Exhibit 10.46


                               SERVICING AGREEMENT

                                      among



                              TRI FUNDING III, INC.
                                   ("Issuer")

                                       and



                             TRENDWEST RESORTS, INC.
                           ("Servicer" or "Trendwest")

                                       and



            NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION, as Trustee
                                   ("Trustee")

                           Dated as of August 1, 1999




<PAGE>


                                TABLE OF CONTENTS
<TABLE>
<CAPTION>
SECTION                                           HEADING                                                       PAGE
<S>                        <C>                                                                                  <C>
ARTICLE 1                  DEFINITIONS............................................................................2

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

ARTICLE 2                  SERVICER REPRESENTATIONS, WARRANTIES AND COVENANTS.....................................4

       Section 2.01.       Representations and Warranties.........................................................4
       Section 2.02.       Covenants..............................................................................6

ARTICLE 3                  ADMINISTRATION AND SERVICING OF CONTRACTS..............................................7

       Section 3.01.       Responsibilities of Servicer...........................................................7
       Section 3.02.       Standard of Care.......................................................................9
       Section 3.03.       Local Bank Account, ACH Payments and Servicer Remittances.............................10
       Section 3.04.       Property Management...................................................................11
       Section 3.05.       Financing Statements..................................................................11
       Section 3.06.       [Reserved.]...........................................................................11
       Section 3.07.       [Reserved.]...........................................................................11
       Section 3.08.       No Offset.............................................................................11
       Section 3.09.       Servicing Compensation................................................................11
       Section 3.10.       Substitution or Purchase of Contracts and Receivables.................................12

ARTICLE 4                  ACCOUNTINGS, STATEMENTS AND REPORTS...................................................13

       Section 4.01.       Monthly Servicer's Reports............................................................13
       Section 4.02.       Financial Statements; Certification as to Compliance; Notice of Default...............13
       Section 4.03.       Independent Accountants'Reports.......................................................15
       Section 4.04.       Access to Certain Documentation and Information.......................................16
       Section 4.05.       Trustee to Cooperate..................................................................18
       Section 4.06.       Oversight of Servicing................................................................18

ARTICLE 5                  THE SERVICER AND THE ISSUER...........................................................19

       Section 5.01.       Servicer Indemnification..............................................................19
       Section 5.02.       Corporate Existence; Reorganizations..................................................19
       Section 5.03.       Limitation on Liability of the Servicer and Others....................................20
       Section 5.04.       The Servicer Not to Resign............................................................20
       Section 5.05.       Issuer Indemnification................................................................21

ARTICLE 6                  SERVICING TERMINATION.................................................................21


       <PAGE>
       Section 6.01.       Servicer Events of Default............................................................21
       Section 6.02.       Appointment of Successor Servicer.....................................................24
       Section 6.03.       Notification to Noteholders...........................................................24
       Section 6.04.       Waiver of Past Defaults...............................................................24
       Section 6.05.       Effects of Termination of Servicer....................................................25
       Section 6.06.       No Effect on Other Parties............................................................25

ARTICLE 7                  [RESERVED]............................................................................26


ARTICLE 8                  MISCELLANEOUS PROVISIONS..............................................................26

       Section 8.01.       Termination of the Servicing Agreement................................................26
       Section 8.02.       Amendments............................................................................26
       Section 8.03.       Governing Law.........................................................................27
       Section 8.04.       Notices, etc., to Trustee, Issuer and Servicer........................................27
       Section 8.05.       Notices and Other Documents to Noteholders; Waiver....................................28
       Section 8.06.       Severability of Provisions............................................................28
       Section 8.07.       Binding Effect........................................................................29
       Section 8.08.       Article Headings and Captions.........................................................29
       Section 8.09.       Legal Holidays........................................................................29
       Section 8.10.       Assignment for Security for the Notes.................................................29
       Section 8.11.       No Servicing Assignment...............................................................29
       Section 8.12.       Counterparts..........................................................................29
       Section 8.13.       Parties Will Not Institute Insolvency Proceedings.....................................29

Signatures.......................................................................................................30


</TABLE>


EXHIBIT A -- Form of Monthly Servicer's Report
EXHIBIT B -- Permitted Changes to Property Management Agreement
EXHIBIT C -- Form of Report of Independent Accountants


<PAGE>
                               SERVICING AGREEMENT

         THIS SERVICING AGREEMENT, dated as of August 1, 1999 (the "Agreement"),
by and among TRI FUNDING III,  INC., a Delaware  corporation  (herein,  together
with its permitted  successors and assigns,  the "Issuer"),  TRENDWEST  RESORTS,
INC.,  an Oregon  corporation,  for itself  (together  with its  successors  and
assigns, "Trendwest") as servicer hereunder (herein, together with its permitted
successors and assigns,  the "Servicer"),  and NORWEST BANK MINNESOTA,  NATIONAL
ASSOCIATION,  a national banking  association as trustee (herein,  together with
its  permitted  successors  and  assigns,  the  "Trustee")  under the  Indenture
(defined below).


                              PRELIMINARY STATEMENT

         The Issuer has entered  into an  Indenture,  dated as of August 1, 1999
(as amended  and  supplemented  from time to time,  the  "Indenture"),  with the
Trustee and the  Servicer,  pursuant  to which the Issuer  intends to issue from
time to time in series its Receivables-Backed Notes (collectively, the "Notes").

         The Issuer, Trendwest Resorts, Inc. (not as Servicer, but acting on its
own behalf,  "Trendwest"),  TRI Funding II, Inc., a Delaware  corporation  ("TRI
II"), TRI Funding Company I, L.L.C., a Delaware limited  liability company ("TRI
I"), TW Holdings II, Inc., a Delaware  corporation  ("TW II"),  and TW Holdings,
Inc., a Nevada  corporation  ("TW  Holdings"),  have entered into a  Receivables
Purchase Agreement, dated as of August 1, 1999 (as amended and supplemented from
time to time, the "Receivables Purchase Agreement"),  providing for, among other
things,  the sale by  Trendwest,  TRI I, TRI II,  TW II and TW  Holdings  to the
Issuer of the Assets, as defined in the Receivables  Purchase  Agreement.  Under
the terms and conditions  set forth in the Indenture,  the Issuer is and will be
pledging such Assets to the Trustee as security for the Notes. As a precondition
to the  effectiveness  of the Receivables  Purchase  Agreement,  the Receivables
Purchase Agreement requires that the Servicer,  the Issuer and the Trustee enter
into this Agreement to provide for the servicing of the Assets.

         In order to further  secure the Notes,  the Issuer is  granting  to the
Trustee a security interest in, among other things,  the Issuer's rights derived
under this Agreement and the Receivables  Purchase  Agreement,  and the Servicer
agrees  that all  covenants  and  agreements  made by the  Servicer  herein with
respect to the Assets  shall also be for the benefit and security of the Trustee
and all  Holders  from time to time of the Notes.  For its  services  under this
Agreement,  the Servicer  will receive a Servicer Fee as provided  herein and in
the Indenture.

                                       1
<PAGE>


                                    ARTICLE 1

                                   DEFINITIONS

        Section 1.01.  Defined  Terms.  Except as otherwise  specified or as the
context may otherwise require,  the following terms have the respective meanings
set forth below for all purposes of this Agreement,  and the definitions of such
terms are equally applicable both to the singular and plural forms of such terms
and to the  masculine,  feminine and neuter  genders of such terms.  Capitalized
terms used but not otherwise  defined herein shall have the respective  meanings
assigned to such terms in the Indenture.

         "Assets" shall have the meaning  specified in the Receivables  Purchase
Agreement.

         "Collateral Agent Agreement" shall mean the Collateral Agent Agreement,
dated as of August 1, 1999, among Sage Systems,  Inc., as Collateral  Agent, the
Trustee,  the Issuer and  Trendwest,  as amended and  supplemented  from time to
time.

          "Collateral  Agent  Files"  shall have the  meaning  specified  in the
Receivables Purchase Agreement.

         "Contract  Files" shall have the meaning  specified in the  Receivables
Purchase Agreement.

          "Independent Accountants" shall mean KPMG Peat Marwick or another firm
of public accountants of nationally  recognized  standing;  provided,  that such
firm is  independent  with  respect to the  Servicer  within the  meaning of the
Securities Act of 1933, as amended.

         "Institutional  Investor"  shall  have  the  meaning  specified  in the
Indenture.

         "Issuer" shall mean TRI Funding III, Inc., a Delaware corporation,  and
its permitted successors and assigns.

         "Liquidated   Receivable"   shall  mean  a  Receivable  that  has  been
liquidated pursuant to Section 3.01(b) hereof.

         "Local Bank Account" shall mean the account established by the Servicer
at the Local Bank, into which account  collections with respect to the Contracts
will be deposited by the Servicer.

         "Local Bank" shall mean Commerce  Bank of  Washington  (or an affiliate
thereof), and its successors and assigns.


                                       2
         <PAGE>

         "Monthly  Servicer's  Report"  shall  mean the report  prepared  by the
Servicer  pursuant to Section 4.01 hereof, a form of which is attached hereto as
Exhibit A.

         "Officer's  Certificate"  shall  mean,  for any Person,  a  certificate
signed by the  President,  any Vice  President,  Treasurer  or Secretary of such
Person and,  in the case of the Issuer,  any  authorized  representative  of the
Issuer.

         "Opinion of Counsel" shall mean a written  opinion of counsel in a form
that is, and from counsel who is, reasonably acceptable to the person requesting
such opinion.

         "Receivables  Purchase  Agreement" shall mean the Receivables  Purchase
Agreement, dated as of the date hereof, among Trendwest, TW Holdings, TRI I, TRI
II, TW II and the  Issuer as the same may be amended  or  modified  from time to
time, together with any annexes,  appendices,  exhibits or schedules thereto and
including the Asset Assignment and any Subsequent Asset Assignment  executed and
delivered in connection therewith.

         "Remittance  Date" shall mean the  Business Day  immediately  preceding
each Payment Date.

         "Reported Company" shall mean each of the Issuer, WorldMark,  Trendwest
and its  subsidiaries,  provided,  however,  if Trendwest is no longer acting as
Servicer,  then  "Reported  Company"  shall  also  mean any  successor  Servicer
appointed pursuant to this Agreement.

         "Reported Company's  Financial  Statements" shall include each Reported
Company's audited  consolidated  balance sheet,  income statement,  statement of
cash flows, auditors opinion letter regarding audited financial statements,  all
notes to the audited  financial  statements  and, with respect to  Trendwest,  a
letter  stating that either (i) the auditors have found no material  weakness or
(ii) specifying any material weaknesses found by such auditors;  Trendwest's and
WorldMark's  financial  statements  shall be audited,  but,  with respect to any
other Reported Company, if such information is not currently being audited, then
such information may be unaudited.

         "Servicer"  shall  initially  mean  Trendwest  Resorts,  Inc.  until  a
successor  Person  shall have become the  Servicer  pursuant  to the  applicable
provisions  of  this  Agreement,  and  thereafter  "Servicer"  shall  mean  such
successor Person.

         "Servicer Default" shall mean any occurrence or circumstance which with
notice or the lapse of time or both would be a Servicer  Event of Default  under
this Agreement.

         "Servicer  Event of  Default"  shall  mean each of the  occurrences  or
circumstances enumerated in Section 6.01 hereof.

                                       3

         <PAGE>

         "Servicer  Termination  Notice"  means the notice  described in Section
6.01 hereof.

         "Servicing  Officer" shall mean those officers of the Servicer involved
in, or  responsible  for, the  administration  and  servicing of the Assets,  as
identified  on the list of Servicing  Officers  furnished by the Servicer to the
Trustee and the Noteholders from time to time.

         "Substitution  Criterion"  shall  have  the  meaning  specified  in the
Receivables Purchase Agreement.

         "Substitute  Receivable"  shall  have  the  meaning  specified  in  the
Receivables Purchase Agreement.

         "TRI I" shall mean TRI  Funding  Company,  L.L.C.,  a Delaware  limited
liability company, and its permitted successors and assigns.

         "TRI II" shall mean TRI Funding II, Inc., a Delaware  corporation,  and
its permitted successors and assigns.

         "Trustee"  shall  initially  mean  Norwest  Bank  Minnesota,   National
Association,  until a successor Person shall have become the Trustee pursuant to
the applicable provisions of the Indenture,  and thereafter "Trustee" shall mean
such successor Person.

         "TW Holdings" shall mean TW Holdings,  Inc., a Nevada corporation,  and
its permitted successors and assigns.

         "TW II" shall mean TW Holdings II, Inc.,  a Delaware  corporation,  and
its permitted successors and assigns.

         "Upgrade" shall have the meaning specified in the Indenture.

         "Upgrade Contract" shall have the meaning specified in the Indenture.


                                    ARTICLE 2

               SERVICER REPRESENTATIONS, WARRANTIES AND COVENANTS

         Section 2.01.  Representations  and Warranties.  The Servicer makes the
following  representations  and warranties to the Trustee and for the benefit of
the Noteholders as of the Closing Date, which shall survive the Closing Date:

                                       4

         <PAGE>

                   (a)  Organization  and Good  Standing.  The Servicer has been
         duly  incorporated  and is  validly  existing  in  good  standing  as a
         corporation  under  the laws of the  State of  Oregon,  with  requisite
         corporate  power  and  authority  to own its  properties,  perform  its
         obligations  under this Agreement and the Indenture and to transact the
         business  in which it is now engaged or in which it proposes to engage;
         the Servicer 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  the  Servicer  to  perform  its
         obligations under this Agreement and the Indenture.

                   (b)  Authorization  and  Binding  Obligation.  Each  of  this
         Agreement  and the  Indenture  has been duly  authorized,  executed and
         delivered by the Servicer and constitutes the valid and legally binding
         obligation  of  the  Servicer   enforceable  against  the  Servicer  in
         accordance with its terms, subject as to enforcement to any 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.

                   (c) No Violation. The entering into of this Agreement and the
         Indenture and the performance by the Servicer of its obligations  under
         this  Agreement  and  the  Indenture  and  the   consummation   of  the
         transactions herein and therein  contemplated will not conflict with or
         result in a breach of any of the terms or provisions  of, or constitute
         a default  under,  or result in the creation or imposition of any lien,
         charge  or  encumbrance  upon  any of the  property  or  assets  of the
         Servicer  pursuant to the terms of any  material  indenture,  mortgage,
         deed of trust or other  agreement or  instrument to which it is a party
         or by which it is bound or to which  any of its  property  or assets is
         subject, nor will such action result in any violation of the provisions
         of its  Articles of  Incorporation  or  By-laws,  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 it or any of
         its  properties;  and  no  consent,  approval,  authorization,   order,
         registration  or  qualification  of or  with  any  court,  or any  such
         regulatory  authority or other governmental  agency or body is required
         for the Servicer to enter into this Agreement and the Indenture.

                   (d)   No   Proceedings.   There   are   no   proceedings   or
         investigations pending, or to the knowledge of the Servicer, threatened
         against or affecting  the Servicer or any  subsidiary  in or before any
         court,  governmental  authority  or  agency  or  arbitration  board  or
         tribunal,   including  but  not  limited  to  any  such  proceeding  or
         investigation  with  respect to any  environmental  or other  liability
         resulting  from the  ownership or use of any of the  Vacation  Credits,
         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 the Servicer and its
         subsidiaries, or the ability of the Servicer to perform its obligations
         under this Agreement or the Indenture. The Servicer is not in

                                       5
         <PAGE>

         default with respect to any order of any court,  governmental authority
         or agency or arbitration board or tribunal.

                   (e)  Approvals.  The  Servicer (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
         materially  adversely  affect the business or condition  (financial  or
         otherwise) of the Servicer and its subsidiaries.

                   (f)  Investment  Company.  The Servicer is not an  investment
         company which is required to register under the Investment  Company Act
         of 1940, as amended.

                   (g) Fidelity  Bond.  The Servicer has insurance  coverage for
         employee  dishonesty  with respect to funds it holds in an amount equal
         to $500,000 per  occurrence  and coverage under an errors and omissions
         policy.

                    (h) ERISA.  Except for one 401(K) plan,  the Servicer  does
         not have or maintain any pension plans.

                   (i) Year 2000. The Servicer has reviewed its computer systems
         relating to the  collections of the  Receivables,  and such systems are
         Year 2000 compliant.

         Section 2.02. Covenants. (a) The Servicer covenants as to the Assets:

                   (i) The  Servicer  shall not  release  or assign  any Lien in
         favor of the Trustee on any Receivables or the Vacation Credits related
         to any Contract in whole or in part,  except as permitted  herein or in
         the Indenture.

                  (ii) The Servicer  will in all material  respects duly fulfill
         all  obligations  on the  Servicer's  part to be fulfilled  under or in
         connection  with the  Assets.  The  Servicer  will not amend,  rescind,
         cancel or modify any Contract or term or provision  thereof,  except as
         permitted  herein or in the Indenture or in connection with an Upgrade,
         and the Servicer  will not do anything  that would impair the rights of
         the Noteholders in the Assets,  except as contemplated herein or in the
         Indenture;  provided that, without limiting the foregoing, the Servicer
         may once per  Contract  over the  lifetime of such  Contract  allow the
         Obligor of such  Contract  to skip one  Scheduled  Payment  and add one
         month to the term of the related Contract; provided, further, that such
         extension  will not extend the date of the last payment of any Contract
         that  terminates  prior to the  Stated  Maturity  one month  beyond the
         Stated Maturity of the Notes.

                                       6

         <PAGE>

                 (iii) As more  specifically  set forth below, in performing its
         servicing  duties  hereunder,  the Servicer  shall collect all payments
         required to be made by the Obligors under the Contracts and enforce all
         material  rights of the Issuer under the Contracts.  The Servicer shall
         not  assign,  sell,  pledge  or  exchange  or in any  way  encumber  or
         otherwise dispose of the Receivables or the Vacation Credits, except as
         permitted hereunder or in the Indenture.

         (b) The Servicer will deliver each of the  accountings,  statements and
reports described in Article 4 hereof to each party as set forth therein.

         (c)  The  Servicer  shall  maintain  insurance  coverage  for  employee
dishonesty  with respect to funds it holds in an amount greater than or equal to
$500,000 per occurrence and coverage under an errors and omissions policy.

         (d)  Trendwest  and the Servicer,  if not  Trendwest,  will not consent
(except as may be required by the reasonableness  standard in Section 2.3 of the
Third Amended  Vacation  Program  Agreement,  dated as of June 3, 1994,  between
Trendwest  and  WorldMark,  as amended) to any request  from  WorldMark to allow
WorldMark to encumber,  pledge or hypothecate  any vacation  property under such
Section 2.3.


                                    ARTICLE 3

                    ADMINISTRATION AND SERVICING OF CONTRACTS

        Section 3.01.  Responsibilities of Servicer.  (a) The Servicer,  for the
benefit of the  Noteholders,  shall be responsible for, and shall, in accordance
with its customary  practices,  pursue the managing,  servicing,  administering,
enforcing and making of collections on the Contracts,  the Vacation Credits, the
enforcement  of the  Trustee's  security  interest  in the  Receivables  and the
Vacation  Credits  granted  pursuant to the Indenture,  and, if applicable,  the
resale of the Vacation  Credits,  each in accordance with applicable law and the
standards and procedures set forth in this Agreement and any related  provisions
of  the  Indenture  and  the  Receivables  Purchase  Agreement.  The  Servicer's
responsibilities   shall  include   collecting  and  posting  of  all  payments,
responding to inquiries of Obligors, investigating delinquencies, accounting for
collections  and furnishing  monthly and annual  statements to the Trustee,  the
Noteholders  and the Rating Agencies with respect to payments and using its best
efforts to maintain the perfected  security interest of the Trustee in the Trust
Estate (except with respect to the Vacation  Credits).  Subject to the terms and
conditions of this  Agreement,  the Servicer (at its  expense),  acting alone or
through a subservicer,  shall have full power and authority,  acting at its sole
discretion,  to do  any  and  all  things  in  connection  with  such  managing,
servicing, administration, enforcement, collection and such resale of the

                                       7
<PAGE>

Vacation  Credits  that it may  deem  necessary  or  desirable  and in the  best
interests  of  the  Noteholders,   including  the  prudent  delegation  of  such
responsibilities.   Without  limiting  the  generality  of  the  foregoing,  the
Servicer,  in its own name, shall, and is hereby authorized and empowered by the
Trustee,  subject to Section 3.02  hereof,  to execute and deliver (on behalf of
itself, the Noteholders,  the Trustee or any of them) any and all instruments of
satisfaction or  cancellation,  or of partial or full release or discharge,  and
all other comparable instruments,  with respect to the Contracts, the Collateral
Agent Files and the Contract Files.  Subject to the terms and conditions of this
Agreement,  the  Servicer,  also  may,  in its sole  discretion,  waive any late
payment  charge or  penalty,  or any other  fees  that may be  collected  in the
ordinary course of servicing any Contract.  Notwithstanding  the foregoing,  the
Servicer,  shall  not,  except  pursuant  to a  judicial  order  from a court of
competent  jurisdiction,  or as otherwise  expressly provided in this Agreement,
release  or waive the right to  collect  the  Scheduled  Payments  or any unpaid
balance on any  Contract.  The Trustee  shall,  at the expense of the  Servicer,
furnish  the  Servicer,  or at the request of the  Servicer,  with any powers of
attorney and other documents  necessary or appropriate to enable the Servicer to
carry out their servicing and administrative  duties hereunder,  and the Trustee
shall not be responsible for the Servicer's application thereof. Notwithstanding
any  delegation of its  responsibilities  hereunder,  the Servicer  shall remain
primarily liable for the full performance of its obligations hereunder.

         (b) The  Servicer  shall  conduct any Contract  management,  servicing,
administration, collection or enforcement actions in the following manner:

                   (i) The  Servicer,  as agent for and on behalf of the Issuer,
         with respect to any Defaulted  Contract shall follow such practices and
         procedures as are normal and consistent  with the Servicer's  standards
         and procedures relating to its own contracts,  receivables and vacation
         credits that are similar to the Contracts, Receivables and the Vacation
         Credits,  including  without  limitation,  the  taking  of  appropriate
         actions  to  foreclose  or  otherwise   liquidate  any  such  Defaulted
         Contract, together with the related Vacation Credits and to enforce the
         Issuer's rights in or under the  Receivables  Purchase  Agreement.  The
         Servicer shall continue its customary  practice of applying payments on
         Defaulted  Contracts  and  Delinquent  Contracts  first  to  delinquent
         interest,  then to interest and then to  principal.  All  Recoveries or
         Residual  Proceeds  in respect of any such  Receivable  and the related
         Vacation  Credits  received by the  Servicer  shall be deposited in the
         Local Bank Account pursuant to Section 3.03(a);

                  (ii) The Servicer may sue to enforce or collect upon Contracts
         as agent for the Trustee.  If the  Servicer  elects to commence a legal
         proceeding  to enforce a  Contract,  the act of  commencement  shall be
         deemed to be an  automatic  assignment  of the Contract to the Servicer
         for purposes of collection  only. If, however,  in any enforcement suit
         or legal  proceeding  it is held that the  Servicer  may not  enforce a
         Contract  on the ground  that it is not a real party in  interest  or a
         holder entitled to enforce the Contract, then the Trustee shall, at the
         Servicer's  request and expense,  take such steps as the Servicer deems
         necessary  and  instructs the Trustee in writing to take to enforce the
         Contract, including

                                       8
         <PAGE>

         bringing suit in its name or the name of the Issuer or the names of the
         Noteholders,  and the Trustee shall be  indemnified by the Servicer for
         any such action taken;

                 (iii) The  Servicer  shall  exercise  any  rights  of  recourse
         against  third  parties  that exist with  respect  to any  Contract  in
         accordance  with the Servicer's  usual practice and applicable  law. In
         exercising recourse rights, the Servicer is authorized on the Trustee's
         behalf to reassign  the Contract to the person  against  whom  recourse
         exists  to the  extent  necessary,  and at the  price  set forth in the
         document  creating  the  recourse.  The  Servicer  will not  reduce  or
         diminish such recourse  rights,  except to the extent that it exercises
         such right;

                  (iv) The Servicer may not accept Substitute  Contracts that do
         not comply with  Section  3.10  hereof,  Sections  3.03 and 3.04 of the
         Receivables  Purchase Agreement,  Section 4.03 of the Indenture and the
         definition of Eligible Contract;

                   (v) The Servicer  may waive,  modify or vary any terms of any
         Contract or consent to the  postponement of strict  compliance with any
         such term if in the  Servicer's  reasonable  and prudent  determination
         such waiver,  modification or postponement is not materially adverse to
         the  Noteholders;  provided,  however,  that (A) the Servicer shall not
         forgive  any  payment,  and (B)  the  Servicer  shall  not  permit  any
         modification,  waivers,  variation or postponements with respect to any
         Contract  that would  decrease  the  Scheduled  Payment,  decrease  the
         interest  rate,  defer the payment of any  principal or interest or any
         Scheduled Payment, reduce the Collateral Value of such Contract (except
         in connection  with actual  payments  attributable  to such  Collateral
         Value), or prevent the complete amortization of the Collateral Value of
         such  Contract from  occurring by the  Calculation  Date  preceding the
         Stated  Maturity  with  respect to such Notes.  The Monthly  Servicer's
         Report  shall  indicate  any  modification  of  any  Scheduled  Payment
         pursuant to Section 2.02(a)(ii) hereof; and

                  (vi)  Notwithstanding  any provision to the contrary contained
         in this  Agreement,  the  Servicer  shall  exercise  any right  under a
         Contract to accelerate the unpaid Scheduled Payments,  due or to become
         due  thereunder  in such a  manner  as to  maximize  the  net  proceeds
         available to the Issuer; provided,  however, that the Servicer will not
         accelerate any Scheduled Payment unless permitted to do so by the terms
         of the Contract and under applicable law.

        Section 3.02. Standard of Care. In managing,  administering,  servicing,
enforcing  and making  collections  on the  Contracts  and the Vacation  Credits
pursuant to this Agreement,  the Servicer will provide such services in a manner
consistent  with past  practice  and  applicable  law and will not  change  such
practice  in any way  that  would  cause  an  adverse  material  change  in such
practice. In any event, the Servicer warrants that in providing such services it
will  exercise  that degree of skill and care  consistent  with that which other
servicers in the industry customarily exercise with respect to similar contracts
and vacation  credits owned or serviced by them. The Servicer  shall  punctually
perform all of its obligations

                                       9
<PAGE>

and agreements under this Agreement and shall comply with all applicable federal
and state laws and  regulations,  shall maintain all state and federal  licenses
and  franchises  necessary  for it to  perform  its  servicing  responsibilities
hereunder,  and shall not materially impair the rights of the Noteholders in any
Contracts or payments thereunder.

        Section 3.03. Local Bank Account, ACH Payments and Servicer Remittances.
(a) The Servicer  has  previously  instructed  (or,  with respect to  Substitute
Contracts and Subsequent Contracts,  will have instructed) each Obligor to remit
his or her payments to a third party agent of the Servicer.  The Servicer  shall
cause such agent to deposit, within one Business Day, all payments for principal
and  interest on the  Receivables  that it receives  into an account (the "Local
Bank  Account")  maintained  at the Local  Bank in the name of,  and in the sole
control of, such agent.  In the event that a third party  (which may not include
any  Affiliate of Trendwest) is no longer acting as an agent for the purposes of
collecting  payments relating to the Trust Estate, the Servicer will establish a
lockbox  account in the name of the Trustee  with a lockbox  bank and direct the
Obligors to make all payments to such lockbox account.  The Servicer shall cause
payments made by automated  clearing  house debit to be deposited  directly into
the Local Bank Account from the  Obligor's  relevant  account.  On each Business
Day, the Servicer shall, or shall cause the Local Bank Account Bank to, transfer
all amounts in the Local Bank Account  collected  relating to the  Contracts and
the  Receivables  (including  the  purchase  price  thereof)  to the  Collection
Account,  which shall be an  Eligible  Account at the Trustee in the name of the
Trustee on behalf of the Noteholders.  The Trustee,  based solely on information
set forth in each  Monthly  Servicer's  Report,  shall  cause the amounts in the
Collection  Account  to be  withdrawn  from the  Collection  Account  on related
Payment  Date in an  amount  necessary  to make the  distributions  set forth in
Section 12.02(d) or 12.02(e) of the Indenture on such Payment Date.

         (b) Except as otherwise  provided in this Agreement,  the Servicer,  as
agent of the Issuer,  shall remit for deposit in the Local Bank  Account by 4:00
p.m.,  Seattle time, on each Business Day the amounts  described below that have
been received by the Servicer through 4:00 p.m.,  Seattle time, on the preceding
Business Day:

                   (i) all  payments  made under the  Contracts  relating to the
         Receivables  due after the  Cut-Off  Date,  including  prepayments  but
         excluding taxes, received directly by the Servicer;

                  (ii)     all Residual Proceeds and Recoveries; and

                 (iii)  the  Purchase  Price of any  Contract  purchased  by the
         Servicer or the Issuer, to the extent received by the Servicer.

         The Servicer  shall hold in trust for the benefit of the Holders of the
Notes any  payment it receives  relating to items (i) through  (iii) above until
such time as the Servicer  transfers  any such payment to the Local Bank Account
Bank for deposit in the Local Bank  Account.  Any such amounts held in the Local
Bank Account shall be held in trust for the benefit of the Noteholders.


                                       10
<PAGE>

        Section 3.04. Property Management. Trendwest will continue to manage the
Club in accordance with the management agreement between Trendwest and WorldMark
in existence as of the date hereof, as the same may be amended from time to time
on  account of (i) a change in such  agreement  approved  by a  majority  of the
members  of  WorldMark,  (ii) a change  in the  agreement  made in order to keep
Trendwest or WorldMark in compliance  with federal,  state or local laws,  rules
and  regulations,  (iii) as such agreement may be amended from time to time with
the written  consent of the Holders of Notes  representing  66-2/3% in principal
amount of the  Outstanding  Notes of the  Controlling  Class or (iv) a change in
such agreement in the manner described in Exhibit B to this Agreement.

        Section 3.05. Financing  Statements.  (a) The Servicer will make all UCC
filings and  recordings as may be required to perfect the security  interests of
the  Trustee in the Trust  Estate  pursuant to the terms of the  Indenture.  The
Servicer shall, in accordance with its customary servicing procedures and at its
own  expense,  be  responsible  for such  steps  as are  necessary  to  maintain
perfection  of such  security  interests.  The  Trustee  hereby  authorizes  the
Servicer to re-perfect or to cause the  re-perfection of such security  interest
on its behalf as Trustee, as necessary.

         (b)  Within  thirty  (30) days from the date upon  which the  financing
statements are filed in connection with the issuance of the Notes,  the Servicer
shall cause  searches to be conducted  in such offices and promptly  deliver the
results of such searches to the Trustee.

        Section 3.06.    [Reserved.]

        Section 3.07.    [Reserved.]

        Section 3.08. No Offset. Prior to the termination of this Agreement, the
obligations  of the Servicer  under this  Agreement  shall not be subject to any
defense,  counterclaim  or right of offset  which the  Servicer  has or may have
against the Issuer,  the  Trustee or any  Noteholder  whether in respect of this
Agreement,  the Indenture,  the Notes, the Receivables  Purchase Agreement,  any
Contract, Receivable, Vacation Credit or otherwise.

        Section  3.09.   Servicing   Compensation.   As  compensation   for  the
performance  of its  obligations  under this  Agreement,  the Servicer  shall be
entitled to receive the Servicer  Fee.  The Servicer Fee shall be paid  monthly,
commencing on the Initial  Payment Date and terminating on the first to occur of
(i) the receipt of the last Scheduled Payment and related Residual Proceeds with
respect to the last  remaining  Contract,  (ii) the receipt of  Recoveries  with
respect to the last remaining Contract, or (iii) the date on which the Notes are
paid in full.  The  Servicer  Fee shall be paid by the Issuer to the Servicer at
the times and in the priority as set forth in the Indenture.  The Servicer shall
pay all expenses  incurred by it in  connection  with its  servicing  activities
hereunder,  including, without limitation, payment of the fees and disbursements
of the Independent Accountants, payment of

                                       11
<PAGE>

expenses  incurred in connection with  distributions  and reports to the Trustee
and the  Noteholders  and  shall  not be  entitled  to  reimbursement  for  such
expenses;  provided, however, in accordance with Section 12.02 of the Indenture,
that the Servicer will be entitled to prompt  reimbursement  from the Issuer for
reasonable  costs and expenses  incurred by the Servicer  (including  reasonable
attorney's fees and out-of-pocket  expenses) in connection with the realization,
attempted  realization  or  enforcement  of rights and remedies  upon  Defaulted
Contracts, from amounts received as Recoveries from any Defaulted Contracts.

        Section 3.10. Substitution or Purchase of Contracts and Receivables. (a)
Except with respect to an Upgrade, the Servicer shall not allow termination of a
Contract prior to the scheduled  expiration  date unless the Obligor prepays the
entire  Contract  in full or unless the Issuer has (i)  pledged to the Trustee a
Substitute  Receivable and the Issuer's interest in the related Vacation Credits
under the related Substitute Contract, and delivered to the Trustee the original
executed  counterpart  of  such  Substitute  Contract  or  (ii)  purchased  such
Receivable and the Issuer's  interest in the related  Vacation  Credits from the
Trustee by remittance  of the Purchase  Price to the Servicer for deposit in the
Local Bank Account in accordance with Section 3.03(a) hereof; provided, further,
that purchases and  substitutions of Receivables  pursuant to this  subparagraph
(a) shall comply with the  requirements of Section 4.03 of the Indenture and the
criteria set forth in Section 3.04 of the Receivables Purchase Agreement.

         (b) The Servicer shall permit the Issuer to (i) purchase the Receivable
related to any Defaulted  Contract or  Delinquent  Contract by remittance by the
Issuer to the Servicer for deposit in the Local Bank Account in accordance  with
Section  3.03(a) hereof or (ii)  substitute  for the  Receivable  related to any
Defaulted  Contract  or  Delinquent  Contract a  Substitute  Receivable  and the
Issuer's interest in the Vacation Credits under the related Substitute Contract,
upon the delivery to the Trustee of the  original  executed  counterpart  of the
Substitute  Contract;  provided that, purchases and substitutions of Receivables
pursuant to this  subparagraph (b) shall comply with the requirements of Section
4.03  of the  Indenture  and the  criteria  set  forth  in  Section  3.04 of the
Receivables Purchase Agreement.

         (c)  Notwithstanding  any other provision  contained in this Agreement,
the Servicer shall not, with respect to a Defaulted Contract, negotiate or enter
into a new contract  with the Obligor  relating to the  Vacation  Credits or the
Obligor's  obligations  under  such  Defaulted  Contract  unless  the Issuer has
repurchased or made a substitution for the Receivable  related to such Defaulted
Contract in the manner set forth in subsection (b) hereof.

         (d) In the event that Trendwest is required,  as a result of the breach
by it of certain  representations  or warranties,  to repurchase or substitute a
Contract  pursuant to Section 3.03 of the Receivables  Purchase  Agreement,  the
Servicer shall permit such  repurchase or  substitution  in accordance  with the
terms of Sections 3.03 and 3.04 thereof.

         (e) Once the Purchase and Substitution Limit is reached, Trendwest may,
at its option,  purchase,  in its own right and not as Servicer  hereunder,  the
Vacation Credits relating to a

                                       12
<PAGE>

Defaulted  Contract at a price equal to 25% of the initial  principal balance of
the related  Contract.  On such  Determination  Date,  Trendwest  shall,  or, if
Trendwest is not the Servicer,  shall cause the Servicer to, immediately deposit
the proceeds of such sale into the Local Bank Account,  and such proceeds  shall
be deemed to be a collection of principal with respect to such Contract.

         (f) Prior to the substitution of any Contract  hereunder,  the Servicer
shall  review  its  records  and  determine  that  there  are no  liens or other
interests in such Substitute  Contract,  the related  Substitute  Receivable and
related  Vacation  Credits other than that of  Trendwest.  If there are any such
other  interests in such Substitute  Contract,  such Contract shall not become a
Substitute Contract until all such interests have been terminated.


                                    ARTICLE 4

                       ACCOUNTINGS, STATEMENTS AND REPORTS

        Section 4.01. Monthly Servicer's  Reports.  No later than 2:00 p.m., New
York time, on each Determination Date, the Servicer shall deliver to the Issuer,
the Initial Purchaser,  the Trustee, each Noteholder and the Rating Agencies the
Monthly  Servicer's Report in the form attached as Exhibit A hereto with respect
to the activity in the immediately  preceding Due Period.  The  determination by
the Servicer of such amounts shall,  in the absence of manifest error, be deemed
to be  presumptively  correct and the Trustee shall be protected in relying upon
the same  without  any  independent  check or  investigation.  In the  course of
preparing the Monthly  Servicer's Report, the Servicer shall seek direction from
the  Issuer as to  remittance  of the funds to be paid to the  Issuer  after all
other distributions in accordance with the Indenture.  Contracts and Receivables
which have been substituted for or purchased by Trendwest or the Issuer shall be
identified  by the related  Obligor  number.  On each  Determination  Date,  the
Servicer shall deliver to the Trustee, in the form of a computer disk or tape or
via electronic  transmission in a format  acceptable to the Trustee,  containing
all the  information in the Servicer's  electronic  files  regarding each of the
Receivables as well as any additional  information  reasonably  requested by the
Trustee  prior to the  related  Payment  Date.  The  Monthly  Servicer's  Report
prepared for each Due Period for June, September,  December and March shall also
include a summary of the following information as of the end of such Due Period:
the total number of Vacation Credits,  whether sold or unsold;  the total number
of Vacation  Credits sold;  and the number of developed  properties of the Club;
the name of each  such  developed  property  and the total  number  of  Vacation
Credits allocated to each developed property.

        Section 4.02.  Financial  Statements;  Certification  as to  Compliance;
Notice of Default.  (a) The Servicer (or the  successor  Servicer if the initial
Servicer is no longer the Servicer) will deliver,  or cause to be delivered,  to
the Trustee,  the Initial  Purchaser,  each Holder and the Rating Agencies (and,
upon the request of any Noteholder, to any prospective transferee of any Note):

                                       13

         <PAGE>

                   (i) within 120 days after the end of each fiscal year of each
         Reported  Company,  a  copy  of  such  Reported   Company's   Financial
         Statements, all in reasonable detail and accompanied by an opinion of a
         firm of independent  certified public  accountants  (which shall be (i)
         KPMG  Peat  Marwick,  (ii)  a  legal  successor  thereto,  or  (iii)  a
         nationally  recognized  accounting  firm)  stating that such  financial
         statements  present  fairly the  financial  condition of such  Reported
         Company  (or,  in the  case of a  successor  Servicer,  such  successor
         Servicer's  financial  condition)  and have been prepared in accordance
         with generally  accepted  accounting  principles  consistently  applied
         (except for changes in application in which such  accountants  concur),
         and that the  examination of such  accountants in connection  with such
         financial  statements  has  been  made  in  accordance  with  generally
         accepted auditing standards, and accordingly included such tests of the
         accounting   records  and  such  other  auditing   procedures  as  were
         considered necessary in the circumstances;

                  (ii)  within  60  days  of the  end of  each  fiscal  quarter,
         unaudited  versions of each  Reported  Company's  consolidated  balance
         sheet, income statement and cash flow statement;

                 (iii) with the Issuer's,  the  Servicer's and  Trendwest's  (if
         Trendwest is not the Servicer) Financial  Statements delivered pursuant
         to  subsections  (a)(i) and  (a)(ii)  above,  each of the  Issuer,  the
         Servicer and Trendwest (if Trendwest is not the Servicer)  will deliver
         an  Officer's  Certificate  stating  that such officer has reviewed the
         relevant terms of the Indenture, the Receivables Purchase Agreement and
         this Agreement and has made, or caused to be made, under such officer's
         supervision,  a  review  of the  transactions  and  conditions  of such
         Reported  Company during the period covered by such Reported  Company's
         Financial  Statements  then  being  furnished,  that the review has not
         disclosed  the  existence of any Default or Event of Default  under the
         Indenture or any Servicer Default or Servicer Event of Default or, if a
         Default or Event of Default under the  Indenture or a Servicer  Default
         or a Servicer Event of Default exists,  describing its nature,  and the
         Issuer, with respect to a Default or Event of Default, or the Servicer,
         with  respect to a Servicer  Default  or a Servicer  Event of  Default,
         describing what action such Person has taken and is taking with respect
         thereto,  and that on the basis of such review the officer signing such
         certificate  is of the opinion that during such period the Servicer has
         serviced the Contracts in compliance with the procedures  hereof except
         as disclosed in such certificate;

                  (iv)  with  each  Reported  Company's   Financial   Statements
         delivered  pursuant  to  subsections  (a)(i) and  (a)(ii)  above,  each
         Reported  Company shall deliver an Officer's  Certificate  stating that
         such financial  statements  present  fairly the financial  condition of
         such Reported Company;

                                       14

         <PAGE>

                   (v)  immediately  upon becoming aware of the existence of any
         condition or event which  constitutes a Servicer  Default or a Servicer
         Event of Default hereunder,  a Default or an Event of Default under the
         Indenture or Receivables  Purchase Agreement,  or a Trigger Event under
         the  Indenture,  a written  notice  describing its nature and period of
         existence  and what  action the  Servicer  is or  proposes to take with
         respect thereto;

                  (vi) promptly upon the Servicer's becoming aware of:

                            (A)     any  proposed  or  pending  investigation of
                  it, the Club or the Issuer by any governmental authority or
                  agency, or

                            (B) any pending or proposed court or  administrative
                  proceeding  which  involves or may involve the  possibility of
                  materially and adversely  affecting the properties,  business,
                  prospects,  profits or condition  (financial  or otherwise) of
                  the Servicer, the Club or the Issuer,

         a  written  notice  specifying  the  nature  of such  investigation  or
         proceeding  and what action the  Servicer is taking or proposes to take
         with respect thereto and evaluating its merits; and

                  (vi) with reasonable promptness any other data and information
         which may be reasonably  requested from time to time, including without
         limitation any information required to be made available at any time to
         any  prospective  transferee  of any  Notes  in order  to  satisfy  the
         requirements of Rule 144A under the Securities Act of 1933, as amended.

         (b) On or  before  each  April  30,  so  long as any of the  Notes  are
outstanding,  the Servicer shall furnish to the Trustee an Officer's Certificate
either  stating that such action has been taken with  respect to the  recording,
filing,   and  rerecording   and  refiling  of  any  financing   statements  and
continuation  statements  as  necessary  to maintain the interest of the Trustee
created by the Indenture and the Issuer created  Receivables  Purchase Agreement
with  respect to the Trust  Estate and  reciting  the  details of such action or
stating  that no such  action is  necessary  to  maintain  such  interest.  Such
Officer's Certificate shall also describe the recording, filing, rerecording and
refiling of any financing  statements and  continuation  statements that will be
required to maintain  the  interest of the Trustee in the Trust Estate until the
date such next Officer's Certificate is due.

        Section 4.03.  Independent  Accountants' Reports. (a) Within thirty (30)
days of the  Closing  Date,  the  Servicer  shall,  at its  expense,  cause  the
Independent  Accountants  to prepare a report,  a form of which is  attached  as
Exhibit  C hereto  (which  report  shall  also  include  as well the  additional
procedure of comparing  the actual aging of the random  sample  portfolio to the
aging number provided by the Collateral Agent's system), to the effect that such
Independent Accountants have reviewed a statistically  significant random sample
(at the 95% confidence level) of the Collateral Agent

                                       15
<PAGE>

Files and that such reviewed Collateral Agent Files are in the possession of the
Collateral Agent and properly accounted for in the Collateral Agent's records.

         (b) For each  fiscal  year  (commencing  with the  fiscal  year  ending
December  31,  1999),  the Servicer at its expense  shall cause the  Independent
Accountants  (who may also render and deliver other services to the Servicer and
its Affiliates) to prepare a report that shall include the information set forth
in the report set forth in  paragraph  (a) of this  Section 4.03 and which shall
also include a report addressed to the Servicer, the Trustee,  Initial Purchaser
and the  Noteholders  as of the  close  of such  year,  to the  effect  that the
Independent  Accountants have compared the information  contained in the Monthly
Servicer's Reports delivered for a random three-month period during the relevant
period with  information  contained in the accounts and records for such period,
and, where  applicable,  on the basis of such procedures and comparison,  report
matters which come to the  Independent  Accountants'  attention to indicate that
the information  contained in the Monthly  Servicer's Reports does not reconcile
with the information  contained in the Servicer's  accounts and records.  If any
letter  delivered  pursuant to this  Section  4.03  (commencing  with the letter
relating to the fiscal year ending December 31, 1999) discloses such exceptions,
the Servicer at its expense shall cause the  Independent  Accountants to deliver
an agreed-upon  procedures letter addressed to the Servicer, the Trustee and the
Noteholders  for each  subsequent  three-month  period.  Such  obligation  shall
continue  until  the  Independent  Accountants  deliver a letter  relating  to a
three-month period that does not disclose any such exceptions.  Thereafter,  the
Servicer  shall cause a letter to be  delivered  relating to each fiscal year in
accordance  with the first  sentence of this Section  4.03.  The Servicer  shall
deliver to the Trustee a copy of any such reports within 90 days of the close of
the relevant period.

        Section 4.04. Access to Certain  Documentation and Information.  (a) The
Servicer  shall  provide  to  the  Trustee  or any  Noteholder  and  their  duly
authorized  representatives,  attorneys  or  accountants  access  to any and all
documentation and to any existing data processing  systems  (including,  but not
limited to, any data that can reasonably be generated  therefrom)  regarding the
Trust Estate  (including  the Contract  Schedule) that the Servicer may possess,
such access being afforded  without charge but only upon reasonable  request and
during  normal  business  hours  so as not to  interfere  unreasonably  with the
Servicer's  normal operations or customer or employee  relations,  at offices of
the Servicer  designated  by the Servicer.  If a Servicer  Event of Default or a
Trigger  Event has  occurred,  the  reasonable  costs of providing the foregoing
shall be borne by the  Servicer;  otherwise,  the Person  seeking the  foregoing
shall pay its, his or her own expenses relating to the foregoing.

         (b) At all times  during  the term  hereof,  the  Servicer  shall  keep
available at its principal  executive  office for inspection by Noteholders  and
the Trustee a list of all  Contracts  the  interests in which are then held as a
part of the Trust Estate,  together with a  reconciliation  of such list to that
set forth in the Contract Schedule and each of the Monthly  Servicer's  Reports,
indicating the cumulative  addition and removal of the Issuer's  interest in the
Contracts from the Trust Estate.

                                       16

<PAGE>

         (c)  The  Servicer  will  maintain  accounts  and  records  as to  each
respective  Contract serviced by the Servicer that are accurate and sufficiently
detailed  as to permit  (i) the  reader  thereof  to know as of the most  recent
Calculation Date the status of such Contract,  including any payments,  Residual
Proceeds and  Recoveries  received or owing (and the nature of each) thereon and
(ii) the reconciliation between payments, Residual Proceeds or Recoveries on (or
with respect to) each  Contract  and the amounts from time to time  deposited in
the Collection Account in respect of such Contract.

         (d) The Servicer  will  maintain all of its  computerized  accounts and
records so that,  from and after the time of the  acquisition  of an interest in
the Assets by the Issuer,  the  Servicer's  accounts and records  (including any
back-up  computer  archives) that refer to any Contract,  Receivable or Vacation
Credits  indicate  clearly that the  Receivables are owned by the Issuer and are
pledged,  together with the Issuer's  security  interest in the related Vacation
Credits,  to the Trustee for the benefit of the  Noteholders.  Indication of the
Trustee's  interest  in a  Receivable  will be deleted  from or  modified on the
Servicer's  accounts and records when,  and only when, the Receivable or related
Contract has been paid in full, replaced with a Substitute Contract or purchased
by  Trendwest  or the  Issuer  or  assigned  to the  Servicer  pursuant  to this
Agreement, as the case may be.

         (e) Nothing in this  Section 4.04 shall  affect the  obligation  of the
Servicer to observe any  applicable  law  prohibiting  disclosure of information
regarding  the  Obligors,  and the  failure  to  provide  information  otherwise
required by this Section 4.04 as a result of such  observance  by the  Servicer,
shall not constitute a breach of this Section 4.04.

         (f) All information  (that is not public  information)  obtained by the
Trustee or any Noteholder  regarding any Reported  Company  (pursuant to Section
4.02 or otherwise), the Obligors and the Contracts, whether upon exercise of its
rights under this Section 4.04 or otherwise,  shall be maintained by the Trustee
and the Noteholder,  as applicable,  in confidence in accordance with procedures
adopted  by the  Trustee or such  Noteholder,  as  applicable,  in good faith to
protect  such  confidential  information;  provided  that  the  Trustee  and any
Noteholder  may deliver or disclose such  confidential  information to (i) their
directors,  officers,  trustees,  managers,  employees,  agents,  attorneys  and
affiliates   (to  the  extent  such   disclosure   reasonably   relates  to  the
administration of the investment represented by the Notes), (ii) their financial
advisors and other  professional  advisors who agree to hold  confidential  such
information  substantially in accordance with the terms of this Section 4.04(f),
(iii) any other holder of any Note, (iv) any Institutional Investor to which any
Noteholder  sells  or  offers  to sell  such  Note or any  part  thereof  or any
participation therein (if such Person has agreed in writing prior to its receipt
of such  confidential  information to be bound by the provisions of this Section
4.04(f)), (v) any federal or state regulatory authority having jurisdiction over
the  Trustee or any  Noteholder,  (vi) the  National  Association  of  Insurance
Commissioners or any similar  organization,  or any nationally recognized rating
agency that requires  access to information  about the  Noteholders'  investment
portfolio,  (vii) the Rating  Agencies or (viii) any other  Person to which such
delivery or disclosure may be necessary or appropriate (w) to effect  compliance
with  any law,  rule,  regulation  or order  applicable  to the  Trustee  or any
Noteholder, (x) in response to

                                       17
<PAGE>

any subpoena or other legal  process,  (y) in connection  with any litigation to
which the Trustee or any Noteholder is a party or (z) if an Event of Default has
occurred  and is  continuing,  to the extent the Trustee or any  Noteholder  may
reasonably determine such delivery and disclosure to be necessary or appropriate
in the  enforcement  or for the  protection of the rights and remedies under the
Notes and the Transaction Documents.

        Section 4.05.  Trustee to  Cooperate.  Upon payment  (including  through
application of any prepayment) in full of any Contract, the Servicer will notify
the  Trustee by  written  certification  (which  certification  shall  include a
statement  to the effect  that all  amounts  received  in  connection  with such
payments in full which are  required to be  deposited  in the Local Bank Account
pursuant to Section 3.03 hereof have been so deposited)  of a Servicing  Officer
and shall request  delivery of the Contract to the Servicer in  accordance  with
Section 1.3 of the  Collateral  Agent  Agreement.  Upon receipt of such delivery
request,  the  Collateral  Agent  shall,  within 7 days of such  request  by the
Servicer,  release  such  Contract  to  the  Servicer  in  accordance  with  the
Collateral  Agent  Agreement.  Upon  release of such  Contract,  the Servicer is
authorized to execute an instrument in  satisfaction  of such Contract and to do
such other  acts and  execute  such other  documents  as it deems  necessary  to
discharge  the Obligor  thereunder  and,  if  applicable,  release any  security
interest in the Vacation Credits related  thereto.  The Servicer shall determine
when a Contract has been paid in full.  Upon the written  request of a Servicing
Officer and subject to the Trustee's rights to indemnity contained herein and in
the Indenture, the Trustee shall perform such other acts as reasonably requested
in  writing  by the  Servicer  and  otherwise  cooperate  with the  Servicer  in
enforcement of the Noteholders' rights and remedies with respect to Contracts.

         Section 4.06.  Oversight of Servicing.  (a) Prior to each Payment Date,
the Trustee shall review the Monthly Servicer's Report related thereto and shall
determine the following:

                   (i)  that such Monthly Servicer's Report is complete on its
         face; and

                  (ii)  that the  amounts  credited  to and  withdrawn  from the
         Collection  Account,  the  Capitalized  Interest  Account,   Prefunding
         Account  and the  Reserve  Account,  as set forth in the records of the
         Trustee,  are  the  same  as the  amount  set  forth  in  such  Monthly
         Servicer's Report.

         (b) In the event of any  discrepancy  between the information set forth
in  subparagraph  (a) as  calculated  by the Servicer  from that  determined  or
calculated  by the Trustee,  the Trustee shall  promptly  notify the Servicer of
such  discrepancy.  If  within  30 days of such  notice  being  provided  to the
Servicer,  the Trustee and the Servicer are unable to resolve such  discrepancy,
the Trustee shall promptly notify the Holders of the Notes of such discrepancy.

         (c) Based solely on the information  included in the Contract  Schedule
delivered  on the  Closing  Date and the  electronic  reports  provided  on each
Payment Date thereafter, the Trustee

                                       18
<PAGE>

shall  determine  that any  Substitute  Contracts  delivered  under Section 3.10
satisfy  the  Substitution  Criterion  as  defined in the  Receivables  Purchase
Agreement.

         (d) Other than as  specifically  set forth elsewhere in this Agreement,
the Trustee shall have no obligation to supervise, verify, monitor or administer
the performance of the Servicer and shall have no liability for any action taken
or omitted by the Servicer.

         (e) The  Trustee  shall  consult  fully  with  the  Servicer  as may be
necessary  from time to time to perform or carry out the  Trustee's  obligations
hereunder,  including  the  obligation  to choose at any time a successor to the
duties and obligations of the Servicer as servicer under Section 6.02 hereof.


                                    ARTICLE 5

                           THE SERVICER AND THE ISSUER

        Section 5.01. Servicer Indemnification. (a) The Servicer shall indemnify
and hold harmless the Trustee, the Issuer, and the Trust Estate, for the benefit
of the Noteholders, from and against any loss, liability, claim, expense, damage
or injury suffered or sustained to the extent that such loss, liability,  claim,
expense,  damage or injury  arose out of or was imposed by reason of the failure
by the Servicer to perform its duties under this  Agreement or are  attributable
to errors  or  omissions  of the  Servicer  related  to such  duties;  provided,
however, that the Servicer shall not indemnify any party to the extent that acts
of fraud, gross negligence or breach of fiduciary duty by such party contributed
to such loss, liability, claim, expense, damage or injury.

         (b)  Indemnification  under this  Section 5.01 shall  include,  without
limitation,  reasonable  fees and expenses of counsel and expenses of litigation
reasonably  incurred.  If the  Servicer has made any  indemnity  payments to the
Trustee or the  Noteholders  pursuant to this Section and such party  thereafter
collects any of such amounts from others,  such party will  promptly  repay such
amounts  collected to the Servicer  without  interest.  The  provisions  of this
Section 5.01 shall survive any expiration or termination of this Agreement.

        Section 5.02.  Corporate  Existence;  Reorganizations.  (a) The Servicer
shall keep in full effect its existence  and good  standing as a corporation  in
the State of its incorporation and will obtain and preserve its qualification to
do  business  as a  foreign  corporation  in each  jurisdiction  in  which  such
qualification  is or shall be  necessary  to enable the  Servicer to perform its
duties under this  Agreement,  except where the failure to so qualify  would not
have a  material  adverse  effect on the  Trust  Estate  or the  ability  of the
Servicer to perform its duties hereunder;  provided,  however, that the Servicer
may  reincorporate  in another State, if to do so would be in the best interests
of the  Servicer  and  would  not  have  a  material  adverse  effect  upon  the
Noteholders.

                                       19

<PAGE>

         (b) The Servicer shall not (i) convey,  transfer or lease substantially
all of its assets as an  entirety to any  Person,  or (ii) merge or  consolidate
with another  Person,  unless such Person or the merged or  consolidated  entity
acquires  substantially  all the  assets of the  Servicer,  as an  entirety  and
executes  and delivers to the Issuer and the Trustee an  agreement,  in form and
substance reasonably  satisfactory to the Issuer and the Trustee, which contains
an assumption by such Person or entity of the due and punctual  performance  and
observance  of each  covenant  and  condition to be performed or observed by the
Servicer,  under this Agreement;  provided that nothing herein shall prevent the
Servicer from selling contracts and receivables which are not Assets pursuant to
a receivables financing.

        Section 5.03. Limitation on Liability of the Servicer and Others. Except
as provided in Section 5.01, the Servicer,  and any of the officers,  directors,
employees or agents of the  Servicer  shall not be under any  liability  for any
action taken or for refraining  from the taking of any action by the Servicer in
its capacity as Servicer  pursuant to this Agreement;  provided,  however,  that
this  provision  shall not protect the  Servicer or any such Person  against any
liability which would otherwise be imposed by reason of willful misconduct,  bad
faith or negligence (which includes negligence with respect to the duties of the
Servicer  explicitly  set forth in this  Agreement)  in the  performance  of its
duties hereunder. The Servicer and any officer,  director,  employee or agent of
the  Servicer  may rely in good faith on any  document  of any kind prima  facie
properly  executed  and  submitted  by any Person  with  respect to any  matters
arising  hereunder.  No implied  covenants or obligations shall be read into the
Servicing Agreement against the Servicer. In the event the Servicer performs any
activities  beyond the requirements of this Agreement,  it shall have the option
but will not be required to perform such activities in the future.

        Section 5.04.  The Servicer Not to Resign.  (a) The Servicer  (except as
set forth in the last sentence of this subsection (a)) shall not resign from the
duties and  obligations  hereby  imposed on it by this  Agreement  except upon a
determination by the Board of Directors of the Servicer that by reason of change
in applicable  legal  requirements,  with which the Servicer  cannot  reasonably
comply,  the  continued  performance  by the  Servicer of its duties  under this
Agreement  would cause it to be in  violation of such legal  requirements,  said
determination  to be  evidenced by a resolution  from the  appropriate  Board of
Directors  to such effect,  accompanied  by an Opinion of Counsel to such effect
and reasonably satisfactory to the Trustee.

         (b) No such  resignation  shall  become  effective  until  a  successor
Servicer,  acceptable to the Rating Agencies and to Holders of not less than 51%
in aggregate principal amount of the Outstanding Notes of the Controlling Class,
shall  have  assumed  the  responsibilities  and  obligations  of  the  Servicer
hereunder.

         (c) Except as provided in Sections 5.02 and 6.01 hereof, the duties and
obligations  of the Servicer  under this  Agreement  shall  continue  until this
Agreement  shall have been  terminated  as provided in Section 8.01 hereof,  and
shall survive the exercise by the Issuer or the Trustee of

                                       20
<PAGE>

any right or remedy under this Agreement,  or the enforcement by the Issuer, the
Trustee or any Noteholder of any provision of the Notes or this Agreement.

        Section 5.05.  Issuer  Indemnification.  The Issuer shall  indemnify and
hold harmless the Servicer (but solely from the amounts to be distributed as set
forth  in  Sections   12.02(d)(xxi),   12.02(e)(xvi)  and  12.03(d)(ii)  of  the
Indenture)  from and  against  any loss,  liability,  expense,  damage or injury
suffered  or  sustained  by the  Servicer,  including  but  not  limited  to any
judgment,  award,  settlement,  reasonable  attorneys'  fees and other costs and
expenses  incurred in  connection  with the defense of any actual or  threatened
action,  proceeding  or claim,  which  arises out of the  Servicer's  activities
hereunder;  provided,  however, that the Issuer shall not indemnify the Servicer
if the Servicer's activities  constituted fraud, willful misconduct,  negligence
(which includes  negligence with respect to the duties of the Servicer which are
explicitly  set forth in this  Agreement)  or breach  of  fiduciary  duty by the
Servicer for any amounts for which the  Servicer is  obligated to indemnify  the
Issuer or other Persons pursuant to Section 5.01 hereof.


                                    ARTICLE 6

                              SERVICING TERMINATION

         Section 6.01. Servicer Events of Default. (a) Any of the following acts
or occurrences shall constitute a Servicer Event of Default:

                   (i) any failure by the  Servicer  (A) to deliver to the Local
         Bank for  deposit in the Local Bank  Account or (B) to deliver or cause
         to be  delivered to the Trustee for deposit in the  Collection  Account
         any proceeds or payments  received from an Obligor or in respect of the
         Trust  Estate and  required to be so  delivered  under the terms of the
         Indenture and this Agreement that continues unremedied until 2:00 p.m.,
         New York time, on the second  successive  Business Day  following  such
         failure; or provided,  however, that the Trustee, upon receiving actual
         knowledge  of such  failure,  shall give the Servicer  prompt  written,
         telecopied or telephonic  notice of such failure.  Notwithstanding  the
         foregoing,  any  failure by the  Trustee to deliver  such notice to the
         Servicer  shall not  prevent  the  occurrence  of a  Servicer  Event of
         Default; or

                  (ii)  any  failure  by  the  Servicer  to  deliver  a  Monthly
         Servicer's  Report  pursuant  to Section  4.01  hereof  that  continues
         unremedied until 2:00 p.m., New York time, the following  Business Day;
         provided,  however,  that if the Trustee has actual  knowledge that the
         Servicer has not delivered such Monthly Servicer's Report by 2:00 p.m.,
         New York time,  on a  Determination  Date,  the Trustee  shall give the
         Servicer  written,  telecopied  or  telephonic  notice of such failure.
         Notwithstanding  the  foregoing,  any failure by the Trustee to deliver
         such  notice to the  Servicer  shall not prevent  the  occurrence  of a
         Servicer Event of Default; or


                                       21
         <PAGE>

                 (iii) any failure by the Servicer to remit any  Purchase  Price
         received  by it to the Trustee  that  continues  unremedied  until 5:00
         p.m., New York time,  the following  Business Day;  provided,  however,
         that if the Servicer has not remitted any Purchase Price received by it
         to the Trustee by 3:00 p.m., New York time, on the  Determination  Date
         and the Trustee has actual  knowledge  that such Purchase Price has not
         been  paid,  the  Trustee  shall  give  the  Servicer  prompt  written,
         telecopied or telephonic  notice of such failure.  Notwithstanding  the
         foregoing,  any  failure by the  Trustee to deliver  such notice to the
         Servicer  shall not  prevent  the  occurrence  of a  Servicer  Event of
         Default; or

                  (iv) any failure by the  Servicer to make  remittances  (other
         than a remittance of Purchase  Price referred to in clause (iii) above)
         or deliver  notices  pursuant to Section  3.03 hereof,  that  continues
         unremedied  until 2:00 p.m.,  New York time,  of the second  successive
         Business Day; or

                   (v) any failure on the part of the  Servicer  duly to observe
         or perform any other  covenants or agreements of the Servicer set forth
         in this Agreement or the Indenture or any representation or warranty of
         the Servicer set forth in Section 2.01 of this Agreement shall prove to
         be incorrect in any material respect, which failure or breach continues
         unremedied for a period of 30 days after the date on which the Servicer
         becomes aware of such failure or breach,  or receives written notice of
         such failure or breach; or

                  (vi) any  assignment  by the  Servicer  to a  delegate  of its
         duties or rights under this Agreement, except as specifically permitted
         hereunder, or any attempt to make such an assignment; or

                 (vii)  the  entry of a decree  or order  for  relief by a court
         having  jurisdiction  in respect of the Servicer or a petition  against
         the Servicer in an involuntary case under any federal  bankruptcy laws,
         as now or hereafter in effect,  or any other present or future  federal
         or state  bankruptcy,  insolvency  or  similar  law,  or  appointing  a
         receiver,  liquidator,  assignee, trustee,  custodian,  sequestrator or
         other similar  official for the Servicer or for any substantial part of
         its property,  or ordering the winding up or liquidation of the affairs
         of the  Servicer  and the  continuance  of any  such  decree  or  order
         unstayed and in effect,  or failure for such  petition to be dismissed,
         for a period of 60 consecutive days; or

                (viii) the  commencement  by the  Servicer of a  voluntary  case
         under any federal  bankruptcy  laws, as now or hereafter in effect,  or
         any other present or future  federal or state  bankruptcy,  insolvency,
         reorganization  or similar  law, or the consent by the  Servicer to the
         appointment  of  or  taking  possession  by  a  conservator,  receiver,
         liquidator, assignee, trustee, custodian, sequestrator or other similar
         official in any insolvency,  readjustment of debt, marshaling of assets
         and  liabilities,  bankruptcy or similar  proceedings of or relating to
         the Servicer  relating to a substantial  part of its  property,  or the
         making by the Servicer of an  assignment  for the benefit of creditors,
         or the failure by the Servicer generally to pay its debts as such debts
         become due or if the Servicer shall admit in writing its

                                       22
         <PAGE>

         inability  to pay their debts as they become due,  or the taking of
         corporate  action by the  Servicer in furtherance of any of the
         foregoing; or

                  (ix)  the  stockholders'   equity  of  the  Servicer  and  its
         consolidated  subsidiaries,  determined  in accordance  with  generally
         accepted  accounting  principles,  as would be shown on a  consolidated
         balance sheet for such Persons, is below $50,000,000; or

                   (x)     the occurrence of a Trigger Event.

         (b)  If a  Servicer  Event  of  Default  shall  have  occurred  and  be
continuing,  the Trustee shall,  upon written  direction of the Holders of Notes
representing not less than 66-2/3% in principal amount of the Outstanding  Notes
of the Controlling Class, by notice (the "Servicer Termination Notice") given in
writing to the Servicer  terminate all, but not less than all, of the rights and
obligations  (except as expressly  provided  herein) of the Servicer  under this
Agreement.  Notwithstanding the foregoing,  a delay in or failure of performance
under Sections  6.01(a)(ii) or 6.01(a)(v) hereof for a period of more than 30 or
more days  shall not  constitute  a  Servicer  Event of Default if such delay or
failure could not have been prevented by the exercise of reasonable diligence by
the  Servicer  and such  delay or  failure  was  caused by acts of  declared  or
undeclared war, public disorder, rebellion or sabotage,  epidemics,  landslides,
lightning,  fire, hurricanes,  earthquakes,  floods or similar causes; provided,
however,  that in any event,  such delay or failure shall  constitute a Servicer
Event  of  Default  if it  continues  unremedied  for a period  of 30 days.  The
preceding sentence shall not relieve the Servicer from using its best efforts to
perform its  obligations in a timely manner in accordance with the terms of this
Agreement,  and the  Servicer  shall  provide  the  Trustee,  the Issuer and the
Noteholders  with prompt notice of such failure or delay by it,  together with a
description of its efforts to so perform its obligations.

         (c) On or after the receipt by the  Servicer of a Servicer  Termination
Notice,  all authority and power of the Servicer under this  Agreement,  whether
with respect to the Notes or the  Contracts or  otherwise,  shall pass to and be
vested in the successor Servicer appointed pursuant to Section 6.02 hereof, and,
without  limitation,  such successor Servicer is hereby authorized and empowered
to execute and  deliver,  on behalf of such  Servicer,  as  attorney-in-fact  or
otherwise, any and all documents and other instruments,  and to do or accomplish
all other acts or things necessary or appropriate to effect the purposes of such
notice of  termination,  whether to complete the transfer of the  Contracts  and
related  documents,  or  otherwise.  The Servicer  agrees to cooperate  with the
Trustee  and  the  successor  Servicer  in  effecting  the  termination  of  the
responsibilities  and  rights  of the  Servicer  hereunder,  including,  without
limitation,  the transfer to the successor  Servicer for administration by it of
all cash amounts that shall at the time be held by the Servicer for deposit,  or
have been  deposited  by the  Servicer or  thereafter  received  with respect to
Contracts.  To assist the  successor  Servicer in enforcing all rights under the
Contracts,  the  outgoing  Servicer,  at its  own  expense  (including,  without
limitation,  any costs or expenses  associated with the complete transfer of all
servicing data and the completion,  correction or manipulation of such servicing
data as may be  required  by the  successor  Servicer  to correct  any errors or
insufficiencies  in the  servicing  data or  otherwise  to enable the  successor
Servicer to

                                       23
<PAGE>

service the Contracts properly and effectively to the successor Servicer in such
form as the  successor  Servicer may  reasonably  request),  shall  transfer its
records (electronic and otherwise) relating to such Contracts and shall transfer
the  related  Contracts  (to the extent not held by the  Trustee)  and all other
records,  correspondence  and documents  relating to the  Contracts  that it may
possess  to the  successor  Servicer  in the  manner  and at such  times  as the
successor Servicer shall reasonably request.

        Section 6.02. Appointment of Successor Servicer. (a)(i) On and after the
time at which the Servicer  resigns as Servicer  pursuant to Section 5.04 hereof
or is terminated as Servicer pursuant to Section 6.01 hereof, the Trustee shall,
within  90  days  of the  delivery  of a  Servicer  Termination  Notice,  at the
direction  of Holders of Notes  representing  not less than 66-2/3% in principal
amount of the Outstanding  Notes of the Controlling  Class, and with the consent
of the Rating Agencies, appoint a successor Servicer; provided, however, pending
the  appointment  of  the  successor  Servicer,  the  Trustee  shall  act as the
successor Servicer hereunder.

        (ii) The  successor  Servicer  shall be the successor in all respects to
the  Servicer  in its  capacity  as  Servicer  under  this  Agreement,  and  the
transactions  set forth or  provided  for herein and shall be subject to all the
responsibilities, duties and liabilities relating thereto placed on the Servicer
by the terms and provisions hereof;  provided,  however, that any such successor
shall not be liable for any acts or omissions of such  outgoing  Servicer or for
any breach by the outgoing Servicer of any of its representations and warranties
contained herein or in any related document or agreement. Subject to the consent
of the Rating  Agencies  and the Holders  representing  not less than 66-2/3% in
principal  amount  of the  Outstanding  Notes  of the  Controlling  Class,  such
successor  Servicer may  subcontract  with another firm to act as subservicer so
long as such successor  Servicer  remains fully  responsible and accountable for
performance  of all  obligations  of the  Servicer  on and  after  the time such
Servicer receives the Servicer Termination Notice. Such successor Servicer shall
be entitled to the Servicer Fee in connection with acting as Servicer hereunder.

         (b) Each of the  Servicer,  the Issuer,  the Trustee and any  successor
Servicer,  shall take such action,  consistent with this Agreement,  as shall be
necessary to effectuate any such succession. Upon any succession, such successor
Servicer  shall notify the Obligors that it has been  appointed  Servicer  under
this Agreement with respect to the Contracts.

        Section 6.03.  Notification to Noteholders.  The Servicer shall promptly
notify the Issuer,  the Trustee and the Rating Agencies of any Servicer Event of
Default upon actual  knowledge  thereof by an officer of the Servicer.  Upon any
termination of, or appointment of a successor to, the Servicer  pursuant to this
Article  6,  the  Trustee  shall  give  prompt  written  notice  thereof  to the
Noteholders at their respective addresses appearing in the Note Register.

         Section  6.04.  Waiver of Past  Defaults.  The  Trustee  shall,  at the
direction of the Holders of Notes representing not less than 66-2/3%

                                       24
<PAGE>

in principal amount of the Outstanding Notes of the Controlling Class, on behalf
of all Noteholders,  waive any default by the Servicer in the performance of its
obligations hereunder and its consequences, other than a default with respect to
required  deposits and payments in accordance with Article 3 or a default of the
type set forth in clause (vii) or (viii) of Section 6.01(a) hereof, which waiver
shall  require  the consent of each  Noteholder.  Upon any such waiver of a past
default,  such default shall cease to exist,  and any Servicer  Event of Default
arising  therefrom  shall be deemed to have been  remedied for every  purpose of
this  Agreement.  No such waiver shall extend to any subsequent or other default
or impair any right consequent thereon except to the extent expressly waived.

        Section  6.05.  Effects  of  Termination  of  Servicer.   (a)  Upon  the
appointment of a successor  Servicer,  the predecessor  Servicer shall remit any
Scheduled  Payments and any other payments or proceeds that such predecessor may
receive  pursuant to any Contract or otherwise to such successor after such date
of appointment.

         (b) After the delivery of a Servicer  Termination  Notice, the outgoing
Servicer  shall  have no further  obligations  with  respect to the  management,
administration,  servicing, enforcement, custody or collection of the Contracts,
and the successor Servicer shall have all of such obligations,  except that such
outgoing  Servicer  will  transmit or cause to be  transmitted  directly to such
successor  Servicer  promptly on receipt and in the same form in which received,
any amounts held by such outgoing Servicer (properly endorsed where required for
such  successor  to collect  them)  received as payments  upon or  otherwise  in
connection  with  the  Contracts.   Such  outgoing  Servicer's   indemnification
obligations pursuant to Section 5.01 hereof will survive the termination of such
Servicer but will not extend to any acts or omissions of a successor Servicer.

        Section 6.06. No Effect on Other  Parties.  (a) Upon any  termination of
the rights and powers of the  Servicer  pursuant  to Section  6.01,  or upon any
appointment of a successor to such Servicer,  all the rights, powers, duties and
obligations of Trendwest under this Agreement, the Indenture and the Receivables
Purchase  Agreement,   other  than  Trendwest's  rights,   powers,   duties  and
obligations as Servicer therein,  shall remain unaffected by such termination or
appointment and shall remain in full force and effect thereafter.


                                       25


         <PAGE>


                                    ARTICLE 7

                                   [RESERVED]


                                    ARTICLE 8

                            MISCELLANEOUS PROVISIONS

        Section  8.01.  Termination  of the  Servicing  Agreement.  (a) Absent a
termination  pursuant to Section 6.01, the respective  duties and obligations of
the  Servicer,  the  Issuer and the  Trustee  created  by this  Agreement  shall
terminate upon the discharge of the Indenture in accordance with its terms;  and
the  respective  duties and  obligations  of the Trustee  shall  terminate  with
respect to the  Trustee in the event the Trustee  resigns or is  replaced  under
Section 7.09 of the Indenture; provided, however, that no resignation or removal
of the Trustee and no appointment of a successor  Trustee shall become effective
until the acceptance of appointment by the successor  Trustee under Section 7.10
of the  Indenture.  Upon the  termination  of this  Agreement  pursuant  to this
Section  8.01(a),  the  Servicer  shall  pay  all  monies  with  respect  to the
Receivables and Vacation  Credits held by the Servicer,  as the case may be, and
to which the Servicer is not entitled, to the Issuer or upon the Issuer's order.
The Servicer's indemnification  obligations pursuant to Section 5.01 hereof will
survive the termination of this Agreement.

         (b) This Agreement shall not be automatically terminated as a result of
an Event of  Default  under the  Indenture  or any action  taken by the  Trustee
thereafter  with respect  thereto,  and any  liquidation or  preservation of the
Trust  Estate by the  Trustee  thereafter  shall be subject to the rights of the
Servicer to service the  Receivables  and to collect  servicing  compensation as
provided hereunder.

        Section 8.02. Amendments. (a) This Agreement may be amended from time to
time by the Issuer and the  Servicer,  with the consent of the Trustee,  and the
Holders of not less than 66-2/3% in principal amount of the Outstanding Notes of
the Controlling Class for the purpose of adding any provisions to or changing in
any manner or  eliminating  any of the provisions of this  Agreement;  provided,
however,  that no such  amendment  shall,  without the consent of each  affected
Noteholder (i) alter the priorities  with which any allocation of funds shall be
made under this  Agreement;  (ii)  permit the  creation of any lien on the Trust
Estate (other than the lien of the Indenture) or any portion  thereof or deprive
any such  Noteholder of the benefit of this  Agreement with respect to the Trust
Estate or any portion thereof; (iii) modify any provision herein relating to the
voting  percentage of Noteholders  necessary to grant consent or give direction,
(iv) modify this  Section 8.02 or Sections  6.02 or 6.04  hereof,  (v) cause the
downgrade  of the then  current  ratings  assigned by the Rating  Agencies  with
respect to the Notes.

                                       26

<PAGE>

         (b) Promptly after the execution of any  amendment,  the Servicer shall
send to the  Trustee,  the  Rating  Agencies  and  each  Holder  of the  Notes a
conformed copy of each such amendment.

         (c) It shall be  necessary,  in any consent of  Noteholders  under this
Section  8.02, to approve the  particular  form of any proposed  amendment.  The
manner of obtaining  such consent and of  evidencing  the  authorization  of the
execution thereof by Noteholders shall be subject to such reasonable regulations
as the Trustee may prescribe.

         (d) Any amendment or modification  effected  contrary to the provisions
of this Section 8.02 shall be void.

        Section  8.03.  Governing  Law.  This  Agreement  shall be  construed in
accordance  with the internal  laws of the State of New York  without  regard to
conflict of laws  principles  and the  obligations,  rights and  remedies of the
parties hereunder shall be determined in accordance with such laws.

        Section  8.04.  Notices,  etc.,  to Trustee,  Issuer and  Servicer.  Any
request,  demand,  authorization,  direction,  notice, consent, waiver or Act of
Noteholders or other document provided or permitted by this Agreement to be made
upon,  given or furnished to, or filed with any party hereto shall be sufficient
for every purpose hereunder if in writing and telecopied or mailed,  first-class
postage prepaid and addressed to the appropriate address below:

                   (a) to the Trustee at 11000  Broken Land  Parkway,  Columbia,
         Maryland 21044 (facsimile number (410) 884-2363),  Attention: Corporate
         Trust Services,  Securities Administration,  TRI Funding 1999-1, with a
         copy  to  the  Trustee  at  Sixth  Street  and  Marquette  Avenue,  MAC
         N9311-161,  Minneapolis,  MN 55479  (facsimile  number (612) 667-3539),
         Attention: Corporate Trust Services, Asset-Backed Administrations or at
         any other address previously furnished in writing to the Issuer and the
         Servicer; or

                   (b) to the Issuer at TRI  Funding  III,  Inc.,  9805  Willows
         Road,  Redmond,  Washington  98052  (facsimile  number (425) 498-3050),
         Attention: Vice President, or at any other address previously furnished
         in writing to the  Trustee,  the  Noteholders  and the  Servicer by the
         Issuer; or

                   (c) to the Servicer at Trendwest Resorts,  Inc., 9805 Willows
         Road,  Redmond,  Washington  98052  (facsimile  number (425) 498-3050),
         Attention: Executive Vice President, or at any other address previously
         furnished in writing to the Trustee, the Noteholders and the Issuer; or

                                       27

         <PAGE>

                   (d) to DCR at 17 State Street, 12th Floor, New York, New York
         10004  (facsimile  number  (212)  908-0355),  Attention:   Asset-Backed
         Securities/Timeshare Group or at any other address previously furnished
         in writing to the Trustee and the Issuer; or

                   (e) to Fitch IBCA, Inc., at One State Street Plaza, New York,
         New York 10004  (facsimile  (212)  514-9879),  Attention:  Asset-Backed
         Securities or at any other address  previously  furnished in writing to
         the Trustee, the Noteholders, the Servicer and the Issuer.

        Section 8.05.  Notices and Other Documents to Noteholders;  Waiver.  (a)
Where this  Agreement  provides  for notice to  Noteholders  of any event,  such
notice  shall be in writing and sent (i) by  telefacsimile  if the sender on the
same day  sends a  confirming  copy of such  notice  by a  recognized  overnight
delivery service (charges prepaid), or (ii) by registered or certified mail with
return receipt requested (postage prepaid),  or (iii) by a recognized  overnight
delivery service (with charges prepaid).  Any such notice to a Noteholder or its
nominee  must be sent to (i)  such  Person  at the  address  specified  for such
communications in the Note Register,  or at such other address as the Noteholder
shall have  specified to the Trustee in writing and (ii) if  specified,  to such
other Person as shall be identified in writing to the Trustee by each Noteholder
or its nominee. The Trustee acknowledges receipt of Annex 1 to the Note Purchase
Agreement,  which sets  forth  such  information  with  respect  to the  initial
Holders.  Notice  under this  Section  8.05 will be deemed to be given only when
actually received.

         (b) Where this Agreement provides for notice in any manner, such notice
may be waived in writing by any Person  entitled to receive such notice,  either
before or after the  event,  and such  waiver  shall be the  equivalent  of such
notice.  Waivers of notice by Noteholders  shall be filed with the Trustee,  but
such filing  shall not be a condition  precedent  to the  validity of any action
taken in reliance upon such waiver.

         (c) Any reports,  documents or other  communications other than notices
to be sent to  Noteholders  may be  telecopied  or mailed,  first class  postage
prepaid  and  shall be  addressed  to the  Noteholders  and their  nominees  and
designees, if applicable, as set forth in paragraph (a) above.

        Section  8.06.  Severability  of  Provisions.  If  one  or  more  of the
provisions of this Agreement shall be for any reason whatever held invalid, such
provisions shall be deemed severable from the remaining covenants and provisions
of this Agreement,  and shall in no way affect the validity or enforceability of
such remaining  provisions,  the rights of any parties hereto,  or the rights of
the  Trustee or any  Noteholder.  To the extent  permitted  by law,  the parties
hereto waive any provision of law which renders any provision of this  Agreement
prohibited or unenforceable in any respect.


                                       28
<PAGE>

        Section 8.07.  Binding Effect. All provisions of this Agreement shall be
binding upon and inure to the benefit of the  respective  successors and assigns
of the parties hereto, and all such provisions shall inure to the benefit of the
Noteholders.  This  Agreement may not be modified  except by a writing signed by
all parties hereto.

         Section 8.08.  Article Headings and Captions.  The article headings and
captions in this Agreement are for  convenience of reference only, and shall not
limit or otherwise affect the meaning hereof.

        Section 8.09.  Legal  Holidays.  In the case where the date on which any
action  required  to be taken,  document  required  to be  delivered  or payment
required to be made is not a Business Day, such action, delivery or payment need
not be made on such date, but may be made on the next succeeding Business Day.

        Section  8.10.  Assignment  for  Security  for the Notes.  The  Servicer
understands  that the Issuer  will assign to and grant to the Trustee a security
interest in all of its right, title and interest to this Agreement. The Servicer
consents   to  such   assignment   and  grant  and   further   agree   that  all
representations,  warranties,  covenants  and  agreements  of the Servicer  made
herein shall also be for the benefit of and inure to the Trustee and all Holders
from time to time of the Notes.

        Section 8.11. No Servicing Assignment.  Notwithstanding  anything to the
contrary contained herein,  except as provided in Sections 5.02 and 5.04 hereof,
this  Agreement  may not be assigned by the Issuer,  the Seller or the  Servicer
(except  with respect to the  appointment  of a  subservicer)  without the prior
written  consent of the Holders of Notes  representing  not less than 66-2/3% in
principal amount of the Outstanding Notes of the Controlling Class.

         Section 8.12.  Counterparts.  This  Agreement may be executed in one or
more counterparts all of which together shall constitute one original document.

        Section 8.13. Parties Will Not Institute Insolvency Proceedings.  During
the term of this  Agreement  and for one year and one day after the  termination
hereof,  none of the parties  hereto or any  Affiliate  thereof or any Holder of
Outstanding  Notes (and each Holder of Outstanding Notes so agrees by acceptance
of a Note)  will  file any  involuntary  petition  or  otherwise  institute  any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceeding or
other  proceeding  under any federal or state  bankruptcy or similar law against
the Issuer.


                                       29
<PAGE>


         IN WITNESS WHEREOF, the Issuer, Trendwest, the Servicer and the Trustee
have caused this Agreement to be duly executed by their  respective  officers or
authorized  signatories  thereunto duly authorized as of the date and year first
above written.

                   TRI FUNDING III, INC., as Issuer



             By
            Name:
           Title:



                   TRENDWEST RESORTS, INC., as Servicer and for itself



             By
            Name:
           Title:



                   NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION, as Trustee



             By
            Name:
           Title:


                                       30

<PAGE>
                                    EXHIBIT A


                                     FORM OF
                            MONTHLY SERVICER'S REPORT



<PAGE>
                                    EXHIBIT B


               PERMITTED CHANGES TO PROPERTY MANAGEMENT AGREEMENT

1.       The right of entry into resort units  provision of the agreement may be
         amended to accommodate emergency situations.

2.       The permitted percentage interest that Trendwest has in an entity which
         contracts with Trendwest may be decreased.

3.       The maximum management fees paid to Trendwest may be decreased.

4.       The  Advances  and  Reimbursements  provision  may be  amended  so that
         WorldMark  will  reimburse  Trendwest  for sums which were  advanced by
         Trendwest at Trendwest's cost rather than at a set interest rate.

5.       The provision of the agreement  authorizing Trendwest to pay itself its
         management fee,  reimbursements and authorized  expenses may be amended
         to require  board  approval  should  Trendwest  seek  reimbursement  of
         expenses in excess of the budgeted amount for such expenses.

6.       The  competition  provision  of the  agreement  may be  amended so that
         employees  and managers of Trendwest  and  WorldMark may not in any way
         obtain or retain the services of the other's  employees for a period of
         twelve months following the termination or expiration of the agreement.

7.       Information  relating to the names and addresses of any person named in
         the agreement may be updated as necessary.


<PAGE>


                                    EXHIBIT C

                    FORM OF REPORT OF INDEPENDENT ACCOUNTANTS