the Assets by TFI pursuant to this Agreement is not
subject to the bulk  transfer or any similar  statutory  provisions in effect in
any applicable jurisdiction.

     (xi)  There  are  no  proceedings  or  investigations  pending  or,  to the
knowledge of such  Seller,  threatened  against or  affecting  such Seller in or
before any  court,  governmental  authority  or agency or  arbitration  board or
tribunal  which,  individually  or in the aggregate,  involve the possibility of
materially and adversely affecting the properties,  business, prospects, profits
or condition  (financial or  otherwise)  of such Seller,  or the ability of such
Seller to perform its obligations  under this Agreement or the other Transaction
Documents. Such Seller is not in default with respect to any order of any court,
governmental authority or agency or arbitration board or tribunal.

     (xii) All tax returns or extensions  required to be filed by such Seller in
any jurisdiction have in fact been filed, and all taxes,  assessments,  fees and
other  governmental  charges  upon such  Seller,  or upon any of the  respective
properties,  income or  franchises  shown to be due and payable on such  returns
have been, or will be, paid. All such tax returns are true and correct, and such
Seller has no knowledge of any proposed  additional tax assessment against it in
any material amount nor of any basis  therefor.  The provisions for taxes on the
books of such  Seller  are in  accordance  with  generally  accepted  accounting
principles.

     (xiii)  Such  Seller  (i) is  not in  violation  of any  laws,  ordinances,
governmental rules or regulations to which it is subject, (ii) has not failed to
obtain any licenses,  permits,  franchises or other governmental  authorizations
necessary to the  ownership  of its property or to the conduct of its  business,
and  (iii)  is not in  violation  in any  material  respect  of any  term of any
agreement,  charter instrument, bylaw or instrument to which it is a party or by
which it may be bound  which  violation  or failure to obtain  might  materially
adversely  affect the business or condition  (financial  or  otherwise)  of such
Seller.

     (xiv) It is the  intention of such Seller that the Assets are being or have
been acquired by TFI and that the beneficial interest in and title to the Assets
are not part of such Seller's  estate in the event of the filing of a bankruptcy
petition by or against such Seller under any bankruptcy law.

     (xv) Immediately  prior to the acquisition of the Assets by TFI pursuant to
this  Agreement,  such Seller was the sole owner of its portion of the Assets at
such time and had good and marketable title to the Assets, free and clear of all
liens,  claims and encumbrances  (except for the Acquisition  Consideration  and
security  interests in the Assets which shall be  terminated  on or prior to the
applicable Series Closing Date).

     (xvi) The  Sellers  will treat the  transfer of the Assets as a sale to TFI
for federal, State and local income tax reporting and accounting purposes.

     (xvii) The sale of the Assets  pursuant to this Agreement  constitutes  the
valid  sale by the  Sellers  to TFI of all of such  Seller's  right,  title  and
interest in the Assets.

     (xviii) The Sellers have valid  business  reasons for selling the Assets to
TFI  pursuant  to this  Agreement  rather than  obtaining a loan  secured by the
Assets.

     (xix) The Sellers will be operated  generally so as to not be substantively
consolidated with TFI for bankruptcy purposes.

     (xx) No event has occurred that adversely  affects the Sellers'  ability to
perform the transactions contemplated by the Transaction Documents.

     (xxi) Each pension plan or profit sharing plan to which each of the Sellers
is a party has been fully  funded in  accordance  with the  obligations  of such
Seller as set forth in such plan.

     (xxii)  Neither the  acquisition  nor the holding of the  Contracts and the
related  Receivables  violates any federal or State law, rule or regulation  the
non-compliance  with which could have a material  adverse effect on the value of
the Contracts or the related Receivables.

            Section  3.02.  Representations  and  Warranties  of TFI. TFI hereby
makes the  following  representations  and  warranties  for the  benefit  of the
Issuer,  the  Trustee and  Holders of the Notes,  on which the  Sellers  rely in
entering into this Agreement with TFI and on which the Holders of the Notes rely
in purchasing the Notes;  such  representations  and warranties speak as of each
Series Closing Date unless otherwise indicated, but shall survive any subsequent
transfer,  assignment,  contribution  or  conveyance  of the  Assets or any part
thereof:

     (a) TFI has been duly organized and is validly existing in good standing as
a corporation under the laws of the State of Delaware,  with corporate power and
authority to own its properties,  perform its obligations  under the Transaction
Documents and to transact the business in which it is now engaged or in which it
proposes to engage; TFI is duly qualified to do business and is in good standing
in  each  State  in  which  the  nature  of its  business  requires  it to be so
qualified,  except where failure to so qualify would not have a material adverse
effect on the ability of TFI to perform its  obligations  under the  Transaction
Documents.

     (b) The  transfer  to and  receipt by TFI of the  Sellers'  interest in the
Contracts,  the Receivables  and the related Credits  pursuant to this Agreement
and  the  consummation  of  the  transactions  contemplated  herein  and  in the
Transaction  Documents  will not conflict with or result in breach of any of the
terms or provisions of, or constitute (with or without notice,  lapse of time or
both) a default under the Certificate of  Incorporation or By-laws of TFI or any
material indenture,  agreement,  mortgage,  deed of trust or other instrument to
which TFI is a party or by which it is  bound,  or  result  in the  creation  or
imposition of any lien,  charge or  encumbrance  (except for the lien created by
the Sale Agreement and the Indenture)  upon any of the property or assets of TFI
pursuant  to the terms of, such  indenture,  mortgage,  deed of trust,  or other
agreement  or  instrument  to which TFI is a party or by which it is bound or to
which any of the  property  or assets of TFI is  subject,  nor will such  action
result in any violation of the provisions of the Certificate of Incorporation or
By-laws of TFI or any statute or any order,  rule or  regulation of any court or
regulatory  authority or other governmental  agency or body having  jurisdiction
over TFI or any of its  properties;  and no  consent,  approval,  authorization,
order,  registration or qualification of or with or other action of any court or
any such regulatory  authority or other governmental  agency or body is required
for the acquisition of the Assets hereunder.

     (c) The  Transaction  Documents  to which  TFI is a party  have  been  duly
authorized,  executed and delivered by TFI by all necessary corporate action and
constitute valid and legally binding  obligations of TFI enforceable against TFI
in  accordance  with their  terms,  subject  as to  enforcement  to  bankruptcy,
insolvency,  reorganization  and other  similar  laws of  general  applicability
relating to or affecting  creditors' rights generally and to general  principles
of equity  regardless of whether  enforcement  is sought in a court of equity or
law.

     (d)  There are no  proceedings  or  investigations  to which TFI is a party
pending or, to the knowledge of TFI,  threatened,  before any court,  regulatory
body,  administrative  agency or other tribunal or governmental  instrumentality
(a)  asserting  the  invalidity  of this  Agreement,  (b) seeking to prevent the
issuance  of  the  Notes  or  the   consummation  of  any  of  the  transactions
contemplated by this Agreement,  or (c) seeking any determination or ruling that
would  materially and adversely affect the performance by TFI of its obligations
under, or the validity or enforceability of, this Agreement.

     (e) All approvals, authorizations, consents, orders or other actions of any
Person or of any court,  governmental  agency or body or  official,  required in
connection with the execution and delivery of this Agreement,  have been or will
be taken or obtained on or prior to the related Series Closing Date.

     (f) The TFI Address is the principal  place of business and chief executive
office of TFI.

     Section  3.03.  Purchase or  Substitution  Required  upon Breach of Certain
Representations  and Warranties.  Upon discovery by TFI or any of the Sellers of
the breach of any  representations  or  warranties  set forth in Section 3.01 or
3.02 hereof  which  materially  and  adversely  affects the value of a Contract,
Receivable, the related Credits, or the interests of the Holders of the Notes of
any Series, or a breach of any of the  representations  and warranties set forth
in Sections 3.01(a)(v), 3.01(a)(vi), 3.01(a)(vii), 3.01(a)(xiii),  3.01(a)(xiv),
3.01(a)(xvi), 3.01(a)(xxii) or 3.01(a)(xxiii) hereof, the party discovering such
breach shall give prompt written notice to the other parties.  Trendwest  shall,
within 30 days from the date it was notified of, or  otherwise  discovers,  such
breach, cure such breach, or, (1) if the breach relates to a particular Contract
and is not cured,  either (a) purchase  TFI's  interest in such Contract and the
related  Receivable  from TFI at the Purchase  Price or (b) provide a Substitute
Contract or (2) if the breach relates to a representation or warranty  regarding
the  selection  criteria  of the  Contracts  as a  whole  and is  not  cured  by
Trendwest,  either (a) purchase TFI's interest in such non-conforming  Contracts
and the related Receivables from TFI or (b) provide Substitute  Contracts as set
forth above,  so that the  representations  and  warranties  with respect to the
selection  criteria are correct,  as evidenced by a certificate of an officer of
Trendwest to the Trustee.  The Purchase Price for a purchased  Contract shall be
paid,  and any Substitute  Contract  shall be delivered,  by Trendwest to TFI in
accordance  with Section  3.04(c)  hereof.  It is understood and agreed that the
obligation  of Trendwest to cure or purchase or replace any Contract as to which
such a breach has occurred  shall  constitute  the sole remedy  respecting  such
breach  available  to TFI,  the  Issuer,  the Holders of Notes or the Trustee on
behalf of such  Holders  (except  for any  indemnities  provided  under  Section
4.01(j) hereof or any obligations under the Sale Agreement or the Indenture) for
any losses,  claims, damages and liabilities arising from TFI's interest in such
Contract or the inclusion of TFI's  interest in such Contract in the  applicable
Series Trust Estate.

            Section  3.04.   Requirements   for  Purchase  or   Substitution  of
Contracts;  Upgrades. (a) If Trendwest is required to purchase TFI's interest in
any Contract and the related  Receivables  under Section 3.03 hereof,  if TFI or
Trendwest is required to purchase the Issuer's  interest in any Contract and the
related  Receivables under Section 3.03 of the Sale Agreement,  or if the Issuer
is required or elects to purchase the Trustee's interest in any Contract and the
related Receivables under Section 3.10 of the Servicing Agreement, such Contract
and related  Receivables  shall be purchased by Trendwest at the Purchase Price.
All purchases  shall be  accomplished  at the times  specified in subsection (c)
below.

           (b) If Trendwest is required to substitute any Contract under Section
3.03 hereof or if TFI or Trendwest is required to substitute  any Contract under
Section  3.03  of the  Sale  Agreement  (a  "Substitute  Contract"),  each  such
Substitute Contract shall (i) be an Eligible Contract; (ii) be written on one of
the standard forms attached as Exhibit A to this Agreement; (iii) be accompanied
by a supplement to this  Agreement  substantially  in the form of Annex A hereto
subjecting such Contract to the provisions  hereof and providing with respect to
such Substitute Contract the information required in the related Series Contract
Schedule;  (iv) not have been selected  using  procedures  that  identified  the
Contracts as being less  desirable or valuable  than other  comparable  vacation
credit installment contracts owned by Trendwest;  and (v) not have any Scheduled
Payments that are due after the Stated  Maturity Date of the Notes of the Series
supported by such Contract.  In addition,  (i) such  Substitute  Contracts shall
have an  aggregate  Collateral  Value  at least  equal to and not  substantially
greater than the aggregate  Collateral Value of the Contracts being withdrawn as
of  the  date  of  withdrawal  (the  "Substitution   Criterion")  and  (ii)  the
representations and warranties set forth in Sections 3.01 and 3.02 shall be true
and correct with respect to such  Substitute  Contract and the aggregate pool of
Contracts as of the date such Substitute Contract is conveyed to TFI.

         Upon  the  substitution  of any  Substitute  Contract  pursuant  to the
provisions of this Section 3.04(b), Trendwest hereby agrees that such Substitute
Contract will be subject to all the terms and provisions of this Agreement,  the
Sale  Agreement,  the  Servicing  Agreement,  the  Custodian  Agreement  and the
Indenture  just as if such  Substitute  Contract  had been  one of the  original
Contracts  acquired on the applicable Series Closing Date. Upon the substitution
of a Substitute  Contract  pursuant to this Section  3.04(b),  TFI and Trendwest
shall  also  comply  with  the  provisions  and  limitations  set  forth  in the
Indenture.  All  substitutions  shall be  accomplished  at the time specified in
subsection (c) below.

           (c) Any  purchase  or  substitution  of a Contract  by  Trendwest  in
accordance  with Section 3.03 hereof or this Section 3.04 or by TFI or Trendwest
under Section 3.03 or Section 3.04 of the Sale Agreement shall be made either by
remittance  of the  Purchase  Price  to the  Subservicer  for  deposit  into the
Clearing  Account in accordance with Section 3.03(a) of the Servicing  Agreement
or by substitution of a Substitute Contract, as applicable,  within one Business
Day  following  the  expiration  of the cure  period set forth in  Section  3.03
hereof.

           (d)  If an  Obligor  desires  to  enter  into  an  Upgrade  Contract,
Trendwest,  as Servicer,  shall inform the Issuer and TFI of such fact.  In such
event, if the Issuer desires to purchase the receivable  related to such Upgrade
and so advises  Trendwest,  Trendwest  for the benefit of the Issuer and TFI may
(but shall not be obligated to) enter into an Upgrade Contract with such Obligor
and transfer such Upgrade Contract to TFI in exchange for the existing  Contract
with such Obligor and an amount equal to the difference in the principal balance
between the existing  Contract and the Upgrade  Contract  (which amount shall be
paid to Trendwest by  increasing  the amount owed by TFI under the  intercompany
debt  between  TFI and  Trendwest);  provided,  however,  that (i) such  Upgrade
Contract  has an  interest  rate that is not more than 1.0% per annum lower than
the interest rate on the Contract that is being  replaced,  (ii) each  Scheduled
Payment  under the Upgrade  Contract  shall be the equal to or greater  than the
Scheduled  Payments on the  existing  Contract,  (iii) such Obligor has made all
Scheduled Payments due on or before the date of such Upgrade,  (iv) such Upgrade
Contract is written on one of the standard  forms  attached as Exhibit A to this
Agreement,  (v)  simultaneous  with  the  execution  of  the  Upgrade  Contract,
Trendwest  shall  execute a form of  assignment  to TFI attached to such Upgrade
Contract, and indicate on the face of the Upgrade Contract that such contract is
being sold to TFI,  so that TFI can  immediately  execute an  assignment  of the
related  Receivable  to the Issuer,  which will pledge  such  Receivable  to the
Trustee pursuant to the Indenture, (vi) such Upgrade Contract shall be delivered
by Trendwest to the Custodian  immediately  after  execution of such contract by
the Obligor, WorldMark and Trendwest (and, in any event, prior to the release of
the original Contract),  (vii) the transfer of the Upgrade Contract shall not be
effective (and the lien of the Trustee on the existing  Contract and the related
Receivable shall not be released) until after any applicable  rescission  period
has expired and (viii)  clauses  (i)-(vii)  above shall be  representations  and
warranties of Trendwest,  and Trendwest  shall be obligated to purchase from the
Issuer any Upgrade Contract that does not comply with such  representations  and
warranties.  Simultaneous  with the  delivery  of such  Upgrade  Contract to the
Custodian, Trendwest shall deliver to the Trustee a supplement to this Agreement
substantially  in the form of Annex A hereto  subjecting  such  Contract  to the
provisions  hereof and  providing  with  respect to such  Upgrade  Contract  the
information required on the applicable Series Contract Schedule.

         Upon the  acquisition  by TFI of any Upgrade  Contract  pursuant to the
provisions of this Section  3.04(d) (and the subsequent  transfer of the related
Receivable to the Issuer),  Trendwest  hereby agrees that such Upgrade  Contract
and the related Receivable, as applicable,  will be subject to all the terms and
provisions of this Agreement,  the Sale Agreement,  the Servicing  Agreement and
the  Indenture  just as if such  Upgrade  Contract  had been one of the original
Contracts acquired on the applicable Series Closing Date.


                            ARTICLE 4 SELLER COVENANTS

     Section 4.01.  Seller  Covenants.  Each Seller hereby  covenants and agrees
with TFI as follows:

     (a) Except as  hereinafter  provided,  such Seller will keep in full effect
its  existence,  rights and  franchises  as a corporation  or limited  liability
company,  as applicable,  and will obtain and preserve its  qualification  to do
business as a foreign  corporation or limited liability company,  as applicable,
in each  jurisdiction  in which such  qualification  is or shall be necessary to
protect  the  validity  and  enforceability  of  this  Agreement  or  any of the
Contracts and to perform its duties hereunder. Any person into which such Seller
may be merged or consolidated, or to whom such Seller has sold substantially all
of its assets,  or any  corporation  resulting  from any merger,  conversion  or
consolidation to which such Seller shall be a party, or any Person succeeding to
the  business of such Seller shall be the  successor  of such Seller  hereunder,
without the  execution  or filing of any paper or any further act on the part of
any of the parties  hereto,  anything  herein to the  contrary  notwithstanding;
provided, however, that (w) immediately after giving effect to such transaction,
no representation or warranty made pursuant to Section 3.01(c) hereof shall have
been breached,  (x) such successor executes an agreement of assumption,  in form
reasonably  satisfactory to the Trustee,  to perform every obligation under this
Agreement,  (y) such Seller  shall have  delivered  to TFI a  certificate  of an
officer  of such  Seller  and an  Opinion  of  Counsel  each  stating  that such
consolidation,  merger, or succession and such agreement of assumption  complies
with this Section 4.01 and that all conditions  precedent,  if any, provided for
in this Agreement  relating to such transaction have been complied with, and (z)
such Seller shall have delivered to TFI an Opinion of Counsel either (1) stating
that, in the opinion of such counsel,  all financing statements and continuation
statements  and  amendments  thereto  have  been  executed  and  filed  that are
necessary fully to preserve and protect the interest of TFI in the Contracts and
reciting the details of such  filings,  or (2) stating  that,  in the opinion of
such  counsel,  no such action  shall be  necessary to preserve and protect such
interest.

     (b)  Neither  such  Seller  nor any of the  members,  directors,  officers,
employees or agents of such Seller (and,  with respect to the Prior  Issuer,  of
the members of such Seller)  shall be under any liability to TFI, the Trustee or
the Holders of Notes for any action taken or for  refraining  from the taking of
any action in good faith pursuant to this  Agreement,  or for errors in judgment
not involving recklessness or negligence; provided, however, that this provision
shall  not  protect   such  Seller   against   any  breach  of   warranties   or
representations  made herein,  or failure to perform its  obligations  in strict
compliance  with this  Agreement,  or any  liability  which would  otherwise  be
imposed by reason of any breach of the terms and  conditions of this  Agreement.
Such Seller, and any member, director, officer, employee or agent of such Seller
(and, with respect to the Prior Issuer, of the members of such Seller), may rely
in good faith on any  document of any kind prima  facie  properly  executed  and
submitted by any Person  respecting any matters arising  hereunder.  Such Seller
shall not be under any obligation to appear in,  prosecute,  or defend any legal
action that is not  incidental  to its  obligations  as the seller of the Assets
under this  Agreement  and that in its  opinion may involve it in any expense or
liability.

     (c) Such Seller  will from time to time,  at its own  expense,  execute and
file such additional financing statements (including continuation statements) as
may be  necessary  or which the Trustee  may deem  appropriate  to preserve  the
security interests and liens described in Section  3.01(a)(viii)  hereof and are
reasonably satisfactory in form and substance to TFI and the Issuer.

     (d) Such Seller will not change its name,  identity or corporate  structure
in any manner  that  would,  could,  or might make any  financing  statement  or
continuation  statement misleading within the meaning of section 9-402(7) of the
UCC,  unless it shall  have given  TFI,  the Issuer and the  Trustee at least 30
days' prior written notice thereof.

     (e) Such Seller will give TFI, the Issuer and the Trustee at least 30 days'
prior written notice of any relocation of its principal  executive office if, as
a result of such relocation,  the applicable provisions of the UCC would require
the filing of any amendment of any previously  filed  financing or  continuation
statement or of any new financing statement.

     (f)  Such  Seller  will  duly  fulfill  all  obligations  on its part to be
fulfilled under or in connection  with each Contract,  will not change or modify
the terms of the Contracts (and shall prevent any  third-party  originator  that
still  owns any  Contract  from  changing  or  modifying  the  terms of any such
Contract)  except  as  expressly  permitted  by the  terms  of  the  Transaction
Documents  and will do nothing  to impair  the rights of TFI,  the Issuer or the
Trustee in the  Assets.  In the event that the rights of such  Seller  under any
Contract or any guaranty of the related Obligor's obligations under any Contract
are not assignable to TFI or the Issuer, such Seller will enforce such rights on
behalf of TFI or the Issuer;  the Seller is not aware of any such  inability  to
assign any Contracts.

     (g) Such Seller will comply,  in all material  respects,  with all material
acts,  rules,  regulations,  orders,  decrees and directions of any governmental
authority applicable to the Assets or any part thereof; provided,  however, that
such Seller may contest any act,  regulation,  order, decree or direction in any
reasonable  manner which shall not materially and adversely affect the rights of
TFI, the Issuer or the Trustee in the Assets.

     (h) Such Seller will advise TFI,  the Issuer and the Trustee  promptly,  in
reasonable  detail,  of the  occurrence  of any breach by such Seller  following
discovery  by  such  Seller  of  such  breach  of any  of  its  representations,
warranties and covenants contained herein.

     (i) Such Seller will execute or endorse,  acknowledge,  and deliver to TFI,
the  Issuer  and the  Trustee  from  time to time such  schedules,  confirmatory
assignments,  conveyances,  and other  reassurances or instruments and take such
further  similar actions  relating to the Assets,  and the rights covered by the
Transaction Documents,  as TFI, the Issuer or the Trustee may reasonably request
to preserve and  maintain  title to the Assets and the rights of the Trustee and
the Holders of Notes therein against the claims of all persons and parties.

     (j) Trendwest  agrees to  indemnify,  defend and hold TFI harmless from and
against any and all loss,  liability,  damage,  judgment,  claim,  deficiency or
expense (including interest,  penalties,  reasonable attorney's fees and amounts
paid in settlement)  that is caused by (i) a material  breach at any time by any
Seller of the  representations,  warranties  and covenants  contained in Section
3.01 hereof or this Section 4.01 or (ii) any material  information  furnished by
any Seller which is set forth in any schedule delivered hereunder,  being untrue
in any  material  respect  when any  such  representation  was made or  schedule
delivered,  provided that Trendwest shall not have any liability with respect to
a  representation  or warranty as to any specific  Contract,  Receivable  or the
related  Credits other than to purchase  such  Contract or  substitute  for such
Contract  in  accordance   with  Section  3.03  hereof  unless  such  breach  of
representation  or warranty is the result of a Seller's fraud,  negligence,  bad
faith or willful  misconduct.  Trendwest  shall also  indemnify the Issuer,  the
Trustee  and the  Servicer  for any  cost or  expenses  incurred  by them in the
enforcement of this  Agreement.  The obligations of Trendwest under this Section
4.01(j)  shall be  considered  to have been relied upon by TFI and shall survive
the execution,  delivery and  performance of this  Agreement,  regardless of any
investigation  made by or on behalf of TFI, until  termination of the Indenture.
If Trendwest has made any indemnity  payments  pursuant to this Section  4.01(j)
and  thereafter  the  recipient  collects any of such amounts from others,  such
party will promptly repay the amount collected to Trendwest, without interest.

     (k) Such  Seller  will do nothing  to  disturb  or impair  the  acquisition
hereunder by TFI of all of such Seller's right, title and interest in the Assets
or the Issuer's rights, title or interest in the Purchased Assets.

     (l) Such Seller (i) will (A) maintain its books and records  separate  from
the books and records of TFI and (B) maintain bank accounts  separate from those
of TFI and (ii) will not (x) take,  prior to the complete  payment of the Notes,
any action that would cause the dissolution or liquidation of TFI, (y) guarantee
(directly  or  indirectly),  endorse or  otherwise  become  contingently  liable
(directly or indirectly)  for the  obligations  of TFI or (z) institute  against
TFI, or join any other person in instituting  against TFI, any case,  proceeding
or other action under any existing or future  bankruptcy,  insolvency or similar
laws.

     (m) Such Seller shall notify TFI, the Issuer and the Trustee promptly after
becoming aware of any Lien on any Asset.

     (n) On each date as of which Trendwest substitutes a Substitute Contract in
accordance with Section 3.03 hereof, Trendwest shall provide to TFI a supplement
to this Agreement  substantially  in the form of Annex A hereto  subjecting such
Contract to the provisions  hereof and providing with respect to such Substitute
Contract the information required in the Contract Schedule.

     (o) The annual  financial  statements  of such  Seller  will  disclose  the
effects  of the  transactions  contemplated  by  the  Transaction  Documents  in
accordance  with  generally  accepted  accounting   principles.   The  financial
statements  of such Seller and TFI will also disclose that the assets of TFI are
not available to pay creditors of such Seller.  The resolutions,  agreements and
other  instruments  underlying the  Transaction  Documents will be  continuously
maintained by such Seller as official records.

     (p)  Such  Seller  will,  at its own  cost  and  expense,  (i)  retain  the
Electronic  Ledger as a master record of the  Contracts and the related  Credits
and copies of all documents  relating to each Contract  (other than the original
executed  Contracts) as custodian for the Issuer and other Persons, if any, with
interests in the Contracts  and the related  Credits and (ii) mark the Contracts
and the  Electronic  Ledger to the effect that the  Contracts  and such Seller's
interest  in the related  Credits  have been  acquired by TFI,  that the related
Receivables  subsequently  have  been  transferred  by TFI to the  Issuer  and a
security  interest in the related  Contracts  and the related  Credits have been
granted by TFI to the Issuer and that such Receivables,  security  interests and
rights have been pledged,  transferred and assigned to the Trustee by the Issuer
pursuant to the Indenture.

     (q)  Such  Seller  will  perform  the  transactions  contemplated  by  this
Agreement in a manner that is consistent  with TFI's  ownership  interest in the
Assets  (prior to the  conveyance  of any part of such  interest  to the  Issuer
pursuant to the Sale  Agreement).  Such  Seller will  respond to all third party
inquiries  confirming  the  transfer  of the Assets to TFI and of the  Purchased
Assets to the Issuer.

     (r) Such Seller shall  immediately  transfer to the Servicer for deposit in
the Clearing Account any payment it receives relating to the Assets.

     Section  4.02.  TFI  Covenants.  TFI hereby  covenants  and agrees with the
Sellers as follows:

     (a) TFI  hereby  acknowledges  and agrees  that its  rights in the  related
Credits  are  expressly  subject to the rights of the  related  Obligors in such
Credits pursuant to the applicable Contract.

     (b) On  each  date  as of  which  any  interest  in any  Contract  is to be
purchased  or replaced by Trendwest  pursuant to Section 3.03 hereof,  TFI shall
submit to Trendwest an instrument of assignment assigning TFI's interest in such
Contract and the related Credits to Trendwest,  signed by the president,  senior
vice president or any vice president of TFI. Each such assignment  shall operate
as an assignment, without recourse, representation, or warranty, to Trendwest of
all of TFI's right,  title,  and interest in and to such  Contract,  the related
Receivable and the related Credits and any security  documents relating thereto,
such  assignment  being an assignment  outright and not for  security,  and upon
payment of the Purchase  Price or delivery of a Substitute  Contract,  Trendwest
will  thereupon  own such  interest in the  Contract  and all such  security and
documents, free of any further obligation to TFI with respect thereto. If in any
enforcement suit or legal proceeding it is held that Trendwest may not enforce a
Contract  on the  ground  that it is not a real  party  in  interest  or  holder
entitled to enforce the Contract,  TFI shall, at TFI's expense,  take such steps
as TFI deems necessary to enforce the Contract, including bringing suit in TFI's
name.

     (c) TFI warrants that, except as contemplated by the Transaction Documents,
it will have ownership of or a valid security  interest in the related  Credits.
TFI shall not assign,  sell,  pledge,  or  exchange,  or in any way  encumber or
otherwise dispose of the related Credits, except as contemplated by or permitted
under the Transaction Documents.

            Section 4.03.  Assignment of Assets. The Sellers understand that TFI
will  assign to the  Issuer the  Receivables  and grant to the Issuer a security
interest in all its right,  title and interest to this Agreement,  the Contracts
and the  related  Credits  and that the Issuer  will  assign to and grant to the
Trustee a security  interest  in such  Receivables,  Contracts  and the  related
Credits.  The Sellers  consent to such  assignments and grants and further agree
that all representations,  warranties, covenants and agreements the Sellers made
herein shall also be for the benefit of and inure to the Issuer, the Trustee and
all Holders from time to time of the Notes.


                         ARTICLE 5 CONDITIONS PRECEDENT

            Section  5.01.   Conditions  to  TFI's  Initial   Obligations.   The
obligations of TFI to execute and deliver the Asset Assignment to the Sellers on
the  Closing  Date  and  the  applicable  Subsequent  Asset  Assignment  to  the
Subsequent  Sellers on each  subsequent  Series  Closing Date,  pursuant to, and
perform it  obligations  pursuant  to,  this  Agreement  shall be subject to the
satisfaction of the following conditions:

     (a) All representations and warranties of the Sellers contained in Sections
3.01(b) and 3.01(c)  hereof and all  information  provided in the related Series
Contract  Schedule shall be true and correct on such Series  Closing Date,  with
the same effect as though such  representations  and warranties had been made on
such date, and the  applicable  Sellers shall have delivered to TFI, the Issuer,
the  Trustee  and each  original  purchaser  of the  related  Series of Notes an
Officer's Certificate to such effect;

     (b) All  representations and warranties of the Sellers contained in Section
3.01(a) hereof shall be true and correct on the related Series Closing Date with
respect to the Contracts  listed on the related Series Contract  Schedule,  with
the same effect as though such  representations  and warranties had been made on
such date, and the  applicable  Sellers shall have delivered to TFI, the Issuer,
the  Trustee  and each  original  purchaser  of the  related  Series of Notes an
Officer's Certificate to such effect;

     (c) The Sellers  shall have  delivered  all other  information  theretofore
required  or  reasonably  requested  by  TFI  to be  delivered  by  the  Sellers
hereunder,  duly certified by an officer of each of the Sellers, and the Sellers
shall  have  substantially  performed  all  other  obligations  required  to  be
performed as of such Series Closing Date by the provisions of this Agreement;

     (d) On or prior to such Series  Closing Date,  Trendwest,  on behalf of the
Sellers  shall have  delivered,  or caused the delivery of, the  Custodian  File
related to the Contracts identified in the Contract Schedule to the Custodian or
its agent and,  subject to Section 2.04  hereof,  there shall have been made all
filings,  recordings and/or  registrations,  and there shall have been given, or
taken,  any  notice or any other  similar  action,  as may be  necessary  in the
opinion of TFI, in order to establish and preserve the right, title and interest
of TFI in such Contract and the other Assets;

     (e)  On  or  before  the  Closing  Date,  the  Issuer,  the  Servicer,  the
Subservicer and the Trustee shall have entered into the Servicing Agreement;

     (f) The  related  Series of Notes  shall be issued and sold on the  related
Series Closing Date, the Issuer shall receive the full consideration due it upon
the issuance of such Notes, the Issuer shall have applied such consideration, to
the extent  necessary,  to pay the related  consideration to TFI for the sale of
the Receivables and the grant of the security  interest in the Contracts and the
Credits, and TFI shall have applied such consideration, to the extent necessary,
to pay the related Acquisition Consideration; and

     (g) Each of the  Sellers  shall  have  executed  and  delivered  the  Asset
Assignment or a Subsequent Asset Assignment, as applicable.

            Section   5.02.   Conditions  to  the  Sellers'   Obligations.   The
obligations  of each of the  Sellers  to  execute  and  deliver to TFI the Asset
Assignment or a Subsequent  Asset  Assignment,  as  applicable,  and perform its
obligations  pursuant to this Agreement on the Closing Date and each  subsequent
Series  Closing  Date  shall be  subject to the  satisfaction  of the  following
conditions:

     (a) All  representations  and warranties of TFI contained in this Agreement
shall be true and correct  with the same  effect as though such  representations
and warranties had been made on such date;

     (b) TFI shall have executed and delivered the applicable Asset  Assignment;
and

     (c) All corporate and legal  proceedings  and all instruments in connection
with the  transactions  contemplated  by this Agreement shall be satisfactory in
form and substance to such Seller,  and such Seller shall have received from the
TFI copies of all documents (including, without limitation, records of corporate
proceedings) relevant to the transactions herein contemplated as such Seller may
reasonably have requested.

         Trendwest's and TFI's obligations to repurchase the Contracts  pursuant
to this  Agreement  shall not be affected by any failure of the Issuer to comply
with clause (a) of this Section 5.02 subsequent to the Closing Date.


                         ARTICLE 6 TERM AND TERMINATION

            Section 6.01.  Term. This Agreement shall commence as of the date of
execution and delivery  hereof and shall continue in full force and effect until
the later of (i) payment with respect to the last Asset or (ii)  termination  of
the Indenture.

            Section 6.02. Default by Sellers.  If any Seller shall be in default
under this  Agreement and such default shall not have been cured for a period of
60 days, or if such Seller shall become  insolvent or make an assignment for the
benefit of its creditors or have a receiver  appointed for all or  substantially
all of its properties, or if any proceedings commenced, or consented to, by such
Seller are not stayed or dismissed within 90 days after being commenced  against
such  Seller  under any  bankruptcy,  insolvency  or other law for the relief of
debtors,  TFI shall have the right,  in addition to any other rights it may have
under any  applicable  law, to  terminate  this  Agreement  with respect to such
Seller upon 30 days' prior  written  notice to such  Seller;  provided  that any
termination of this Agreement  shall not release such Seller from any obligation
under this Agreement.


                             ARTICLE 7 MISCELLANEOUS

            Section  7.01.  Amendments.   This  Agreement  and  the  rights  and
obligations  of the parties  hereunder may not be changed  orally but only by an
instrument in writing  signed by the party against which  enforcement is sought.
This Agreement may be amended by TFI and the Sellers only with the prior written
consent of the Holders of 66-2/3% in principal  amount of the Controlling  Class
of the Notes Outstanding of each Series;  provided,  however, that the number of
Holders of any Series  required  for any such  amendment  may be modified as set
forth in the related Series Supplement.

     Section  7.02.   Governing  Law.  This  Agreement  shall  be  construed  in
accordance  with the internal laws of the State of New York,  without  regard to
choice of law principles.

            Section  7.03.  Notices.  All  demands,  notices and  communications
hereunder  shall be in  writing  and shall be  delivered  personally,  mailed by
registered  or  certified  United  States  mail,  postage  prepaid,  or sent via
overnight air courier or facsimile  communication and addressed,  in the case of
the Sellers, to the Seller Address,  and in the case of TFI, to the TFI Address.
All notices and demands shall be deemed to have been given either at the time of
the  delivery  thereof to any  officer of the Person  entitled  to receive  such
notices and demands at the address of such Person for notices  hereunder,  or on
the third day after the mailing thereof to such address, as the case may be. Any
Person may change the  address for notices  hereunder  by giving  notice of such
change to the other Person.

            Section 7.04.  Separability Clause. Any provisions of this Agreement
which are prohibited or  unenforceable  in any  jurisdiction  shall,  as to such
jurisdiction,   be   ineffective   to  the   extent  of  such   prohibition   or
unenforceability  without  invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.

            Section  7.05.  Assignment.  Except as provided in Section  4.01(a),
this  Agreement may not be assigned or delegated by any Seller without the prior
written  consent of TFI,  the Trustee  and the  Holders of 66-2/3% in  principal
amount of the Notes of the Controlling Class of each Series  Outstanding and may
not be assigned or delegated by TFI without the prior written consent of each of
the Sellers,  the Trustee and the Holders of 66-2/3% in principal  amount of the
Notes of the Controlling Class of each Series Outstanding.

            Section 7.06. Further Assurances. Each of the Sellers and TFI agrees
to do such  further  acts and things and to execute  and  deliver to the Trustee
such additional assignments,  agreements, powers and instruments as are required
by the Trustee to carry into effect the purposes of this  Agreement or to better
assure and confirm  unto the  Trustee or the Holders of the Notes their  rights,
powers or  remedies  hereunder.  If any  Obligor  shall be in default  under any
Contract,  upon reasonable request from the Servicer, the applicable Seller will
take all  reasonable  steps to assist in enforcing  such Contract and preserving
and  maintaining  title to the  Assets  and the  rights of the  Trustee  and the
Holders of the Notes  therein  against  the claims of all persons and parties to
the extent the applicable  Seller is capable of performing  such requested steps
and the Servicer  reasonably  determines  that the  assistance of the applicable
Seller is necessary to effect the intent and purposes hereof.

            Section  7.07.  No  Waivers;  Cumulative  Remedies.  No  failure  to
exercise  and no delay in  exercising,  on the part of TFI or the  Sellers,  any
right,  remedy,  power or privilege  hereunder shall operate as a waiver thereof
nor shall any single or partial  exercise  of any right,  remedy,  or  privilege
hereunder  preclude any other or further  exercise hereof or the exercise of any
other  right,  remedy,  power or  privilege.  The rights,  remedies,  powers and
privileges  herein  provided are  cumulative  and not  exhaustive of any rights,
remedies, powers and privileges provided by law.

            Section  7.08.  Binding  Effect;  Third  Party  Beneficiaries.  This
Agreement  will inure to the benefit of and be binding upon the parties  hereto,
the Holders of Outstanding Notes, and their respective  successors and permitted
assigns.

            Section 7.09.  Set-Off.  (a) Each of the Sellers hereby  irrevocably
and unconditionally  waives all right of set-off that it may have under contract
(including  this  Agreement),  applicable  law or otherwise  with respect to any
funds or monies of TFI and the  Issuer at any time held by or in the  possession
of such Seller.

           (b) TFI and the Issuer  shall have the right to set-off  against each
Seller  any  amounts  to which such  Seller  may be  entitled  and to apply such
amounts to any claims TFI and the Issuer may have  against such Seller from time
to time under this Agreement. Upon any such set-off TFI shall give notice of the
amount thereof and the reasons therefor.

     Section 7.10.  Counterparts.  This Agreement may be executed in one or more
counterparts all of which together shall constitute one original document.



<PAGE>



     IN WITNESS  WHEREOF,  the Sellers and TF I have caused this Agreement to be
duly executed by their respective  officers  thereunto duly authorized as of the
date and year first above written.

                   TRENDWEST RESORTS, INC., in its individual
                             capacity and as Seller



                                       By
                                      Name:
                                     Title:



                      TRI FUNDING COMPANY I, L.L.C., Seller
                        By: TRENDWEST FUNDING I, INC., as
                                     member



                                       By
                                      Name:
                                     Title:



                            TW HOLDINGS, INC., Seller



                                       By
                                      Name:
                                     Title:



                           TRENDWEST FUNDING II, INC.



                                       By
                                      Name:
                                     Title:




<PAGE>


===============================================================================

===============================================================================


                                     ANNEX A


                   FORM OF SUPPLEMENT FOR SUBSTITUTE CONTRACTS
                              AND UPGRADE CONTRACTS


         Pursuant  to Section  3.04(b) and  Section  3.04(d) of the  Receivables
Purchase Agreement dated as of March 1, 1998 (the "Agreement"),  among Trendwest
Resorts, Inc.  ("Trendwest"),  TRI Funding Company I, L.L.C., TW Holdings,  Inc.
and  Trendwest  Funding  II,  Inc.  ("TFI"),  attached as Schedule I hereto is a
Supplemental Contract Schedule, which includes information regarding Assets that
are hereby  sold,  assigned,  transferred  and  delivered by Trendwest to TFI in
accordance  with the  Agreement and the Asset  Assignment  and setting forth the
Collateral  Value of any Contract being sold to TFI by the Issuer pursuant to an
Upgrade or exchanged pursuant to a substitution.

                             TRENDWEST RESORTS, INC.



                                       By
                                      Name:
                                     Title:




<PAGE>


==============================================================================

==============================================================================


                                   SCHEDULE I


             SUPPLEMENTAL CONTRACT SCHEDULE FOR SUBSTITUTE CONTRACTS
                              AND UPGRADE CONTRACTS






<PAGE>


===============================================================================

===============================================================================


                                    EXHIBIT A


                                FORM OF CONTRACT






<PAGE>


===============================================================================

===============================================================================


                                    EXHIBIT B


                            FORM OF ASSET ASSIGNMENT

         This Asset  Assignment  ("Assignment")  is made as of March ____,  1998
(the  "Closing  Date"),  by  and  among  Trendwest  Resorts,   Inc.,  an  Oregon
corporation  ("Trendwest"),  TRI Funding Company I, L.L.C.,  a Delaware  limited
liability company (the "Prior Issuer"), TW Holdings, Inc., a Nevada corporation,
(together  with  Trendwest and the Prior  Issuer,  the  "Assignors"  and each an
"Assignor") and Trendwest Funding II, Inc., a Delaware corporation ("Assignee"),
with reference to the following facts:


                                    RECITALS:

     A. In  connection  with the sale of  certain  assets  of the  Assignors  in
conjunction  with the  issuance  of notes on the date  hereof by TRI Funding II,
Inc.,  Assignee  and  the  Assignors  have  executed  the  Receivables  Purchase
Agreement dated as of March 1, 1998 (the "Agreement").

     B. In  connection  with the  Agreement,  each of the  Assignors  desires to
assign and transfer to Assignee all of such Assignor's right, title and interest
in  and to  each  of  the  assets  described  in  Schedule  I  hereto,  and  the
corresponding paragraphs below (the "Assigned Interests").

     C. Assignee  desires to accept this Assignment and transfer of the Assigned
Interests  and assume all duties and  obligations  attendant  thereto,  accruing
after the Transfer Date.

     D. Terms used but not defined herein have the meanings  ascribed to them in
the Agreement.

         NOW  THEREFORE,  for good and valuable  consideration,  the receipt and
sufficiency of which are hereby  acknowledged and in consideration of the mutual
covenants set forth herein, the Assignors and Assignee hereby agree as follows:

     1. Assignment. Each Assignor hereby assigns, conveys, grants and transfers,
without  recourse  except as provided  in the  Agreement,  to Assignee  (and the
successors and assigns of Assignee) the following property:

     1.1. Such Assignor's right,  title and interest in and to the Contracts and
related Receivables described and listed on Schedule I hereto.

     1.2. A  security  interest  in the  vacation  credits  subject to each such
Contract (the "Credits").

                  1.3.     All other Assets relating to such Contract.

     2. Assumption.  Assignee hereby accepts the foregoing assignment and hereby
assumes all of the indebtedness,  if any, duties and obligations incident hereto
and thereto, subject to the terms and conditions of the Agreement.

     3. Further  Assurance.  The  Assignors  and  Assignee  each hereby agree to
provide such further assurances and to execute and deliver such documents and to
perform all such other acts as are necessary or  appropriate  to consummate  and
effectuate this Assignment.

     4. Distinct  Entities.  The Assignors and Assignee hereby  acknowledge that
for all  purposes  each of the  Assignors  and the  Assignee  are  separate  and
distinct legal entities.  Accordingly,  no Assignor shall be liable to any third
party for the debts,  obligations and liabilities of the Assignee;  and Assignee
shall  not be  liable  to  any  third  party  for  the  debts,  obligations  and
liabilities  of any  Assignor  to the extent that such  debts,  obligations  and
liabilities have not been expressly assumed by Assignee hereunder.

     5. Governing Law. This  Assignment  shall be governed by and interpreted in
accordance with the laws of the State of New York, and the parties hereto hereby
acknowledge  and agree that this  Assignment and the  transactions  contemplated
hereunder were negotiated and entered into in the State of New York.

     6.  Authority.  Each of the  Assignors  and the Assignee  hereby  represent
respectively  that  they  have  full  power  and  authority  to enter  into this
Assignment.

     7. Counterparts.  This Assignment may be executed in multiple counterparts,
each of which  shall be deemed an  original  but all of which,  taken  together,
shall constitute one and the same instrument.

     8.  Successors  and Assigns.  Each of the Assignors and the Assignee  agree
that this  Assignment  will be  binding  and will  inure to the  benefit of each
Assignor and its  successors and assigns and the Assignee and its successors and
assigns.



<PAGE>



     IN WITNESS WHEREOF,  this Assignment has been executed as of the date first
above written.

                        TRENDWEST RESORTS, INC., Assignor



                                       By
                                      Name:
                                     Title:



                     TRI FUNDING COMPANY I, L.L.C., Assignor
                    By: TRENDWEST FUNDING I, INC., as member



                                       By
                                      Name:
                                     Title:



                           TW HOLDINGS, INC., Assignor



                                       By
                                      Name:
                                     Title:



                      TRENDWEST FUNDING II, INC., Assignee



                                       By
                                      Name:
                                     Title:




<PAGE>


==============================================================================

==============================================================================


                                   SCHEDULE I


                                CONTRACT SCHEDULE







<PAGE>


===============================================================================

===============================================================================


                                    EXHIBIT C


                       FORM OF SUBSEQUENT ASSET ASSIGNMENT

         This Asset Assignment  ("Assignment")  is made as of ___________,  ____
(the "Series Closing Date"),  by and among  Trendwest  Resorts,  Inc., an Oregon
corporation  ("Trendwest"),  TW Holdings, Inc., a Nevada corporation,  (together
with Trendwest,  the  "Assignors" and each an "Assignor") and Trendwest  Funding
II, Inc., a Delaware corporation  ("Assignee"),  with reference to the following
facts:


                                    RECITALS:

     A. In  connection  with the sale of  certain  assets  of the  Assignors  in
conjunction  with the  issuance  of notes on the date  hereof by TRI Funding II,
Inc.,  Assignee  and  the  Assignors  have  executed  the  Receivables  Purchase
Agreement dated as of March 1, 1998 (the "Agreement").

     B. In  connection  with the  Agreement,  each of the  Assignors  desires to
assign and transfer to Assignee all of such Assignor's right, title and interest
in  and to  each  of  the  assets  described  in  Schedule  I  hereto,  and  the
corresponding paragraphs below (the "Assigned Interests").

     C. Assignee  desires to accept this Assignment and transfer of the Assigned
Interests  and assume all duties and  obligations  attendant  thereto,  accruing
after the Transfer Date.

     D. Terms used but not defined herein have the meanings  ascribed to them in
the Agreement.

         NOW  THEREFORE,  for good and valuable  consideration,  the receipt and
sufficiency of which are hereby  acknowledged and in consideration of the mutual
covenants set forth herein, the Assignors and Assignee hereby agree as follows:

     1. Assignment. Each Assignor hereby assigns, conveys, grants and transfers,
without  recourse  except as provided  in the  Agreement,  to Assignee  (and the
successors and assigns of Assignee) the following property:

     1.1. Such Assignor's right,  title and interest in and to the Contracts and
related Receivables described and listed on Schedule I hereto.

     1.2. A  security  interest  in the  vacation  credits  subject to each such
Contract (the "Credits").

     1.3. All other Assets relating to such Contract.

     2. Assumption.  Assignee hereby accepts the foregoing assignment and hereby
assumes all of the indebtedness,  if any, duties and obligations incident hereto
and thereto, subject to the terms and conditions of the Agreement.

     3. Further  Assurance.  The  Assignors  and  Assignee  each hereby agree to
provide such further assurances and to execute and deliver such documents and to
perform all such other acts as are necessary or  appropriate  to consummate  and
effectuate this Assignment.

     4. Distinct  Entities.  The Assignors and Assignee hereby  acknowledge that
for all  purposes  each of the  Assignors  and the  Assignee  are  separate  and
distinct legal entities.  Accordingly,  no Assignor shall be liable to any third
party for the debts,  obligations and liabilities of the Assignee;  and Assignee
shall  not be  liable  to  any  third  party  for  the  debts,  obligations  and
liabilities  of any  Assignor  to the extent that such  debts,  obligations  and
liabilities have not been expressly assumed by Assignee hereunder.

            5.  Governing  Law.  This  Assignment   shall  be  governed  by  and
interpreted  in  accordance  with the laws of the  State  of New  York,  and the
parties  hereto  hereby  acknowledge  and  agree  that this  Assignment  and the
transactions  contemplated  hereunder  were  negotiated  and entered into in the
State of New York.

     6.  Authority.  Each of the  Assignors  and the Assignee  hereby  represent
respectively  that  they  have  full  power  and  authority  to enter  into this
Assignment.

     7. Counterparts.  This Assignment may be executed in multiple counterparts,
each of which  shall be deemed an  original  but all of which,  taken  together,
shall constitute one and the same instrument.

     8.  Successors  and Assigns.  Each of the Assignors and the Assignee  agree
that this  Assignment  will be  binding  and will  inure to the  benefit of each
Assignor and its  successors and assigns and the Assignee and its successors and
assigns.



<PAGE>



     IN WITNESS WHEREOF,  this Assignment has been executed as of the date first
above written.

                        TRENDWEST RESORTS, INC., Assignor



                                       By
                                      Name:
                                     Title:



                           TW HOLDINGS, INC., Assignor



                                       By
                                      Name:
                                     Title:



                      TRENDWEST FUNDING II, INC., Assignee



                                       By
                                      Name:
                                     Title:




<PAGE>


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                                   SCHEDULE I


                                CONTRACT SCHEDULE