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                           PURCHASE AND SALE AGREEMENT



                                     between



                           TRENDWEST FUNDING II, INC.
                                   ("Seller")



                                       and



                             TRENDWEST RESORTS, INC.
                                  ("Trendwest")



                                       and



                              TRI FUNDING II, INC.
                                   ("Issuer")



                            Dated as of March 1, 1998



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                                TABLE OF CONTENTS

                              SECTION HEADING PAGE

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

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

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

Section 2.01.   Purchase Asset Acquisition...................................3
Section 2.02.   Grant of Security Interest...................................4
Section 2.03.   Purchased Asset Price........................................4
Section 2.04.   Delivery of Contracts; Filing of Financing Statements........4
Section 2.05.   Servicing of Contracts and Credits...........................4
Section 2.06.   Review of Contracts..........................................5

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

Section 3.01.   Representations and Warranties of the Seller.................5
Section 3.02.   Representations and Warranties of the Issuer................12
Section 3.03.   Purchase or Substitution Required upon Breach of Certain
                Representations and Warranties..............................14
Section 3.04.   Requirements for Purchase or Substitution of
                         Receivables; Upgrades..............................14

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

Section 4.01.   Seller and Trendwest Covenants..............................16
Section 4.02.   Issuer Covenants............................................20
Section 4.03.   Assignment of Purchased Assets..............................21

ARTICLE 5       CONDITIONS PRECEDENT........................................21

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

ARTICLE 6       TERM AND TERMINATION........................................23

Section 6.01.   Term........................................................23
Section 6.02.   Default by the Seller or Trendwest..........................23

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

Section 7.01.           Amendments..........................................23
Section 7.02.           Governing Law.......................................23
Section 7.03.           Notices.............................................23
Section 7.04.           Separability Clause.................................24
Section 7.05.           Assignment..........................................24
Section 7.06.           Further Assurances..................................24
Section 7.07.           No Waivers; Cumulative Remedies.....................24
Section 7.08.           Binding Effect; Third Party Beneficiaries...........24
Section 7.09.           Set-Off.............................................24
Section 7.10.           Counterparts........................................25

Signature Page..............................................................26


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




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         THIS  PURCHASE  AND SALE  AGREEMENT,  dated as of March 1,  1998  (this
"Agreement"),  by and among  Trendwest  Funding  II,  Inc.,  a Delaware  special
purpose corporation (herein, together with its permitted successors and assigns,
the "Seller"),  Trendwest Resorts, Inc., an Oregon corporation (herein, together
with its  permitted  successors  and assigns,  "Trendwest")  and TRI Funding II,
Inc.,  a  Delaware  special  purpose  corporation  (herein,  together  with  its
permitted successors and assigns, the "Issuer").


                              PRELIMINARY STATEMENT

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

         In  furtherance  thereof,  the Issuer,  Trendwest,  and the Seller have
entered into this Agreement to provide for, among other things,  the purchase by
the  Issuer of all of the  right,  title and  interest  in and to the  Purchased
Assets and a security  interest in the Contracts and the related Credits,  which
the Issuer is pledging to the Trustee,  and in which the Issuer will be granting
to the Trustee a security interest, as security for the Notes. As a precondition
to the effectiveness of this Agreement, the Issuer, the Trustee, the Subservicer
and the Servicer will enter into the Servicing  Agreement,  dated as of March 1,
1998 (as amended and supplemented from time to time, the "Servicing Agreement"),
to provide for the  administration  and  servicing of the Purchased  Assets.  In
connection  with the  issuance  of each  Series  of Notes and  pursuant  to this
Agreement,  the Seller from time to time will sell the  Purchased  Assets to the
Issuer.  The initial sale shall be effected by this  Agreement and an Assignment
from the  Seller  to the  Issuer,  and the  list of  Contracts  relating  to the
Purchased  Assets so conveyed shall be listed on Schedule I to such  Assignment.
Subsequent sales shall be effected by this Agreement and Subsequent  Assignments
from the  Seller  to the  Issuer,  and the list of  Contracts  relating  to each
conveyance  of  Purchased  Assets  shall be listed on  Schedule I to the related
Subsequent Assignment.

         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 Servicing Agreement, and the Seller agrees that all
covenants  and  agreements  made by it in this  Agreement  with  respect  to the
Purchased  Assets  supporting each Series of Notes shall also be for the benefit
and  security of the  Trustee and all holders  from time to time of the Notes of
such Series. In consideration for the Purchased Assets and its  representations,
warranties,  covenants and other agreements under this Agreement, on the Closing
Date the Seller will receive  payment  from the Issuer of cash,  a  Subordinated
Note and all of the common  stock of the  Issuer,  and, in  connection  with the
issuance of subsequent Series of Notes, the Seller will receive cash and, to the
extent necessary, a Subordinated Note.


                              ARTICLE 1DEFINITIONS

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

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

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

     (i) a copy of the Contract;

     (ii) notice of assignment; and

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

     "Contracts" shall mean the retail  installment  contracts which are sold to
the Issuer under this Agreement by the Seller.

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

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

     (i) the original Contract; and

     (ii) notice of assignment.

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

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

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

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

         "Purchased  Asset Price"  shall mean an amount  equal to the  aggregate
principal amount  outstanding on the Receivables  relating to a Series as of the
related Series Cut-Off Date.

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

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

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

     "Subsequent Assignment" shall mean the Subsequent Assignment, substantially
in the form attached  hereto as Exhibit C, one of which shall be entered into in
connection  with each  conveyance of Receivables  relating to each issuance of a
Series of Notes after the Closing Date.

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

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

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

     "Substitution  Date"  shall  mean  the  date a  Contract  is  purchased  or
substituted  pursuant to Section 3.03 hereof;  such date shall occur on the 25th
of each month or on the next Business Day if the 25th is not a Business Day.

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

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


                    ARTICLE 2 ACQUISITION OF PURCHASED ASSETS

            Section  2.01.  Purchase  Asset  Acquisition.   In  return  for  the
applicable Purchased Asset Price and other rights created by this Agreement, the
Seller hereby transfers,  assigns, sells, and grants, without recourse except as
provided in Section 3.03 of this  Agreement,  on the related Series Closing Date
any and all of the Seller's  respective right,  title and interest in and to all
of the Purchased Assets relating to the Contracts set forth on Schedule I to the
Assignment or Subsequent Assignment,  as the case may be, including the proceeds
of the Receivables and all payments  received on or due after the related Series
Cut-Off Date and all income and proceeds of the  foregoing or relating  thereto.
The Seller hereby acknowledges that each transfer of the Purchased Assets to the
Issuer is absolute  and  irrevocable,  without  reservation  or retention of any
interest whatsoever by the Seller.

            Section 2.02. Grant of Security Interest. The Seller hereby pledges,
grants and  assigns to the Issuer a security  interest  in the  Seller's  right,
title and  interest  in the  Contracts  and the  related  Credits  to secure the
Seller's  performance  of its  obligations  hereunder  and  the  payment  of the
obligations  of the  Obligors  under each  Contract,  and this  Agreement  shall
constitute a security agreement for such purpose under applicable law.

            Section  2.03.  Purchased  Asset  Price.  By  the  execution  of the
Assignment or Subsequent Assignment, as applicable, subject to all the terms and
conditions  of  this  Agreement  and  in  reliance  upon  the   representations,
warranties  and covenants  set forth in this  Agreement,  on the related  Series
Closing  Date,  the  Issuer  hereby  agrees  to pay the  Purchased  Asset  Price
simultaneously  with the related  issuance of Notes.  The Purchased  Asset Price
shall be paid in the form of cash or in such  other  form as the  Seller and the
Issuer may agree.

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

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

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

            Section 2.05. Servicing of Contracts and Credits. The Servicer shall
service  the  Receivables,  the  Contracts,  the  related  Credits and the other
Purchased  Assets for the benefit of the Issuer (and its successors and assigns)
in  accordance  with the  terms and  conditions  of the  Transaction  Documents.
Notwithstanding  the  foregoing,  Trendwest  acknowledges  and  agrees  that its
obligations  under this Agreement are independent of any obligations it may have
under  the other  Transaction  Documents  and that its  obligations  under  this
Agreement  will  continue  in full force and effect  until  termination  of this
Agreement in  accordance  with Section 6.01 hereof,  unless  otherwise  provided
herein.

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


                    ARTICLE 3 REPRESENTATIONS AND WARRANTEES

            Section 3.01.  Representations  and  Warranties  of the Seller.  The
Seller,  with respect to itself and the  Receivables,  the Contracts and related
Credits, and Trendwest, with respect to the Contracts,  Receivables, the related
Credits,  and  the  Seller,  hereby  make  the  following   representations  and
warranties  to the Issuer  for the  benefit of the  Trustee  and  Holders of the
Notes,  on which the Issuer relies in acquiring the Receivables and on which the
Holders  of each  Series  of Notes  rely in  purchasing  such  Notes;  provided,
however, that with respect to the representations and warranties relating to the
Assets, the Holders of Notes of any Series only rely on such representations and
warranties  to the  extent  such  Assets  are part of the  Series  Trust  Estate
supporting  such Series of Notes.  Such  representations  and  warranties  shall
survive any subsequent transfer,  assignment,  contribution or conveyance of the
Receivables  and the security  interest in the Contracts and related Credits and
any issuance of Notes.

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

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

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

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

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

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

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

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

     (viii) All actions,  filings  (including UCC filings) and recordings as are
required by the Indenture and that may be necessary to perfect,  with respect to
the applicable  Series Trust Estate,  a security  interest of the Issuer and the
Trustee in, and the sale by  Trendwest,  TW Holdings and the Prior Issuer to the
Seller of the Contract and the related Receivables being acquired,  and the sale
from the Seller to the Issuer of the Receivables being acquired and the transfer
of the security  interest in the Purchased  Assets (other than the  Receivables,
TFI's right and  interests  under the  Receivables  Purchase  Agreement  and the
related proceeds and payments)  hereunder have been accomplished and are in full
force and effect.

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

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

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

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

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

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

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

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

     (xvii) Neither the Seller nor Trendwest has any specific knowledge that the
Contract will not be fully performed in accordance with its terms.

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

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

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

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

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

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

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

     (b) As to the aggregate  pool of Contracts  supporting a Series of Notes as
of the related  Series Closing Date,  neither  Trendwest nor the Seller used any
selection  procedures  that  identified the Contracts as being less desirable or
valuable than other comparable vacation credit installment  contracts originated
by Trendwest.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

     (xv)  Immediately  prior to the acquisition of the Purchased  Assets by the
Issuer  pursuant  to this  Agreement,  the  Seller  was the  sole  owner of such
Purchased  Assets  and the  Contracts  at  such  time  and had a valid  security
interest (or a security interest in a security interest) in the related Credits,
and had good and marketable  title to such Purchased  Assets,  free and clear of
all liens,  claims and  encumbrances  (except for the Purchased Assets Price and
security  interests in the  Purchased  Assets and the  Contracts  which shall be
terminated on or prior to the related Series Closing Date);  and the acquisition
of the  Purchased  Assets by the Issuer does not violate the terms or provisions
of any Contract.

     (xvi) The Seller will treat the transfer of the Purchased  Assets as a sale
to the Issuer for federal,  State and local income tax reporting and  accounting
purposes.  The  affiliated  group of which  the  Seller is a member  within  the
meaning of Section 1504 of the Code shall treat the Purchased Assets as owned by
the Issuer for federal, state and local income tax purposes.

     (xvii) The  transfer of the  Purchased  Assets  pursuant to this  Agreement
constitutes  the  valid  transfer  by the  Seller  to the  Issuer  of all of the
Seller's right, title and interest in the Purchased Assets.

     (xviii) The Seller has valid  business  reasons  for selling the  Purchased
Assets to the Issuer  pursuant to this  Agreement  rather than  obtaining a loan
secured by the Purchased Assets.

     (xix) The Seller will be operated  generally so as to not be  substantively
consolidated with the Issuer.

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

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

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

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

     (a) The Issuer has been duly  organized  and is  validly  existing  in good
standing as a  corporation  under the laws of the State of Delaware,  with power
and  authority  to  own  its  properties,  perform  its  obligations  under  the
Transaction Documents and to transact the business in which it is now engaged or
in which it proposes to engage;  the Issuer 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 Issuer to perform its obligations
under the Transaction Documents.

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

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

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

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

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

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

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

           (b)  If the  Seller  or  Trendwest  is  required  to  substitute  any
Receivable  related to a Contract under Section 3.03 hereof, or if the Issuer is
required or elects to  substitute  any  Receivable  related to a Contract  under
Section 3.10 of the Servicing  Agreement (a  "Substitute  Contract"),  each such
Substitute Contract shall (i) be an Eligible Contract; (ii) be written on one of
the standard forms attached as Exhibit A to this Agreement; (iii) be accompanied
by a supplement to this  Agreement  substantially  in the form of Annex A hereto
subjecting such Contract to the provisions  hereof and providing with respect to
such Substitute Contract the information required in the related Series Contract
Schedule;  (iv) not have been selected  using  procedures  that  identified  the
Contracts as being less  desirable or valuable  than other  comparable  vacation
credit retail installment contracts originated by Trendwest and (v) not have any
Scheduled  Payments that are due after the Stated  Maturity Date of the Notes of
the  Series  supported  by such  Contract.  In  addition,  (i)  such  Substitute
Contracts  shall have an  aggregate  Collateral  Value at least equal to and not
materially  greater than the aggregate  Collateral  Value of the Contracts being
withdrawn as of the date of withdrawal (the  "Substitution  Criterion") and (ii)
the  representations and warranties set forth in Sections 3.01 and 3.02 shall be
true and correct with respect to such Substitute Contract and the aggregate pool
of Contracts as of the date the Substitute Receivable is conveyed to the Issuer.

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

           (c)  Any  purchase  or  substitution  of a  Receivable  related  to a
Contract by the Seller in  accordance  with  Section 3.03 hereof or this Section
3.04 or by the Issuer under  Section 3.10 of the  Servicing  Agreement  shall be
made either by remittance of the Purchase Price to the  Subservicer  for deposit
into the Clearing  Account in accordance  with Section  3.03(a) of the Servicing
Agreement or by substitution of a Substitute Receivable,  as applicable,  within
one  Business  Day  following  the  expiration  of the cure  period set forth in
Section 3.03 hereof.

           (d) Any voluntary purchase or substitution of a Receivable related to
a Contract by the Issuer  pursuant to the terms of the  Servicing  Agreement  or
Indenture in the event of a default, delinquency or modification with respect to
such  Contract   shall  satisfy  the  same   requirements   for  a  purchase  or
substitution, as the case may be, as are set forth in this Section 3.04.

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

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


                               ARTICLE 4 COVENANTS

     Section 4.01.  Seller and Trendwest  Covenants.  The Seller (and Trendwest,
with respect to  subsections  (c), (j), (n) and (q) of this Section 4.01) hereby
covenants and agrees with the Issuer as follows:

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

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

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

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

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

     (f)  The  Seller  will  duly  fulfill  all  obligations  on its  part to be
fulfilled  under or in  connection  with each  Contract  and will not  change or
modify the terms of the Contracts except as expressly  permitted by the terms of
the Transaction Documents and will do nothing to impair the rights of the Issuer
or the  Trustee  in the  Purchased  Assets.  In the event that the rights of the
Seller sold  hereunder  to the Issuer  under any Contract or any guaranty of the
related  Obligor's  obligations  under any  Contract are not  assignable  to the
Issuer,  the Seller will enforce such rights on behalf of the Issuer; the Seller
is not aware of any such inability to assign any Contracts.

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

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

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

     (j) Trendwest agrees to indemnify, defend and hold the Issuer harmless from
and against any and all loss, liability,  damage, judgment, claim, deficiency or
expense (including interest,  penalties,  reasonable attorney's fees and amounts
paid in settlement)  that is caused by (i) a material  breach at any time by the
Seller or Trendwest of its  representations,  warranties and covenants contained
in Section 3.01 hereof or this  Section  4.01 or (ii) any  material  information
furnished by the Seller which is set forth in any schedule delivered  hereunder,
being untrue in any material  respect when any such  representation  was made or
schedule  delivered,  provided that neither  Trendwest nor the Seller shall have
any liability  with respect to a  representation  or warranty as to any specific
Contract,  Receivable or the related  Credits other than to purchase the related
Receivable or  substitute  for such  Receivable in accordance  with Section 3.03
hereof  unless  such breach of  representation  or warranty is the result of the
fraud,  negligence,  bad faith or willful misconduct of the Seller or Trendwest.
Trendwest  shall also  indemnify  the Trustee and the  Servicer  for any cost or
expenses incurred by them in the enforcement of this Agreement.  The obligations
of Trendwest  under this Section 4.01(j) shall be considered to have been relied
upon by the Issuer and shall survive the execution,  delivery and performance of
this  Agreement,  regardless  of any  investigation  made by or on behalf of the
Issuer,  until  termination of the Indenture.  If either Trendwest or the Seller
has made any indemnity  payments pursuant to this Section 4.01(j) and thereafter
the recipient collects any of such amounts from others, such party will promptly
repay the amount  collected to either  Trendwest or the Seller,  as  applicable,
without interest.

     (k) The  Seller  will do  nothing  to  disturb  or impair  the  acquisition
hereunder by the Issuer of all of the Seller's right,  title and interest in the
Purchased Assets and interest in the Contracts and related Credits.

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

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

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

     (o) The annual financial statements of the Seller will disclose the effects
of the transactions contemplated by the Transaction Documents in accordance with
generally accepted accounting principles. The resolutions,  agreements and other
instruments underlying the Transaction Documents will be continuously maintained
by the Seller as official records.

     (p) The affiliated group of which the Seller is a member within the meaning
of Section 1504 of the Code shall treat the  Receivables  as owned by the Issuer
for federal, state and local income tax purposes.

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

     (r) The Seller will perform the transactions contemplated by this Agreement
in a manner  that is  consistent  with the  Issuer's  ownership  interest in the
Purchased  Assets.  The  Seller  will  respond  to  all  third  party  inquiries
confirming the transfer of the Purchased Assets to the Issuer.

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

     (t) The  Seller  will not amend its  Certificate  of  Incorporation  or its
By-laws  without the prior  written  consent of the Trustee and the Holders of a
majority in principal amount of Notes Outstanding.

     Section 4.02. Issuer Covenants. The Issuer hereby covenants and agrees with
the Seller as follows:

     (a) The  Issuer  hereby  acknowledges  and  agrees  that its  rights in the
Receivables,  the  Contracts and related  Credits are  expressly  subject to the
rights of the  related  Obligors  in such  Receivables,  Contracts  and  Credits
pursuant to the related Contract.

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

     (c) The Issuer warrants that it will have a valid security  interest in the
Contracts and related  Credits and that it will warrant and defend such interest
in  such  Contracts  and  Credits  against  all  Persons,   claims  and  demands
whatsoever.  The Issuer shall not assign,  sell, pledge, or exchange,  or in any
way  encumber or  otherwise  dispose of the  Contracts  or the related  Credits,
except as permitted under the Transaction Documents.

     (d) The Issuer  shall treat  Purchased  Assets as owned by it for  federal,
State and local income tax  purposes,  shall include in the  computation  of its
gross income for such purposes the other income from the Purchased Assets, shall
treat the Notes as its debt for such purposes and shall deduct the interest paid
or accrued with respect to the Notes in accordance with its applicable method of
accounting for such purposes.

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


                         ARTICLE 5 CONDITIONS PRECEDENT

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

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

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

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

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

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

     (f) The  related  Series of Notes  shall be issued and sold on the  Closing
Date, the Issuer shall receive the full  consideration  due it upon the issuance
of the Notes,  and the Issuer  shall have  applied  such  consideration,  to the
extent necessary, to pay the related Purchased Asset Price; and

     (g) The Seller shall have executed and delivered the Assignment.

     Section 5.02.  Conditions to the Sellers'  Obligations.  The obligations of
the Seller to execute and deliver to the Issuer the Assignment or the Subsequent
Assignment,  as the case may be, and perform it  obligations  pursuant  to, this
Agreement  on the  applicable  Series  Closing  Date  shall  be  subject  to the
satisfaction of the following conditions:

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

     (b) The Issuer shall have executed and delivered the applicable Assignment;
and

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

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


                         ARTICLE 6 TERM AND TERMINATION

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

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


                             ARTICLE 7 MISCELLANEOUS

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

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

     Section 7.03. Notices.  All demands,  notices and communications  hereunder
shall be in writing and shall be delivered  personally,  mailed by registered or
certified United States mail, postage prepaid, or sent via overnight air courier
or facsimile  communication  and addressed,  in the case of Trendwest,  to 12301
N.E. 10th Place,  Bellevue,  Washington 98005, in the case of the Seller, to the
Seller  Address,  and in the case of the  Issuer,  to the  Issuer  Address.  All
notices and demands shall be deemed to have been given either at the time of the
delivery  thereof to any officer of the Person  entitled to receive such notices
and demands at the address of such Person for notices hereunder, or on the third
day after the mailing  thereof to such  address,  as the case may be. Any Person
may change the address for notices  hereunder by giving notice of such change to
the other Person.

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

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

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

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

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

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

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

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



<PAGE>



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


                       TRENDWEST FUNDING II, INC., Seller



                                       By
                                      Name:
                                     Title:



                             TRENDWEST RESORTS, INC.



                                       By
                                      Name:
                                     Title:



                          TRI FUNDING II, INC., Issuer



                                       By
                                      Name:
                                     Title:




<PAGE>


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

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


                                     ANNEX A


                   FORM OF SUPPLEMENT FOR SUBSTITUTE CONTRACTS
                              AND UPGRADE CONTRACTS

         Pursuant to Section  3.04(b) and Section  3.04(e) of the  Purchase  and
Sale  Agreement  dated as of March  1,  1998  (the  "Sale  Agreement"),  between
Trendwest  Funding II, Inc. (the  "Seller"),  Trendwest  Resorts,  Inc., and TRI
Funding II, Inc. (the "Issuer"), attached as Schedule I hereto is a Supplemental
Schedule, which includes information regarding Receivables that are hereby sold,
assigned,  transferred  and  delivered by the Seller to the Issuer in accordance
with the Sale  Agreement and the  [Subsequent]  Assignment and setting forth the
Collateral Value of any Contract being sold to the Seller by the Issuer pursuant
to an Upgrade or exchanged pursuant to a substitution.

                       TRENDWEST FUNDING II, INC., Seller



                                       By
                                      Name:
                                     Title:



                          TRI FUNDING II, INC., Issuer



                                       By
                                      Name:
                                     Title:




<PAGE>


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

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


                                   SCHEDULE I


                 SUPPLEMENTAL SCHEDULE FOR SUBSTITUTE CONTRACTS
                              AND UPGRADE CONTRACTS






<PAGE>


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

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


                                    EXHIBIT A


                                FORM OF CONTRACT






<PAGE>


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

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


                                    EXHIBIT B


                               FORM OF ASSIGNMENT

         This Assignment Agreement  ("Assignment") is made as of March ___, 1998
(the "Transfer  Date"),  by and between  Trendwest  Funding II, Inc., a Delaware
corporation,  (the  "Assignor")  and TRI Funding  Company II,  Inc.,  a Delaware
Corporation (the "Assignee"), with reference to the following facts:


                                    RECITALS:

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

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

     C. Assignee  desires to accept this Assignment and transfer of the Assigned
Interests.

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

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

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

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

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

     1.3. A security  interest in all other  Purchased  Assets  relating to such
Contracts.

     2. Pledge. The Assignor hereby pledges, without recourse except as provided
in the Sale Agreement,  to Assignee (and the successors and assigns of Assignee)
a security interest in the Contracts.

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

     4. Distinct Entities. The Assignor and Assignee hereby acknowledge that for
all purposes the  Assignor  and  Assignee are each  separate and distinct  legal
entities.  Accordingly,  the Assignor shall not be liable to any third party for
the debts,  obligations and liabilities of the Assignee;  and Assignee shall not
be liable to any third party for the debts,  obligations  and liabilities of the
Assignor.

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

     6. Authority.  The Assignor and Assignee each hereby represent respectively
that they have full power and authority to enter into this Assignment.

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

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



<PAGE>



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

                      TRENDWEST FUNDING II, INC., ASSIGNOR



                                       By
                                      Name:
                                     Title:



                         TRI FUNDING II, INC., ASSIGNEE



                                       By
                                      Name:
                                     Title:




<PAGE>


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

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


                                    EXHIBIT C


                          FORM OF SUBSEQUENT ASSIGNMENT

     This Assignment Agreement  ("Assignment") is made as of ___________,  _____
(the "Transfer  Date"),  by and between  Trendwest  Funding II, Inc., a Delaware
corporation,  (the  "Assignor")  and TRI Funding  Company II,  Inc.,  a Delaware
Corporation (the "Assignee"), with reference to the following facts:


                                    RECITALS:

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

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

     C. Assignee  desires to accept this Assignment and transfer of the Assigned
Interests.

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

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

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

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

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

     1.3. A security  interest in all other  Purchased  Assets  relating to such
Contracts.

     2. Pledge. The Assignor hereby pledges, without recourse except as provided
in the Sale Agreement,  to Assignee (and the successors and assigns of Assignee)
a security interest in the Contracts.

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

     4. Distinct Entities. The Assignor and Assignee hereby acknowledge that for
all purposes the  Assignor  and  Assignee are each  separate and distinct  legal
entities.  Accordingly,  the Assignor shall not be liable to any third party for
the debts,  obligations and liabilities of the Assignee;  and Assignee shall not
be liable to any third party for the debts,  obligations  and liabilities of the
Assignor.

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

     6. Authority.  The Assignor and Assignee each hereby represent respectively
that they have full power and authority to enter into this Assignment.

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

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



<PAGE>



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

                      TRENDWEST FUNDING II, INC., ASSIGNOR



                                       By
                                      Name:
                                     Title:



                         TRI FUNDING II, INC., ASSIGNEE



                                       By
                                      Name:
                                     Title:




<PAGE>


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

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


                                    EXHIBIT D


                            FORM OF SUBORDINATED NOTE



                                $------------



                              TRI FUNDING II, INC.


                                SUBORDINATED NOTE



Date:  ____________, _____               Stated Maturity:  __________, 2___

         TRI FUNDING II, INC., a special purpose  corporation duly organized and
existing  under the laws of the State of  Delaware  (the  "Issuer,"  which  term
includes any successor entity under the Indenture  referred to below), for value
received,  hereby promises to pay to Trendwest Funding II, Inc. ("TFI"),  or its
assigns,  the  principal sum  ___________________  Dollars  ($_____________)  in
monthly  installments  beginning on  ___________,  ______ (the "Initial  Payment
Date"),  and to pay  interest  monthly in arrears on the unpaid  portion of said
principal  sum (and,  to the extent that the payment of such  interest  shall be
legally enforceable, on any overdue installment of interest on this Subordinated
Note) on the fifteenth day of each calendar  month or, if such  fifteenth day is
not a Business Day, the Business Day  immediately  following  (each,  a "Payment
Date"),  for the period from and including  ___________,  _____ through the last
day of the applicable Due Period immediately  preceding the Initial Payment Date
for the Series _____ Notes referred to below,  and thereafter,  monthly from and
including  the  first day  through  the last day of the Due  Period  immediately
preceding the Payment Date, at the rate of _______% per annum (calculated on the
basis of a 360-day year  consisting of 12 months of 30 days each).  Each monthly
installment of principal  payable on this  Subordinated  Note shall be an amount
equal to the cash  available for  distribution  pursuant to a Series  Supplement
relating to such Series until the principal  amount owed hereunder,  as adjusted
as set  forth  below,  is paid in full.  Any  remaining  unpaid  portion  of the
principal  amount of this  Subordinated  Note shall be due and  payable no later
than the Stated  Maturity  referred  to above;  provided,  however,  that if the
Series _____ Notes (as defined below) are not paid in full on such date, no such
amounts  shall be due or payable  until the Series _____ Notes are paid in full.
All terms  used in this  Subordinated  Note which are  defined in the  Indenture
(referred to herein as the  "Indenture"),  dated as of March 1, 1998,  among the
Issuer,  Trendwest  Resorts,  Inc., as Servicer,  and LaSalle  National Bank, as
Trustee shall have the meanings assigned to them in the Indenture.

         The  principal  and interest on this  Subordinated  Note are payable by
check mailed by  first-class  mail to TFI or its assigns or by wire  transfer in
immediately  available funds to the account  specified in writing to the Trustee
by TFI or its assigns  received at least five  Business Days prior to the Record
Date for the Payment Date on which wire transfers will commence, in such coin or
currency  of the  United  States of  America  as at the time of payment is legal
tender for  payment of public and private  debts.  Funds  represented  by checks
returned  undelivered  will be held for payment to the Person entitled  thereto,
subject  to the terms of the  Indenture,  at the  office or agency in the United
States of America  designated as such by the Issuer for such purpose pursuant to
the Indenture.

         The principal  owed on this  Subordinated  Note will be increased  from
time to time in the  event  that TFI  transfers  the  receivable  related  to an
Upgrade  Contract to the Issuer to be included in the Series _____ Trust Estate,
such  amount  to equal the  difference  between  the  principal  balance  of the
receivable of Upgrade Contract as of the date of such Upgrade and the Collateral
Value on such date of the Receivable being replaced.

         This Subordinated Note and the Issuer's Receivables-Backed Notes Series
_____ (the "Series _____ Notes") issued pursuant to the Indenture are secured by
certain  Receivables  and other  Collateral  described in the  Indenture and the
Series  Supplement.  The Series Trust Estate  relating to the Series _____ Notes
also secures the payment of certain other amounts and certain other  obligations
as described in the  Indenture  and the Series  Supplement.  Until the Notes are
paid in full and the  obligations  of the  Issuer  under the  Indenture  and the
Series Supplement are satisfied,  (i) the Subordinated Notes are payable only at
the time and in the manner  provided in the Indenture and the Series  Supplement
and are not  redeemable  or  prepayable  at the option of the Issuer before such
time and (ii) the holder of this  Subordinated Note will not cause the filing of
a bankruptcy  petition against the Issuer for any reason whatsoever,  including,
without limitation,  the failure of the Issuer to make any payments of principal
of or interest on this  Subordinated  Note until after a period equal to 10 days
plus the applicable  preference  period under the United States  Bankruptcy Code
has passed since the Series _____ Notes were paid in full.

         The Indenture permits, with certain exceptions as therein provided, the
amendment  thereof and the  modification  of the rights and  obligations  of the
Issuer  and the  rights  of the  holder  of this  Subordinated  Note  under  the
Indenture and the Series  Supplement at any time by the Issuer,  the Trustee and
the  Servicer  with the  consent  of the  Holders  of not less than  66-2/3%  in
principal  amount of Notes of the  Controlling  Class of the Series  _____ Notes
Outstanding  under the Indenture and the Series  Supplement.  The Indenture also
contains provisions permitting the Holders of specified percentages in aggregate
principal  amount of the Series _____ Notes, at the time  Outstanding  under the
Indenture  and the Series  Supplement,  to waive  compliance  by the Issuer with
certain  provisions  of the  Indenture  and  certain  past  defaults  under  the
Indenture and their  consequences.  This  Subordinated Note shall not be amended
without the consent of Holders of not less than 66-2/3% in  principal  amount of
the Controlling Class of the Series _____ Notes Outstanding.

         No reference  herein to the Indenture or the Series  Supplement  and no
provision of this Subordinated Note or of the Indenture or the Series Supplement
shall  alter or impair the  obligation  of the  Issuer,  which is  absolute  and
unconditional,  to pay the principal of and interest on this Subordinated  Note,
but, so long as any Notes of any Series are Outstanding,  solely from the Series
Collateral  pledged to the Trustee under the Indenture and the Series Supplement
with respect to the Series _____ Notes at the times,  place and rate, and in the
coin  or  currency,  herein  prescribed.  Notwithstanding  anything  else to the
contrary contained in this Subordinated Note or the Indenture, the obligation of
the Issuer to pay the principal of and interest on this Subordinated Note is not
a general obligation of the Issuer, nor its officers or directors,  but, so long
as any Notes are Outstanding,  is limited solely to the Collateral pledged under
the Indenture.

         So long as the  Notes of any  Series  are  Outstanding,  TFI  shall not
transfer this Subordinated Note to any Person.

         This  Subordinated  Note and the  Indenture  shall be  governed  by and
construed in accordance with the internal laws of the State of New York, without
regard to conflicts of laws principles.

     IN WITNESS WHEREOF,  TRI Funding II, Inc. has caused this Subordinated Note
to be signed, manually, by its ______________________.

                                 TRI FUNDING II,INC.



                                       By
                                      Name:
                                     Title:




<PAGE>


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                                   SCHEDULE I


                                CONTRACT SCHEDULE