RECEIVABLES PURCHASE AGREEMENT

                           dated as of January 7, 2000

                                      Among

                        TW HOLDINGS III, INC., as Seller,

                      TRENDWEST RESORTS INC., as Servicer,

                        SAGE SYSTEMS, INC., as Custodian,

                    INTERNATIONAL SECURITIZATION CORPORATION,

                  BANK ONE, NA (MAIN OFFICE CHICAGO), as Agent

                                       and

                          BANK ONE, NA, as Paying Agent

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                                TABLE OF CONTENTS


ARTICLE I PURCHASE ARRANGEMENTS................................................1

         Section 1.1   Purchase Facility.......................................1
         Section 1.2   Increases...............................................1
         Section 1.3   Decreases...............................................2
         Section 1.4   Payment Requirements....................................2
         Section 1.5   Repurchase or Substitution for  Charged-Off and
                       Defaulted Receivables...................................3
         Section 1.6   Upgrades................................................4

ARTICLE II PAYMENTS AND COLLECTIONS............................................5

         Section 2.1   Payments................................................5
         Section 2.2   Distributions Prior to Amortization Date................5
         Section 2.3   Distributions Following Amortization Date...............7
         Section 2.4   Sharing of Applications.................................7
         Section 2.5   Payment Recission.......................................7
         Section 2.6   Maintenance of Purchaser Interest.......................8
         Section 2.7   Clean Up Call...........................................8
         Section 2.8   Designated Accounts.....................................8
         Section 2.9   Investment of Amounts in Designated Accounts............9
         Section 2.10  Procedures for Substitution and Release of Receivables..9
         Section 2.11  Deemed Collections.....................................10

ARTICLE III CONDUIT FUNDING...................................................10

         Section 3.1   CP Costs...............................................10
         Section 3.2   CP Costs Payments......................................10
         Section 3.3   Calculation of CP Costs and Carrying and Servicing
                       Costs..................................................10

ARTICLE IV FINANCIAL INSTITUTION FUNDING......................................10

         Section 4.1   Financial Institution Funding..........................10
         Section 4.2   Yield Payments.........................................11
         Section 4.3   Selection and Continuation of Tranche Periods..........11
         Section 4.4   Financial Institution Discount Rates...................11
         Section 4.5   Suspension of the LIBO Rate............................11

ARTICLE V REPRESENTATIONS AND WARRANTIES......................................12

         Section 5.1   Representations and Warranties of Originating Parties..12
         Section 5.2   Financial Institution Representations and Warranties...16

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ARTICLE VI CONDITIONS OF PURCHASES............................................17

         Section 6.1   Conditions Precedent to Initial Purchase...............17
         Section 6.2   Conditions Precedent to All Purchases..................17

ARTICLE VII COVENANTS.........................................................18

         Section 7.1   Affirmative Covenants of the Originating Parties.......18
         Section 7.2   Negative Covenants of the Originating Parties..........25

ARTICLE VIII ADMINISTRATION AND COLLECTION....................................25

         Section 8.1   Designation of Servicer................................25
         Section 8.2   Duties of Servicer.....................................26
         Section 8.3   Collections Following an Amortization Event............27
         Section 8.4   Responsibilities of Seller.............................27
         Section 8.5   Reports................................................27
         Section 8.6   Servicing Fees.........................................28
         Section 8.7   TWRI Financial Covenants...............................28

ARTICLE IX HEDGING............................................................28

         Section 9.1   Hedge Event............................................28
         Section 9.2   Hedge Accumulation Period..............................28

ARTICLE X AMORTIZATION EVENTS.................................................29

         Section 10.1  Amortization Events....................................29
         Section 10.2  Remedies...............................................31

ARTICLE XI INDEMNIFICATION....................................................32

         Section 11.1  Indemnities by the Originating Parties.................32
         Section 11.2  Increased Cost and Reduced Return......................34
         Section 11.3  Other Costs and Expenses...............................35
         Section 11.4  Allocations............................................35

ARTICLE XII THE AGENT.........................................................35

         Section 12.1  Authorization and Action...............................35
         Section 12.2  Delegation of Duties...................................36
         Section 12.3  Exculpatory Provisions.................................36
         Section 12.4  Reliance by Agent......................................36
         Section 12.5  Non-Reliance on Agent and Other Purchasers.............37
         Section 12.6  Reimbursement and Indemnification......................37
         Section 12.7  Agent in its Individual Capacity.......................37
         Section 12.8  Successor Agent........................................37

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ARTICLE XIII ASSIGNMENTS; PARTICIPATIONS......................................38

         Section 13.1  Assignments............................................38
         Section 13.2  Participations.........................................39

ARTICLE XIV LIQUIDITY FACILITY................................................39

         Section 14.1  Transfer to Financial Institutions.....................39
         Section 14.2  Transfer Price Reduction Yield.........................40
         Section 14.3  Payments to Conduit....................................40
         Section 14.4  Limitation on Commitment to Purchase from Conduit......40
         Section 14.5  Defaulting Financial Institutions......................40

ARTICLE XV THE CUSTODIAN......................................................41

         Section 15.1  Appointment of Custodian; Delivery of Records;
                       Verification...........................................41
         Section 15.2  Receipts...............................................42
         Section 15.3  Duties of Custodian....................................42
         Section 15.4  Representations and Warranties of Custodian............43
         Section 15.5  Indemnification of Custodian...........................44
         Section 15.6  Adverse Interests......................................44
         Section 15.7  Termination of Custodian...............................44

ARTICLE XVI MISCELLANEOUS.....................................................45

         Section 16.1  Waivers and Amendments.................................45
         Section 16.2  Notices................................................45
         Section 16.3  Ratable Payments.......................................46
         Section 16.4  Protection of Ownership Interests of the Purchasers....46
         Section 16.5  Confidentiality........................................47
         Section 16.6  Bankruptcy Petition....................................47
         Section 16.7  Limitation of Liability................................48
         Section 16.8  CHOICE OF LAW..........................................48
         Section 16.9  CONSENT TO JURISDICTION................................48
         Section 16.10 WAIVER OF JURY TRIAL...................................48
         Section 16.11 Integration; Binding Effect; Survival of Terms.........48
         Section 16.12 Counterparts; Severability; Section References.........49
         Section 16.13 Bank One Roles.........................................49
         Section 16.14 Characterization.......................................49

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                             Exhibits and Schedules

Exhibit I         Definitions

Exhibit II        Form of Purchase Notice

Exhibit III       Places  of  Business  of the Originating Parties; Locations of
                  Records; Federal Employer Identification Number(s)

Exhibit IV        Form of Seller Direction

Exhibit V         Form of Compliance Certificate

Exhibit VI        Form of Assignment Agreement

Exhibit VII       Credit and Collection Policy

Exhibit VIII      Form of Vacation Owner Agreements

Exhibit IX        Form of Monthly Report

Exhibit X         Request for Release

Exhibit XI        Receipt

Exhibit XII       Account Numbers

Schedule A        Commitments of Financial Institutions

Schedule B        Documents  to  be  Delivered  to the  Agent on or Prior to the
                  Initial Purchase

Schedule C        Existing Environmental Claims

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                         RECEIVABLES PURCHASE AGREEMENT

     This Receivables Purchase Agreement dated as of January 7, 2000 is among TW
Holdings III, Inc., a Delaware corporation ("Seller"),  Trendwest Resorts, Inc.,
an Oregon corporation  ("TWRI"), as initial Servicer (the Servicer together with
the Seller,  the "Originating  Parties" and each an "Originating  Party"),  Sage
Systems,  Inc., as Custodian,  the funding entities listed on Schedule A to this
Agreement (together with their respective successors and assigns hereunder,  the
"Financial Institutions"), International Securitization Corporation ("Conduit"),
Bank One,  NA, as paying  agent to the  extent  described  herein  (the  "Paying
Agent")  and Bank One,  NA (Main  Office  Chicago)  as agent for the  Purchasers
hereunder or any successor  agent  hereunder  (together  with its successors and
assigns hereunder,  the "Agent").  Unless defined elsewhere herein,  capitalized
terms used in this Agreement  shall have the meanings  assigned to such terms in
Exhibit I.

                             PRELIMINARY STATEMENTS

     Seller desires to transfer and assign Purchaser Interests to the Purchasers
from time to time.

     Conduit  may,  in its  absolute  and sole  discretion,  purchase  Purchaser
Interests from Seller from time to time.

     In the event that  Conduit  declines to make any  purchase,  the  Financial
Institutions shall, at the request of Seller,  purchase Purchaser Interests from
time to time. In addition,  the Financial  Institutions have agreed to provide a
liquidity facility to Conduit in accordance with the terms hereof.

     Bank One, NA has been requested and is willing to act as Agent on behalf of
Conduit and the Financial Institutions in accordance with the terms hereof.

                                   ARTICLE I
                              PURCHASE ARRANGEMENTS

     Section 1.1 Purchase Facility.

     Upon the terms and  subject to the  conditions  hereof,  Seller may, at its
option,  sell and assign Purchaser Interests to the Agent for the benefit of one
or more of the Purchasers. In accordance with the terms and conditions set forth
herein, Conduit may, at its option,  instruct the Agent to purchase on behalf of
Conduit (or if Conduit shall decline to purchase,  the Agent shall purchase,  on
behalf of the Financial  Institutions)  Purchaser Interests from time to time in
an aggregate  amount not to exceed the Purchase Limit during the period from the
date hereof to but not including  the earlier to occur of the  Revolving  Period
Termination  Date and the Facility  Termination  Date.  Seller  hereby  assigns,
transfers  and conveys to the Agent for the benefit of Conduit or the  Financial
Institutions,  as applicable, and the Agent hereby acquires, all of Seller's now
owned and existing and hereafter  arising or acquired right,  title and interest
in and to the Purchaser Interests.

     Section 1.2  Increases.

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     Seller  shall  provide  the Agent with at least two  Business  Days'  prior
notice in a form set forth as Exhibit  II hereto of the  Initial  Purchase  each
Incremental  Purchase (a  "Purchase  Notice").  Each  Purchase  Notice  shall be
subject  to  Section  6.2  hereof  and,  except  as set  forth  below,  shall be
irrevocable  and shall specify the requested  Purchase Price (which shall not be
less than  $2,000,000)  and date of purchase and, in the case of an  Incremental
Purchase to be funded by the Financial Institutions, the requested Discount Rate
and Tranche Period. Each Purchase Notice shall include a Schedule of Receivables
for any  Receivables  either being sold under the Sale  Agreement on the date of
such Incremental  Purchase or which were sold under the Sale Agreement since the
date of the preceding  Incremental  Purchase.  Seller may submit to the Agent no
more than two Purchase Notices during any Accrual Period. Following receipt of a
Purchase  Notice,  the Agent will determine  whether  Conduit agrees to make the
purchase. If Conduit declines to make a proposed purchase, Seller may cancel the
Purchase  Notice or, in the  absence  of such a  cancellation,  the  Incremental
Purchase of the Purchaser  Interest will be made by the Financial  Institutions.
On the date of each Incremental  Purchase,  upon  satisfaction of the applicable
conditions  precedent  set  forth  in  Article  VI,  Conduit  or  the  Financial
Institutions,   as  applicable,  shall  deposit  to  the  Facility  Account,  in
immediately  available funds, no later than 12:00 noon (Chicago time), an amount
equal  to (i) in the  case of  Conduit,  the  aggregate  Purchase  Price  of the
Purchaser  Interests  Conduit  is  then  purchasing  or  (ii)  in the  case of a
Financial  Institution,  such  Financial  Institution's  Pro  Rata  Share of the
aggregate Purchase Price of the Purchaser  Interests the Financial  Institutions
are purchasing.

     Section 1.3 Decreases.

     On each  Settlement  Date  prior  to the  Amortization  Date,  the  Monthly
Available  Funds shall be applied to reduce Capital (i) to the extent  described
in clause fourth of Section 2.2(a) and (ii) to the extent  determined by Seller,
to the extent Monthly  Available  Funds are available to be applied  pursuant to
clause tenth of Section  2.2(a).  On each Settlement Date on or following to the
Amortization  Date, the Amortization  Period Available Funds shall be applied to
reduce Capital to the extent described in clause fourth of Section 2.3. Servicer
shall include in the Monthly  Report  delivered  pursuant to Section 8.5 on each
Monthly Report Date the amount of the Monthly  Available  Funds or  Amortization
Period Available Funds, as applicable,  that will be applied pursuant to Section
2.2 or Section 2.3, as applicable,  to reduce Capital on the related  Settlement
Date.  All amounts paid pursuant to clauses  fourth and sixth of Section  2.2(a)
and clause  fourth of  Section  2.3 shall be  applied  ratably to the  Purchaser
Interests  of Conduit and the  Financial  Institutions  in  accordance  with the
amount of Capital (if any) owing to Conduit,  on the one hand, and the amount of
Capital (if any) owing to the Financial  Institutions  (ratably,  based on their
respective Pro Rata Shares), on the other hand.

     Section 1.4 Payment Requirements.

     All amounts to be paid or deposited by any  Originating  Party  pursuant to
any provision of this  Agreement  shall be paid or deposited in accordance  with
the terms hereof no later than 11:00 a.m.  (Chicago time) on the day when due in
immediately  available  funds,  and if not received  before 11:00 a.m.  (Chicago
time)  shall be deemed to be received on the next  succeeding  Business  Day. If
such amounts are payable to a Purchaser they shall be paid to the Agent, for the
account of such Purchaser,  at 1 Bank One Plaza,  Chicago,  Illinois 60670 until
otherwise  notified by the Agent.  Upon written notice to Seller,  the Agent may
debit the  Facility  Account  for all amounts  due and  payable  hereunder.  All
computations of Yield,  per annum fees  calculated as part of any CP Costs,  and

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per annum fees  hereunder and under the Fee Letter shall be made on the basis of
a year of 360  days  for  the  actual  number  of days  elapsed.  If any  amount
hereunder  shall be payable on a day which is not a Business  Day,  such  amount
shall be payable on the next succeeding Business Day.

     Section 1.5  Repurchase  or  Substitution  for  Charged-Off  and  Defaulted
                  Receivables.

     (a) On any Settlement Date,  Originator may, at its option,  cause Agent to
convey  back to Seller  the  interest  of Agent in (x) to the  extent  permitted
pursuant to Section  1.5(d),  any  Receivable  which  constituted  a Charged-Off
Receivable or a Defaulted  Receivable as of the last day of the related  Accrual
Period and (y) to the extent  permitted by Section  1.5(f),  any Vacation Credit
which  constituted  a  Repossessed  Vacation  Credit  as of the  last day of the
related Accrual Period.  Seller shall provide the Agent with irrevocable written
notice  on the  Monthly  Report  Date  preceding  such  Settlement  Date  of its
intention to cause such reconveyance to occur,  which notice shall (i) state the
amount of each form of  consideration  described  in Sections  1.5(b) and 1.5(e)
which  shall  be paid to  Agent  on such  Settlement  Date,  (ii)  identify  the
Charged-Off  Receivables or Defaulted Receivables to be reconveyed to Seller and
(iii)  otherwise  be  satisfactory  in form  and  substance  to  Agent.  On such
Settlement  Date,  Agent shall execute a Request for Release in accordance  with
Section 2.10 for such Charged-Off Receivables or Defaulted Receivables,  without
representation or warranty.

     (b) As  consideration  for any reconveyance  pursuant to Section  1.5(a)(x)
which occurs on a Settlement Date prior to the earlier to occur of the Revolving
Period  Termination  Date and the  Amortization  Date,  Seller shall  provide to
Agent, on behalf of the Purchasers:

               (i) first,  additional  Purchaser  Interests in Seller's existing
          Receivables  (so long as such  additional  Purchaser  Interests do not
          cause the aggregate Purchaser Interests to exceed 100%);

               (ii) second, if the aggregate Purchaser Interests as described in
          clause (i) would exceed 100%,  then Seller  shall  acquire  additional
          Eligible  Receivables  pursuant to the Sale Agreement which will cause
          the aggregate Purchaser Interests to be equal to or less than 100%, to
          the extent  that such  Receivables  are  available  to Seller  (and in
          compliance  with  all  provisions  in the Sale  Agreement  and in this
          Agreement for the acquisition of Receivables, including the provisions
          of Sections 2.10(a)); and

               (iii) third,  to the extent that the  Purchaser  Interests  would
          continue to exceed  100%,  Seller shall pay to Agent,  in  immediately
          available  funds,  an amount to be applied to reduce Capital such that
          the Purchaser Interests shall not exceed 100%.

     (c) As consideration for any reconveyance  which occurs pursuant to Section
1.5(a)(x),  on any  Settlement  Date on or following the earlier to occur of the
Revolving  Period  Termination  Date and the  Amortization  Date,  Seller  shall
deposit into the Collection  Account in immediately  available  funds, an amount
equal to 100% of the  Outstanding  Balance of such Receivable as of the last day
of the related Accrual Period.

     (d) The aggregate Outstanding Balance of Receivables reconveyed pursuant to
Section  1.5(a)(x)  shall  (i) at no time  exceed  10% of the  result of (a) the
aggregate  initial  Outstanding  Balance of all  Receivables  conveyed  from the
Originator  to the Seller on any RSA Purchase  Date reduced by (b) the aggregate
Outstanding Balance of all Receivables  subsequently  reconveyed from the Seller

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to the Originator,  and (ii) in no one year exceed  $7,500,000.  For purposes of
clause  (ii) a "year"  shall be  measured  from the date of  closing  or initial
purchase under this agreement or, for subsequent  years, the anniversary of such
date.

     (e) As consideration for any reconveyance  pursuant to Section 1.5(a)(y) of
a Repossessed  Vacation Credit, on the applicable  Settlement Date, Seller shall
deposit into the  Collection  Account in immediately  available  funds an amount
equal to 25% of the original  purchase price paid by the defaulting  Obligor for
such Vacation Credit.

     (f)  Seller may not  repurchase  Repossessed  Vacation  Credits at any time
pursuant  to  Section  1.5(a)(y)  unless  each of the  following  conditions  is
satisfied:

               (i)  either  the  Amortization   Date  or  the  Revolving  Period
          Termination Date has occurred;

               (ii) Seller has  theretofore  repurchased  the maximum  amount of
          Charged-off  Receivables  and  Defaulted  Receivables  permitted to be
          repurchased  at such time  pursuant to Sections  1.5(a)(x) and 1.5(d);
          and

               (iii)  the  aggregate  Outstanding  Balance  of  all  Charged-off
          Receivables and Defaulted  Receivables related to Repossessed Vacation
          Credits  which have been  repurchased  pursuant to Section  1.5(a)(y),
          including the Repossessed  Vacation  Credits to be repurchased on such
          Settlement  Date,  does  not  exceed  an  amount  equal to 5.0% of the
          Outstanding Balance of Eligible Receivables as of the earlier to occur
          of the Amortization Date and the Revolving Period Termination Date.

Seller  may not  repurchase  any  Repossessed  Vacation  Credits  relating  to a
Charged-off  Receivable or a Defaulted  Receivable unless Seller repurchases all
of the Repossessed  Vacation Credits relating to such Charged-off  Receivable or
Defaulted Receivable at such time.

     (g) The  rights  of  Seller  pursuant  to this  Section  1.5 to  repurchase
Charged-off Receivables,  Defaulted Receivables and Repossessed Vacation Credits
shall be subject and  subordinate to the rights of the Agent pursuant to Section
10.2 to sell,  dispose or otherwise  liquidate the  Receivables  and the Related
Security  following the occurrence of an Amortization  Event. Such rights of the
Seller shall not apply to any Charged-off Receivables,  Defaulted Receivables or
Repossessed Vacation Credits which the Agent or any Servicer has sold, nor shall
they apply to any Charged-off Receivables,  Defaulted Receivables or Repossessed
Vacation  Credits as to which the Agent or any  Servicer  has  provided at least
five  Business  Days  prior  notice to the  Seller of its  intention  so to sell
(unless,  prior  to the  expiration  of such  five  Business  Days,  Seller  has
irrevocably  committed  to  purchase  such  Charged-off  Receivables,  Defaulted
Receivables or Repossessed  Vacation  Credits on the next succeeding  Settlement
Date).

     Section 1.6  Upgrades.

     In connection  with an Upgrade by an Obligor,  (i) Seller shall acquire the
Upgrade  Contract from  Originator  pursuant to the Sale  Agreement,  upon which

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acquisition each then outstanding  Purchaser  Interest shall include an interest
in the  Receivable  (the  "Upgrade  Receivable")  represented  by  such  Upgrade
Contract  (and in the Related  Security  and  Collections  with  respect to such
Upgrade  Receivable) and (ii) upon such  acquisition by Seller and compliance by
Seller with  Section  2.10,  Agent shall  release  all of its  interests  in the
existing  Receivable  (the  "Pre-Upgrade  Receivable")  in respect of which such
Upgrade occurred.

                                   ARTICLE II
                            PAYMENTS AND COLLECTIONS

     Section 2.1 Payments.

     Notwithstanding  any  limitation on recourse  contained in this  Agreement,
Seller  shall  immediately  pay to the Agent  when due,  for the  account of the
relevant Purchaser or Purchasers on a full recourse basis,

     (a)  such  fees as set  forth  in the  Fee  Letter  (which  fees  shall  be
sufficient to pay all fees owing to the Financial Institutions);

     (b) all amounts payable as Yield;

     (c) all amounts  payable as Deemed  Collections  (which shall be applied to
reduce  outstanding  Capital  hereunder in accordance  with Sections 2.2 and 2.3
hereof);

     (d) all amounts payable pursuant to Article XI, if any;

     (e)  all  Servicer  costs  and  expenses  in  connection   with  servicing,
administering and collecting the Receivables (to the extent not paid directly to
the Servicer);

     (f) all Broken Funding Costs;

     (g) all Hedging Costs incurred by the Agent or the Purchasers; and

     (h) all Default Fees (collectively, the "Obligations").

     If any Person  fails to pay any of the  Obligations  when due,  such Person
agrees to pay,  on demand,  the  Default  Fee in  respect  thereof  until  paid.
Notwithstanding the foregoing,  no provision of this Agreement or the Fee Letter
shall require the payment or permit the  collection of any amounts  hereunder in
excess  of the  maximum  permitted  by  applicable  law.  If at any time  Seller
receives any Collections or is deemed to receive any  Collections,  Seller shall
immediately  deposit such  Collections  or Deemed  Collections to the Collection
Account and, at all times prior to such payment,  such Collections shall be held
in trust by Seller for the exclusive benefit of the Purchasers and the Agent.

     Section 2.2 Distributions Prior to Amortization Date.

     (a) On each  Settlement  Date prior to the  Amortization  Date,  the Paying
Agent shall distribute all Monthly Available Funds with respect to the preceding
Accrual Period in the following order of priority,  based upon the  instructions
set forth in the Monthly Report prepared by the Servicer:

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               first, if TWRI or one of its Affiliates is not then acting as the
          Servicer, such Monthly Available Funds shall be applied to the payment
          of the Successor Servicer fee;

               second,   any  Monthly   Available   Funds  remaining  after  the
          application in clause first shall be applied to the  reimbursement  of
          the Agent's costs of collection and enforcement of this Agreement;

               third,   any  Monthly   Available   Funds   remaining  after  the
          applications  in clauses first and second shall be applied  ratably to
          the payment of all  accrued  and unpaid fees under the Fee Letter,  CP
          Costs and Yield;

               fourth,  if the aggregate  Purchaser  Interests exceed 100% as of
          the last day of the related  Accrual  Period,  any  Monthly  Available
          Funds remaining after the  applications in clauses first through third
          shall be paid to the  Agent in  reduction  of  Capital  to the  extent
          necessary to reduce the aggregate Purchaser Interests to 100%;

               fifth,   any  Monthly   Available   Funds   remaining  after  the
          applications  in clauses first through fourth shall be applied ratably
          for the ratable  payment of all other unpaid  Obligations  (other than
          Servicer fees and costs and Deemed Collections);

               sixth, if the amount of Monthly Available Funds on deposit in the
          Reserve Account is less than the Reserve Account Required Amount,  any
          Monthly  Available Funds  remaining after the  applications in clauses
          first  through  fifth shall be deposited in the Reserve  Account until
          the amount therein equals the Reserve Account Required Amount;

               seventh, if a Hedge Accumulation Period is in effect, any Monthly
          Available  Funds  remaining  after the  applications  in clauses first
          through sixth shall be deposited in the Hedge Account;

               eighth, if an Amortization  Event has occurred and is continuing,
          but the Agent has not declared the Amortization  Date to have occurred
          pursuant to Section 10.2,  then any Monthly  Available Funds remaining
          after the  applications  described in clauses  first  through  seventh
          shall be deposited in the Reserve Account;

               ninth,   any  Monthly   Available   Funds   remaining  after  the
          applications  in clauses first through eighth shall be applied ratably
          for the payment to the  Servicer of the  servicing  fee  specified  in
          Section 8.6;

               tenth,   any  Monthly   Available   Funds   remaining  after  the
          applications in clauses first through ninth shall be paid to the Agent
          to effect a reduction  of  Capital,  to the extent so  specified  in a
          Monthly Report as provided in Section 1.3; and

               eleventh,   any  Monthly  Available  Funds  remaining  after  the
          applications  in  clauses  first  through  tenth  shall be paid to the
          Seller.

     (b) If, on any Settlement Date prior to the Amortization  Date, the Monthly
Available Funds available to be applied pursuant to Section 2.2(a) are less than
the amounts  specified in clauses first  through  fifth of Section  2.2(a) (such
shortfall being a "Monthly Shortfall"), then the Paying Agent shall, as provided
in the Monthly  Report,  withdraw from the Reserve Account the lesser of (i) the

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Monthly Shortfall and (ii) the amount of funds in the Reserve Account, and shall
apply such withdrawn funds to unpaid amounts  specified in clauses first through
fifth of Section 2.2(a), in the order of priority therein specified.

     Section 2.3 Distributions Following Amortization Date.

     On each Settlement Date on or following the  Amortization  Date, the Paying
Agent shall distribute all  Amortization  Period Available Funds with respect to
the preceding Accrual Period in the following order of priority,  based upon the
instructions set forth in the Monthly Report prepared by the Servicer:

               first, if TWRI or one of its Affiliates is not then acting as the
          Servicer, such Amortization Period Available Funds shall be applied to
          the payment of the Successor Servicer fee;

               second,  any Amortization  Period Available Funds remaining after
          the application in clause first shall be applied to the  reimbursement
          of the Agent's costs of collection and enforcement of this Agreement;

               third,  any  Amortization  Period Available Funds remaining after
          the  applications in clauses first and second shall be applied ratably
          to the payment of all accrued and unpaid fees under the Fee Letter and
          all CP Costs and Yield;

               fourth,  any Amortization  Period Available Funds remaining after
          the  applications  in clauses first through third shall be paid to the
          Agent in  reduction  of  Capital  to the  extent  necessary  to reduce
          capital to zero;

               fifth,  any  Amortization  Period Available Funds remaining after
          the  applications  in clauses  first  through  fourth shall be applied
          ratably for the ratable payment of all other unpaid Obligations (other
          than  Servicer  costs and  Deemed  Collections)  and  other  Aggregate
          Unpaids;

               sixth,  if TWRI or one of its  Affiliates  is then  acting as the
          Servicer,  any Amortization Period Available Funds remaining after the
          applications  in clauses first through fifth shall be applied  ratably
          for the payment of the servicing fee specified in Section 8.6; and

               seventh,  any Amortization Period Available Funds remaining after
          the  applications  in clauses first through sixth shall be paid to the
          Seller.

     Section 2.4 Sharing of Applications.

     Monthly  Available  Funds,  Amortization  Period  Available Funds and other
amounts applied to the payment of Aggregate  Unpaids pursuant to Section 2.2 and
Section  2.3  shall  be  distributed  in  accordance  with  the   aforementioned
provisions,  and,  giving  effect  to each of the  priorities  set forth in such
Sections, shall be shared ratably (within each priority) among the Agent and the
Purchasers in accordance with the amount of such Aggregate Unpaids owing to each
of them in respect of each such priority.

     Section 2.5 Payment Recission.

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<PAGE>

     No payment of any of the  Aggregate  Unpaids  shall be  considered  paid or
applied  hereunder to the extent that,  at any time,  all or any portion of such
payment or application is rescinded by application of law or judicial authority,
or must  otherwise be returned or refunded  for any reason.  Seller shall remain
obligated for the amount of any payment or application so rescinded, returned or
refunded,  and shall promptly pay to the Agent (for application to the Person or
Persons who suffered such recission,  return or refund) the full amount thereof,
plus the Default Fee from the date of any such recission, return or refunding.

     Section 2.6 Maintenance of Purchaser Interest.

     Seller shall ensure that the Purchaser  Interests of the Purchaser shall at
no  time  exceed  100%.  If the  aggregate  of the  Purchaser  Interests  of the
Purchasers  exceeds 100%, Seller shall immediately pay to the Agent an amount to
be applied to reduce the Capital of the Purchaser Interests (as allocated by the
Agent),  such that after  giving  effect to such  payment the  aggregate  of the
Purchaser Interests equals or is less than 100%.

     Section  2.7 Clean Up Call.

     In  addition to Seller's  rights  pursuant to Section 1.3 and Section  1.5,
Seller  shall have the right  (after  providing  written  notice to the Agent in
accordance with the Required Notice Period), at any time following the reduction
of the  Capital  to a level  that is less than  10.0% of the  original  Purchase
Limit, to repurchase from the Purchasers all, but not less than all, of the then
outstanding Purchaser Interests.  The purchase price in respect thereof shall be
an amount equal to the Aggregate  Unpaids  through the date of such  repurchase,
payable  in  immediately  available  funds.  Such  repurchase  shall be  without
representation,  warranty or recourse of any kind by, on the part of, or against
any Purchaser or the Agent.

     Section 2.8 Designated  Accounts.

     The Servicer shall establish the Reserve  Account,  the Hedge Account,  and
the Collection Account (collectively, the "Designated Accounts") as follows:

     (a) The Servicer,  for the benefit of the  Purchasers,  shall establish and
maintain with the corporate trust department of the Paying Agent a trust account
bearing the  designation "TW Holdings III, Inc.  Reserve  Account" (the "Reserve
Account")  to  include  money  and other  property  deposited  and held  therein
pursuant to Section  2.2 and  Section  6.2.  The  Reserve  Account  shall be the
property of the Seller  subject to the rights of the Agent in the property  held
in the Reserve Account.

     (b) The Servicer,  for the benefit of the  Purchasers,  shall establish and
maintain with the corporate trust department of the Paying Agent a trust account
bearing the  designation  "TW Holdings  III,  Inc.  Hedge  Account"  (the "Hedge
Account")  to  include  money  and other  property  deposited  and held  therein
pursuant to Section 2.2 and Section 9.4. The Hedge Account shall be the property
of the Seller  subject to the  rights of the Agent in the  property  held in the
Hedge Account.

     (c) The Servicer,  for the benefit of the  Purchasers,  shall establish and
maintain with the corporate trust department of the Paying Agent a trust account
bearing  the  designation  "TW  Holdings  III,  Inc.  Collection  Account"  (the

                                       8

<PAGE>

"Collection  Account").  The  Collection  Account  shall be the  property of the
Seller subject to the rights of the Agent in the property held in the Collection
Account.

     Section 2.9  Investment of Amounts in Designated Accounts.

     The  Servicer  shall  direct the Paying  Agent,  in writing,  to invest the
amounts in each Designated Account in Eligible Investments which shall mature on
or  before  the  next  following  Settlement  Date;  provided,  however,  it  is
understood  and agreed  that the Paying  Agent  shall not be liable for any loss
arising from such investment in Eligible  Investments or incurred as a result of
the liquidation of any investment prior to its stated maturity or the failure of
the Servicer to provide timely, written investment direction.  In no event shall
the Paying Agent be liable for the selection of Eligible Investments. The Paying
Agent shall have no obligation to invest or reinvest any amounts held  hereunder
in the absence of written investment  direction.  All such Eligible  Investments
shall be held by the Paying  Agent for the benefit of the Agent on behalf of the
Purchasers.  Eligible  Investments  shall be  selected  that mature so that such
funds will be available at the opening of business on the day preceding the next
following  Settlement  Date. On the Business Day preceding each Settlement Date,
all interest and other investment income (net of losses and investment expenses)
on funds on deposit therein shall be withdrawn from each Designated  Account and
shall be deposited in the Collection Account.

     Section 2.10 Procedures for Substitution and Release of Receivables.

     (a) The obligation of the Agent pursuant to Section  2.10(b) to release its
interests in Receivables  described in clauses (i) and (ii) of the definition of
Released  Receivables  following  the  acquisition  by Seller of (i) one or more
additional Eligible  Receivables for the purpose specified in Section 1.5(a)(ii)
or (ii) an Upgrade Receivable as contemplated in Section 1.6 shall be subject to
the satisfaction by Seller, Originator and Custodian of the conditions precedent
specified in Section  15.1 and 15.2 on or before the RSA  Purchase  Date for any
such additional Eligible Receivable or Upgrade Receivable.

     (b) The Agent shall  release its interest in each Released  Receivable  and
the related Receivable  Documents by executing and delivering to the Custodian a
request for release  substantially in the form attached as Exhibit X (a "Request
for Release")  prepared by the  Servicer.  Pursuant to such Request for Release,
the Agent shall  assign to the Seller  without  representation  or warranty  and
without recourse its right,  title and interest in such Released  Receivable and
the  related  Receivable  Documents.  Upon such  execution  and  delivery,  such
Receivable will be released from the lien of the Agent and the Purchasers.

               (c) (i) Upon satisfaction of the conditions  precedent  specified
          in Section 2.10(c)(ii),  the Agent  -------------------  shall release
          its  interest  in  certain  Receivables  and  the  related  Receivable
          Documents from time to time following the delivery of a certificate of
          the  Seller  (each  a  "Seller   Direction"),   substantially  in  the
          ----------------  form of Exhibit IV hereto.  In connection  with such
          release,  the Agent shall deliver a Request for ----------  Release to
          the  Custodian,  pursuant  to which the  Agent  shall  assign  without
          recourse, representation or warranty its right, title, and interest in
          such  Receivables  and the  Related  Receivable  Documents.  Upon  the
          execution  and delivery of a Seller  Direction and Request for Release
          and  satisfaction  of the such  conditions  precedent,  the applicable
          Receivables  shall be  released  from the  lien of the  Agent  and the
          Purchasers.

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<PAGE>

               (ii) The Agent  shall not  effect a release  pursuant  to Section
          2.10(c)(i) unless each of the following  conditions precedent has been
          satisfied on or prior to the date of such release:

               (A) No Hedge Event,  Potential Amortization Event or Amortization
          Even shall have  occurred and be  continuing or shall result from such
          release; and

               (B) the Seller shall have deposited  into the Collection  Account
          in respect of such release an amount equal to the Outstanding  Balance
          of all such Receivables plus all accrued and unpaid interest thereon.

     Section 2.11 Deemed Collections.

     Seller  hereby  agrees to pay all  Deemed  Collections  immediately  to the
Servicer for  application in accordance  with the terms and  conditions  hereof.
Upon the  payment in full of such  Deemed  Collections  to the Agent,  the Agent
shall  release its  interest in the related  Diluted  Receivable  as provided in
Section 2.10(b).

                                  ARTICLE III
                                 CONDUIT FUNDING

     Section 3.1 CP Costs.

     Seller shall pay CP Costs with respect to the Capital  associated with each
Purchaser  Interest  of Conduit for each day that any Capital in respect of such
Purchaser Interest is outstanding.  Each Purchaser Interest funded substantially
with Pooled  Commercial Paper will accrue CP Costs each day on a pro rata basis,
based  upon the  percentage  share the  Capital  in  respect  of such  Purchaser
Interest  represents  in  relation  to all  assets  held by  Conduit  and funded
substantially with Pooled Commercial Paper.

     Section 3.2 CP Costs Payments.

     On each Settlement Date,  Seller shall pay to the Agent (for the benefit of
Conduit) an aggregate amount equal to all accrued and unpaid CP Costs in respect
of the  Capital  associated  with all  Purchaser  Interests  of Conduit  for the
immediately preceding Accrual Period in accordance with Article II.

     Section 3.3  Calculation of CP Costs and Carrying and Servicing  Costs.

     On each Determination Date, Conduit shall calculate the aggregate amount of
CP Costs for the applicable Accrual Period and Conduit or the Agent shall notify
the Seller and the  Servicer of such  aggregate  amount.  On each  Determination
Date, the Agent shall  calculate the amount of the Carrying and Servicing  Costs
for the  applicable  Accrual Period and shall notify the Seller and the Servicer
of such amount.

                                   ARTICLE IV
                          FINANCIAL INSTITUTION FUNDING

     Section 4.1 Financial Institution Funding.

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<PAGE>

     Each Purchaser  Interest of the Financial  Institutions  shall accrue Yield
for each day during its Tranche Period at either the LIBO Rate or the Prime Rate
in accordance with the terms and conditions hereof. Until Seller gives notice to
the Agent of another  Discount Rate in accordance  with Section 4.4, the initial
Discount  Rate  for  any  Purchaser   Interest   transferred  to  the  Financial
Institutions  pursuant  to the terms and  conditions  hereof  shall be the Prime
Rate.  If the  Financial  Institutions  acquire by  assignment  from Conduit any
Purchaser Interest pursuant to Article XIII, each Purchaser Interest so assigned
shall each be deemed to have a new Tranche Period  commencing on the date of any
such assignment.

     Section  4.2 Yield Payments.

     On the  Settlement  Date  for  each  Purchaser  Interest  of the  Financial
Institutions,  Seller  shall pay to the Agent (for the benefit of the  Financial
Institutions)  an aggregate amount equal to the accrued and unpaid Yield for the
entire Tranche Period of each such Purchaser Interest in accordance with Article
II.

     Section 4.3 Selection and Continuation of Tranche Periods.

     (a) With consultation  from (and approval by) the Agent,  Seller shall from
time  to  time  request  Tranche  Periods  for the  Purchaser  Interests  of the
Financial Institutions, provided that, if at any time the Financial Institutions
shall have a Purchaser  Interest,  Seller shall always request  Tranche  Periods
such that at least one  Tranche  Period  shall end on the 20th day of each month
(or, if such day is not a Business Day, then on the next Business Day).

     (b) Seller or the Agent may,  effective on the last day of a Tranche Period
for any Purchaser Interest (a "Terminating Tranche"),  divide any such Purchaser
Interest  into  multiple  Purchaser  Interests  or  combine  any such  Purchaser
Interest with one or more other  Purchaser  Interests which are either ending on
such day or are newly  created  on such day,  provided  that,  in no event may a
Purchaser  Interest  of Conduit be  combined  with a  Purchaser  Interest of the
Financial Institutions.

     Section 4.4 Financial Institution Discount Rates.

     Seller  may  select  the LIBO  Rate or the  Prime  Rate for each  Purchaser
Interest of the  Financial  Institutions.  Seller  shall by 11:00 a.m.  (Chicago
time):  (i) at least  three (3)  Business  Days prior to the  expiration  of any
Terminating  Tranche with respect to which the LIBO Rate is being requested as a
new Discount Rate and (ii) at least one (1) Business Day prior to the expiration
of any  Terminating  Tranche  with  respect  to which  the  Prime  Rate is being
requested as a new Discount Rate, give the Agent  irrevocable  notice of the new
Discount  Rate for the  Purchaser  Interest  associated  with  such  Terminating
Tranche.

     Section  4.5  Suspension of the LIBO Rate.

     If any Financial Institution notifies the Agent that it has determined that
funding  its  Pro  Rata  Share  of the  Purchaser  Interests  of  the  Financial
Institutions at a LIBO Rate would violate any applicable law, rule,  regulation,
or directive of any governmental or regulatory authority,  whether or not having
the force of law, or that (i)  deposits of a type and  maturity  appropriate  to
match fund its  Purchaser  Interests at such LIBO Rate are not available or (ii)
such LIBO Rate does not accurately  reflect the cost of acquiring or maintaining

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<PAGE>

a  Purchaser  Interest  at such LIBO  Rate,  then the Agent  shall  suspend  the
availability  of such LIBO Rate and require  Seller to select the Prime Rate for
any Purchaser Interest accruing Yield at such LIBO Rate.

                                   ARTICLE V
                         REPRESENTATIONS AND WARRANTIES

     Section 5.1  Representations and Warranties of Originating Parties.

     Each Originating  Party hereby represents and warrants to the Agent and the
Purchasers,  as to itself,  and TWRI hereby  represents  as to WorldMark (to the
extent specific reference to WorldMark is made) that:

     (a) Corporate  Existence and Power. Such Originating Party is a corporation
duly  organized,  validly  existing and in good  standing  under the laws of its
state of  incorporation,  and is duly  qualified  to do business  and is in good
standing as a foreign corporation, and has and holds all corporate power and all
governmental licenses, authorizations,  consents and approvals required to carry
on its business in each jurisdiction in which its business is conducted,  except
where the failure to so qualify or so hold could not  reasonably  be expected to
have a Material Adverse Effect.

     (b) Power and  Authority;  Due  Authorization  Execution and Delivery.  The
execution  and delivery by such  Originating  Party of this  Agreement  and each
other  Transaction  Document to which it is a party,  and the performance of its
obligations hereunder and thereunder and, in the case of Seller, Seller's use of
the proceeds of purchases made  hereunder,  are within its corporate  powers and
authority and have been duly authorized by all necessary corporate action on its
part.  This  Agreement  and  each  other  Transaction  Document  to  which  such
Originating  Party is a party  has been  duly  executed  and  delivered  by such
Originating Party.

     (c) No Conflict.  The execution and delivery by such  Originating  Party of
this Agreement and each other  Transaction  Document to which it is a party, and
the performance of its obligations  hereunder and thereunder,  do not contravene
or violate (i) its certificate or articles of incorporation or by-laws, (ii) any
law,  Rule or  regulation  applicable  to it, (iii) any  restrictions  under any
agreement,  contract or  instrument to which it is a party or by which it or any
of its property is bound, or (iv) any order, writ, judgment,  award,  injunction
or decree  binding on or affecting it or its property,  and do not result in the
creation or imposition of any Adverse Claim on assets of such Originating  Party
or  its  Subsidiaries   (except  as  created  hereunder);   and  no  transaction
contemplated hereby requires compliance with any bulk sales act or similar law.

     (d)  Governmental  Authorization.  Other than the  filing of the  financing
statements required hereunder,  no authorization or approval or other action by,
and no notice to or filing with, any  governmental  authority or regulatory body
is required for the due execution and delivery by such Originating Party of this
Agreement  and each other  Transaction  Document  to which it is a party and the
performance of its obligations hereunder and thereunder.

     (e) Actions, Suits.

               (i) There are no actions, suits or proceedings pending, or to the
          best of such Originating  Party's  knowledge,  threatened,  against or
          affecting  Seller,  or any of its properties,  in or before any court,
          arbitrator or other body.

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<PAGE>

               (ii) There are no actions,  suits or proceedings  pending,  or to
          the best of such Originating Party's knowledge, threatened, against or
          affecting  Servicer,  or any of its or WorldMark's  properties,  in or
          before any court,  arbitrator or other body,  that could be reasonably
          expected to have a Material Adverse Effect.

               (iii) Such  Originating  Party is not in default  with respect to
          any order of any court, arbitrator or governmental body.

     (f) Binding Effect.  This Agreement and each other Transaction  Document to
which such Originating Party is a party constitute the legal,  valid and binding
obligations of such Originating Party enforceable against such Originating Party
in accordance with their  respective  terms,  except as such  enforcement may be
limited by applicable  bankruptcy,  insolvency,  reorganization or other similar
laws  relating  to or  limiting  creditors'  rights  generally  and  by  general
principles  of  equity  (regardless  of  whether  enforcement  is  sought  in  a
proceeding in equity or at law).

     (g) Accuracy of Information.  All information  heretofore furnished by such
Originating  Party or any of its  Affiliates to the Agent or the  Purchasers for
purposes of or in connection with this Agreement,  any of the other  Transaction
Documents  or any  transaction  contemplated  hereby or thereby is, and all such
information  hereafter  furnished  by  such  Originating  Party  or  any  of its
Affiliates  to the Agent or the  Purchasers  will be, true and accurate in every
material  respect on the date such  information  is stated or certified and does
not and will not contain any  material  misstatement  of fact or omit to state a
material fact or any fact necessary to make the statements contained therein not
misleading.

     (h) Use of Proceeds. No proceeds of any purchase hereunder will be used (i)
for a purpose that violates, or would be inconsistent with, Regulation T, U or X
promulgated by the Board of Governors of the Federal Reserve System from time to
time or (ii) to acquire  any  security  in any  transaction  which is subject to
Section 13 or 14 of the Securities Exchange Act of 1934, as amended.

     (i) Good Title. Immediately prior to each purchase hereunder,  Seller shall
be the legal and beneficial  owner of the Receivables and Related  Security with
respect thereto,  free and clear of any Adverse Claim,  except as created by the
Transaction  Documents.  There have been duly filed all financing  statements or
other  similar  instruments  or  documents  necessary  under  the  UCC  (or  any
comparable law) of all appropriate  jurisdictions to perfect Seller's  ownership
interest in each Receivable, its Collections and the Related Security.

     (j) Perfection.  This Agreement,  together with the filing of the financing
statements  contemplated  hereby, is effective to, and shall, upon each purchase
hereunder,  transfer to the relevant Purchaser or Purchasers (and such Purchaser
or Purchasers  shall acquire from Seller) a valid and perfected  first  priority
undivided percentage ownership interest in each Receivable existing or hereafter
arising and in the Related Security and Collections  with respect thereto,  free
and clear of any Adverse Claim, except as created

                                       13

<PAGE>

by  the  Transaction  Documents.  There  have  been  duly  filed  all  financing
statements or other similar instruments or documents necessary under the UCC (or
any comparable law) of all appropriate  jurisdictions to perfect the Agent's (on
behalf of the Purchasers)  ownership  interest in the  Receivables,  the Related
Security and the Collections.

     (k)  Places  of  Business.  The  principal  places  of  business  and chief
executive office of such Originating Party and the offices where it keeps all of
its Records are located at the  address(es)  listed on Exhibit III or such other
locations of which the Agent has been notified in accordance with Section 7.2(a)
in jurisdictions where all action required by Section 15.4(a) has been taken and
completed.  Seller's  Federal  Employer  Identification  Number is correctly set
forth on Exhibit III.

     (l)  Collections.  The conditions and requirements set forth in Section 8.2
have at all times been satisfied and duly performed. The name and address of the
bank with which the Clearing  Account is established,  together with the account
numbers  of the  Clearing  Account  and the  Collection  Account,  are listed on
Exhibit XII.

     (m) Material  Adverse  Effect.  Since June 30, 1999,  no event has occurred
that would have a Material  Adverse Effect,  including a Material Adverse Effect
regarding the collectibility of the Receivables.

     (n) Names.  In the past five (5) years,  Seller has not used any  corporate
names, trade names or assumed names other than the name in which it has executed
this Agreement.

     (o) Ownership of Seller. The Originator owns, directly or indirectly,  100%
of the issued and  outstanding  capital  stock of Seller,  free and clear of any
Adverse  Claim.   Such  capital  stock  is  validly   issued,   fully  paid  and
nonassessable,  and there are no options,  warrants  or other  rights to acquire
securities of Seller.

     (p) Not a Holding Company or an Investment Company.  Such Originating Party
is not a "holding  company"  or a  "subsidiary  holding  company"  of a "holding
company"  within the meaning of the Public Utility  Holding Company Act of 1935,
as  amended,  or  any  successor  statute.  Such  Originating  Party  is  not an
"investment compa ny" within the meaning of the Investment  Company Act of 1940,
as amended, or any successor statute.

     (q)  Compliance  with  Law.  Such  Originating  Party has  complied  in all
respects with all applicable laws, rules, regulations, orders, writs, judgments,
injunctions,  decrees  or awards to which it may be  subject.  Each  Receivable,
together with the Contract related thereto,  does not contravene any laws, rules
or  regulations  applicable  thereto  (including  laws,  rules  and  regulations
relating to truth in lending, fair credit billing, fair credit reporting,  equal
credit opportunity,  fair debt collection practices and privacy), and no part of
such Contract is in violation of any such law, Rule or regulation.

     (r) Compliance with Credit and Collection  Policy.  Such Originating  Party
has complied in all material respects with the Credit and Collection Policy with
regard  to each  Receivable  and the  related  Contract,  and has not  made  any
material  change to such Credit and  Collection  Policy,  except  such  material
change as to which  the  Agent has been  notified  in  accordance  with  Section
7.1(a)(v).

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<PAGE>

     (s) Payments to Originator.  With respect to each Receivable transferred to
Seller under the Sale Agreement, Seller has given reasonably equivalent value to
the Originator in consideration  therefor, and such transfer was not made for or
on  account  of an  antecedent  debt.  No  transfer  by  the  Originator  of any
Receivable  under the Sale  Agreement is or may be voidable under any Section of
the Bankruptcy Reform Act of 1978 (11 U.S.C. ss.ss. 101 et seq.), as amended.

     (t)  Enforceability  of  Contracts.  Each  Contract  with  respect  to each
Receivable is effective to create,  and has created,  a legal, valid and binding
obligation  of  the  related  Obligor  to pay  the  Outstanding  Balance  of the
Receivable  created  thereunder and any accrued  interest  thereon,  enforceable
against the Obligor in accordance with its terms, except as such enforcement may
be limited by applicable bankruptcy, insolvency, reorganization or other similar
laws  relating  to or  limiting  creditors'  rights  generally  and  by  general
principles  of  equity  (regardless  of  whether  enforcement  is  sought  in  a
proceeding in equity or at law).

     (u) Eligible  Receivables.  Each Receivable included in the Net Receivables
Balance as an  Eligible  Receivable  on the RSA  Purchase  Date was an  Eligible
Receivable on such RSA Purchase Date.

     (v) Net  Receivables  Balance.  Immediately  after  giving  effect  to each
purchase hereunder,  the Net Receivables Balance is at least equal to the sum of
(i) the  aggregate  Capital  of all  the  Purchaser  Interests,  plus  (ii)  the
Aggregate Reserves.

     (w) Year 2000. Such Originating Party (i) has reviewed the areas within its
business  and  operations  which  could be  adversely  affected by the Year 2000
Problem, (ii) has developed a Year 2000 Plan to address the Year 2000 Problem on
a timely basis,  (iii) is taking all actions  necessary to meet the Schedule and
goals of the Year  2000  Plan and (iv)  has  established  adequate  reserves  to
implement  the Year  2000  Plan.  Such  Originating  Party  does not  reasonably
anticipate that the Year 2000 Problem could have a Material Adverse Effect.

     (x) Accounting. The manner in which such Originating Party accounts for the
transactions  contemplated  by this  Agreement and the Sale  Agreement  does not
jeopardize the true sale analysis.

     (y) Title to Properties.  WorldMark,  directly or  beneficially,  owns good
record and marketable  title in fee simple to, or valid leasehold  interests in,
all real  property  necessary or used in the ordinary  conduct of its  business,
except for such defects in title as could not, individually or in the aggregate,
have a Material  Adverse Effect.  As of the date of closing or initial  purchase
under this agreement, the real and personal property of the Seller is subject to
no Liens, other than Liens created under the Transaction Documents.

     (z) Liabilities of WorldMark. World Mark:

               (i)  has  not   voluntarily   incurred  or  at  any  time  become
          voluntarily liable for any Indebtedness;

               (ii) has not  voluntarily  allowed its property to become subject
          to any Liens, nor is any of its property  subject to any Liens,  other
          than (a) utility or other easements or licenses  unrelated to any debt
          of  WorldMark  or (b)  Liens  that  in do not  exceed,  in  aggregate,
          $100,000; and

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<PAGE>

               (iii) has not  involuntarily  incurred  and is not  involuntarily
          liable for any debt, nor is any of its property  involuntarily subject
          to any Liens  (other  than  utility or similar  easements  or licenses
          unrelated  to any  debt  of  WorldMark)  that  individually  or in the
          aggregate (with respect to all such debt and the  obligations  secured
          by all such Liens) exceed $1,000,000.

     (aa) Environmental  Matters. TWRI has conducted its operations and kept and
maintained  its property in compliance  with all  Environmental  Laws.  TWRI has
performed its duties under its  management  agreement with WorldMark in material
compliance with all Environmental Laws.

     (bb) No Subsidiaries of WorldMark. WorldMark has no subsidiaries.

     (cc) Conformity of Receivable Documents.  The information set forth on each
Schedule of  Receivables  is accurate  and is  consistent  with the terms of the
related Receivable Documents delivered to the Custodian.

     (dd)  Insurance.  Originator  in its  individual  capacity  and as property
manager for WorldMark maintains in effect, or causes to be maintained in effect,
such property,  casualty and liability  insurance  covering its and  WorldMark's
real property and personal  property as Originator deems appropriate in its good
faith business judgement.

     (ee)  Compliance  with  Representations.  On  and as of the  date  of  each
purchase  of a Purchaser  Interest  hereunder,  each  Originating  Party  hereby
represents  and warrants that all of the other  representations  and  warranties
made by it set forth in this  Section  5.1 are true and correct on and as of the
date of such purchase (and after giving effect to such  purchase) as though made
on and as of each such date.

     Section 5.2 Financial Institution Representations and Warranties.

     Each Financial  Institution hereby represents and warrants to the Agent and
Conduit that:

     (a) Existence and Power.  Such Financial  Institution is a corporation or a
banking association duly organized,  validly existing and in good standing under
the laws of its  jurisdiction  of  incorporation  or  organization,  and has all
corporate power to perform its obligations hereunder.

     (b) No Conflict.  The execution and delivery by such Financial  Institution
of this Agreement and the  performance of its  obligations  hereunder are within
its corporate  powers,  have been duly  authorized  by all  necessary  corporate
action,  do not  contravene  or  violate  (i) its  certificate  or  articles  of
incorporation  or  association  or  by-laws,  (ii) any law,  Rule or  regulation
applicable  to it,  (iii) any  restrictions  under any  agreement,  contract  or
instrument  to which it is a party or any of its property is bound,  or (iv) any
order, writ, judgment, award, injunction or decree binding on or affecting it or

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<PAGE>

its  property,  and do not result in the creation or  imposition  of any Adverse
Claim on its assets.  This  Agreement  has been duly  authorized,  executed  and
delivered by such Financial Institution.

     (c)  Governmental  Authorization.  No  authorization  or  approval or other
action  by,  and no notice to or filing  with,  any  governmental  authority  or
regulatory body is required for the due execution and delivery by such Financial
Institution of this Agreement and the performance of its obligations hereunder.

     (d) Binding Effect. This Agreement constitutes the legal, valid and binding
obligation of such  Financial  Institution  enforceable  against such  Financial
Institution  in accordance  with its terms,  except as such  enforcement  may be
limited by applicable  bankruptcy,  insolvency,  reorganization or other similar
laws  relating  to or  limiting  creditors'  rights  generally  and  by  general
principles  of equity  (regardless  of whether such  enforcement  is sought in a
proceeding in equity or at law).

                                   ARTICLE VI
                             CONDITIONS OF PURCHASES

     Section 6.1 Conditions Precedent to Initial Purchase.

     The initial  purchase  of a  Purchaser  Interest  under this  Agreement  is
subject to the conditions precedent that

     (a) the Agent shall have  received  on or before the date of such  purchase
those documents listed on Schedule B, and

     (b) the Agent shall have received all fees and expenses required to be paid
on such date pursuant to the terms of this Agreement and the Fee Letter.

     Section 6.2  Conditions Precedent to All Purchases.

     Each purchase of a Purchaser Interest (other than pursuant to Section 13.1)
shall be subject to the further conditions precedent that:

     (a) the Purchaser shall have delivered to the Agent a Purchase  Notice,  as
specified in Section 1.2;

     (b) in the case of each such purchase: the Servicer shall have delivered to
the  Agent  on or  prior to the  date of such  purchase,  in form and  substance
satisfactory  to the Agent,  all Monthly  Reports as and when due under  Section
8.5, and, upon the Agent's  request,  the Servicer  shall have  delivered to the
Agent at least three (3) days prior to such purchase an interim  Monthly  Report
showing the amount of Eligible Receivables;

     (c) the  representations  and  warranties of the Seller made in Section 5.1
are true and  correct on and as of the date of such  purchase  as though made on
and as of such date;

     (d) the Facility  Termination  Date shall not have occurred,  the aggregate
Capital of all Purchaser  Interests  shall not exceed the Purchase Limit and the
aggregate Purchaser Interests shall not exceed 100%;

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<PAGE>

     (e) no event has  occurred  and is  continuing,  or would  result from such
purchase that constitutes or would constitute an Amortization Event, a Potential
Amortization Event, or an Excess Aged Receivables Event;

     (f) all actions and  conditions  specified in Article XV of this  Agreement
which are to be taken or  satisfied  on or prior to an RSA  Purchase  Date shall
have been fully performed or satisfied;

     (g) the Agent  shall  have  received  such  other  approvals,  opinions  or
documents as it may reasonably request;

     (h) the  amount  of funds  in the  Reserve  Account  (including  any  funds
deposited  therein by Seller in connection  with such  Purchase)  shall equal at
least the Reserve Fund Required Amount following such Incremental Purchase; and

     (i) the Facility Termination Date shall not have occurred.

                                  ARTICLE VII
                                    COVENANTS

     Section 7.1  Affirmative Covenants of the Originating  Parties.

     Until the date on which the Aggregate  Unpaids have been  indefeasibly paid
in full and this  Agreement  terminates  in  accordance  with  its  terms,  each
Originating Party hereby covenants, as to itself, as set forth below:

     (a) Financial Reporting.  Such Originating Party will maintain,  for itself
and  each  of  its  Subsidiaries,   a  system  of  accounting   established  and
administered in accordance with GAAP, and furnish to the Agent:

               (i)  Annual  Reporting.  (a) For TWRI,  within 90 days  after the
          close  of  each  of  its  fiscal  years,   audited,   ----------------
          unqualified  financial statements (which shall include balance sheets,
          statements  of income and  retained  earnings  and a statement of cash
          flows)  certified in accordance with GAAP by any Big 5 Accounting Firm
          or any other independent public  accountants  acceptable to the Seller
          and Agent, (b) for the Seller,  within 90 days after the close of each
          of its  fiscal  years,  unaudited,  unqualified  financial  statements
          (which may be internally prepared and shall include balance sheets and
          statements of income) certified by an Authorized Officer,  and (c) for
          WorldMark, within 120 days after the close of each of its fiscal years
          audited, unqualified financial statements (which shall include balance
          sheets,  statements of income and retained earnings and a statement of
          cash flows) for such fiscal year certified in accordance  with GAAP by
          any independent public accountants  acceptable to the Seller and Agent
          (including Molatore, Pugh, McDaniel, Scroggin & Co., LLP).

               (ii) Quarterly  Reporting.  Within 45 days after the close of the
          first three (3) quarterly periods of each of  -------------------  its
          respective  fiscal years, (a) for TWRI a balance sheet as at the close
          of each such period and statements of income and retained earnings and
          a statement  of cash flows for the period from the  beginning  of such
          fiscal year to the end of such quarter, all certified by an Authorized
          Officer,  and (b) for the Seller and World Mark,  balance sheets of as

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<PAGE>

          at the close of each such  period  and  statements  of income  for the
          period  from  the  beginning  of such  fiscal  year to the end of such
          quarter, all certified by an Authorized Officer. All quarterly reports
          delivered to pursuant to this Section  7.1(a)(ii) may be unaudited and
          internally prepared. -------------------

               (iii)  Compliance   Certificate.   Together  with  the  financial
          statements   required   hereunder,   a   compliance   certificate   in
          substantially  the form of  Exhibit  V signed by  Seller's  Authorized
          Officer and dated the date of such annual financial  statement or such
          quarterly  financial  statement,  as the  case may be,  together  with
          copies of the certificates of TWRI and WorldMark delivered pursuant to
          Section 4.1(a)(iii) of the Sale Agreement.

               (iv)  Shareholders  Statements  and  Reports.  Promptly  upon the
          furnishings   thereof  to  the   shareholders  of  Originator  or  its
          Affiliates,  copies of all  financial  statements,  reports  and proxy
          statements so furnished.

               (v) S.E.C. Filings.  Promptly upon the filing thereof,  copies of
          all registration  statements and annual,  quarterly,  monthly or other
          regular  reports which  Originator  or its  Affiliates or any of their
          Subsidiaries  may  from  time to time  file  with the  Securities  and
          Exchange Commission.

               (vi) Copies of Notices.  Promptly upon its receipt of any notice,
          request for consent,  financial statements,  certification,  report or
          other  communication  under  or in  connection  with  any  Transaction
          Document  from any Person  other than the Agent or Conduit,  copies of
          the same.

               (vii)  Change in Credit and  Collection  Policy.  At least thirty
          (30) days  prior to the  effectiveness  of any  material  change in or
          amendment to the Credit and  Collection  Policy,  a copy of the Credit
          and  Collection  Policy  then in effect and a notice  indicating  such
          change or amendment.

               (viii) Other Information. Promptly, from time to time, such other
          information, documents, records or reports relating to the Receivables
          or the condition or operations,  financial or otherwise,  of Seller as
          the Agent may from time to time reasonably request in order to protect
          the interests of the Agent and the Purchasers under or as contemplated
          by this Agreement.

     (b)  Notices.  Seller  will  notify  the  Agent  in  writing  of any of the
following promptly upon learning of the occurrence thereof,  describing the same
and, if applicable, the steps being taken with respect thereto;

     (c) Trigger Events.  The occurrence of each Amortization  Event,  Potential
Amortization  Event,  Hedge  Event  and  Excess  Aged  Receivables  Event,  by a
statement of an Authorized Officer of Seller.

     (i) Judgment and Proceedings.

               (A) The entry of any (1) judgment or decree against the Servicer,
          WorldMark or any of their  respective  Subsidiaries  if the  aggregate
          amount of all  judgments  and  decrees  then  outstanding  against the

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<PAGE>

          Servicer,  WorldMark or their Subsidiaries exceeds $1,000,000,  or (2)
          any judgment whatsoever against the Seller.

               (B) The institution of (1) any litigation, arbitration proceeding
          or  governmental  proceeding  against  Seller,  or  (2)  any  material
          litigation,  arbitration proceeding or governmental proceeding against
          Servicer, any of its Subsidiaries, or WorldMark.

               (ii)  Material  Adverse  Effect.  The  occurrence of any event or
          condition  that  has,  or could  reasonably  be  expected  to have,  a
          Material  Adverse Effect,  including a Material  Adverse Effect on the
          collectibility of the Receivables.

               (iii)  Amortization  Date.  The  occurrence of the  "Amortization
          Date" under the Sale Agreement.

               (iv) Defaults Under Other Agreements.  The occurrence of an event
          of default under any other material financing  arrangement pursuant to
          which such Originating Party is a debtor or an obligor.

               (v) Downgrade of the  Originator.  Any downgrade in the rating of
          any Indebtedness or asset backed security of the Originator, or any of
          its  Subsidiaries  or  Affiliates,  as  applicable  or as  may  become
          applicable,  by any nationally recognized rating agency, setting forth
          the  Indebtedness or asset backed security  affected and the nature of
          such change.

               (vi) Default by Custodian.  The  occurrence of a default or event
          of default under Article XV or any other  provision of this  Agreement
          by the Custodian.

     (d) Compliance  with Laws and  Preservation  of Corporate  Existence.  Such
Originating Party will comply in all material respects with all applicable laws,
rules, regulations, orders, writs, judgments,  injunctions, decrees or awards to
which it may be subject.  Such Originating  Party will preserve and maintain its
corporate  existence,  rights,  franchises and privileges in the jurisdiction of
its  incorporation,  and  qualify  and remain  qualified  in good  standing as a
foreign corporation in each jurisdiction where its business is conducted.

     (e) Audits.

               (i) Such Originating Party will furnish to the Agent from time to
          time such  information  with respect to it and the  Receivables as the
          Agent may reasonably  request.  Such Originating Party will, from time
          to time during  regular  business hours as requested by the Agent upon
          reasonable notice permit the Agent, or its agents or  representatives,
          (x) to examine  and make copies of and  abstracts  from all Records in
          the  possession  or under the control of such  Person  relating to the
          Receivables and the Related Security, including the related Contracts,
          and (y) to visit the  offices  and  properties  of such Person for the
          purpose of examining such materials described in clause (x) above, and
          to discuss matters  relating to such Person's  financial  condition or
          the Receivables and the Related  Security or any Person's  performance
          under any of the  Transaction  Documents or any  Person's  performance
          under the  Contracts  and, in each case,  with any of the  officers or
          employees of Seller or the Servicer having knowledge of such matters.

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<PAGE>

               (ii) The cost of audits conducted pursuant to this Section 7.1(d)
          shall be borne by such  Originating  Party (x) once per calendar  year
          and (y) at any time when an  Amortization  Event has  occurred  and is
          continuing.

     (f) Keeping and Marking of Records and Books.

               (i) The Servicer will maintain and implement  administrative  and
          operating  procedures   (including  an  ability  to  recreate  records
          evidencing  Receivables  in  the  event  of  the  destruction  of  the
          originals  thereof),  and will keep and  maintain  (or will  cause the
          Custodian to keep and  maintain)  all  documents,  books,  records and
          other information reasonably necessary or advisable for the collection
          of all Receivables (including records adequate to permit the immediate
          identification  of each  new  Receivable  and all  Collections  of and
          adjustments to each existing  Receivable).  The Servicer will give the
          Agent  notice  of  any  material  change  in  the  administrative  and
          operating procedures referred to in the previous sentence.

               (ii)  Such  Originating  Party  will  (a) on or prior to the date
          hereof,  mark its master data  processing  records and other books and
          records relating to the Purchaser Interests with a legend,  acceptable
          to the Agent,  describing  the  Purchaser  Interests  and (b) upon the
          request of the Agent (x) mark each Contract  with a legend  describing
          the Purchaser Interests and (y) deliver to the Custodian all Contracts
          (including all multiple  originals of any such  Contract)  relating to
          the Receivables.

     (g)  Compliance  with  Contracts  and Credit and  Collection  Policy.  Such
Originating  Party  will  timely  and  fully (i)  perform  and  comply  with all
provisions, covenants and other promises required to be observed by it under the
Contracts  related to the Receivables,  and (ii) comply in all respects with the
Credit  and  Collection  Policy  in regard to each  Receivable  and the  related
Contract.  Seller  will pay when due any taxes  payable in  connection  with the
Receivables,  exclusive  of taxes on or measured by income or gross  receipts of
Conduit, the Agent or any Financial Institution.

     (h) Performance and Enforcement of Sale Agreement.  Seller shall, and shall
require the  Originator  to, perform each of their  respective  obligations  and
undertakings   under  and  pursuant  to  the  Sale  Agreement,   shall  purchase
Receivables  thereunder  in strict  compliance  with the terms thereof and shall
vigorously  enforce the rights and  remedies  accorded to Seller  under the Sale
Agreement.  Seller  shall take all actions to perfect and enforce its rights and
interests  (and the  rights and  interests  of the Agent and the  Purchasers  as
assignees of Seller) under the Sale Agreement as the Agent may from time to time
reasonably  request,  including  making claims to which it may be entitled under
any  indemnity,  reimbursement  or  similar  provision  contained  in  the  Sale
Agreement.

     (i)  Performance  and Enforcement of Custodian  Duties.  Seller shall,  and
shall require the Custodian to, perform each of their respective obligations and
undertakings  under and  pursuant  to  Article  XV of this  Agreement  and shall
vigorously  enforce the rights and remedies  accorded to Seller under Article XV
of this  Agreement.  Seller  shall take all  actions to perfect  and enforce its
rights  and  interests  (and the  rights  and  interests  of the  Agent  and the
Purchasers  as assignees of Seller)  under  Article XV of this  Agreement as the
Agent may from time to time reasonably request, including making claims to which
it may be  entitled  under any  indemnity,  reimbursement  or similar  provision
contained in Article XV of this Agreement.

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<PAGE>

     (j) Ownership. Seller shall take all necessary action to (i) vest legal and
equitable  title to the  Receivables,  the Related  Security and the Collections
purchased under the Sale Agreement  irrevocably in Seller, free and clear of any
Adverse  Claims  other  than  Adverse  Claims  in  favor  of the  Agent  and the
Purchasers  (including  the filing of all financing  statements or other similar
instruments or documents  necessary under the UCC (or any comparable law) of all
appropriate  jurisdictions  to perfect  Seller's  interest in such  Receivables,
Related  Security and Collections  and such other action to perfect,  protect or
more fully  evidence the interest of Seller  therein as the Agent may reasonably
request),  and (ii)  establish  and  maintain,  in favor of the  Agent,  for the
benefit  of the  Purchasers,  a valid and  perfected  first  priority  undivided
percentage  ownership  interest  (and/or a valid and  perfected  first  priority
security  interest) in all Receivables,  Related Security and Collections to the
full extent contemplated herein, free and clear of any Adverse Claims other than
Adverse  Claims  in  favor  of the  Agent  for  the  benefit  of the  Purchasers
(including the filing of all financing  statements or other similar  instruments
or documents  necessary under the UCC (or any comparable law) of all appropriate
jurisdictions  to perfect the  Agent's  interest  in such  Receivables,  Related
Security and Collections and such other action to perfect, protect or more fully
evidence the interest of the Agent as the Agent may reasonably request).

     (k)  Purchasers'  Reliance.  Seller  acknowledges  that the  Purchasers are
entering into the  transactions  contemplated by this Agreement in reliance upon
Seller's  identity  as a legal  entity  that is  separate  from the  Originator.
Therefore,  from and after the date of execution and delivery of this Agreement,
Seller shall take all  reasonable  steps,  including all steps that the Agent or
any Purchaser may from time to time  reasonably  request,  to maintain  Seller's
identity as a separate  legal  entity and to make it  manifest to third  parties
that Seller is an entity with assets and liabilities  distinct from those of the
Originator and any Affiliates thereof and not just a division of the Originator.
Without  limiting the  generality  of the foregoing and in addition to the other
covenants set forth herein, Seller shall:

               (i) engage in only the acquisition, ownership, selling, reselling
          (under the circumstances  contemplated by this Agreement) and pledging
          of the  property  acquired  from the  Originator  pursuant to the Sale
          Agreement  (including  the  ability  to enter  into a new  installment
          contract  with an Obligor  pursuant  to an  Upgrade),  and causing the
          issuance and sale of Purchaser  Interests  pursuant to this  Agreement
          and the  exercise of any powers  permitted to  corporations  under the
          General Corporation Law of the State of Delaware, which are incidental
          to the foregoing or necessary to accomplish the foregoing;

               (ii)  maintain its books and records  separate from the books and
          records of any other entity, and maintain separate bank accounts where
          no funds of the  Seller  shall be  commingled  with funds of any other
          entity;

               (iii) keep in full effect its existence, rights and franchises as
          a  corporation  under the laws of the State of Delaware and 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;

               (iv) conduct its business from an office or office space separate
          from the offices of Originator  and WorldMark and maintain a telephone

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<PAGE>

          number separate from those of Originator and WorldMark and operate its
          business generally so as not to be substantively consolidated with any
          of its Affiliates;

               (v) not own any  subsidiary  or lend or advance  any moneys to or
          make an investment in, any Person, or make any capital expenditures;

               (vi) not (1) dissolve or liquidate in whole or in part,  commence
          any case,  proceeding  or other  action  under any  existing or future
          bankruptcy,  insolvency  or similar  law  seeking to have an order for
          relief  entered  with  respect  to  it,  or  seeking   reorganization,
          arrangement,    adjustment,    wind-up,   liquidation,    dissolution,
          composition or other relief with respect to it or its debts,  (2) seek
          appointment  of a receiver,  Paying Agent,  custodian or other similar
          official  for it or  any  part  of  its  assets,  (3)  make a  general
          assignment  for the benefit of creditors  (other than as  contemplated
          herein),  or (4) take any action in  furtherance  of, or consenting or
          acquiescing in, any of the foregoing;

               (vii)  not  guarantee   (directly  or  indirectly),   endorse  or
          otherwise become  contingently liable (directly or indirectly) for the
          obligations  of,  or  own  or  purchase  any  stock,   obligations  or
          securities  of  or  any  other   interest  in,  or  make  any  capital
          contribution to, any other Person;

               (viii) not merge or consolidate with any other Person;

               (ix) not  engage  in any  other  action  that  adversely  affects
          whether  the  separate  legal  identity  of  the  Originator  will  be
          respected,  including holding itself out as being liable for the debts
          of any other  party or acting  other  than in its  corporate  name and
          through its duly authorized officers or agents;

               (x) not create,  incur, assume, or in any manner become liable in
          respect of any  indebtedness  other than that  contemplated  herein or
          trade payables and expense accruals incurred in the ordinary course of
          business and which are incidental to its business purpose;

               (xi) at all  times  have a Board of  Directors  of three to seven
          members, which consists of at least one director who is an Independent
          Director,   and  have  at  least  one  executive  officer  who  is  an
          Independent  Officer;  provided,  however,  that (a) such  Independent
          Director may also be the Independent  Officer and (b) such Independent
          Director and such Independent  Officer may serve in similar capacities
          for other  "special  purpose  entities"  formed by Originator  and its
          Affiliates;  Seller's  Certificate of Incorporation shall at all times
          provide that such Independent  Director shall have a fiduciary duty to
          the Purchasers;

               (xii) compensate all employees,  consultants and agents directly,
          from Seller's bank accounts,  for services  provided to Seller by such
          employees,  consultants  and agents and,  to the extent any  employee,
          consultant or agent of Seller is also an employee, consultant or agent
          of  the  Originator,  allocate  the  compensation  of  such  employee,
          consultant or agent between  Seller and the Originator on a basis that
          reflects the services rendered to Seller and the Originator;

                                       23

<PAGE>

               (xiii)  conduct  all  transactions  with the  Originator  and the
          Servicer  (including  any delegation of its  obligations  hereunder as
          Servicer)  strictly on an  arm's-length  basis,  allocate all overhead
          expenses  (including  telephone and other  utility  charges) for items
          shared between Seller and the Originator on the basis of actual use to
          the extent  practicable  and,  to the extent  such  allocation  is not
          practicable, on a basis reasonably related to actual use;

               (xiv) observe all corporate formalities as a distinct entity, and
          ensure  that all  corporate  actions  relating  to (a) the  selection,
          maintenance  or  replacement  of the  Independent  Director,  (b)  the
          dissolution  or  liquidation  of  Seller  or (c)  the  initiation  of,
          participation  in,  acquiescence  in or  consent  to  any  bankruptcy,
          insolvency, reorganization or similar proceeding involving Seller, are
          duly authorized by unanimous vote of its Board of Directors (including
          the Independent Director);

               (xv) prepare its financial  statements  separately  from those of
          the Originator and insure that any consolidated  financial  statements
          of the  Originator or any Affiliate  thereof that include  Seller have
          notes clearly stating that Seller is a separate  corporate  entity and
          that its assets will be  available  first and  foremost to satisfy the
          claims of the creditors of Seller and will not be available to satisfy
          the claims of the creditors of Originator;

               (xvi) pay all of Seller's  operating  expenses  from the Seller's
          own assets  (except for certain  payments by the  Originator  or other
          Persons  pursuant  to  allocation  arrangements  that  comply with the
          requirements of this Section 7.1(j));

               (xvii)  maintain  the  effectiveness  of, and continue to perform
          under  the  Sale  Agreement,  such  that it does not  amend,  restate,
          supplement,  cancel, terminate or otherwise modify the Sale Agreement,
          or give any consent, waiver, directive or approval thereunder or waive
          any default,  action,  omission or breach under the Sale  Agreement or
          otherwise grant any indulgence thereunder,  without (in each case) the
          prior written consent of the Agent;

               (xviii) take such other  actions as are  necessary on its part to
          ensure that the facts and  assumptions set forth in the opinion issued
          by Chapman and Cutler as counsel for Seller,  in  connection  with the
          closing or initial  purchase  under this  Agreement  and  relating  to
          substantive consolidation issues, and in the certificates accompanying
          such opinion,  remain true and correct in all material respects at all
          times.

     (l) Taxes.  Such  Originating  Party shall file all tax returns and reports
required  by  law to be  filed  by it and  shall  promptly  pay  all  taxes  and
governmental charges at any time owing.

     (m) Insurance.  Seller shall maintain in effect,  or cause to be maintained
in effect,  at Seller's  own expense,  such  property,  casualty  and  liability
insurance covering the Originating  Parties' real property and personal property
as Seller  shall deem  appropriate  in its good  faith  business  judgment.  The
foregoing  requirements shall not be construed to negate,  reduce or modify, and
are in addition to, Seller's obligations hereunder.

     (n)   Environmental   Laws.  TWRI  shall,  and  shall  cause  each  of  its
Subsidiaries  to conduct its  operations  and keep and  maintain its property in

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compliance with all Environmental  Laws. TWRI shall perform its duties under its
management agreement with WorldMark in compliance with all Environmental Laws.

     Section 7.2 Negative Covenants of the Originating  Parties.

     Until the date on which the Aggregate  Unpaids have been  indefeasibly paid
in full and this  Agreement  terminates  in  accordance  with  its  terms,  each
Originating Party hereby covenants, as to itself, that:

     (a) Name  Change,  Offices and  Records.  Such  Originating  Party will not
change its name,  identity or corporate structure (within the meaning of Section
9-402(7) of any applicable enactment of the UCC) or relocate its chief executive
office or any office where Records are kept unless it shall have:  (i) given the
Agent at least  forty-five  (45) days'  prior  written  notice  thereof and (ii)
delivered to the Agent all financing statements, instruments and other documents
requested by the Agent in connection with such change or relocation.

     (b)  Modifications  to Contracts  and Credit and  Collection  Policy.  Such
Originating  Party will not make any change to the Credit and Collection  Policy
that could adversely  affect the  collectibility  of the Receivables or decrease
the credit  quality of any newly  created  Receivables.  Except as  provided  in
Section  8.2(e),  the Servicer  will not extend,  amend or otherwise  modify the
terms of any Receivable or any Contract related thereto other than in accordance
with the Credit and Collection Policy.

     (c) Sales,  Liens.  Seller shall not sell,  assign (by  operation of law or
otherwise)  otherwise  dispose of, grant any option with  respect to,  create or
suffer to exist any Adverse  Claim upon  (including  the filing of any financing
statement) or with respect to any Receivable,  Related  Security or Collections,
or upon or with respect to any Contract  under which any Receivable  arises,  or
any  Collection  Account,  or assign any right to receive  income  with  respect
thereto  (other than,  in each case,  the creation of the  interests  therein in
favor of the Agent and the Purchasers provided for herein).  Seller shall defend
the right,  title and interest of the Agent and the  Purchasers in, to and under
any of the  foregoing  property,  against all claims of third  parties  claiming
through or under  Seller or the  Originator.  However,  no part of this  Section
7.2(c) shall be construed as prohibiting an assignment  pursuant to Section 2.10
or Section 13.1 of this Agreement.

     (d) Net  Receivables  Balance.  At no time prior to the  Amortization  Date
shall Seller permit the Net Receivables  Balance to be less than an amount equal
to the sum of (i) the aggregate Capital of all the Purchaser Interests plus (ii)
the Aggregate Reserves.

                                  ARTICLE VIII
                          ADMINISTRATION AND COLLECTION

     Section 8.1 Designation of Servicer.

     (a) The servicing,  administration  and collection of the Receivables shall
be conducted by such Person (the  "Servicer") so designated from time to time in
accordance  with this  Section  8.1.  TWRI is hereby  designated  as, and hereby
agrees to perform the duties and  obligations  of, the Servicer  pursuant to the

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<PAGE>

terms of this Agreement.  The Agent may at any time following the occurrence and
during the continuation of a Servicer  Default  designate as Servicer any Person
to succeed TWRI or any successor Servicer.

     (b)  TWRI  shall  not  be  permitted  to  delegate  any of  its  duties  or
responsibilities  as  Servicer  to any  Person  other  than (i) with  respect to
Charged-Off  Receivables,  outside  collection  agencies in accordance  with its
customary  practices and (ii) with the prior written  consent of the Agent (such
consent not to be  unreasonably  withheld),  any  sub-servicer  appointed by the
Servicer.  If at any time the Agent shall designate as Servicer any Person other
than TWRI, all duties and responsibilities  theretofore delegated by TWRI to any
sub-servicer  may, at the  discretion of the Agent,  be terminated  forthwith on
notice given by the Agent to TWRI and to such sub-servicer.

     (c)  Notwithstanding  the foregoing  subSection (b), as long as TWRI or its
Subsidiary or Affiliate is Servicer,

               (i) TWRI  shall be and remain  primarily  liable to the Agent and
          the Purchasers  for the full and prompt  performance of all duties and
          responsibilities of the Servicer hereunder, and

               (ii) the  Agent  and the  Purchasers  shall be  entitled  to deal
          exclusively  with TWRI in matters  relating  to the  discharge  by the
          Servicer of its duties and responsibilities  hereunder.  The Agent and
          the Purchasers  shall not be required to give notice,  demand or other
          communication to any Person other than TWRI in order for communication
          to the Servicer and its  sub-servicer  or other  delegate with respect
          thereto  to be  accomplished.  TWRI,  at  all  times  that  it is  the
          Servicer, shall be responsible for providing any sub-servicer or other
          delegate of the Servicer  with any notice given to the Servicer  under
          this Agreement.

     Section 8.2 Duties of Servicer.

     (a) The Servicer shall take or cause to be taken all such actions as may be
necessary  or advisable to collect  each  Receivable  from time to time,  all in
accordance with applicable laws, rules and regulations, with reasonable care and
diligence, and in accordance with the Credit and Collection Policy.

     (b) The Servicer shall cause each Obligor to remit his or her payments to a
clearing  account  (the  "Clearing  Account")  established  at Commerce  Bank of
Washington or another bank acceptable to the Agent in its sole  discretion.  The
Servicer  shall cause any payments  made by  Automatic  Debit  Collection  to be
deposited  directly  into the  Clearing  Account  from each  Obligor's  relevant
account.  On each Business Day, the Servicer  shall cause the Custodian to remit
all amounts on deposit in the Clearing  Account related to the Receivables to be
remitted to the Collection Account.

     (c) The  Servicer  shall  hold in trust  for the  benefit  of the Agent any
payments it receives in respect of the  Receivables  until such time as it shall
transfer such payments to the Clearing Account. Any amounts held in the Clearing
Account in respect of the Receivables  shall be held in trust for the benefit of
the Agent.

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<PAGE>

     (d) The Servicer shall administer and cause the Custodian to administer the
Collections in accordance with the procedures  described  herein,  in Article II
and in Article XV.

     (e) The Servicer may, in accordance with the Credit and Collection  Policy,
extend the maturity of any Receivable or adjust the  Outstanding  Balance of any
Receivable as the Servicer determines to be appropriate to maximize  Collections
thereof;  provided,  however,  that such extension or adjustment shall not alter
the status of such Receivable as a Delinquent Receivable, a Defaulted Receivable
or a Charged-Off  Receivable or limit the rights of the Agent or the  Purchasers
under this Agreement. Notwithstanding anything to the contrary contained herein,
the Agent shall have the absolute and unlimited  right to direct the Servicer to
commence or settle any legal action with respect to any  Delinquent  Receivable,
Defaulted Receivable or Charged-Off Receivable or to foreclose upon or repossess
any Related Security (including any Vacation Credits).

     (f) Any payment by an Obligor in respect of any Indebtedness  owed by it to
the Originator or Seller shall, except as otherwise specified by such Obligor or
otherwise  required by contract or law and unless  otherwise  instructed  by the
Agent,  be applied as a Collection of any  Receivable of such Obligor  (starting
with the  oldest  such  Receivable)  to the extent of any  amounts  then due and
payable  thereunder  before  being  applied  to any  other  receivable  or other
obligation of such Obligor.

     (g) The  Servicer  shall  instruct  the  Paying  Agent in  writing  to make
withdrawals  and payments from  Collection  Account for the purposes of carrying
out the Servicer's duties hereunder.

     Section 8.3  Collections  Following an  Amortization  Event.

     Seller hereby authorizes the Agent, and agrees that, upon and following the
occurrence of an Amortization  Event, the Agent shall be entitled to (i) endorse
Seller's name on checks and other  instruments  representing  Collections,  (ii)
enforce the Receivables,  the related  Contracts and the Related  Security,  and
(iii) take such action as shall be  necessary  or  desirable  to cause all cash,
checks and other  instruments  constituting  Collections  of Receivables to come
into the possession of the Agent rather than Seller.

     Section 8.4  Responsibilities  of Seller.

     Anything herein to the contrary notwithstanding,  the exercise by the Agent
and the Purchasers of their rights hereunder shall not release the Servicer, the
Originator or Seller from any of their duties or obligations with respect to any
Receivables  or under  the  related  Contracts.  The  Purchasers  shall  have no
obligation or liability with respect to any  Receivables  or related  Contracts,
nor shall any of them be obligated to perform the obligations of Seller.

     Section 8.5 Reports.

     The Servicer shall prepare and forward to the Agent and the Paying Agent:

     (a) on the 15th day of each month (or,  if such day is not a Business  Day,
then the next Business Day) and at such other times as the Agent shall  request,
a Monthly Report,  which shall include a certification  by the Servicer that all
Representations  and  Warranties  contained  in Section  5.1 are true as of that

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<PAGE>

date, and to the extent the Representations and Warranties  contained in Section
5.1 are not true as of that  date,  a  detailed  description  of the  facts  and
circumstances  that have caused any of the  Representations  or Warranties to be
untrue as of that date.

     (b) at such times as the Agent shall  request,  a listing by Obligor of all
Receivables together with an aging of such Receivables.

     Section 8.6 Servicing Fees.

     In  consideration  of TWRI's  agreement to act as Servicer  hereunder,  the
Purchasers  hereby  agree  that,  so long as TWRI shall  continue  to perform as
Servicer hereunder, the Seller shall pay over to TWRI a servicing fee, as and to
the extent  provided in Article II. Such  servicing fee shall be payable on each
Settlement  Date for the  preceding  Accrual  Period in an  amount  equal to the
lesser of (x) the product of (i)  one-twelfth,  (ii) 1.75%,  and (iii) the daily
average  outstanding  amount of Capital  during such Accrual  Period and (y) the
amount of funds  available for payment of such servicing fee pursuant to Article
II.

     Section 8.7 TWRI Financial Covenants.

     For so long as TWRI is the Servicer, TWRI covenants that:

     (a) It shall maintain,  as of the close of each of its fiscal quarters,  an
Interest Coverage Ratio of not less than 6.0 to 1.0.

     (b) It shall maintain,  as of the close of each of its fiscal  quarters,  a
Capitalization Ratio of not greater than 1.0 to 2.0.

     (c) Notwithstanding  the foregoing,  for so long as the Agent is a party to
the Credit  Agreement,  the definitions in this Agreement of "Interest  Coverage
Ratio"  and  "Capitalization   Ratio,"  and  the  requisite  ratios,   shall  be
automatically  amended,  modified or waived mutatis mutandis upon any amendment,
modification  or any waiver of the  equivalent  definitions  or ratios under the
Credit Agreement.

                                   ARTICLE IX
                                     HEDGING

     Section  9.1 Hedge  Event.

     A Hedge  Event shall occur if, for any  Accrual  Period,  the Gross  Excess
Spread Percentage shall be less than 4.75%.

     Section 9.2 Hedge Accumulation Period.

     (a)  Following the  occurrence  of a Hedge Event,  funds shall be deposited
into the Hedge Account to the extent provided in Section 2.2(a) beginning on the
first  Settlement  Date  thereafter  and ending on the first to occur of (i) the
Hedge Event Cure Date and (ii) the  Amortization  Date (such period,  the "Hedge
Accumulation Period").

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<PAGE>

     (b) On any day during the Hedge  Accumulation  Period,  the Agent  shall be
entitled to withdraw any or all of the available  funds in the Hedge Account and
use such funds for the purpose of acquiring one or more Purchased Hedges.

     (c)  If  the  Hedge  Accumulation  Period  terminates  as a  result  of the
occurrence of the Hedge Event Cure Date,  then all funds in the Hedge Account on
such date shall be  deposited in the  Collection  Account and treated as part of
the Monthly  Available Funds. If the Hedge  Accumulation  Period terminates as a
result of the occurrence of the  Amortization  Date, then at the election of the
Agent,  funds in the Hedge  Account on such date shall be (x)  deposited  in the
Collection  Account and  treated as part of the  Amortization  Period  Available
Funds or (y)  retained  in the Hedge  Account for use in  acquiring  one or more
Purchased Hedges.

                                   ARTICLE X
                               AMORTIZATION EVENTS

     Section 10.1 Amortization  Events.

     The occurrence of any one or more of the following  events shall constitute
an Amortization Event:

     (a) Any  Originating  Party  shall fail (i) to make any  payment or deposit
required hereunder when due, or (ii) to perform or observe any term, covenant or
agreement  hereunder  (other than as referred to in clause (i) of this paragraph
(a) or in paragraph  (k) below) and such failure in the case of this clause (ii)
shall continue for three (3) consecutive Business Days.

     (b) Any  representation,  warranty,  certification or statement made by any
Originating Party in this Agreement,  any other  Transaction  Document or in any
other  document  delivered  pursuant  hereto or thereto shall prove to have been
incorrect  when made or deemed made, and the effects of such have not been cured
within  three  business  days  after  the  date  the  representation,  warranty,
certification or statement was discovered,  or should have been discovered,  not
to have been correct.

     (c)  Failure of Seller to pay any  Indebtedness  when due or the failure of
any other Originating Party to pay any Indebtedness greater than $1,000,000 when
due; or the default by any  Originating  Party in the  performance  of any term,
provision  or  condition  contained  in  any  agreement  under  which  any  such
Indebtedness  greater than $1,000,000 was created or is governed,  the effect of
which is to cause,  or to permit the holder or holders of such  Indebtedness  to
cause, such Indebtedness to become due prior to its stated maturity; or any such
Indebtedness of any Originating Party shall be declared to be due and payable or
required to be prepaid  (other than by a regularly  scheduled  payment) prior to
the date of maturity thereof.

     (d) (i) Any Originating  Party or any of its  Subsidiaries  shall generally
not pay its  debts as such  debts  become  due or shall  admit  in  writing  its
inability to pay its debts generally or shall make a general  assignment for the
benefit of creditors;  or any  proceeding  shall be instituted by or against any
Originating  Party or any of its Subsidiaries  seeking to adjudicate it bankrupt
or insolvent, or seeking liquidation,  winding up, reorganization,  arrangement,
adjustment,  protection,  relief or composition of it or its debts under any law
relating to bankruptcy,  insolvency or reorganization  or relief of debtors,  or
seeking  the entry of an order  for  relief or the  appointment  of a  receiver,
paying agent or other  similar  official for it or any  substantial  part of its
property or (ii) any Originating Party or any of their  Subsidiaries  shall take

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<PAGE>

any  corporate  action to  authorize  any of the actions set forth in clause (i)
above in this subSection (d).

     (e) WorldMark:

               (i) voluntarily  incurs or at any time become  voluntarily liable
          for any Indebtedness;

               (ii)  voluntarily  allows its  property to become  subject to any
          Liens,  or subjects any of its  property to any Liens,  other than (a)
          utility  or  other  easements  or  licenses  unrelated  to any debt of
          WorldMark or (b) Liens that in do not exceed, in aggregate,  $100,000;
          or

               (iii) involuntarily  incurs or becomes  involuntarily  liable for
          any debt, or subjects any of its property  involuntarily  to any Liens
          (other than utility or similar easements or licenses  unrelated to any
          debt of WorldMark) that individually or in the aggregate (with respect
          to all such debt and the obligations secured by all such Liens) exceed
          $1,000,000.

     (f)  As  at  the  end  of  any  Accrual  Period,  the  Three-Month  Average
Delinquency Ratio shall exceed 5.0%.

     (g)  As  at  the  end  of  any  Accrual  Period,  the  Three-Month  Average
Consolidated Delinquency Ratio shall exceed 5.0%.

     (h) As at the end of any Accrual Period,  the  Three-Month  Average Default
Ratio shall exceed 3.0%.

     (i)  As  at  the  end  of  any  Accrual  Period,  the  Three-Month  Average
Consolidated Default Ratio shall exceed 3.0%.

     (j) As of the end of any Accrual Period,  the Net Excess Spread  Percentage
shall be less than or equal to zero.

     (k) As of the end of any Accrual Period,  the  Three-Month  Average Charge-
Off Ratio shall exceed 5.0%.

     (l)  As  of  the  end  of  any  Accrual  Period,  the  Three-Month  Average
Consolidated Charge-Off Ratio shall exceed 5.0%.

     (m) A  Hedge  Event  shall  occur  and  shall  continue  to  exist  for six
consecutive months.

     (n) The aggregate  number of Units decreases to less than 90% of the number
of units in  existence  on the date of closing or  initial  purchase  under this
Agreement.

     (o) As of the end of any  fiscal  quarter  of TWRI at any time that TWRI is
the Servicer,  TWRI shall not be in compliance with one or more of the financial
covenants set forth in Section 8.7 of this Agreement.

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<PAGE>

     (p) One or more final  judgments  for the payment of money shall be entered
against  Seller on claims not covered by insurance or as to which the  insurance
carrier  has  denied  its  responsibility,  and  such  judgment  shall  continue
unsatisfied  and in effect for fifteen (15)  consecutive  days without a stay of
execution.

     (q)  This  Agreement  shall  terminate  in  whole  or in  part  (except  in
accordance with its terms),  or shall cease to be effective or to be the legally
valid,  binding and  enforceable  obligation  of Seller,  or any  Obligor  shall
directly  or  indirectly  contest in any manner  such  effectiveness,  validity,
binding nature or enforceability, or the Agent for the benefit of the Purchasers
shall cease to have a valid and perfected  first priority  security  interest in
the Receivables,  the Related Security, and the Collections with respect thereto
and the Collection Accounts.

     (r) The aggregate  Purchaser Interests shall exceed 100% and shall continue
as such  until  the  earlier  of (i) one  Business  Day  following  the date any
Originating  Party has actual  knowledge  thereof  and (ii) the next  Settlement
Date.

     (s) The  "Amortization  Date" shall occur under the Sale  Agreement  or the
Originator  shall for any reason cease to  transfer,  or cease to have the legal
capacity to transfer,  or otherwise be incapable of transferring  Receivables to
Seller under the Sale Agreement.

     (t) Seller at any time becomes less than a 100% wholly owned  subsidiary of
Originator.

     (u) For any Accrual  Period,  Collections  received  by means of  Automatic
Debit  Collection  during such  Accrual  Period  shall be less than 50.0% of the
total Collections received during such Accrual Period.

     (v) A date shall occur which is the earliest of (i) any date  following the
occurrence of the Revolving  Period  Termination Date upon which (x) the Default
Ratio or the Consolidated  Default Ratio as of the end of the preceding  Accrual
Period  exceeds  2.25%  or  (y)  the  Delinquency   Ratio  or  the  Consolidated
Delinquency  Ratio as of the end of the preceding  Accrual Period exceeds 4.25%,
(ii) the first anniversary of the occurrence of the Revolving Period Termination
Date, and (iii) the Facility Termination Date.

     (w) A date shall occur which is the 90th day following the earlier to occur
of (i) a public announcement of a Change of Control and (ii) the occurrence of a
Change of Control.

     Section 10.2 Remedies.

     Upon the occurrence and during the  continuation of an Amortization  Event,
funds  shall be  deposited  into the Reserve  Account to the extent  provided in
Section 2.2, and the Agent may, or upon the direction of the Required  Financial
Institutions  shall, take any of the following  actions:  (i) replace the Person
then acting as Servicer,  (ii) declare the  Amortization  Date to have occurred,
whereupon the Amortization Date shall forthwith occur,  without demand,  protest
or further notice of any kind, all of which are hereby  expressly waived by each
Originating  Party;   provided,   however,   that  upon  the  occurrence  of  an
Amortization Event described in Section 10.1(d), or of an actual or deemed entry
of an order for relief with respect to any  Originating  Party under the Federal
Bankruptcy  Code,  the  Amortization  Date shall  automatically  occur,  without

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<PAGE>

demand,  protest  or any notice of any kind,  all of which are hereby  expressly
waived by each  Originating  Party,  (iii) to the fullest  extent  permitted  by
applicable law, declare that the Default Fee shall accrue with respect to any of
the  Aggregate  Unpaids  outstanding  at such  time,  (iv)  acquire  one or more
Purchased  Hedges,  (v)  notify  Obligors  of the  Purchasers'  interest  in the
Receivables and (vi) sell, dispose of or otherwise  liquidate the Receivables or
the Related  Security in a commercially  reasonable  manner and on  commercially
reasonable terms. If the Amortization Date has occurred,  all amounts on deposit
in the Reserve Account shall be deposited in the Collection  Account and treated
as part of the Amortization  Period Available Funds. The  aforementioned  rights
and remedies  shall be in addition to all other rights and remedies of the Agent
and the  Purchasers  available  under this  Agreement,  by  operation of law, at
equity or otherwise, all of which are hereby expressly preserved,  including all
rights  and  remedies  provided  under  the UCC,  all of which  rights  shall be
cumulative.

                                   ARTICLE XI
                                 INDEMNIFICATION

     Section 11.1 Indemnities by the Originating  Parties.

     Without  limiting any other rights that the Agent or any Purchaser may have
hereunder or under  applicable  law, (a) Seller hereby agrees to indemnify  (and
pay upon demand to) the Agent and each Purchaser and their  respective  assigns,
officers, directors, agents and employees (each an "Indemnified Party") from and
against any and all damages, losses, claims, taxes, liabilities, costs, expenses
and for all other amounts payable,  including reasonable  attorneys' fees (which
attorneys  may be employees of the Agent or such  Purchaser)  and  disbursements
(all of the foregoing being collectively  referred to as "Indemnified  Amounts")
awarded against or incurred by any of them arising out of or as a result of this
Agreement or the acquisition,  either directly or indirectly,  by a Purchaser of
an interest in the Receivables,  and (b) the Servicer hereby agrees to indemnify
(and pay upon demand) each  Indemnified  Party for  Indemnified  Amounts awarded
against or incurred by any of them arising out of the  Servicer's  activities as
Servicer hereunder,  excluding, however, in all of the foregoing instances under
the preceding clauses (A) and (B):

               (i) Indemnified Amounts to the extent a final judgment of a court
          of competent jurisdiction holds that such Indemnified Amounts resulted
          from  gross  negligence  or  willful  misconduct  on the  part  of the
          Indemnified Party seeking indemnification;

               (ii)  Indemnified  Amounts to the extent the same includes losses
          in respect of  Receivables  that are  uncollectible  on account of the
          insolvency,  bankruptcy  or lack of  creditworthiness  of the  related
          Obligor; or

               (iii) taxes imposed by the jurisdiction in which such Indemnified
          Party's principal  executive office is located,  on or measured by the
          overall  net income of such  Indemnified  Party to the extent that the
          computation   of  such   taxes  is   consistent   with  the   Intended
          Characterization;

provided,  however,  that  nothing  contained in this  sentence  shall limit the
liability of any  Originating  Party or limit the recourse of the  Purchasers to
any Originating Party for amounts otherwise  specifically provided to be paid by
such Originating  Party under the terms of this Agreement.  Without limiting the

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<PAGE>

generality of the foregoing  indemnification,  Seller shall  indemnify the Agent
and the  Purchasers  for  Indemnified  Amounts  (including  losses in respect of
uncollectible  receivables,  regardless of whether reimbursement  therefor would
constitute recourse to Seller or the Servicer) relating to or resulting from:

               (iv)  any  representation  or  warranty  made by any  Originating
          Party,  the  Originator  or the Custodian (or any officers of any such
          Person)  under  or  in  connection  with  this  Agreement,  any  other
          Transaction  Document or any other  information or report delivered by
          any such  Person  pursuant  hereto or  thereto,  which shall have been
          false or incorrect when made or deemed made;

               (v) the  failure by any Seller,  the  Servicer,  the  Originator,
          WorldMark or the Custodian to comply with any applicable  law, Rule or
          regulation with respect to any Receivable or Contract related thereto,
          or the  nonconformity  of any Receivable or Contract  included therein
          with any such applicable law, Rule or regulation or any failure of the
          Originator, WorldMark or the Custodian to keep or perform any of their
          respective  obligations,  express  or  implied,  with  respect  to any
          Contract;  (vi) any failure of Seller, the Servicer, the Originator or
          the Custodian to perform its duties, covenants or other obligations in
          accordance  with  the  provisions  of  this  Agreement  or  any  other
          Transaction Document;

               (vii) any lawsuit or legal claim  arising out of or in connection
          with the Resorts and Units,  any defect in  WorldMark's  ownership  of
          title  to, or  leasehold  rights  in,  the real  property  used in its
          business,  any  Obligor's  right to use the Resorts and Units,  or any
          rights or services that are the subject of any Contract;

               (viii)  any  dispute,   claim,  offset  or  defense  (other  than
          discharge in  bankruptcy of the Obligor) of the Obligor to the payment
          of any Receivable (including a defense based on such Receivable or the
          related  Contract not being a legal,  valid and binding  obligation of
          such Obligor  enforceable against it in accordance with its terms), or
          any other  claim  resulting  from the sale of the  services  or rights
          related to such Receivable or the furnishing or failure to provide for
          such rights or furnish such services;

               (ix) the  commingling  of  Collections of Receivables at any time
          with other funds;

               (x) any  investigation,  litigation or  proceeding  related to or
          arising from this  Agreement or any other  Transaction  Document,  the
          transactions  contemplated  hereby,  the  use  of  the  proceeds  of a
          purchase,  the  ownership  of the  Purchaser  Interests  or any  other
          investigation,  litigation  or  proceeding  relating  to  Seller,  the
          Servicer or the  Originator  in which any  Indemnified  Party  becomes
          involved as a result of any of the transactions contemplated hereby;

               (xi) any  inability to litigate any claim  against any Obligor in
          respect of any  Receivable  as a result of such  Obligor  being immune
          from civil and  commercial  law and suit on the grounds of sovereignty
          or otherwise from any legal action, suit or proceeding;

               (xii) any Amortization Event described in Section 10.1(d);

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<PAGE>

               (xiii) any  failure of Seller to acquire and  maintain  legal and
          equitable  title to, and ownership of any  Receivable  and the Related
          Security and  Collections  with respect  thereto from the  Originator,
          free and clear of any Adverse Claim (other than as created hereunder);
          or any failure of Seller to give  reasonably  equivalent  value to the
          Originator  under the Sale Agreement in  consideration of the transfer
          by the Originator of any  Receivable,  or any attempt by any Person to
          void  such  transfer  under  statutory  provisions  or  common  law or
          equitable action;

               (xiv) any  failure to vest and  maintain  vested in the Agent and
          the Purchasers, or to transfer to the Agent and the Purchasers,  legal
          and equitable  title to, and ownership of, a first priority  undivided
          percentage  ownership  (to  the  extent  of  the  Purchaser  Interests
          contemplated  hereunder) in the Receivables,  the Related Security and
          the Collections, free and clear of any Adverse Claim;

               (xv) the failure to have filed, or any delay in filing, financing
          statements or other similar  instruments or documents under the UCC of
          any applicable  jurisdiction or other  applicable laws with respect to
          any  Receivable,  the Related  Security and  Collections  with respect
          thereto,  and the proceeds of any thereof,  whether at the time of any
          Incremental Purchase or at any subsequent time;

               (xvi) any  action or  omission  by any  Originating  Party  which
          reduces or  impairs  the  rights of the Agent or the  Purchasers  with
          respect to any Receivable or the value of any such Receivable;

               (xvii) any attempt by any Person to void any Incremental Purchase
          hereunder  under  statutory  provisions  or  common  law or  equitable
          action; and

               (xviii) the Year 2000  Problem  with  respect to the  Originating
          Parties.

Any Indemnified Amounts incurred by actions of the Custodian shall be payable by
the Custodian to the Agent no later than the 30th day after a demand for payment
of the Buyer is delivered to the  Custodian.  Any such  Indemnified  Amounts not
paid by such date shall be immediately payable by the Originator to the Buyer.

     Section 11.2 Increased Cost and Reduced  Return.

     If after the date  hereof,  any  Funding  Source  shall be charged any fee,
expense or increased cost on account of the adoption of any applicable law, Rule
or regulation  (including  any  applicable  law,  Rule or  regulation  regarding
capital adequacy) or any change therein,  or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration  thereof, or compliance
with any  request or  directive  (whether or not having the force of law) of any
such authority, central bank or comparable agency: (i) that subjects any Funding
Source to any charge or withholding on or with respect to any Funding  Agreement
or a  Funding  Source's  obligations  under a Funding  Agreement,  or on or with
respect to the Receivables,  or changes the basis of taxation of payments to any
Funding Source of any amounts  payable under any Funding  Agreement  (except for
changes in the rate of tax on the  overall  net  income of a Funding  Source) or
(ii)  that  imposes,  modifies  or deems  applicable  any  reserve,  assessment,
insurance  charge,  special  deposit or similar  requirement  against assets of,
deposits with or for the account of a Funding  Source,  or credit  extended by a

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<PAGE>

Funding Source  pursuant to a Funding  Agreement or (iii) that imposes any other
condition  the result of which is to  increase  the cost to a Funding  Source of
performing its obligations under a Funding  Agreement,  or to reduce the rate of
return on a Funding Source's capital as a consequence of its obligations under a
Funding Agreement,  or to reduce the amount of any sum received or receivable by
a Funding Source under a Funding Agreement or to require any payment  calculated
by reference  to the amount of  interests or loans held or interest  received by
it, then within 10 days,  upon written demand by the Agent,  Seller shall pay to
the Agent, for the benefit of the relevant Funding Source,  such amounts charged
to such Funding Source or compensate such Funding Source for such reduction.

     Section  11.3 Other Costs and  Expenses.

     Seller  shall pay to the Agent and  Conduit  within 30 days,  upon  written
demand all costs and out-of-pocket  expenses in connection with the preparation,
execution,  delivery and  administration  of this  Agreement,  the  transactions
contemplated hereby and the other documents to be delivered hereunder, including
the cost of Conduit's  auditors  auditing the books,  records and  procedures of
Seller,  reasonable fees and out-of-pocket expenses of legal counsel for Conduit
and the Agent (which such counsel may be employees of Conduit or the Agent) with
respect  thereto and with respect to advising  Conduit and the Agent as to their
respective  rights and remedies  under this  Agreement.  Seller shall pay to the
Agent on demand any and all costs and expenses of the Agent and the  Purchasers,
if any,  including  reasonable  counsel fees and expenses in connection with the
enforcement of this Agreement and the other documents delivered hereunder and in
connection  with  any  restructuring  or  workout  of  this  Agreement  or  such
documents,  or the  administration  of this Agreement  following an Amortization
Event. Seller shall reimburse Conduit on demand for all other costs and expenses
incurred by Conduit ("Other  Costs"),  including the cost of auditing  Conduit's
books by certified public  accountants,  the cost of rating the Commercial Paper
by  independent   financial  rating  agencies,   and  the  reasonable  fees  and
out-of-pocket expenses of counsel for Conduit or any counsel for any shareholder
of Conduit with respect to advising  Conduit or such  shareholder  as to matters
relating to Conduit's operations.

     Section 11.4  Allocations.

     Conduit shall allocate the liability for Other Costs among Seller and other
Persons with whom Conduit has entered into  agreements to purchase  interests in
receivables ("Other Sellers"). If any Other Costs are attributable to Seller and
not  attributable  to any Other  Seller,  Seller shall be solely liable for such
Other Costs.  However,  if Other Costs are attributable to Other Sellers and not
attributable to Seller, such Other Sellers shall be solely liable for such Other
Costs.  All allocations to be made pursuant to the foregoing  provisions of this
Article XI shall be made by Conduit in its sole  discretion and shall be binding
on Seller and the Servicer.

                                  ARTICLE XII
                                    THE AGENT

     Section 12.1 Authorization and Action.

     Each Purchaser hereby  designates and appoints Bank One to act as its agent
hereunder and under each other Transaction Document, and authorizes the Agent to
take such  actions  as agent on its behalf and to  exercise  such  powers as are

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<PAGE>

delegated to the Agent by the terms of this Agreement and the other  Transaction
Documents together with such powers as are reasonably  incidental  thereto.  The
Agent shall not have any duties or responsibilities,  except those expressly set
forth herein or in any other Transaction Document, or any fiduciary relationship
with any  Purchaser,  and no  implied  covenants,  functions,  responsibilities,
duties,  obligations  or liabilities on the part of the Agent shall be read into
this  Agreement or any other  Transaction  Document or  otherwise  exist for the
Agent.  In performing  its  functions  and duties  hereunder and under the other
Transaction  Documents,  the Agent shall act solely as agent for the  Purchasers
and does not  assume  nor shall be  deemed to have  assumed  any  obligation  or
relationship of trust or agency with or for any Originating Party or any of such
Originating  Party's  successors or assigns.  The Agent shall not be required to
take any action that exposes the Agent to personal liability or that is contrary
to this  Agreement,  any other  Transaction  Document  or  applicable  law.  The
appointment  and  authority  of the Agent  hereunder  shall  terminate  upon the
indefeasible  payment in full of all Aggregate  Unpaids.  Each Purchaser  hereby
authorizes  the Agent to execute each of the Uniform  Commercial  Code financing
statements on behalf of such  Purchaser  (the terms of which shall be binding on
such Purchaser).

     Section 12.2 Delegation of Duties.

     The Agent may execute any of its duties under this Agreement and each other
Transaction  Document  by or through  agents or  attorneys-in-fact  and shall be
entitled to advice of counsel  concerning all matters pertaining to such duties.
The Agent shall not be  responsible  for the  negligence  or  misconduct  of any
agents or attorneys-in-fact selected by it with reasonable care.

     Section  12.3  Exculpatory  Provisions.

     Neither the Agent nor any of its directors,  officers,  agents or employees
shall be (i) liable for any action  lawfully  taken or omitted to be taken by it
or them under or in  connection  with this  Agreement  or any other  Transaction
Document (except for its, their or such Person's own gross negligence or willful
misconduct),  or (ii) responsible in any manner to any of the Purchasers for any
recitals,  statements,  representations  or warranties  made by any  Originating
Party  contained  in this  Agreement,  any  other  Transaction  Document  or any
certificate, report, statement or other document referred to or provided for in,
or  received  under  or  in  connection  with,  this  Agreement,  or  any  other
Transaction  Document or for the value,  validity,  effectiveness,  genuineness,
enforceability  or  sufficiency  of this  Agreement,  or any  other  Transaction
Document or any other document furnished in connection herewith or therewith, or
for any failure of any Originating Party to perform its obligations hereunder or
thereunder, or for the satisfaction of any condition specified in Article VI, or
for the perfection,  priority, condition, value or sufficiency of any collateral
pledged in connection  herewith.  The Agent shall not be under any obligation to
any Purchaser to ascertain or to inquire as to the  observance or performance of
any of the  agreements  or  covenants  contained  in,  or  conditions  of,  this
Agreement or any other Transaction Document, or to inspect the properties, books
or records of the  Originating  Parties.  The Agent  shall not be deemed to have
knowledge of any Amortization  Event or Potential  Amortization Event unless the
Agent has received notice from Seller or a Purchaser.

     Section 12.4 Reliance by Agent.

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<PAGE>

     The  Agent  shall in all  cases be  entitled  to rely,  and  shall be fully
protected  in relying,  upon any document or  conversation  believed by it to be
genuine and correct and to have been signed,  sent or made by the proper  Person
or Persons and upon advice and statements of legal counsel (including counsel to
Seller),  independent  accountants and other experts  selected by the Agent. The
Agent shall in all cases be fully  justified  in failing or refusing to take any
action under this Agreement or any other  Transaction  Document  unless it shall
first receive such advice or  concurrence  of Conduit or the Required  Financial
Institutions or all of the Purchasers,  as applicable,  as it deems  appropriate
and it  shall  first  be  indemnified  to its  satisfaction  by the  Purchasers,
provided that unless and until the Agent shall have  received  such advice,  the
Agent may take or  refrain  from  taking  any  action,  as the Agent  shall deem
advisable and in the best  interests of the  Purchasers.  The Agent shall in all
cases be fully protected in acting,  or in refraining from acting, in accordance
with a request of Conduit or the Required  Financial  Institutions or all of the
Purchasers,  as applicable,  and such request and any action taken or failure to
act pursuant thereto shall be binding upon all the Purchasers.

     Section 12.5  Non-Reliance on Agent and Other Purchasers.

     Each Purchaser  expressly  acknowledges  that neither the Agent, nor any of
its officers, directors, employees, agents,  attorneys-in-fact or affiliates has
made  any  representations  or  warranties  to it and  that no act by the  Agent
hereafter taken,  including any review of the affairs of any Originating  Party,
shall be deemed to constitute any  representation or warranty by the Agent. Each
Purchaser   represents  and  warrants  to  the  Agent  that  it  has  and  will,
independently  and without  reliance  upon the Agent or any other  Purchaser and
based on such documents and information as it has deemed  appropriate,  made its
own  appraisal of and  investigation  into the business,  operations,  property,
prospects,  financial and other  conditions and  creditworthiness  of Seller and
made its own  decision  to enter  into this  Agreement,  the  other  Transaction
Documents and all other documents related hereto or thereto.

     Section 12.6 Reimbursement and Indemnification.

     The Financial  Institutions  agree to reimburse and indemnify the Agent and
its officers, directors, employees, representatives and agents ratably according
to  their  Pro  Rata  Shares,  to the  extent  not  paid  or  reimbursed  by the
Originating  Parties  (i) for any  amounts  for which the  Agent,  acting in its
capacity as Agent,  is  entitled to  reimbursement  by the  Originating  Parties
hereunder and (ii) for any other expenses incurred by the Agent, in its capacity
as Agent  and  acting  on  behalf  of the  Purchasers,  in  connection  with the
administration  and  enforcement  of this  Agreement  and the other  Transaction
Documents.

     Section 12.7 Agent in its Individual Capacity.

     The Agent and its  Affiliates  may make loans to, accept  deposits from and
generally  engage in any kind of business with Seller or any Affiliate of Seller
as  though  the  Agent  were  not  the  Agent  hereunder.  With  respect  to the
acquisition of Purchaser  Interests pursuant to this Agreement,  the Agent shall
have the same rights and powers under this Agreement in its individual  capacity
as any Purchaser and may exercise the same as though it were not the Agent,  and
the terms "Financial  Institution,"  "Purchaser,"  "Financial  Institutions" and
"Purchasers" shall include the Agent in its individual capacity.

     Section  12.8  Successor Agent.

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     The Agent may, upon five days' notice to Seller and the Purchasers, and the
Agent will,  upon the direction of all of the Purchasers  (other than the Agent,
in its individual capacity) resign as Agent. If the Agent shall resign, then the
Required Financial  Institutions  during such five-day period shall appoint from
among the Purchasers a successor  agent. If for any reason no successor Agent is
appointed by the Required  Financial  Institutions  during such five-day period,
then  effective  upon the  termination  of such five day period,  the Purchasers
shall  perform  all of the  duties  of the Agent  hereunder  and under the other
Transaction Documents and Seller and the Servicer (as applicable) shall make all
payments  in  respect  of the  Aggregate  Unpaids  directly  to  the  applicable
Purchasers and for all purposes shall deal directly with the  Purchasers.  After
the  effectiveness of any retiring Agent's  resignation  hereunder as Agent, the
retiring Agent shall be discharged from its duties and obligations hereunder and
under the other Transaction Documents and the provisions of this Article XII and
Article XI shall  continue in effect for its benefit with respect to any actions
taken or omitted to be taken by it while it was Agent under this  Agreement  and
under the other Transaction Documents.

                                  ARTICLE XIII
                           ASSIGNMENTS; PARTICIPATIONS

     Section 13.1 Assignments.

     (a) Seller and each Financial  Institution  hereby agree and consent to the
complete  or partial  assignment  by Conduit of all or any portion of its rights
under,  interest  in,  title to and  obligations  under  this  Agreement  to the
Financial Institutions pursuant to Section 13.1 or to any other Person, and upon
such  assignment,  Conduit shall be released from its  obligations  so assigned.
Further, Seller and each Financial Institution hereby agree that any assignee of
Conduit of this  Agreement or all or any of the  Purchaser  Interests of Conduit
shall have all of the rights and  benefits  under this  Agreement as if the term
"Conduit" explicitly referred to such party, and no such assignment shall in any
way impair the rights and benefits of Conduit hereunder.  Neither the Seller nor
the Servicer shall have the right to assign its rights or obligations under this
Agreement.

     (b) Any Financial  Institution may at any time and from time to time assign
to one or more Persons ("Purchasing Financial  Institutions") all or any part of
its rights  and  obligations  under this  Agreement  pursuant  to an  assignment
agreement,  substantially  in the form set  forth in  Exhibit  VII  hereto  (the
"Assignment  Agreement") executed by such Purchasing  Financial  Institution and
such selling  Financial  Institution.  The consent of Conduit  shall be required
prior to the effectiveness of any such assignment.  Each assignee of a Financial
Institution  must have a short-term  debt rating of A-1 or better by S&P and P-1
by  Moody's  and must agree to deliver  to the  Agent,  promptly  following  any
request therefor by the Agent or Conduit, an enforceability  opinion in form and
substance  satisfactory to the Agent and Conduit.  Upon delivery of the executed
Assignment Agreement to the Agent,

     (c)  such  selling  Financial   Institution  shall  be  released  from  its
obligations  hereunder  to  the  extent  of  such  assignment.   Thereafter  the
Purchasing  Financial  Institution  shall  for  all  purposes  be  an  Financial
Institution  party  to  this  Agreement  and  shall  have  all  the  rights  and
obligations of an Financial  Institution under this Agreement to the same extent
as if it were an  original  party  hereto  and no  further  consent or action by
Seller, the Purchasers or the Agent shall be required.

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     (d) Each of the  Financial  Institutions  agrees  that in the event that it
shall cease to have a short-term  debt rating of A-1 or better by S&P and P-1 by
Moody's  (an  "Affected   Financial   Institution"),   such  Affected  Financial
Institution shall be obliged,  at the request of Conduit or the Agent, to assign
all of its rights and obligations hereunder to (x) another Financial Institution
or (y) another funding entity  nominated by the Agent and acceptable to Conduit,
and willing to participate in this Agreement  through the Liquidity  Termination
Date in the place of such  Affected  Financial  Institution;  provided  that the
Affected  Financial  Institution  receives  payment  in  full,  pursuant  to  an
Assignment  Agreement,  of an amount equal to such Financial  Institution's  Pro
Rata Share of the Capital and Yield owing to the Financial  Institutions and all
accrued but unpaid fees and other costs and  expenses  payable in respect of its
Pro Rata Share of the Purchaser Interests of the Financial Institutions.

     Section 13.2 Participations.

     Any Financial  Institution  may, in the ordinary  course of its business at
any  time  sell to one or more  Persons  (each  a  "Participant")  participating
interests  in its Pro Rata Share of the  Purchaser  Interests  of the  Financial
Institutions, its obligation to pay Conduit its Acquisition Amounts or any other
interest of such Financial Institution hereunder.  Notwithstanding any such sale
by a Financial  Institution of a participating  interest to a Participant,  such
Financial Institution's rights and obligations under this Agreement shall remain
unchanged,  such Financial  Institution shall remain solely  responsible for the
performance  of its  obligations  hereunder,  and Seller,  Conduit and the Agent
shall  continue to deal solely and directly with such  Financial  Institution in
connection with such Financial  Institution's  rights and obligations under this
Agreement.  Each Financial  Institution  agrees that any agreement  between such
Financial  Institution and any such Participant in respect of such participating
interest shall not restrict such Financial  Institution's  right to agree to any
amendment,  supplement, waiver or modification to this Agreement, except for any
amendment, supplement, waiver or modification described in Section 16.1(b)(i).

                                  ARTICLE XIV
                               LIQUIDITY FACILITY

     Section 14.1 Transfer to Financial Institutions.

     Each Financial  Institution  hereby agrees,  subject to Section 14.4,  that
immediately  upon  written  notice  from  Conduit  delivered  on or prior to the
Liquidity Termination Date, it shall acquire by assignment from Conduit, without
recourse  or  warranty,  its Pro  Rata  Share  of one or  more of the  Purchaser
Interests of Conduit as specified by Conduit.  Each such  assignment  by Conduit
shall be made pro rata among the Financial Institutions, provided, however, that
Conduit  may at any  time  and from  time to  time,  in its  sole  and  absolute
discretion,  make any such assignment to any Affected Financial Institution on a
non-pro rata basis.  Each Financial  Institution  shall, no later than 1:00 p.m.
(Chicago  time) on the date of such  assignment,  pay in  immediately  available
funds to the Agent at an account  designated  by the Agent,  for the  benefit of
Conduit,  its Acquisition Amount.  Unless an Financial  Institution has notified
the Agent that it does not intend to pay its Acquisition  Amount,  the Agent may
assume that such payment has been made and may,  but shall not be obligated  to,
make the amount of such  payment  available  to Conduit  in  reliance  upon such
assumption.  Conduit  hereby  sells and  assigns  to the  Agent for the  ratable
benefit  of the  Financial  Institutions,  and the Agent  hereby  purchases  and
assumes  from  Conduit,  effective  upon the  receipt by Conduit of the  Conduit

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Transfer Price, the Purchaser  Interests of Conduit which are the subject of any
transfer pursuant to this Article XIII.

     Section 14.2 Transfer Price Reduction Yield.

     If the  Adjusted  Liquidity  Price is  included in the  calculation  of the
Conduit Transfer Price for any Purchaser  Interest,  each Financial  Institution
agrees that the Agent shall pay to Conduit the Reduction Percentage of any Yield
received by the Agent with respect to such Purchaser Interest.

     Section 14.3 Payments to Conduit.

     In  consideration  for the reduction of the Conduit  Transfer Prices by the
Conduit Transfer Price Reductions,  effective only at such time as the aggregate
amount of the Capital of the Purchaser  Interests of the Financial  Institutions
equals the Conduit Residual,  each Financial  Institution hereby agrees that the
Agent shall not distribute to the Financial  Institutions and shall  immediately
remit to Conduit any Yield,  Collections or other payments  received by it to be
applied  pursuant to the terms  hereof or otherwise to reduce the Capital of the
Purchaser Interests of the Financial Institutions.

     Section  14.4   Limitation on Commitment to Purchase from Conduit.

     Notwithstanding  anything to the contrary in this  Agreement,  no Financial
Institution  shall have any  obligation to purchase any Purchaser  Interest from
Conduit, pursuant to Section 14.1 or otherwise, if:

               (i) Conduit shall have  voluntarily  commenced any  proceeding or
          filed any petition  under any  bankruptcy,  insolvency  or similar law
          seeking the dissolution,  liquidation or  reorganization of Conduit or
          taken any corporate  action for the purpose of effectuating any of the
          foregoing; or

               (ii)  involuntary  proceedings or an  involuntary  petition shall
          have been  commenced or filed against  Conduit by any Person under any
          bankruptcy,   insolvency  or  similar  law  seeking  the  dissolution,
          liquidation  or  reorganization  of  Conduit  and such  proceeding  or
          petition shall have not been dismissed.

     Section 14.5 Defaulting  Financial  Institutions.

     If one or more Financial Institutions defaults in its obligation to pay its
Acquisition  Amount  pursuant to Section 13.1 (each such  Financial  Institution
shall be called a "Defaulting Financial Institution" and the aggregate amount of
such  defaulted  obligations  being herein  called the "Conduit  Transfer  Price
Deficit"),  then upon notice from the Agent,  each Financial  Institution  other
than  the  Defaulting  Financial   Institutions  (a  "Non-Defaulting   Financial
Institution")  shall promptly pay to the Agent, in immediately  available funds,
an amount equal to the lesser of (x) such Non-Defaulting Financial Institution's
proportionate  share (based upon the relative  Commitments of the Non-Defaulting
Financial Institutions) of the Conduit Transfer Price Deficit and (y) the unused
portion of such Non-Defaulting Financial Institution's  Commitment. A Defaulting
Financial  Institution  shall  forthwith  upon  demand  pay to the Agent for the
account of the  Non-Defaulting  Financial  Institutions all amounts paid by each
Non-Defaulting  Financial  Institution  on behalf of such  Defaulting  Financial
Institution,  together  with  interest  thereon,  for  each  day from the date a

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<PAGE>

payment was made by a Non-Defaulting  Financial  Institution until the date such
Non-Defaulting  Financial  Institution  has been paid such amounts in full, at a
rate per annum  equal to the  Federal  Funds  Effective  Rate  plus two  percent
(2.0%). In addition, without prejudice to any other rights that Conduit may have
under applicable law, each Defaulting Financial Institution shall pay to Conduit
forthwith  upon  demand,  the  difference  between  such  Defaulting   Financial
Institution's unpaid Acquisition Amount and the amount paid with respect thereto
by the Non-Defaulting  Financial  Institutions,  together with interest thereon,
for each day from the date of the Agent's request for such Defaulting  Financial
Institution's  Acquisition  Amount  pursuant to Section  14.1 until the date the
requisite  amount is paid to Conduit in full,  at a rate per annum  equal to the
Federal Funds Effective Rate plus two percent (2.0%).

                                   ARTICLE XV
                                  THE CUSTODIAN

     Section 15.1 Appointment of Custodian;  Delivery of Records;  Verification.

     Appointment of Custodian; Delivery of Receivable Documents; Verification

     (a) The  Seller  hereby  initially  appoints  Sage  Systems,  Inc.,  in its
independent corporate capacity, as the Custodian, to act as custodian and bailee
with respect to the Receivable  Documents  that are related to the  Receivables.
The Custodian  hereby accepts such  appointment  and agrees to maintain and hold
all such Receivable  Documents  received by it for the exclusive  benefit of the
Seller,  the  Servicer,  the  Agent and the  Purchasers.  With  respect  to such
Receivable  Documents,  the  Custodian  agrees  to act in  accordance  with this
Agreement  and in  accordance  with any  directions  of the Seller,  Servicer or
Agent. Under no circumstances  shall the Custodian (i) deliver possession of any
Receivable  Documents  to the  Servicer  or any other  Person,  or (ii) take any
directions  with  respect  to any  Receivable  Documents  from the  Seller,  the
Servicer or any other Person, without the express written consent of the Agent.

     (b) On a date at least five  Business Days prior to a proposed RSA Purchase
Date,  the  Originator  shall  deliver  or  cause  to be  delivered  (a)  to the
Custodian,  Seller and the Agent a Draft Schedule of Receivables pursuant to the
Sale  Agreement,  which shall list the  Receivables  the Originator  proposes to
transfer to Seller, and (b) to the Custodian, each Receivable Document listed in
the definition of "Receivable Documents."

     (c) Upon  receipt  of the  documents  described  in  Section  15.1(b),  the
Custodian  shall  verify that (i) all  documents  required to be delivered to it
pursuant to this Agreement are in the Custodian's possession, and that (ii) such
documents appear regular on their face and relate to the appropriate  Receivable
and none of the  Receivable  Documents  contain  evidence of any claims,  liens,
security interests or encumbrances (other than the Lien of this Agreement).

     (d) Not less than two  Business  Days prior to the  proposed  RSA  Purchase
Date, the Custodian  shall deliver to the  Originator,  the Seller and the Agent
(in both hard copy and electronic format acceptable to the Agent) a confirmation
and Schedule (the "Schedule of  Exceptions")  on which the Custodian  shall both
confirm that it has performed the verification  described in Section 15.1(c) and
note any  discrepancy or deficiency  which exists with respect to any Receivable
Document.  The delivery of such Schedule of Exceptions  shall be the Custodian's
representation that, other than the discrepancies and deficiencies  described in
such Schedule of Exceptions,  all Receivable  Documents required to be delivered

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hereunder are in the possession of the Custodian.  No Receivable which is listed
on a Schedule of Exceptions shall constitute an Eligible  Receivable  unless the
Agent, in its sole discretion, has consented in writing to the treatment of such
Receivable as an Eligible Receivable.

     (e) Not more than five Business Days  following each RSA Purchase Date, the
Custodian  shall ensure that All  Receivable  Documents  related to  Receivables
conveyed  to Seller on an RSA  Purchase  Date will be marked and placed in files
which pertain only to Receivables conveyed to Seller, which files are physically
separated from the files relating to other receivables which the Custodian holds
on behalf of itself or others, including other TWRI Receivables.

     Section 15.2  Receipts.

     On the  Business  Day  immediately  preceding  an RSA  Purchase  Date,  the
Custodian shall deliver (in both hard copy and electronic  format  acceptable to
the Agent) (i) an original certification and receipt in the form attached hereto
as Exhibit XI (a "Receipt") to the Originator, and (ii) copies of the Receipt to
the Seller and Agent.  Each  Receipt  shall  include a list of all  Receivables,
including  such  newly  sold  Receivables,  for which the  Custodian  is holding
Receivable Documents.

     Section 15.3 Duties of Custodian.

     (a)  Covenant  of  Custodian.  Until this  Agreement  has  terminated,  the
Custodian  shall  maintain the Master  Schedule of Receivables at its office set
forth on the signature page hereof for inspection  during normal  business hours
by interested parties.

     (b)  Standard  of  Care.  The  Custodian  shall  use  reasonable  care,  in
accordance  with the standard  customs  adhered to by  institutions  that act as
custodians in the performance of its obligations hereunder.

     (c)  Facilities.  The Custodian  shall maintain  continuous  custody of all
items  delivered to it in secure  fireproof  facilities  located at 2553 B 152nd
Avenue, Space #15K2, Redmond,  Washington 98052. The Custodian will notify Agent
of any change of address  no less than 90 days in advance of any  relocation  of
these  facilities.  The Custodian  shall provide access to the facilities to the
Seller and the Agent or their related  representatives  at such time as the each
may reasonably request.

     (d)  Reviews.  The  Custodian  shall  conduct,  or cause  to be  conducted,
periodic  reviews of all items held by it under this  Agreement in such a manner
as  shall  enable  the  Seller  and the  Agent to  verify  the  accuracy  of the
Custodian's record keeping. The Custodian shall immediately report to the Seller
and the Agent any defect with respect to a Receivable Document or any failure on
its part to hold the Receivable Documents as herein provided.

     (e) Release of Documents. Upon receipt of a Request for Release as provided
in Section 2.10 of this  Agreement,  the Custodian  shall,  within five Business
Days, deliver the requested Receivable Documents as directed in such Request for
Release.  Receivable  Documents  properly  released as provided in Section  2.10
shall be free of the  interests  of the Agent for the benefit of the  Purchasers
under this Agreement. Upon notice of a the declaration of the Amortization Date,

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<PAGE>

and if TWRI or any of its  Subsidiaries  or  Affiliates  is no longer  acting as
Servicer, the Custodian shall cooperate to effect the transfer of the Records to
such third parties as is necessary.

     (f) Insurance.  The Custodian  shall,  at its own expense,  maintain at all
times during the existence of this Agreement,  and keep in full force and effect
(a) fidelity insurance,  (b) theft of document insurance, (c) forgery insurance,
and (d) insurance covering the risk of errors and omissions.  All such insurance
shall be in amounts,  with standard coverage and subject to deductibles,  as are
customary   for  insurance   typically   maintained  by  custodians  in  similar
transactions.  A certificate  of the  respective  insurer as to each such policy
shall be furnished to the Agent,  upon  request,  stating that such policy is in
full force and effect.

     (g) Updated  Receipt and Receivable  Data. On each  Determination  Date and
within two  Business  Days of a request  from the  Agent,  the  Custodian  shall
provide  (i) an  updated  Receipt  (in  both  hard  copy and  electronic  format
acceptable  to the Agent) to the Agent,  as to the  Receivable  Documents in its
possession  and (ii)  such  electronic  data  regarding  the  Receivables  as is
reasonably  requested  by the Agent in a format  acceptable  to the  Agent.  (h)
Copies of  Receivable  Documents.  Upon  request from the Agent,  the  Custodian
shall, at the expense of the Servicer, provide copies of Receivable Documents to
the Agent.

     (i)  Annual  Reports.  Custodian  will  maintain  for  itself a  system  of
accounting  established and  administered in accordance with GAAP and furnish to
the  Agent,  within  90 days  after  the  close  of each  of its  fiscal  years,
unaudited,  unqualified  financial  statements (which may be internally prepared
and shall  include  balance  sheets and  statements  of income)  certified by an
Authorized Officer.

     Section 15.4 Representations and Warranties of Custodian.

     The  Custodian,  in  its  individual  corporate  capacity,  represents  and
warrants to the Agent and the Purchasers that:

     (a) The  Custodian  (i) is duly  organized,  validly  existing  and in good
standing under the laws of the  jurisdiction of its  incorporation  and (ii) has
full  corporate  power and  authority  to conduct its  business and affairs as a
Custodian;

     (b) The  Custodian  does not  control,  is not  controlled  by nor is under
common control with, the Seller;

     (c)  In  respect   of  other   creditors,   lenders   or  other   financial
intermediaries  of  Originator  or any  Affiliate  of  Originator  for which the
Custodian is acting as custodian, the Custodian is (i) in possession of all loan
files  required by the related loan  documents,  and (ii) is in compliance  with
such loan documents; and

     (d) This  Agreement,  when executed and delivered by the  Custodian,  shall
constitute the valid, legal and binding obligation of the Custodian, enforceable
against the Custodian in accordance  with its terms,  except as the  enforcement
thereof may be limited by applicable  receivership or similar debtor relief laws
and that certain equitable  remedies may not be available  regardless of whether
enforcement is sought in equity or at law.

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<PAGE>

     Section 15.5 Indemnification of Custodian.

     The  Custodian  in its  individual  corporate  capacity,  hereby  agrees to
indemnify  and  hold  the  Servicer,  the  Seller,  WorldMark  (subject  to  the
provisions of any separate  agreement between the Custodian and WorldMark),  the
Agent, the Purchasers,  their  shareholders,  affiliates,  directors,  officers,
employees, agents, successors and assigns, harmless from and against any and all
losses,  claims,   demands,  causes  of  action,  or  other  legal  proceedings,
judgments,   costs,  liabilities  and/or  expenses,   including  all  reasonable
attorney's fees, incurred resulting from

               (i) the Custodian's negligence,  willful misconduct or failure to
          perform its obligations hereunder,

               (ii) a breach of any  representation or warranty by the Custodian
          contained in this Agreement, or

               (iii)  failure  to  comply  with  any  applicable  law,  Rule  or
          regulation with respect to any Receivable or Contract related thereto.

The foregoing indemnification provisions set forth shall survive any termination
of this Agreement.

     Section  15.6  Adverse  Interests.

     By execution of this  Agreement,  the  Custodian  represents,  warrants and
covenants  that it does not  currently  hold,  and during the  existence of this
Agreement shall not hold, any adverse interest, by way of security or otherwise,
in any Receivable,  and hereby waives and releases any such interest that it may
have  in any  Receivable  as of  the  date  hereof.  Notwithstanding  any  other
provisions  of  this  Agreement  and  without  limiting  the  generality  of the
foregoing,  the Custodian  shall not at any time exercise or seek to enforce any
claim, right or remedy, including any statutory or common law rights of set-off,
if any,  that the  Custodian  may  otherwise  have  against all or any part of a
Record, Receivable or proceeds of either.

     Section 15.7 Termination of Custodian.

     (a) The Agent may,  without  cause,  request that the Custodian be replaced
with a  successor  custodian.  Upon  receipt  of  written  directions  from  the
Purchasers that the Purchasers  desire to remove the Custodian,  the Agent shall
promptly  notify the Custodian  that all its rights and  obligations  under this
Agreement  are  terminated  and the  Seller,  with the  consent of the  Required
Financial  Institutions,  shall immediately  appoint the successor  custodian as
Custodian.

     (b) Upon receipt of such notice,  the  Custodian  will take such actions as
are  necessary to best  facilitate  the  transition  of the  performance  of the
Custodian's  activities  to the  successor  Custodian,  and the  Seller  and the
Custodian shall assist the successor  custodian to assume and perform the duties
of the Custodian  hereunder  (including the immediate delivery of all Receivable
Documents to the successor custodian).

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<PAGE>

                                  ARTICLE XVI
                                  MISCELLANEOUS

     Section 16.1 Waivers and Amendments.

     (a) No  failure  or  delay on the part of the  Agent  or any  Purchaser  in
exercising any power,  right or remedy under this  Agreement  shall operate as a
waiver  thereof,  nor shall any single or partial  exercise  of any such  power,
right or remedy preclude any other further  exercise  thereof or the exercise of
any other power,  right or remedy. The rights and remedies herein provided shall
be cumulative and  nonexclusive  of any rights or remedies  provided by law. Any
waiver of this Agreement  shall be effective  only in the specific  instance and
for the specific purpose for which given.

     (b) No provision of this Agreement may be amended,  supplemented,  modified
or waived  except in writing in accordance  with the  provisions of this Section
16.1(b). The Conduit,  the Servicer,  the Seller and the Agent, at the direction
of the Required Financial Institutions,  may enter into written modifications or
waivers of any provisions of this  Agreement,  provided,  however,  that no such
modification or waiver shall:

               (i) without the consent of each  affected  Purchaser,  (a) extend
          the Liquidity  Termination  Date or the date of any payment or deposit
          of  Collections  by Seller or the  Servicer,  (b)  reduce  the rate or
          extend the time of payment of Yield (or any  component  thereof),  (c)
          reduce any fee payable to the Agent for the benefit of the Purchasers,
          (d) except  pursuant to Article XIII hereof,  change the amount of the
          Capital of any ------------ Purchaser, any Financial Institution's Pro
          Rata  Share  (except  pursuant  to  Sections  14.1  or  14.5)  or  any
          -------------  ----  Financial  Institution's  Commitment,  (e) amend,
          modify or waive any provision of the definition of Required  Financial
          Institutions  or this  Section  16.1(b),  (F) consent to or permit the
          assignment or ---------------  transfer by Seller of any of its rights
          and  obligations  under this  Agreement,  (G) change the definition of
          "Eligible Receivable",  "Aggregate Reserves" or "Reserve Fund Required
          Amount"or (H) amend or modify  -------------------  ------------------
          ----------------------------  any defined  term (or any  defined  term
          used  directly or indirectly in such defined term) used in clauses (a)
          through (G) above in a manner that would  circumvent  the intention of
          the restrictions set forth in such clauses; or

               (ii) without the written consent of the then Agent, amend, modify
          or waive any provision of this  Agreement if the effect  thereof is to
          affect the rights or duties of such Agent.

Notwithstanding  the  foregoing,  (i)  without  the  consent  of  the  Financial
Institutions,  the Agent may, with the consent of Seller and the Servicer, amend
this  Agreement  solely to add  additional  Persons  as  Financial  Institutions
hereunder and (ii) the Agent,  the Required  Financial  Institutions and Conduit
may enter into  amendments  to modify any of the terms or  provisions of Article
XII,  Article  XIII,  Section  16.13 or any other  provision  of this  Agreement
without the consent of Seller and the Servicer, provided that such amendment has
no  negative  impact  upon such  Person.  Any  modification  or  waiver  made in
accordance with this Section 16.1 shall apply to each of the Purchasers  equally
and shall be binding upon Seller, the Purchasers and the Agent.

     Section 16.2 Notices.

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<PAGE>

     Except as provided  below,  all  communications  and notices  provided  for
hereunder  shall be in writing  (including  bank wire,  telecopy  or  electronic
facsimile  transmission  or  similar  writing)  and  shall be given to the other
parties hereto at their  respective  addresses or telecopy  numbers set forth on
the signature  pages hereof or at such other address or telecopy  number as such
Person  may  hereafter  specify  for the  purpose of notice to each of the other
parties hereto.  Each such notice or other  communication shall be effective (i)
if given by telecopy,  upon the receipt  thereof,  (ii) if given by mail, at the
time such  communication  is received  via first class mail or (iii) if given by
any other means,  when  received at the address  specified in this Section 16.2.
Seller hereby  authorizes  the Agent to effect  purchases and Tranche Period and
Discount Rate selections based on telephonic notices made by any Person whom the
Agent in good faith believes to be acting on behalf of Seller.  Seller agrees to
deliver promptly to the Agent a written  confirmation of each telephonic  notice
signed  by an  authorized  officer  of  Seller;  however,  the  absence  of such
confirmation  shall not affect  the  validity  of such  notice.  If the  written
confirmation  differs  from the action  taken by the Agent,  the  records of the
Agent shall govern absent manifest error.

     Section  16.3  Ratable  Payments.

     If any  Purchaser,  whether by setoff or otherwise,  has payment made to it
with respect to any portion of the  Aggregate  Unpaids  owing to such  Purchaser
(other than  payments  received  pursuant to Section  11.2 or 11.3) in a greater
proportion  than that  received  by any other  Purchaser  entitled  to receive a
ratable share of such Aggregate  Unpaids,  such Purchaser agrees,  promptly upon
demand,  to  purchase  for cash  without  recourse or warranty a portion of such
Aggregate  Unpaids held by the other Purchasers so that after such purchase each
Purchaser will hold its ratable proportion of such Aggregate  Unpaids;  provided
that if all or any portion of such excess  amount is thereafter  recovered  from
such Purchaser, such purchase shall be rescinded and the purchase price restored
to the extent of such recovery, but without interest.

     Section 16.4 Protection of Ownership Interests of the Purchasers.

     (a) Seller agrees that from time to time, at its expense,  it will promptly
execute and deliver all  instruments and documents,  and take all actions,  that
may be necessary or  desirable,  or that the Agent may  reasonably  request,  to
perfect,  protect or more fully evidence the Purchaser  Interests,  or to enable
the Agent or the  Purchasers  to exercise and enforce  their rights and remedies
hereunder.  At any time after the  occurrence or during the  continuation  of an
Amortization  Event, the Agent may, or the Agent may direct Seller,  Servicer or
the Custodian to, notify the Obligors of Receivables,  at Seller's expense, that
the Agent is acting on behalf of the ownership interests of the Purchasers under
this  Agreement  and may also  direct  that  payments of all amounts due or that
become due under any or all  Receivables  be made  directly  to the Agent or its
designee.  Seller or the  Servicer (as  applicable)  shall,  at any  Purchaser's
request,  withhold the identity of such  Purchaser (but not of the Agent) in any
such notification.

     (b) If any  Originating  Party  fails  to  perform  any of its  obligations
hereunder,  the  Agent or any  Purchaser  may (but  shall  not be  required  to)
perform,  or cause  performance  of,  such  obligation,  and the Agent's or such
Purchaser's costs and expenses incurred in connection therewith shall be payable
by Seller as  provided  in Section  11.3.  Each  Originating  Party  irrevocably
authorizes the Agent at any time and from time to time in the sole discretion of
the Agent, and appoints the Agent as its  attorney-in-fact,  to act on behalf of
such Originating  Party (i) to execute on behalf of Seller as debtor and to file
financing  statements  necessary or desirable in the Agent's sole  discretion to
perfect and to  maintain  the  perfection  and  priority of the  interest of the

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<PAGE>

Purchasers in the Receivables  and (ii) to file a carbon,  photographic or other
reproduction  of this  Agreement or any financing  statement with respect to the
Receivables  as a financing  statement  in such offices as the Agent in its sole
discretion  deems  necessary  or  desirable  to  perfect  and  to  maintain  the
perfection and priority of the interests of the  Purchasers in the  Receivables.
This appointment is coupled with an interest and is irrevocable.

     (c) If, at any time following an Amortization Event, in connection with the
sale,  liquidation or disposition by the Agent, any Purchaser or any Servicer of
any Receivables,  Vacation Credits or other Related Security, it is necessary to
obtain  any  license  or to  register  or  qualify  any such  Person or any such
collateral under any applicable law or regulation, each Originating Party shall,
at the expense of such Originating Party, take all actions that may be necessary
or desirable,  or that the Agent may reasonably  request,  to assist in any such
licensing,  registration or  qualification,  and the  Originating  Parties shall
reimburse the Agent,  each Purchaser and any such Servicer (other than Trendwest
or any Affiliate thereof) for any fees, costs or expenses incurred thereby.

     Section 16.5 Confidentiality.

     (a) Each  Originating  Party and each  Purchaser  shall  maintain and shall
cause each of its employees and officers to maintain the confidentiality of this
Agreement and the other confidential proprietary information with respect to the
Agent and  Conduit  and their  respective  businesses  obtained by it or them in
connection with the  structuring,  negotiating and execution of the transactions
contemplated  herein,  except that such Originating Party and such Purchaser and
its officers and  employees may disclose such  information  to such  Originating
Party's and such Purchaser's  external accountants and attorneys and as required
by any applicable law or order of any judicial or administrative proceeding.

     (b) Anything herein to the contrary notwithstanding, each Originating Party
hereby consents to the disclosure of any nonpublic  information  with respect to
it (i) to the Agent, the Financial  Institutions or Conduit by each other,  (ii)
by the  Agent  or the  Purchasers  to any  prospective  or  actual  assignee  or
participant  of any  of  them  or  (iii)  by the  Agent  to any  rating  agency,
Commercial Paper dealer or provider of a surety, guaranty or credit or liquidity
enhancement to Conduit or any entity organized for the purpose of purchasing, or
making  loans  secured  by,  financial  assets  for  which  Bank One acts as the
administrative  agent  and  to  any  officers,  directors,   employees,  outside
accountants and attorneys of any of the foregoing.  In addition,  the Purchasers
and the Agent may disclose any such nonpublic  information  pursuant to any law,
rule, regulation, direction, request or order of any judicial, administrative or
regulatory  authority or proceedings  (whether or not having the force or effect
of law).

     Section 16.6 Bankruptcy Petition.

     Seller,  the  Servicer,  the Agent and each  Financial  Institution  hereby
covenants and agrees that,  prior to the date that is one year and one day after
the payment in full of all outstanding senior  Indebtedness of Conduit,  it will
not institute against, or join any other Person in instituting against,  Conduit
any   bankruptcy,   reorganization,   arrangement,   insolvency  or  liquidation
proceedings or other similar  proceeding  under the laws of the United States or
any state of the United States.

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<PAGE>

     Section  16.7  Limitation  of  Liability.

     Except with respect to any claim  arising out of the willful  misconduct or
gross negligence of Conduit,  the Agent or any Financial  Institution,  no claim
may be made by any Originating  Party or any other Person against  Conduit,  the
Agent or any Financial  Institution or their respective  Affiliates,  directors,
officers,   employees,   attorneys   or  agents  for  any   special,   indirect,
consequential or punitive damages in respect of any claim for breach of contract
or any other theory of liability  arising out of or related to the  transactions
contemplated  by this  Agreement,  or any act,  omission or event  occurring  in
connection therewith;  and each Originating Party hereby waives,  releases,  and
agrees not to sue upon any claim for any such  damages,  whether or not  accrued
and whether or not known or suspected to exist in its favor.

     Section 16.8 CHOICE OF LAW.

     THIS  AGREEMENT  SHALL BE GOVERNED  AND  CONSTRUED IN  ACCORDANCE  WITH THE
INTERNAL LAWS (AND NOT THE LAW OF  CONFLICTS) OF THE STATE OF ILLINOIS.

     Section  16.9  CONSENT  TO  JURISDICTION.

     EACH  ORIGINATING  PARTY HEREBY  IRREVOCABLY  SUBMITS TO THE  NON-EXCLUSIVE
JURISDICTION  OF ANY UNITED  STATES  FEDERAL OR ILLINOIS  STATE COURT SITTING IN
CHICAGO, ILLINOIS IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY DOCUMENT EXECUTED BY SUCH PERSON PURSUANT TO THIS AGREEMENT AND
EACH OF ORIGINATING PARTY HEREBY  IRREVOCABLY  AGREES THAT ALL CLAIMS IN RESPECT
OF SUCH ACTION OR PROCEEDING  MAY BE HEARD AND  DETERMINED IN ANY SUCH COURT AND
IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF
ANY SUCH SUIT,  ACTION OR PROCEEDING  BROUGHT IN SUCH A COURT OR THAT SUCH COURT
IS AN INCONVENIENT  FORUM.  NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE AGENT OR
ANY PURCHASER TO BRING  PROCEEDINGS  AGAINST ANY ORIGINATING PARTY IN THE COURTS
OF ANY OTHER  JURISDICTION.  ANY JUDICIAL  PROCEEDING BY ANY  ORIGINATING  PARTY
AGAINST THE AGENT OR ANY  PURCHASER OR ANY AFFILIATE OF THE AGENT OR A PURCHASER
INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED
TO,  OR  CONNECTED  WITH  THIS  AGREEMENT  OR  ANY  DOCUMENT  EXECUTED  BY  SUCH
ORIGINATING PARTY PURSUANT TO THIS AGREEMENT SHALL BE BROUGHT ONLY IN A COURT IN
CHICAGO, ILLINOIS.

     Section  16.10 WAIVER OF JURY TRIAL.

     EACH PARTY HERETO  HEREBY  WAIVES TRIAL BY JURY IN ANY JUDICIAL  PROCEEDING
INVOLVING,  DIRECTLY  OR  INDIRECTLY,  ANY  MATTER  (WHETHER  SOUNDING  IN TORT,
CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF,  RELATED TO, OR CONNECTED WITH
THIS AGREEMENT,  ANY DOCUMENT  EXECUTED BY THE SELLER PURSUANT TO THIS AGREEMENT
OR THE RELATIONSHIP ESTABLISHED HEREUNDER OR THEREUNDER.

     Section 16.11 Integration; Binding Effect; Survival of Terms.

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<PAGE>

     (a) This Agreement,  each Collection  Account  Agreement and the Fee Letter
contain  the final and  complete  integration  of all prior  expressions  by the
parties  hereto with respect to the subject  matter hereof and shall  constitute
the entire agreement among the parties hereto with respect to the subject matter
hereof superseding all prior oral or written understandings.

     (b) This  Agreement  shall be binding  upon and inure to the benefit of the
parties hereto and their respective  successors and permitted assigns (including
any Paying Agent in bankruptcy).  This Agreement shall create and constitute the
continuing  obligations of the parties  hereto in accordance  with its terms and
shall remain in full force and effect until  terminated in  accordance  with its
terms;  provided,  however, that the rights and remedies with respect to (i) any
breach of any representation and warranty made by any Originating Party pursuant
to Article V, (ii) the indemnification and payment provisions of Article XI, and
Sections  15.5,  16.3 and  16.4  shall  be  continuing  and  shall  survive  any
termination of this Agreement.

     Section  16.12  Counterparts;   Severability;   Section  References.

     This  Agreement  may be  executed  in any  number  of  counterparts  and by
different  parties  hereto  in  separate  counterparts,  each of  which  when so
executed  shall be deemed to be an original and all of which when taken together
shall  constitute one and the same  Agreement.  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.  Unless otherwise
expressly indicated,  all references herein to "Article,"  "Section," "Schedule"
or "Exhibit" shall mean articles and sections of, and schedules and exhibits to,
this Agreement.

     Section  16.13  Bank  One  Roles.

     Each of the Financial Institutions  acknowledges that Bank One acts, or may
in the future act, (i) as administrative agent for Conduit,  (ii) as issuing and
paying agent for the Commercial  Paper,  (iii) as Paying Agent,  (iv) to provide
credit or liquidity  enhancement for the timely payment for the Commercial Paper
and (v) to provide other  services from time to time for Conduit  (collectively,
the "Bank One Roles").  Without  limiting the  generality of this Section 16.13,
each Financial  Institution hereby acknowledges and consents to any and all Bank
One Roles and agrees  that in  connection  with any Bank One Role,  Bank One may
take,  or refrain  from  taking,  any action that it, in its  discretion,  deems
appropriate,  including in its role as administrative agent for Conduit, and the
giving of notice to the Agent of a mandatory purchase pursuant to Section 14.1.

     Section 16.14 Characterization.

     (a) It is the intention of the parties hereto that each purchase  hereunder
shall  constitute  and be treated as an absolute  and  irrevocable  sale,  which
purchase  shall  provide  the  applicable  Purchaser  with the full  benefits of
ownership of the applicable Purchaser Interest.  Except as specifically provided
in this Agreement,  each sale of a Purchaser  Interest hereunder is made without
recourse to Seller;  provided,  however, that (i) Seller shall be liable to each
Purchaser and the Agent for all  representations,  warranties and covenants made
by Seller pursuant to the terms of this  Agreement,  and (ii) such sale does not
constitute  and is not intended to result in an  assumption  by any Purchaser or
the Agent or any assignee  thereof of any obligation of Seller or the Originator

                                       49

<PAGE>

or any other person  arising in  connection  with the  Receivables,  the Related
Security,  or the related  Contracts,  or any other obligations of Seller or the
Originator.

     (b) If the  conveyance  by  Seller  to the  Agent  for the  benefit  of the
Purchasers of interests in Receivables  hereunder  shall be  characterized  as a
secured loan and not a sale, it is the intention of the parties hereto that this
Agreement  shall  constitute  a security  agreement  under  applicable  law.  In
furtherance of the foregoing,  Seller hereby grants to the Agent for the ratable
benefit of the  Purchasers  a valid and  perfected  security  interest in all of
Seller's  right,  title and  interest  in, to and  under  the  Receivables,  the
Collections, each Collection Account, all Related Security, all other rights and
payments  relating to the Receivables,  and all proceeds of any thereof prior to
all other  liens on and  security  interests  therein  to secure  the prompt and
complete  payment of the Aggregate  Unpaids.  After an Amortization  Event,  the
Agent and the Purchasers shall have, in addition to the rights and remedies that
they may have under this Agreement,  all other rights and remedies provided to a
secured  creditor  after default under the UCC and other  applicable  law, which
rights and remedies shall be cumulative.

                            [SIGNATURE PAGES FOLLOW]

                                       50

<PAGE>

     IN WITNESS  WHEREOF,  the parties  hereto have caused this  Agreement to be
executed and delivered by their duly authorized officers as of the date hereof.


                                   TW HOLDINGS III, INC.


                                   By:__________________________________
                                   Name:
                                   Title:

                                   Address: 9805 Willows Road
                                            Redmond, WA 98052


                                   TRENDWEST RESORTS INC.


                                   By:__________________________________
                                   Name:
                                   Title:

                                   Address: 9805 Willows Road
                                            Redmond, WA 98052


                                   SAGE SYSTEMS, INC.


                                   By:__________________________________
                                   Name:
                                   Title:

                                   Address:

INTERNATIONAL SECURITIZATION  CORPORATION


                                   By:__________________________________
                                            Authorized Signatory

                                   Address: c/o Bank One, NA
                                            (Main Office Chicago), as Agent
                                            Asset Backed Finance
                                            Suite 0079, 1-19
                                            1 Bank One Plaza
                                            Chicago, Illinois  60670-0019
                                   Fax:     (312) 732-1844

                                       51

<PAGE>

                                   Bank One, NA, as a Financial Institution  and
                                   as Agent


                                   By:__________________________________
                                   Name:
                                   Title:

                           Address:   Bank One, NA (Main Office Chicago)
                                      Asset Backed Finance
                                      Suite 0596, 1-21
                                      1 Bank One Plaza
                                      Chicago, Illinois  60670-0596

                           Fax:       (312) 732-4487


                                   Bank One, NA, as Paying Agent


                                   By:__________________________________
                                   Name:
                                   Title:

                           Address:    Bank One, NA
                                       ATTN: Darlington Cummings
                                       235 West Schrock Road
                                       Westerville, OH  43081

                           Fax:        (602) 221-1711

                                       52

<PAGE>

                                    EXHIBIT I
                                   DEFINITIONS

     As used in this  Agreement,  the  following  terms shall have the following
meanings (such meanings to be equally applicable to both the singular and plural
forms of the terms defined):

     "Accrual  Period"  means each  calendar  month,  provided  that the initial
Accrual Period  hereunder  means the period from (and including) the date of the
initial purchase hereunder to (and including) the last day of the calendar month
thereafter.

     "Accrued  Balance"  means,  with respect to a Receivable  as of any date of
determination, the Outstanding Balance of such Receivable plus the amount of any
accrued and unpaid interest on such Receivable on such date.

     "Acquisition  Amount"  means,  on the date of any purchase  from Conduit of
Purchaser  Interests  pursuant to Section 14.1,  with respect to each  Financial
Institution,  the lesser of (a) such Financial  Institution's  Pro Rata Share of
the  Conduit  Transfer  Price  and  (b)  such  Financial   Institution's  unused
Commitment.

     "Adjusted Liquidity Price" means, in determining the Conduit Transfer Price
for any Purchaser Interest, an amount equal to

     PI[(i)DC+(ii)DA+(iii)[    NDR     ]
                           -----------
                           1+(.50x.10)


     where:

        PI    =  the  undivided  percentage interest evidenced by such Purchaser
                 Interest.

        DC    =  the Deemed Collections.

        DA    =  the aggregate amount of funds in the Designated Accounts.

        NDR   =  the  Outstanding  Balance  of all  Receivables as  to which any
                 payment,  or part thereof, has not remained unpaid for 179 days
                 or more from the original due date for such payment.

Each of the foregoing  shall be determined  from the most recent  Monthly Report
received from the Servicer.

     "Adverse Claim" means a lien, security interest, charge or encumbrance,  or
other right or claim in, of or on any Person's  assets or properties in favor of
any other Person.

                                       1

<PAGE>

     "Affected  Financial  Institution"  has the  meaning  specified  in Section
13.1(c).

     "Affiliate" means, with respect to any Person, any other Person directly or
indirectly  controlling,  controlled  by,  or under  direct or  indirect  common
control with,  such Person or any  Subsidiary of such Person.  A Person shall be
deemed to control another Person if the controlling Person owns 10.0% or more of
any class of voting securities of the controlled  Person or possesses,  directly
or  indirectly,  the power to direct or cause the direction of the management or
policies of the  controlled  Person,  whether  through  ownership  of stock,  by
contract or otherwise.

     "Aged  Receivable"  means,  at the end of any Accrual  Period,  an Eligible
Receivable  which was assigned from  Originator  to Seller  pursuant to the Sale
Agreement on an RSA Purchase Date which  occurred 24 months or more prior to the
end of such Accrual Period. In the case of an Upgrade Receivable, such 24 months
shall be measured from the RSA Purchase Date upon which the related  Pre-Upgrade
Receivable was assigned from Originator to Seller.

     "Agent" has the meaning set forth in the preamble to this Agreement.

     "Aggregate  Reserves" means, on any date, an amount equal to 10% of the Net
Receivables Balance as of the close of business of the Servicer on such date.

     "Aggregate  Unpaids"  means, at any time, an amount equal to the sum of all
accrued and unpaid fees under the Fee Letter, CP Costs,  Yield,  Capital and all
other unpaid Obligations (whether due or accrued) at such time.

     "Agreement" means this Receivables Purchase Agreement, as it may be amended
or modified and in effect from time to time.

     "Amortization  Date"  means the  earlier to occur of (i) the  Business  Day
specified in a written  notice from the Agent  following  the  occurrence of any
Amortization  Event,  and (ii) the date  which is 30  Business  Days  after  the
Agent's  receipt of written  notice from Seller that it wishes to terminate  the
facility evidenced by this Agreement.

     "Amortization Event" has the meaning specified in Section 10.1.

     "Amortization Period Available Funds" shall mean, on any Settlement Date on
or following the Amortization  Date, the aggregate of (i) the Monthly  Available
Funds for such  Settlement  Date,  (ii) all  amounts on  deposit in the  Reserve
Account and (iii) if so determined by the Agent pursuant to Section 9.1(c),  all
amounts then on deposit in the Hedge Account.

     "Assignment Agreement" has the meaning set forth in Section 13.1(b).

     "Authorized Officer" shall mean, with respect to any Originating Party, its
respective corporate controller, chief financial officer or any other designated
officer acceptable to the Agent.

                                       2

<PAGE>

     "Automatic  Debit  Collection"  means the  payment  under a Contract  by an
Obligor by means of automatic  electronic funds transfer from the Obligor's bank
account to the Clearing Account.

     "Bank One" means Bank One, NA (with its main office in Chicago,  Illinois),
in its individual capacity, and its successors.

     "Big 5  Accounting  Firm" means any of the  independent  public  accounting
firms of Arthur Andersen,  Deloitte & Touche,  Ernst & Young, KPMG Peat Marwick,
PriceWaterhouseCoopers, or their successors.

     "Broken  Funding Costs" means for any Purchaser  Interest which (x) (i) has
its  Capital   reduced  or  terminated   without   compliance  with  the  notice
requirements  hereunder or (ii) is assigned  under  Article  XIII or  terminated
prior to the date it was originally scheduled, the excess, if any, of (a) the CP
Costs or Yield (as  applicable)  that would have accrued during the remainder of
the tranche  periods for Commercial  Paper  determined by the Agent to relate to
such Purchaser Interest  subsequent to the date of such reduction or termination
on the Capital of such Purchaser  Interest if such reduction or termination  had
not  occurred,  over (b) the sum of (x) to the  extent  all or a portion of such
Capital is allocated to another Purchaser Interest, actually accrued during such
periods on such Capital for the new  Purchaser  Interest,  and (y) to the extent
such Capital is not allocated to another Purchaser Interest, the income, if any,
actually  received  during such period by the holder of such Purchaser  Interest
from  investing  the portion of such Capital not so  allocated;  or (y) does not
become  subject  to  reduction  following  the  delivery  of  a  Monthly  Report
describing a reduction (as provided in Section  1.3),  the amount of CP Costs or
Yield,  swap  costs or other  interest  or  hedging  expense  that  accrues  for
Commercial  Paper or other funding sources  determined by the Agent to relate to
such Purchaser Interest  subsequent to the date such reduction was designated to
occur  pursuant  to such  Monthly  Report  on the  Capital  of  such  Receivable
Interest.  In the event that the amount  referred  to in clause (b)  exceeds the
amount referred to in clause (A), the relevant  Purchaser or Purchasers agree to
pay to the Seller the amount of such excess.  All Broken  Funding Costs shall be
due and payable  hereunder  upon demand.  "Business  Day" means any day on which
banks are not  authorized or required to close in New York, New York or Chicago,
Illinois and The Depository Trust Company of New York is open for business, and,
if the applicable  Business Day relates to any computation or payment to be made
with respect to the LIBO Rate, any day on which dealings in dollar  deposits are
carried on in the London interbank market.

     "Capital" of any Purchaser  Interest  means,  at any time, (a) the Purchase
Price of such Purchaser  Interest,  minus (b) the sum of the aggregate amount of
Collections  and other  payments  received  by the Agent  which in each case are
applied to reduce such Capital in  accordance  with the terms and  conditions of
this Agreement; provided that such Capital shall be restored (in accordance with
Section 2.5) in the amount of any  Collections or other payments so received and
applied if at any time the  distribution  of such  Collections  or payments  are
rescinded, returned or refunded for any reason.

     "Capitalization Ratio" means the ratio of (a) Consolidated  Indebtedness to
(b) Consolidated Net Worth.

                                       3

<PAGE>

     "Carrying and Servicing  Costs" means,  for any Accrual Period,  the sum of
(i) all CP Costs  for such  Accrual  Period,  (ii) all Yield  allocable  to such
Accrual  Period,  (iii) all fees set forth in the Fee Letter which are allocable
to such Accrual Period and (iv) the servicing  fees and expenses  payable to the
Servicer for such Accrual  Period  pursuant to Section 8.6 of this  Agreement or
otherwise,  in each case as  determined  by the Agent and  reported  pursuant to
Section 3.3 of this Agreement.

     "Change of Control"  means the  acquisition  by any Person,  or two or more
Persons acting in concert,  of beneficial  ownership (within the meaning of Rule
13d-3 of the Securities and Exchange  Commission  under the Securities  Exchange
Act of 1934) of 20% or more of the  outstanding  shares of  voting  stock of any
Originating Party.

     "Charge-Off  Factor" means,  with respect to any Accrual Period, a fraction
of which the numerator is 365 and the  denominator is the number of days in such
Accrual Period.

     "Charge-Off  Ratio" means,  with respect to any Accrual Period, a fraction,
expressed as a percentage  on a per annum basis,  the  numerator of which is the
product  of (x) the  Charge-off  Factor  for such  Accrual  Period,  and (y) the
Outstanding  Balance of all  Receivables  that  became  Charged-Off  Receivables
during  such  Accrual  Period  (but  excluding  the  Outstanding  Balance of all
Charged-off  Receivables that were repurchased by Originator pursuant to Section
1.5 on the Settlement  Date related to such Accrual  Period) and the denominator
of which is the average  Outstanding Balance of all Receivables for such Accrual
Period (but excluding any such repurchased Receivables).

     "Charged-Off  Receivable"  means a Receivable:  (i) as to which the Obligor
thereof  has taken  any  action,  or  suffered  any event to occur,  of the type
described in Section  10.1(d) (as if  references  to  Originating  Party therein
refer to such  Obligor;  (ii) as to which  the  Obligor  thereof,  if a  natural
person,  is deceased;  (iii) which,  consistent  with the Credit and  Collection
Policy, would be written off TWRI's books as uncollectible;  (iv) which has been
identified by Seller as uncollectible;  or (v) as to which any payment,  or part
thereof, remains unpaid for 179 days or more from the original due date for such
payment.

     "Charged-Off TWRI Receivable" means a TWRI Receivable:  (i) as to which the
Obligor thereof has taken any action, or suffered any event to occur, to that of
the type  described in Section  10.1(d) or a similar  event (as if references to
Originating Party therein refer to such bObligor);  (ii) as to which the Obligor
thereof,  if a natural  person,  is deceased,  (iii) which,  consistent with the
Credit  and   Collection   Policy,   would  be  written  off  TWRI's   books  as
uncollectible,  (iv) which has been identified by Seller as uncollectible or (v)
as to which any payment,  or part thereof,  remains  unpaid for 179 days or more
from the original due date for such payment.

     "Clearing Account" has the meaning set forth in Section 8.2(b).

     "Collection Account" has the meaning set forth in Section 2.9(a).

     "Collections"  means, with respect to any Receivable,  all cash collections
and other cash  proceeds  in respect of such  Receivable,  including  all yield,
finance  charges or other  related  amounts  accruing  in respect  thereof,  all

                                       4

<PAGE>

proceeds of repurchases pursuant to Section 1.5 of this Agreement,  all payments
made by or on behalf of Seller in  respect  of Deemed  Collections  and all cash
proceeds of Related Security with respect to such Receivable.

     "Commercial  Paper" means  promissory notes of Conduit issued by Conduit in
the commercial paper market.

     "Commitment" means, for each Financial Institution,  the commitment of such
Financial Institution to purchase its Pro Rata Share of Purchaser Interests from
(i)  Seller  and (ii)  Conduit,  such  Pro  Rata  Share  not to  exceed,  in the
aggregate,  the amount set forth opposite such Financial  Institution's  name on
Schedule A to this Agreement,  as such amount may be modified in accordance with
the terms hereof.

     "Conduit" has the meaning set forth in the preamble to this Agreement.

     "Conduit Residual" means the sum of the Conduit Transfer Price Reductions.

     "Conduit  Transfer Price" means,  with respect to the assignment by Conduit
of one or more Purchaser Interests to the Agent for the benefit of the Financial
Institutions  pursuant  to  Section  13.1,  the sum of (i) the lesser of (a) the
Capital of each Purchaser  Interest and (b) the Adjusted Liquidity Price of each
Purchaser  Interest and (ii) all accrued and unpaid CP Costs for such  Purchaser
Interest.

     "Conduit  Transfer Price Reduction" means in connection with the assignment
of a Purchaser Interest by Conduit to the Agent for the benefit of the Financial
Institutions,  the positive difference between (i) the Capital of such Purchaser
Interest and (ii) the Adjusted Liquidity Price for such Purchaser Interest.

     "Consolidated  Charge-Off Ratio" means, for any Accrual Period, a fraction,
expressed as a percentage  on a per annum basis,  the  numerator of which is the
product  of (x) the  Charge-off  Factor  for such  Accrual  Period,  and (y) the
Outstanding Balance of all TWRI Receivables that became Charged-Off  Receivables
during  such  Accrual  Period  and  the  denominator  of  which  is the  average
Outstanding Balance of all TWRI Receivables for each day in such Accrual Period.

     "Consolidated  Default Ratio" means, at any time, a percentage equal to (i)
the aggregate  Outstanding  Balance of all TWRI  Receivables that were Defaulted
TWRI Receivables at such time divided by (ii) the aggregate  Outstanding Balance
of all TWRI Receivables at such time.

     "Consolidated  Delinquency Ratio" means, at any time, a percentage equal to
(i)  the  aggregate  Outstanding  Balance  of all  TWRI  Receivables  that  were
Delinquent  TWRI  Receivables  at  such  time  divided  by  (ii)  the  aggregate
Outstanding Balance of all TWRI Receivables at such time.

     "Consolidated Indebtedness" means the consolidated Indebtedness of the TWRI
and its consolidated Subsidiaries.

                                       5

<PAGE>

     "Consolidated  Net Worth" means the  consolidated  shareholders'  equity of
TWRI and its consolidated Subsidiaries.

     "Contingent  Obligation"  of a Person means any  agreement,  undertaking or
arrangement by which such Person  assumes,  guarantees,  endorses,  contingently
agrees to purchase or provide funds for the payment of, or otherwise  becomes or
is contingently liable upon, the obligation or liability of any other Person, or
agrees to maintain the net worth or working capital or other financial condition
of any other  Person,  or  otherwise  assures any  creditor of such other Person
against loss,  including any comfort letter,  operating  agreement,  take-or-pay
contract or application for a letter of credit.

     "Contract"  means  a  Vacation  Owner  Agreement  and  any  and  all  other
instruments,   agreements,   invoices,  or  other  writings  pursuant  to  which
Indebtedness  of an  Obligor  to  Originator  arises  or  which  evidences  such
Indebtedness.

     "CP Costs" means,  for each day, the sum of (i) discount  accrued on Pooled
Commercial  Paper on such day,  plus  (ii) any and all  accrued  commissions  in
respect of placement agents and Commercial Paper dealers, and issuing and paying
agent fees incurred,  in respect of such Pooled  Commercial  Paper for such day,
plus (iii) other costs  associated  with funding  small or odd-lot  amounts with
respect  to all  receivable  purchase  facilities  which  are  funded  by Pooled
Commercial  Paper for such day, minus (iv) any accrual of income net of expenses
received  on  such  day  from  investment  of  collections  received  under  all
receivable  purchase  facilities  funded  substantially  with Pooled  Commercial
Paper,  minus (v) any payment received on such day net of expenses in respect of
Broken  Funding Costs related to the prepayment of any  Receivables  Interest of
Conduit  pursuant  to the terms of any  receivable  purchase  facilities  funded
substantially  with Pooled  Commercial  Paper, plus (vi) upon the occurrence and
during the  continuation of an Amortization  Event or an Excess Aged Receivables
Event,  an  amount  equal to the  daily  equivalent  of 2.0% per  annum of total
outstanding Capital. In addition to the foregoing costs, if Seller shall request
any  Incremental  Purchase  during any period of time determined by the Agent in
its sole  discretion to result in  incrementally  higher CP Costs  applicable to
such  Incremental  Purchase,  the Capital  associated with any such  Incremental
Purchase  shall,  during  such  period,  be deemed to be funded by  Conduit in a
special  pool  (which may  include  capital  associated  with  other  receivable
purchase  facilities)  for  purposes of  determining  such  additional  CP Costs
applicable  only to such  special  pool and charged  each day during such period
against such Capital.

     "Credit Agreement" means that certain Credit Agreement dated as of February
12, 1998, among TWRI, Bank of America National Trust and Savings Association and
other financial  institutions  party thereto,  as it may be amended from time to
time and any replacements thereof.

     "Credit  and  Collection  Policy"  means  Seller's  credit  and  collection
policies and  practices  relating to Contracts and  Receivables  existing on the
date hereof and summarized in Exhibit VIII hereto, as modified from time to time
in accordance with this Agreement.

     "Custodian"  means at any time  the  Person  then  authorized  pursuant  to
Article  XV to act as  custodian  and  bailee  with  respect  to the  Receivable
Documents.

                                       6

<PAGE>

     "Deemed  Collections"  means the aggregate of all amounts Seller shall have
been  deemed  to  have  received  as a  Collection  of a  Receivable.  Unless  a
Receivable has been  repurchased  pursuant to Section 1.5 or such Receivable has
been  the  subject  of an  Upgrade  which  complies  with  Section  1.6 of  this
Agreement,  Seller shall be deemed to have  received a  Collection  in full of a
Receivable if at any time (i) the Outstanding  Balance of any such Receivable is
either (x) reduced as a result of any  defective  or rejected  goods or services
(including  an  Obligor's  inability  to exercise  the  Obligor's  rights to use
Resorts and Units), any discount or any adjustment or otherwise by Seller (other
than cash  Collections on account of the Receivables) or (y) reduced or canceled
as a result of a setoff in  respect  of any claim by any  Person  (whether  such
claim  arises  out  of  the  same  or a  related  transaction  or  an  unrelated
transaction) or (ii) any of the  representations  or warranties in Article V are
no longer true with respect to any Receivable.

     "Default Fee" means with respect to any amount due and payable by Seller in
respect of any  Aggregate  Unpaids,  an amount equal to the greater of (i) $1000
and (ii) interest on any such unpaid Aggregate Unpaids at a rate per annum equal
to 2.0% above the Prime Rate.

     "Defaulted  Receivable"  means a Receivable on which payment of all or part
of the  amount  due  remains  unpaid for more than 90 and less than 179 days but
which is not a Charged-Off Receivable.

     "Defaulted TWRI Receivable" means a TWRI Receivable on which payment of all
or part of the amount due remains unpaid for more than 90 and less than 179 days
but which is not a Charged-Off TWRI Receivable.

     "Default Ratio" means, at any time, a percentage equal to (i) the aggregate
Outstanding  Balance of all Receivables that were Defaulted  Receivables at such
time divided by (ii) the aggregate  Outstanding  Balance of all  Receivables  at
such time.

     "Delinquency  Ratio"  means,  at any time,  a  percentage  equal to (i) the
aggregate   Outstanding   Balance  of  all  Receivables   that  were  Delinquent
Receivables  at such time divided by (ii) the aggregate  Outstanding  Balance of
all Receivables at such time.

     "Delinquent Receivable" means a Receivable as to which any payment, or part
thereof,  remains  unpaid for 31 or more days or more from the original due date
for such payment but which is not a Charged-Off Receivable.

     "Delinquent  TWRI  Receivable"  means a TWRI  Receivable  as to  which  any
payment,  or part thereof,  remains  unpaid for 31 or more days or more from the
original  due  date  for  such  payment  but  which  is not a  Charged-Off  TWRI
Receivable.

     "Designated  Accounts"  shall have the  meaning set forth in Section 2.8 of
this Agreement.

     "Determination Date" means, with respect to an Accrual Period, the 10th day
of the month following such Accrual Period, or if such day is not a Business Day
then the next succeeding Business Day.

                                       7

<PAGE>

     "Diluted  Receivable"  shall mean any Receivable in respect of which one or
more of the events  specified in clause (i) or clause (ii) of the  definition of
"Deemed Collections" shall have occurred.

     "Discount Rate" means the LIBO Rate or the Prime Rate, as applicable,  with
respect to each Purchaser  Interest of the Financial  Institutions,  except that
upon the occurrence and during the  continuation of an Amortization  Event or an
Excess  Aged  Receivables  Event,  Discount  Rate shall mean the Prime Rate plus
2.0%.

     "Draft Schedule of Receivables" has the meaning set forth in Section 1.1 of
the Sale Agreement.

     "Eligible  Investment"  shall  mean,  at any  time,  any one or more of the
following  types of  investments,  each of which shall mature on or prior to the
next succeeding Settlement Date:

     (i) direct marketable obligations of the United States having a maturity of
not more than 30 days from the date of acquisition;

     (ii)  marketable  obligations  directly and fully  guaranteed by the United
States as to the full and timely  payment of  principal  and  interest  having a
maturity of not more than 30 days from the date of acquisition;

     (iii) bankers'  acceptances and certificates of deposit denominated in U.S.
Dollars in each case having a maturity of not more than 30 days from the date of
acquisition,  and issued by any bank with capital, surplus and undivided profits
aggregating at least $100,000,000,  the short-term unsecured securities of which
are rated at least A-1 by S&P and P-1 by Moody's;

     (iv) commercial  paper having a maturity of not more than 30 days and which
is rated at least A-1 by S&P and P-1 by Moody's;

     (v) freely  redeemable  shares in no-load  money  market funds which invest
solely  in  obligations,  bankers'  acceptances,  certificates  of  deposit  and
commercial  paper of the types  described in clauses (i) through  (iv),  without
regard to the  limitations  as to the  maturity  of such  obligations,  bankers'
acceptances,  certificates  of  deposit  or  commercial  paper set forth in such
clauses, rated at least AAAm by S&P and Aaa by Moody's; and

     (vi) any money  market fund so long as it shall be rated by each of S&P and
Moody's  as either  AAAm,  Aaa,  as an  eligible  investment  for  AAA/Aaa  rate
transactions, or in the highest short-term rating assigned by S&P or Moody's.

     "Eligible Receivable" means, at any time, an Originated Receivable:

     (i) the  Obligor of which (a) if a natural  person,  is a  resident  of the
United States or any Canadian  province other than Quebec,  (b) if a corporation
or other business organization, is organized under the laws of the United States
or any Canadian province other than Quebec or any political  subdivision thereof

                                       8

<PAGE>

and has its chief executive office in the United States or any Canadian province
other than Quebec; (c) is not an Affiliate of any of the parties hereto; and (d)
is not a government or a governmental subdivision or agency,

     (ii) the Obligor of which is not the Obligor of any Delinquent  Receivable,
Defaulted Receivable or Charged-Off Receivable,

     (iii) which is not more than 30 days past due and which has never been more
than 30 days past due,

     (iv) each payment  (notwithstanding any payments made by the Obligor at the
time of entering  into a  Contract)  under which by its terms is due and payable
within no more than 45 days of the original billing date therefor,

     (v) which has not had its payment terms extended (other than in the case of
an Upgrade Contract),

     (vi) the remaining term of which is not greater than 84 months,

     (vii) on which the Obligor has made at least one payment (other than in the
case of an Upgrade Contract),

     (viii)  which is an  "account,"  "chattel  paper" or  "general  intangible"
within the meaning of Section 9-105 or Section 9-106,  respectively,  of the UCC
of all applicable jurisdictions,

     (ix) which is denominated  and payable only in United States dollars in the
United States,

     (x) which arises under a Contract which is in substantially  the form of ne
of the form contracts set forth on Exhibit IX hereto or which has been otherwise
approved by the Agent in writing,  which,  together with such Receivable,  is in
full force and effect and constitutes the legal, valid and binding obligation of
the related  Obligor  enforceable  against such Obligor in  accordance  with its
terms subject to no offset, counterclaim or other defense,

     (xi) which arises  under a Contract  which (a) does not require the Obligor
under such Contract to consent to the transfer, sale or assignment of the rights
and  duties  of  Seller  under  such   Contract  and  (b)  does  not  contain  a
confidentiality provision that purports to restrict the ability of any Purchaser
to exercise its rights under this  Agreement,  including its right to review the
Contract,

     (xii) .which  arises under a Contract  that contains an obligation to pay a
specified sum of money,

     (xiii)  which,  together  with  the  Contract  related  thereto,  does  not
contravene any law, Rule or regulation  applicable  thereto  (including any law,
Rule and  regulation  relating to truth in lending,  fair credit  billing,  fair
credit reporting,  equal credit opportunity,  fair debt collection practices and
privacy) and with respect to which no part of the Contract related thereto is in
violation of any such law, Rule or regulation,

                                       9

<PAGE>

     (xiv)  which  satisfies  all  applicable  requirements  of the  Credit  and
Collection Policy,

     (xv) which was generated in the ordinary course of Originator's business,

     (xvi)  which  arises  solely from the  purchase  of Vacation  Credits by an
Obligor or from an Upgrade by an Obligor,

     (xvii) as to which the Agent  has not  notified  Seller  that the Agent has
determined  that such Receivable or class of Receivables is not acceptable as an
Eligible  Receivable,  including because such Receivable arises under a Contract
that is not acceptable to the Agent,

     (xviii) as to which,  if such  Receivable  has been listed on a Schedule of
Exceptions  delivered  by the  Custodian  pursuant  to  Section  15.1(d) of this
Agreement,  the  Agent  has  consented  in  writing  to the  treatment  of  such
Receivable as an Eligible Receivable, and

     (xix)  the  Receivables  File for which  includes  all  related  Receivable
Documents.

     "Environmental   Claims"  means  all  claims,   however  asserted,  by  any
governmental   authority  or  other  Person  alleging  potential   liability  or
responsibility  for violation of any Environmental Law, or for release or injury
to the environment.

     "Environmental  Laws" means all  federal,  state or local  laws,  statutes,
common law duties, rules,  regulations,  ordinances and codes, together with all
administrative orders, directed duties, requests,  licenses,  authorizations and
permits of, and agreements  with,  any  governmental  authorities,  in each case
relating to environmental, health, safety and land use matters.

     "ERISA"  means the Employee  Retirement  Income  Security  Act of 1974,  as
amended from time to time.

     An  "Excess  Aged  Receivables  Event"  will  occur  on any date if (i) the
aggregate  outstanding amount of Capital on such date exceeds (ii) the result of
the Fresh Receivables  Balance on such date minus the Aggregate Reserves on such
date.

     "Excess  Concentration  Balances"  means at any time the amount (if any) by
which the  aggregate  Outstanding  Balance of the  Eligible  Receivables  of all
Obligors  which are (i)  natural  persons  resident  in Canada or (ii)  business
organizations  organized under the laws of Canada or any jurisdiction therein or
which have their chief executive  office in Canada or any  jurisdiction  therein
exceeds 10.0% of the aggregate Capital of all Purchaser Interests.

     "Facility Account" means Seller's Account No. 125000024-68617018 at Bank of
America, Washington.

     "Facility  Termination Date" means the earliest of (i) the occurrence of an
Amortization  Event,  (ii)  30  Business  Days  after  the  receipt  of  written
notification  from Seller to the Agent of Seller's  intention to  terminate  the
Liquidity Facility, and (iii) the Liquidity Termination Date.

                                       10

<PAGE>

     "Federal  Funds  Effective  Rate"  means,  for any  period,  a  fluctuating
interest  rate per annum equal for each day during such period  equal to (a) the
weighted  average of the rates on  overnight  federal  funds  transactions  with
members of the Federal  Reserve  System  arranged by federal funds  brokers,  as
published for such day (or, if such day is not a Business Day, for the preceding
Business Day) by the Federal  Reserve Bank of New York in the Composite  Closing
Quotations  for  U.S.  Government  Securities;  or (b) if  such  rate  is not so
published for any day which is a Business Day, the average of the  quotations at
approximately  10:30  a.m.  (Chicago  time)  for such  day on such  transactions
received by the  Reference  Bank from three  federal funds brokers of recognized
standing selected by it.

     "Fee  Letter"  means that  certain  letter  agreement  dated as of the date
hereof among the Seller,  the Originator and the Agent,  as it may be amended or
modified and in effect from time to time.

     "Finance  Charge  Receivable"  means a  Receivable  in  respect  of Finance
Charges.

     "Finance Charges" means, with respect to a Contract, any finance, interest,
late  payment  charges  or  similar  charges  owing by an  Obligor to the Seller
pursuant to such Contract or any service fees owed to the Seller related to such
Contract.  Finance  Charges do not  include  WorldMark  membership  dues owed by
Obligors.

     "Financial  Institutions" has the meaning set forth in the preamble in this
Agreement.

     "Fresh  Receivables   Balance"  means,  at  any  time,  (i)  the  aggregate
Outstanding Balance of all Eligible Receivables at such time reduced by (ii) the
Outstanding Balance of all Aged Receivables at such time.

     "Funding  Agreement"  means this  Agreement and any agreement or instrument
executed by any Funding Source with or for the benefit of Conduit.

     "Funding Source" means (i) any Financial  Institution or (ii) any insurance
company, bank or other funding entity providing liquidity, credit enhancement or
back-up purchase support or facilities to Conduit.

     "GAAP" means  generally  accepted  accounting  principles as in effect from
time to time in the United States, consistently applied.

     "Gross Excess Spread" means, for any Accrual Period,  the total Collections
in respect of Finance  Charge  Receivables  for such Accrual  Period,  minus the
Carrying and Servicing Costs for such Accrual Period.

     "Gross  Excess  Spread  Percentage"  means,  for any  Accrual  Period,  the
percentage  equivalent  of a fraction,  the numerator of which is the product of
twelve and the Gross Excess Spread for such Accrual Period,  and the denominator
of which is the average daily Outstanding Balance of all Receivables during such
Accrual Period.

     "Hedge  Account" shall have the meaning set forth in Section 2.8(c) of this
Agreement.

                                       11

<PAGE>

     "Hedge Accumulation Period" has the meaning set forth in Section 9.2(a).

     "Hedge  Event"  shall have the  meaning  set forth in  Section  9.1 of this
Agreement.

     "Hedge  Event Cure Date"  means the first  Settlement  Date  following  the
occurrence of a Hedge Event which is both (x) the third  consecutive  Settlement
Date on which no Hedge  Event has been in  existence  and (y) a date on which no
Amortization Event or Potential Amortization Event is then in existence.

     "Hedge  Receipts"  shall mean,  with respect to any  Settlement  Date,  the
aggregate amount of payments received by the Agent or in the Collection  Account
from the counterparty  under any Purchased Hedge since the preceding  Settlement
Date.

     "Hedging  Costs"  shall mean all costs  incurred  in the  acquisition  of a
Purchased Hedge pursuant to Section 9.2 of this Agreement and, if such Purchased
Hedge  requires the Seller,  the  Servicer,  the Agent or any  Purchaser to make
subsequent periodic or lump sum payments, any such payments.

     "Incremental  Purchase" means the initial purchase of a Purchaser  Interest
and any subsequent  purchase of one or more Purchaser  Interests which increases
the total outstanding Capital hereunder.

     "Indebtedness" of a Person means such Person's (i) obligations for borrowed
money, (ii) obligations  representing the deferred purchase price of property or
services  (other than accounts  payable  arising in the ordinary  course of such
Person's business payable on terms customary in the trade),  (iii)  obligations,
whether  or not  assumed,  secured by liens or payable  out of the  proceeds  or
production from property now or hereafter owned or acquired by such Person, (iv)
obligations which are evidenced by notes, acceptances, or other instruments, (v)
capitalized  lease  obligations,  (vi) net liabilities under interest rate swap,
exchange or cap agreements,  (vii) Contingent Obligations and (viii) liabilities
in respect of unfunded vested benefits under plans covered by Title IV of ERISA.

     "Independent Director" shall mean a member of the Board of Directors of the
Seller  who is not at such  time,  and  has not  been  at any  time  during  the
preceding  five (5) years,  (a) a director,  officer,  employee or  affiliate of
Seller, the Originator,  or any of their respective  Subsidiaries or Affiliates,
except  as (i) an  Independent  Officer  of the  Seller  or (ii) an  independent
director or independent  officer of any "special  purpose  entity" formed by the
Originator and its Affiliates,  or (b) the beneficial owner (at the time of such
individual's  appointment as an Independent  Director or at any time  thereafter
while  serving as an  Independent  Director)  of any of the  outstanding  common
shares of Seller,  the Originator,  or any of their  respective  Subsidiaries or
Affiliates,  having  general  voting rights nor is a sibling,  parent,  child or
spouse of the foregoing.

     "Independent  Officer" shall mean an executive officer of Seller who is not
at such time,  and has not been at any time during the preceding five (5) years,
(a) a director,  officer, employee or affiliate of Seller, Originator, or any of
their  respective  Subsidiaries  or  Affiliates,  except  as (i) an  Independent
Director of the Seller or (ii) an independent director or independent officer of
any "special purpose entity" formed by the Originator and its Affiliates, or (b)
the  beneficial  owner  (at  the  time of such  individual's  appointment  as an
Independent  Officer or at any time  thereafter  while serving as an Independent

                                       12

<PAGE>

Officer) of any of the outstanding common shares of Seller,  the Originator,  or
any of their  respective  Subsidiaries  or  Affiliates,  having  general  voting
rights, nor is a sibling, parent, child or spouse of the foregoing.

     "Installment Sale Contract" shall mean a vacation owner agreement  executed
by TWRI, WorldMark and an Obligor.

     "Interest  Coverage Ratio" means, as of the close of each fiscal quarter of
TWRI, the ratio of (a) the  consolidated net income of TWRI and its consolidated
Subsidiaries,  determined in accordance with GAAP but without deducting expenses
for interest, taxes on income,  depreciation,  or amortization,  for such fiscal
quarter and the preceding three  consecutive  fiscal quarters of the Servicer to
(b) the consolidated interest expense of TWRI and its consolidated  Subsidiaries
for such period.

     "LIBO  Rate"  means the rate per annum equal to the sum of (i) (a) the rate
at which deposits in U.S. Dollars are offered by the Reference Bank (which in no
case shall be Bank One or any of its  Subsidiaries or Affiliates) to first-class
banks in the London interbank  market at approximately  11:00 a.m. (London time)
two Business Days prior to the first day of the relevant  Tranche  Period,  such
deposits  being  in the  approximate  amount  of the  Capital  of the  Purchaser
Interest  to be  funded or  maintained,  divided  by (b) one  minus the  maximum
aggregate reserve requirement  (including all basic,  supplemental,  marginal or
other  reserves)  which is  imposed  against  the  Reference  Bank in respect of
Eurocurrency  liabilities,  as defined in Regulation D of the Board of Governors
of the Federal  Reserve  System as in effect from time to time  (expressed  as a
decimal),  applicable to such Tranche Period plus (ii) 1.0% per annum.  The LIBO
Rate shall be rounded, if necessary, to the next higher 1/16 of 1.0%.

     "Liquidity Termination Date" means January 5, 2001.

     "Master  Schedule of  Receivables"  shall mean a composite  Schedule of all
Receivables  conveyed from  Originator to Seller pursuant to the Sale Agreement,
excluding any Receivables (i) subsequently  repurchased or substituted for, (ii)
which were the subject of Upgrade Contracts,  and (iii) the Outstanding  Balance
on which has been reduced to zero.

     "Material  Adverse  Effect"  means a  material  adverse  effect  on (i) the
financial condition or operations of any Originating Party and its Subsidiaries,
(ii) the ability of any Originating  Party to perform its obligations under this
Agreement,  (iii) the legality,  validity or enforceability of this Agreement or
any other Transaction Document,  (iv) the Agent's or any Purchaser's interest in
the Receivables generally or in any significant portion of the Receivables,  the
Related  Security  or  the  Collections   with  respect  thereto,   or  (v)  the
collectibility  of the Receivables  generally or of any material  portion of the
Receivables.

     "Monthly Available Funds" shall mean, on any Settlement Date, the aggregate
of (i) the aggregate Collections received with respect to Receivables during the
related Accrual Period, (ii) all Deemed Collections with respect to such Accrual
Period (to the extent  actually  deposited  in the  Collection  Account by or on
behalf of the Seller on or prior to such Settlement  Date) and any unpaid Deemed
Collections  with respect to any earlier  Accrual Period (to the extent actually
deposited  in the  Collection  Account by or on behalf of the  Seller  since the
preceding  Settlement  Date),  (iii) all  amounts  deposited  in the  Collection
Account  pursuant to Section 1.5 in respect of the conveyance by Agent to Seller
of Charged-Off Receivables on such Settlement Date, (iv) all investment earnings

                                       13

<PAGE>

on funds in the Designated  Accounts,  including in any subaccount thereof,  (v)
Hedge Receipts for such Settlement Date and (vi) all amounts  transferred to the
Collection  Account and treated as Monthly  Available  Funds pursuant to Section
9.2 or Section 9.4.

     "Monthly Report" means a report,  in  substantially  the form of Exhibit IX
hereto (appropriately completed), furnished by the Servicer to the Agent and the
Paying Agent  pursuant to Section 8.5. In addition to such other  information as
may be included  therein,  each Monthly  Report shall set forth the  information
specified  in  Section  1.2(c)  of the  Sale  Agreement  and the  amounts  to be
distributed  pursuant  to each  clause of  Section  2.2(a) or  Section  2.3,  as
applicable.

     "Monthly  Report Date" means the date  specified in Section 8.5(a) on which
the Servicer will forward to the Agent and the Paying Agent the Monthly Report.

     "Monthly Shortfall" has the meaning specified in Section 2.2(b).

     "Moody's" means Moody's Investors Service, Inc.

     "Net Excess Spread" means, for any Accrual Period, the total Collections in
respect of Finance Charge Receivables for such Accrual Period,  minus the sum of
(i) the  Carrying and  Servicing  Costs for such  Accrual  Period,  and (ii) the
Accrued Balance of all Receivables which became  Charged-Off  Receivables during
such Accrual Period  (determined for each such Receivable  immediately  prior to
the time such Receivable became a Charged-Off Receivable).

     "Net  Excess  Spread   Percentage"  means,  for  any  Accrual  Period,  the
percentage  equivalent  of a fraction,  the numerator of which is the product of
twelve and the Net Excess Spread for such Accrual Period, and the denominator of
which is the average daily  Outstanding  Balance of all Receivables  during such
Accrual Period.

     "Net Receivables Balance" means, at any time, (i) the aggregate Outstanding
Balance of all Eligible Receivables at such time reduced by (ii) the sum at such
time of (x) Excess Concentration Balances and (y) the Outstanding Balance of all
Aged Receivables.

     "Obligations" shall have the meaning set forth in Section 2.1.

     "Obligor" means a Person obligated to make payments pursuant to a Contract.

     "Originated  Receivable"  means the Indebtedness and other obligations owed
by an Obligor to Originator (without giving effect to any transfer or conveyance
under the Sale  Agreement) or Buyer (after giving effect to the transfers  under
the Sale Agreement) whether constituting an account,  chattel paper,  instrument
or general  intangible,  arising under a contract and includes the obligation to
pay any Finance Charges with respect thereto.  Indebtedness and other rights and
obligations arising from any one transaction,  including  Indebtedness and other
rights and obligations represented by an individual invoice, shall constitute an
Originated  Receivable separate from an Originated  Receivable consisting of the
Indebtedness   and  other  rights  and   obligations   arising  from  any  other
transaction.

     "Originating  Parties"  has the meaning  set forth in the  preamble to this
Agreement.

                                       14

<PAGE>

     "Originator" means Trendwest Resorts,  Inc. in its capacity as Seller under
the Sale Agreement.

     "Outstanding  Balance"  of  any  Receivable  at any  time  means  the  then
outstanding principal balance thereof.

     "Paying Agent" has the meaning set forth in the preamble to this Agreement.

     "Person"  means  an  individual,  partnership,   corporation  (including  a
business  trust),  limited  liability  company,  joint  stock  company,   trust,
unincorporated  association,  joint venture or other entity,  or a government or
any political subdivision or agency thereof.

     "Pooled  Commercial  Paper" means Commercial Paper notes of Conduit subject
to any particular pooling arrangement by Conduit, but excluding Commercial Paper
issued by Conduit  for a tenor and in an amount  specifically  requested  by any
Person in connection with any agreement effected by Conduit.

                  "Potential  Amortization Event" means an event which, with the
passage  of  time  or the  giving  of  notice,  or  both,  would  constitute  an
Amortization Event.

     "Pre-Upgrade  Receivable"  has the meaning set forth in Section 1.6 of this
Agreement.

     "Prime  Rate"  means a rate per annum  equal to the prime rate of  interest
announced from time to time by Bank One or its parent (which is not  necessarily
the lowest rate charged to any  customer),  changing when and as said prime rate
changes.

     "Pro Rata Share" means, for each Financial  Institution,  the Commitment of
such Financial  Institution divided by the Purchase Limit, adjusted as necessary
to give effect to the application of the terms of Sections 14.1 or 14.5.

     "Purchase  Limit"  means  the  lesser  of  $75,000,000  and  98.04%  of the
aggregate Commitments of the Financial Institutions.

     "Purchase Notice" has the meaning set forth in Section 1.2.

     "Purchase  Price"  means,  with  respect to any  Incremental  Purchase of a
Purchaser Interest,  the amount paid to Seller for such Purchaser Interest which
shall  not  exceed  the  least of (i) the  amount  requested  by  Seller  in the
applicable  Purchase Notice, (ii) the excess, if any, of the Purchase Limit over
the aggregate  outstanding amount of Capital  immediately prior to such proposed
Incremental Purchase and (iii) the excess, if any, of the Outstanding Balance of
Eligible  Receivables (less the Aggregate  Reserves) on the applicable  purchase
date over the aggregate  outstanding amount of Capital determined as of the date
of the most recent Monthly Report,  adjusted on a pro forma basis to give effect
to such proposed Incremental Purchase.

     "Purchased  Hedge" means any interest rate swap,  cap,  option,  hedge,  or
other  derivative  instrument,  purchased by or on behalf of the Seller,  at the
direction of the Agent and acceptable to the Agent,  for the primary  purpose of
reducing  the risk to the  Seller or to the  Purchaser  Interests  of changes in
interest rates.

                                       15

<PAGE>

     "Purchaser" means Conduit or a Financial Institution, as applicable.

     "Purchaser  Interest" means, at any time, an undivided percentage ownership
interest  (computed as set forth below)  associated with a designated  amount of
Capital,  selected  pursuant  to the  terms  and  conditions  hereof  in (i) all
Receivables  arising  prior  to the  time  of the  most  recent  computation  or
recomputation of such undivided interest, (ii) all Related Security with respect
to such  Receivables,  and (iii) all  Collections  with  respect  to,  and other
proceeds of, such  Receivables.  Each such undivided  percentage  interest shall
equal:

where:                             C
                               --------
                               NRB - AR

                  C     =  the Capital of such Purchaser Interest.

                  AR    =  the Aggregate Reserves.

                  NRB   =  the Net Receivables Balance.

Such undivided  percentage ownership interest shall be initially computed on its
date of  purchase.  Thereafter,  until its  Amortization  Date,  each  Purchaser
Interest shall be automatically  recomputed (or deemed to be recomputed) on each
day prior to its Amortization Date. The variable  percentage  represented by any
Purchaser  Interest as computed ( or deemed  recomputed)  as of the close of the
business day immediately  preceding its Amortization  Date shall remain constant
at all times after such date.

     "Receipt" has the meaning set forth in Section 15.2 of this Agreement.

     "Receivable"  means an Originated  Receivable  that has been identified for
sale to the Buyer or sold to the Buyer,  as the context may  require,  but shall
not include any Removed Receivable from and after the date on which such Removed
Receivable is repurchased by the Originator hereunder.

     "Receivable  Documents" shall mean with respect to each Receivable and each
Obligor:

               (i) an original Installment Sale Contract;

               (ii) a notice of sale and assignment  affixed to the  Installment
          Sale Contract stating the following:

                  The Receivable  described  herein has been sold to TW Holdings
                  III, Inc.  pursuant to a Sale Agreement dated as of January 7,
                  2000 between Trendwest Resorts, Inc. and TW Holdings III, Inc.
                  Undivided  interests in the Receivable  described have further
                  been sold by TW Holdings  III, Inc. to Bank One, NA, as Agent,
                  pursuant  to a  Receivables  Purchase  Agreement  dated  as of
                  January  7,  2000  among  TW  Holdings  III,  Inc.,  Trendwest
                  Resorts,    Inc.,    Sage   Systems,    Inc.,    International
                  Securitization Corporation, Bank One, NA (Main Office Chicago)
                  and the Purchasers named therein.

                                       16

<PAGE>

               (iii) an original of each guarantee, assumption,  modification or
          substitution   agreement,   if  any,  which  relates  to  the  related
          Receivable (or copy thereof  certified by an officer of the Originator
          to be a true and correct copy); and

               (iv)  copies  of all  other  Receivable  Files  related  to  such
          Receivable.

     "Receivable   Files"  shall  mean  the   documents  and  other  papers  and
computerized  records  customarily  maintained  by  the  Servicer  in  servicing
receivables comparable to the Receivables.

     "Records"  means,  with respect to any  Receivable,  all  Contracts,  other
Receivable  Documents and other documents,  books, records and other information
(including  computer  programs,  tapes,  disks,  punch  cards,  data  processing
software  and related  property  and rights)  relating to such  Receivable,  any
Related Security therefor and the related Obligor.

     "Reduction  Percentage"  means, for any Purchaser  Interest acquired by the
Financial  Institutions from Conduit for less than the Capital of such Purchaser
Interest, a percentage equal to a fraction the numerator of which is the Conduit
Transfer  Price  Reduction for such  Purchaser  Interest and the  denominator of
which is the Capital of such Purchaser Interest.

     "Reference  Bank"  means  Bank One or such  other  bank as the Agent  shall
designate with the consent of Seller.

     "Related Security" means, with respect to any Receivable:

     (c) all security  interests or liens and property subject thereto from time
to time,  if any,  purporting  to secure  payment  of such  Receivable,  whether
pursuant to the Contract related to such Receivable or otherwise,  together with
all financing  statements  and security  agreements  describing  any  collateral
securing such Receivable,

     (d) all  guaranties,  insurance  and other  agreements or  arrangements  of
whatever  character  from time to time  supporting  or securing  payment of such
Receivable  whether  pursuant  to the  Contract  related to such  Receivable  or
otherwise,

     (e) all service  contracts and other  contracts and  agreements  associated
with such Receivable,

     (f) all Records related to such Receivable,

     (g) all of Seller's  right,  title and  interest  in, to and under the Sale
Agreement in respect of such Receivable, and

     (h) all proceeds of any of the foregoing.

     "Released  Receivable"  shall mean any Receivable  which (i) is a Defaulted
Receivable  or  a  Charged-Off   Receivable   for  which  Seller  has  paid  the

                                       17

<PAGE>

consideration  specified in Section 1.5,  (ii) is a  Pre-Upgrade  Receivable  in
respect of which an Upgrade has  occurred  and the Upgrade  Receivable  has been
assigned in  accordance  with  Section  1.6,  (iii) is a Diluted  Receivable  in
respect  of which all  Deemed  Collections  have been  paid in  accordance  with
Section 2.11,  (iv) is a Charged-off  Receivable or a Defaulted  Receivable with
respect to which the Vacation Credits have become  Repossessed  Vacation Credits
and have been repurchased  pursuant to Section 1.5(a)(y) or (v) has been paid in
full.

     "Removed   Receivable"  means  any  Receivable   conveyed  to  Seller  from
Originator  pursuant  to  Section  1.1 of the Sale  Agreement  but  subsequently
repurchased or substituted  for pursuant to Section 1.5 or otherwise  reconveyed
from Seller to Originator.

     "Repossessed  Vacation  Credits"  means,  with  respect  to  a  Charged-off
Receivable  or  a  Defaulted  Receivable,   Vacation  Credits  which  have  been
repossessed from or returned by the Obligor on such Receivable  (whether through
foreclosure, repossession, deed in lieu of foreclosure, or other means).

     "Required   Financial   Institutions"   means,   at  any  time,   Financial
Institutions with Commitments in excess of 66-2/3% of the aggregate Commitments.

     "Required Notice Period" means two days.

     "Reserve  Account"  has  the  meaning  set  forth  in  Section  2.8 of this
Agreement.

     "Reserve Fund Required  Amount" shall mean, as of any date, an amount equal
to 2.0% of the Capital outstanding on such date.

     "Resorts and Units" means those properties owned in fee simple by WorldMark
or in which  WorldMark  has a valid  leasehold  interest,  which  Obligors  have
limited  rights  to use under the  terms of the  Contracts  between  Originator,
WorldMark  and  Obligors.  This  definition  includes  all  Resorts and Units in
existence as of the date of this Agreement or which come into  existence  during
the term of this Agreement.

     "Revolving  Period  Termination Date" means January 5, 2001, or as extended
upon written notice from the Agent, on behalf of the Purchasers, to the Seller.

     "RSA  Purchase  Date" means (i) a date that is a "Purchase  Date" under the
Sale Agreement and (ii) any date on which Seller acquires any Upgrade Receivable
pursuant to the Sale Agreement.

     "S&P" means Standard & Poor's Ratings Services.

     "Sale Agreement" means that certain Receivables Sale Agreement, dated as of
the date hereof, between the Originator and Seller.

     "Schedule of  Exceptions"  has the meaning set forth in Section  15.1(d) of
this Agreement.

                                       18

<PAGE>

     "Schedule of  Receivables"  has the meaning set forth in Section 1.1 of the
Sale Agreement.

     "Seller" has the meaning set forth in the preamble to this Agreement.

     "Servicer"  means at any time the  Person  (which  may be the  Agent)  then
authorized  pursuant  to  Article  VIII  to  service,   administer  and  collect
Receivables.

     "Settlement  Date" means (a) the 20th day of each month (or, if such day is
not a Business  Day, then the next  Business  Day),  and (b) the last day of the
relevant  Tranche Period in respect of each Purchaser  Interest of the Financial
Institutions.

     "Settlement  Period"  means (a) in respect of each  Purchaser  Interest  of
Conduit,  the immediately  preceding Accrual Period,  and (b) in respect of each
Purchaser Interest of the Financial  Institutions,  the entire Tranche Period of
such Purchaser Interest.

     "Successor  Servicer  Fee" shall mean,  at anytime  that TWRI or one of its
Affiliates  is not then  active  as the  Servicer,  the fees and  other  amounts
required to provide  reasonable  compensation to the Servicer in connection with
servicing,  administering  and collecting the Receivables,  which fees and other
amounts shall have been agreed upon by Agent and such Servicer.

     "Subsidiary"  of a Person  means (i) any  corporation  more than 50% of the
outstanding  securities  having ordinary voting power of which shall at the time
be owned or controlled, directly or indirectly, by such Person or by one or more
of its  Subsidiaries or by such Person and one or more of its  Subsidiaries,  or
(ii) any partnership,  association,  limited liability company, joint venture or
similar business  organization  more than 50% of the ownership  interests having
ordinary  voting  power  of which  shall at the time be so owned or  controlled.
Unless otherwise  expressly  provided,  all references  herein to a "Subsidiary"
shall mean a Subsidiary of Originator.

     "Terminating Tranche" has the meaning set forth in Section 4.3(b).

     "Three-Month Average Consolidated Charge-Off Ratio" means, as at the end of
any Accrual Period,  the average of the Consolidated  Charge-off Ratios for such
Accrual Period and each of the two immediately preceding Accrual Periods.

     "Three-Month Average  Consolidated  Delinquency Ratio" means, as at the end
of any Accrual Period,  the average of the  Consolidated  Delinquency  Ratio for
such Accrual Period and each of the two immediately preceding Accrual Periods.

     "Three-Month  Average  Consolidated  Default Ratio" means, as at the end of
for any Accrual Period, the average of the Consolidated  Default Ratios for such
Accrual Period and each of the two immediately preceding Accrual Periods.

     "Three-Month  Average Charge-Off Ratio" means, as at the end of any Accrual
Period, the average of the Charge-Off Ratios for such Accrual Period and each of
the two immediately preceding Accrual Periods.

                                       19

<PAGE>

     "Three-Month Average Delinquency Ratio" means, as at the end of any Accrual
Period, the average of the Delinquency Ratio for such Accrual Period and each of
the two immediately preceding Accrual Periods.

     "Three-Month  Average  Default  Ratio" means,  as at the end of any Accrual
Period,  the average of the Default  Ratios for such Accrual  Period and each of
the two immediately preceding Accrual Periods.

     "Tranche  Period" means,  with respect to any Purchaser  Interest held by a
Financial Institution:

     (i) if Yield for such Purchaser  Interest is calculated on the basis of the
LIBO Rate, a period of one,  two,  three or six months,  or such other period as
may be mutually agreeable to the Agent and Seller,  commencing on a Business Day
selected by Seller or the Agent pursuant to this Agreement.  Such Tranche Period
shall  end  on the  day  in  the  applicable  succeeding  calendar  month  which
corresponds  numerically to the beginning day of such Tranche Period,  provided,
however,  that  if  there  is no  such  numerically  corresponding  day in  such
succeeding month, such Tranche Period shall end on the last Business Day of such
succeeding month; or

     (j) if Yield for such Purchaser  Interest is calculated on the basis of the
Prime Rate, a period  commencing on a Business Day selected by Seller and agreed
to by the Agent, provided no such period shall exceed one month.

If any  Tranche  Period  would end on a day which is not a  Business  Day,  such
Tranche Period shall end on the next succeeding Business Day, provided, however,
that in the case of Tranche Periods corresponding to the LIBO Rate, if such next
succeeding  Business Day falls in a new month,  such Tranche Period shall end on
the  immediately  preceding  Business Day. In the case of any Tranche Period for
any Purchaser Interest of which commences before the Amortization Date and would
otherwise end on a date  occurring  after the  Amortization  Date,  such Tranche
Period shall end on the  Amortization  Date. The duration of each Tranche Period
which  commences  after  the  Amortization  Date  shall be of such  duration  as
selected by the Agent.

     "Transaction Documents" means, collectively,  this Agreement, each Purchase
Notice, the Sale Agreement,  each Collection Account Agreement,  the Fee Letter,
the  Subordinated  Note  (as  defined  in  the  Sale  Agreement  and  all  other
instruments,  documents  and  agreements  executed and  delivered in  connection
herewith.

     "TWRI" shall have the meaning it is given in the preamble.

     "TWRI  Receivables"  shall mean, as of any time, all right to use timeshare
or  Vacation  Credit  receivables  originated  or  serviced  by TWRI  other than
receivables  that  have  been  paid in full or  charged  off and  including  the
Receivables.

     "UCC" means the Uniform  Commercial  Code as from time to time in effect in
the specified jurisdiction.

     "Unit" means an individual unit of which Resorts and Units are comprised.

                                       20
<PAGE>

     "Upgrade" means the  cancellation of an existing  Contract and entry into a
new, 84-month Contract by an Obligor,  WorldMark and TWRI, pursuant to which the
Obligor purchases additional Vacation Credits.

     "Upgrade Contract" means the new Contract entered into by an Obligor,  TWRI
and WorldMark related to an Upgrade by such Obligor.

     "Upgrade  Receivable"  has the  meaning  set forth in  Section  1.6 of this
Agreement.

     "Vacation Credits" means ownership  interests in WorldMark that entitle the
owner to use Resorts and Units.

     "WorldMark" has the meaning set forth in the preamble to the Agreement.

     "Year 2000 Plan" means a plan to prevent the Year 2000  Problem from having
an adverse effect upon the business, financial condition,  operations,  property
or prospects of a Person.

     "Year  2000  Problem"  means,  with  respect to any  Person,  the risk that
computer  applications  directly  used by that  Person  cannot or will not:  (a)
handle date information  involving any and all dates before, during and/or after
January 1, 2000, including accepting input, providing output and performing date
calculations in whole or in part; (b) operate accurately without interruption on
and in respect of any and all dates before, during and/or after January 1, 2000;
and (c) store and provide date input information  without creating any ambiguity
as to the century.

     "Yield"  means for each  respective  Tranche  Period  relating to Purchaser
Interests of the Financial  Institutions,  an amount equal to the product of the
applicable  Discount Rate for each Purchaser Interest  multiplied by the Capital
of such  Purchaser  Interest for each day elapsed  during such  Tranche  Period,
annualized on a 360 day basis.

     All accounting terms not specifically  defined herein shall be construed in
accordance  with  GAAP.  All terms  used in Article 9 of the UCC in the State of
Illinois,  and not  specifically  defined herein,  are used herein as defined in
such Article 9.

                                       21

<PAGE>

                                   EXHIBIT II

                             FORM OF PURCHASE NOTICE

[Date]


Bank One, NA (Main Office Chicago),
    as Agent for the Purchasers parties
    to the Receivables Purchase Agreement
    referred to below
Suite 0079, 1-21
1 Bank One Plaza
Chicago, Illinois 60670

Attention:  Asset Backed Finance

                  Re:   Purchase Notice

Ladies and Gentlemen:

     The undersigned refers to the Receivables  Purchase Agreement,  dated as of
January 7, 2000 (the "Receivables Purchase Agreement," the terms defined therein
being used  herein as therein  defined),  among the  undersigned,  as Seller and
Trendwest Resorts, Inc. ("Trendwest"),  as initial Servicer, Sage Systems, Inc.,
as Custodian,  International  Securitization  Corporation  ("Conduit"),  certain
Financial  Institutions  parties  thereto and Bank One, NA, as Agent for Conduit
and such  Financial  Institutions,  and hereby  gives you  notice,  irrevocably,
pursuant  to  Section  1.2 of  the  Receivables  Purchase  Agreement,  that  the
undersigned  hereby  requests  an  Incremental  Purchase  under the  Receivables
Purchase  Agreement,  and in that  connection  sets forth below the  information
relating to such Incremental  Purchase (the "Proposed  Purchase") as required by
Section 1.2 of the Receivables Purchase Agreement:

     (i) The Business Day of the Proposed  Purchase is [insert  purchase  date],
which date is at least two (2) Business Days after the date hereof.

     (ii) The requested  Purchase  Price in respect of the Proposed  Purchase is
$__________.

     (iii) If the Proposed Purchase to be funded by the Financial  Institutions,
the requested  Discount Rate is __________  and the requested  Tranche Period is
__________.

     (iv) Attached  hereto is each Schedule of Receivables  for any  Receivables
either  being  sold  under the Sale  Agreement  on the date of such  Incremental
Purchase  or which  were  sold  under the Sale  Agreement  since the date of the
preceding Incremental  Purchase.  Each such Schedule of Receivables includes the
applicable RSA Purchase Date.

                                       1
<PAGE>

     The undersigned hereby certifies that the following  statements are true on
the date hereof,  and will be true on the date of the Proposed  Purchase (before
and after giving effect to the Proposed Purchase):

     (a) the  representations  and  warranties of the  undersigned  set forth in
Section 5.1 of the Receivables Purchase Agreement are true and correct on and as
of the date of such Proposed Purchase as though made on and as of such date;

     (b) the Facility  Termination  Date shall not have occurred,  the aggregate
Capital of all Purchaser  Interests  shall not exceed the Purchase Limit and the
aggregate Purchaser Interests shall not exceed 100%; and

     (c) no event has  occurred  and is  continuing,  or would  result from such
Proposed  Purchase,  that  will  constitute  an  Amortization  Event,  Potential
Amortization Event or Excess Aged Receivables Event.

     The undersigned hereby certifies that the following statements will be true
on the date of the  Proposed  Purchase  (after  giving  effect  to the  Proposed
Purchase) (or that, if such  statements  are not true,  then the Seller will not
complete the Proposed Purchase):

     (1) all actions and conditions  specified in Article XV of the  Receivables
Purchase Agreement which are to be taken or satisfied on or prior to the date of
a Proposed Purchase shall have been fully performed or satisfied; and

     (2) the amount of funds in the  Reserve  Account  shall  equal at least the
Reserve Fund Required Amount.

                                     Very truly yours,

                                     TW HOLDINGS III, INC.


                                     By:________________________________
                                     Name:
                                     Title:

                                       2

<PAGE>

                                   EXHIBIT III

                 PLACES OF BUSINESS OF THE ORIGINATING PARTIES;
                              LOCATIONS OF RECORDS;
                     FEDERAL EMPLOYER IDENTIFICATION NUMBER

Place of Business:

         TW Holdings III, Inc.
         9805 Willows Road
         Redmond, WA 98052
         (425) 498-2544
         (425) 498-3053 fax

         Trendwest Resorts, Inc.
         9805 Willows Road
         Redmond, WA 98052
         (425) 498-2500
         (425) 498-3053 fax

Location of Records:

         9805 Willows Road
         Redmond, WA 98052
         (425) 498-2500
         (425) 498-3053 fax

Federal Employer Identification Number:

         Trendwest Resorts Inc.:    93-1004403
         TW Holdings III, Inc.:     91-2014178


<PAGE>

                                   EXHIBIT IV

                            FORM OF SELLER DIRECTION


                             TW Holdings, III, Inc.

                                Seller Direction

Bank One, NA (Main Office Chicago),
         as Agent
Asset Backed Finance
Suite 0079, 1-19
1 Bank One Plaza
Chicago, Illinois  60670-0019


Ladies and Gentlemen:

     Pursuant to the provisions of Section 2.10(c) of the  Receivables  Purchase
Agreement,  dated as of January 7,  2000,  among TW  Holdings  III,  Inc.,  (the
"Seller"),  Trendwest  Resorts,  Inc.,  as  Servicer,  Sage  Systems,  Inc.,  as
Custodian, and Bank One, NA (Main Office Chicago) as Agent and Paying Agent, you
are hereby  requested to release the Receivables  listed on Schedule A hereto in
exchange for $_______.  The undersigned hereby certifies that (i) the amount set
forth in the previous sentence equals the sum of the Outstanding Balances of the
Receivables  listed in Schedule A plus all accrued and unpaid  interest  thereon
and (ii) in choosing the  Receivables to be released,  the Seller has not used a
selection  process that identified any of the Receivables  being released as any
more  desirable  than the  Receivables  retained  by the  Agent on behalf of the
Purchasers.

     IN WITNESS  WHEREOF,  the  undersigned has executed this direction this ___
day of _____, ____.


TW HOLDINGS III, INC.


By: __________________________
      Name:
      Title



<PAGE>

                         SCHEDULE A TO SELLER DIRECTION

                             SCHEDULE OF RECEIVABLES


                                    EXHIBIT V
                         FORM OF COMPLIANCE CERTIFICATE

To: Bank One, NA (Main Office Chicago), as Agent

     This  Compliance   Certificate  is  furnished   pursuant  to  that  certain
Receivables  Purchase  Agreement  dated as of January 7, 2000 among TW  Holdings
III, Inc.,  (the  "Seller"),  Trendwest  Resorts,  Inc. (the  "Servicer"),  Sage
Systems,  Inc., as Custodian,  the Purchasers party thereto and Bank One, NA, as
agent and paying agent for such Purchasers (the "Agreement").

     THE UNDERSIGNED HEREBY CERTIFIES THAT:

     1. I am the duly elected _________________ of Seller.

     2. I have  reviewed  the terms of the  Agreement  and I have made,  or have
caused to be made under my supervision,  a detailed  review of the  transactions
and  conditions  of Seller and its  Subsidiaries  during the  accounting  period
covered by the attached financial statements.

     3. The examinations  described in paragraph 2 did not disclose,  and I have
no knowledge of, the existence of any  condition or event which  constitutes  an
Amortization  Event,  Potential  Amortization Event, Hedge Accumulation Event or
Excess Aged Receivables Event, as each such term is defined under the Agreement,
during or at the end of the accounting period covered by the attached  financial
statements  or as of the  date of  this  Certificate,  except  as set  forth  in
paragraph 5 below.

     4. Schedule I attached  hereto sets forth  financial data and  computations
evidencing the compliance with certain covenants of the Agreement,  all of which
data and computations are true, complete and correct.

     5. Described below are the  exceptions,  if any, to paragraph 3 by listing,
in detail,  the nature of the condition or event, the period during which it has
existed and the action  which Seller has taken,  is taking,  or proposes to take
with respect to each such condition or event:

     The foregoing  certifications,  together with the computations set forth in
Schedule I hereto and the financial  statements  delivered with this Certificate
in support hereof, are made and delivered this ____ day of _________, ____.

                                   TRENDWEST RESORTS, INC.


                                   By:__________________________________
                                   Name:
                                   Title:

<PAGE>

                         SCHEDULE I TO COMPLIANCE REPORT


A.       Schedule of Compliance as of  __________,  ____ with Section ___ of the
         Agreement.  Unless  otherwise  defined  herein,  the terms used in this
         Compliance  Certificate  have  the  meanings  ascribed  thereto  in the
         Agreement.

This Schedule relates to the month ended: ______________

<PAGE>

                                  EXHIBIT VI

                          FORM OF ASSIGNMENT AGREEMENT


     THIS   ASSIGNMENT   AGREEMENT  is  entered  into  as  of  the  ___  day  of
____________,  ____, by and  between________________________________  ("Seller")
and _____________________________________________ ("Purchaser").

     PRELIMINARY STATEMENTS

     A. This Assignment  Agreement is being executed and delivered in accordance
with Section 12.1(b) of that certain Receivables  Purchase Agreement dated as of
January  7,  2000 by and among TW  Holdings  III,  Inc.,  as  Seller,  Trendwest
Resorts,  Inc.,  as Servicer,  Sage Systems,  Inc., as Custodian,  International
Securitization Corporation ("Conduit"), Bank One, NA, as Agent and Paying Agent,
and the Financial  Institutions party thereto (as amended,  modified or restated
from time to time,  the "Purchase  Agreement").  Capitalized  terms used and not
otherwise defined herein are used with the meanings set forth or incorporated by
reference in the Purchase Agreement.

     B. The Seller is a Financial  Institution party to the Purchase  Agreement,
and the Purchaser wishes to become a Financial Institution thereunder; and

     C. The  Seller is selling  and  assigning  to the  Purchaser  an  undivided
____________% (the "Transferred  Percentage") interest in all of Seller's rights
and  obligations  under the Purchase  Agreement and the  Transaction  Documents,
including  the  Seller's  Commitment  and (if  applicable)  the  Capital  of the
Seller's Purchaser Interests as set forth herein;

     The parties hereto hereby agree as follows:

     1. This sale, transfer and assignment effected by this Assignment Agreement
shall become  effective  (the  "Effective  Date") two (2) Business Days (or such
other date selected by the Agent in its sole  discretion)  following the date on
which a notice  substantially  in the  form of  Schedule  II to this  Assignment
Agreement  ("Effective Notice") is delivered by the Agent to Conduit, the Seller
and the Purchaser.  From and after the Effective  Date, the Purchaser shall be a
Financial  Institution party to the Purchase  Agreement for all purposes thereof
as if the Purchaser were an original  party thereto and the Purchaser  agrees to
be bound by all of the terms and provisions contained therein.

     2. If the Seller has no outstanding  Capital under the Purchase  Agreement,
on the Effective  Date,  Seller shall be deemed to have hereby  transferred  and
assigned to the Purchaser, without recourse,  representation or warranty (except
as provided in  paragraph 6 below),  and the  Purchaser  shall be deemed to have
hereby irrevocably taken,  received and assumed from the Seller, the Transferred
Percentage of the Seller's Commitment and all rights and obligations  associated
therewith under the terms of the Purchase  Agreement,  including the Transferred

<PAGE>

Percentage of the Seller's future funding  obligations  under Section 4.1 of the
Purchase Agreement.

     3. If the Seller has any outstanding  Capital under the Purchase Agreement,
at or before 12:00 noon,  local time of the Seller,  on the  Effective  Date the
Purchaser  shall pay to the Seller,  in immediately  available  funds, an amount
equal to the sum of (i) the Transferred Percentage of the outstanding Capital of
the Seller's Purchaser Interests (such amount,  being hereinafter referred to as
the  "Purchaser's  Capital");  (ii) all accrued but unpaid  (whether or not then
due) Yield  attributable  to the  Purchaser's  Capital;  and (iii)  accruing but
unpaid fees and other costs and expenses  payable in respect of the  Purchaser's
Capital for the period  commencing  upon each date such unpaid amounts  commence
accruing,  to and  including the Effective  Date (the  "Purchaser's  Acquisition
Cost");

whereupon,  the Seller shall be deemed to have sold, transferred and assigned to
the Purchaser, without recourse,  representation or warranty (except as provided
in  paragraph  6  below),  and the  Purchaser  shall be  deemed  to have  hereby
irrevocably  taken,  received  and  assumed  from the  Seller,  the  Transferred
Percentage of the Seller's  Commitment and the Capital of the Seller's Purchaser
Interests  (if  applicable)  and all related  rights and  obligations  under the
Purchase  Agreement and the  Transaction  Documents,  including the  Transferred
Percentage of the Seller's future funding  obligations  under Section 4.1 of the
Purchase Agreement.

     4.  Concurrently  with the execution and delivery  hereof,  the Seller will
provide to the  Purchaser  copies of all  documents  requested by the  Purchaser
which were delivered to such Seller pursuant to the Purchase Agreement.

     5. Each of the parties to this Assignment Agreement agrees that at any time
and from time to time upon the  written  request  of any  other  party,  it will
execute and deliver such further  documents  and do such further acts and things
as such other party may  reasonably  request in order to effect the  purposes of
this Assignment Agreement.

     6. By executing and delivering  this Assignment  Agreement,  the Seller and
the Purchaser  confirm to and agree with each other, the Agent and the Financial
Institutions as follows:  (a) other than the representation and warranty that it
has not created any Adverse Claim upon any interest being transferred hereunder,
the Seller makes no  representation  or warranty  and assumes no  responsibility
with respect to any statements,  warranties or representations made by any other
Person  in or in  connection  with the  Purchase  Agreement  or the  Transaction
Documents or the execution,  legality,  validity,  enforceability,  genuineness,
sufficiency  or value of the  Purchaser,  the  Purchase  Agreement  or any other
instrument or document furnished  pursuant thereto or the perfection,  priority,
condition,  value or  sufficiency  of any  collateral;  (b) the Seller  makes no
representation  or warranty  and assumes no  responsibility  with respect to the
financial  condition of the Seller, any Obligor,  or any Seller Affiliate or the
performance or observance by the Seller, any Obligor, or any Seller Affiliate of
any of their respective obligations under the Transaction Documents or any other
instrument or document  furnished  pursuant thereto or in connection  therewith;
(c) the  Purchaser  confirms  that  it has  received  a copy of the  Transaction
Documents,  together with such other  documents and information as it has deemed
appropriate  to make its own credit  analysis  and  decision  to enter into this

                                       2

<PAGE>

Assignment Agreement; (d) the Purchaser will, independently and without reliance
upon the  Agent,  Conduit,  the  Seller or any other  Financial  Institution  or
Purchaser  and  based  on  such  documents  and  information  as it  shall  deem
appropriate at the time,  continue to make its own credit decisions in taking or
not taking action under the Purchase  Agreement and the  Transaction  Documents;
(e) the Purchaser appoints and authorizes the Agent to take such action as agent
on its behalf and to exercise such powers under the Transaction Documents as are
delegated to the Agent by the terms  thereof,  together  with such powers as are
reasonably  incidental  thereto;  (f) the Purchaser  appoints and authorizes the
Agent to take such  action as agent on its behalf and to  exercise  such  powers
under  the  Transaction  Documents  as are  delegated  to the Agent by the terms
thereof, together with such powers as are reasonably incidental thereto; and (g)
the Purchaser  agrees that it will perform in accordance with their terms all of
the  obligations  which,  by  the  terms  of  the  Purchase  Agreement  and  the
Transaction  Documents,  are  required  to be  performed  by  it as a  Financial
Institution or, when applicable, as a Purchaser.

     7. Each party hereto  represents  and warrants to and agrees with the Agent
that it is  aware  of and  will  comply  with  the  provisions  of the  Purchase
Agreement, including Sections 4.1, 14.1 and 16.6 thereof.

     8.  Schedule I hereto sets forth the revised  Commitment  of the Seller and
the  Commitment of the Purchaser,  as well as  administrative  information  with
respect to the Purchaser.

     9. THIS  ASSIGNMENT  AGREEMENT  SHALL BE  GOVERNED  BY,  AND  CONSTRUED  IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF ILLINOIS.

     10. The Purchaser hereby covenants and agrees that, prior to the date which
is one year and one day after the payment in full of all senior Indebtedness for
borrowed  money of Conduit,  it will not  institute  against,  or join any other
Person  in  instituting   against,   Conduit  any  bankruptcy,   reorganization,
arrangement,  insolvency or liquidation  proceedings or other similar proceeding
under the laws of the United States or any state of the United States.

     IN  WITNESS  WHEREOF,  the  parties  hereto  have  caused  this  Assignment
Agreement to be executed by their  respective  duly  authorized  officers of the
date hereof.



                                  By:  ______________________________

                                     Title:   ____________________________



                                  By: ______________________________

                                     Title: _____________________________

                                       3

<PAGE>

                       SCHEDULE I TO ASSIGNMENT AGREEMENT


                       LIST OF LENDING OFFICES, ADDRESSES
                       FOR NOTICES AND COMMITMENT AMOUNTS


Date: _______________, ____


Transferred Percentage:  ________%



              A-1          A-2          B-1           B-2
              ---          ---          ---           ---
                                     Outstanding
           Commitment   Commitment     Capital       Ratable
Seller     [existing]   [revised]      (if any)       Share
------     ---------    ---------    -----------     -------




             A-1                        B-1            B-2
             ---                        ---            ---
                                     Outstanding
           Commitment                  Capital        Ratable
Purchaser  [initial]                   (if any)        Share
---------  ----------                -----------      -------




Address for Notices
-------------------

Attention:
Phone:
Fax:

<PAGE>

                       SCHEDULE II TO ASSIGNMENT AGREEMENT

                                EFFECTIVE NOTICE


TO
         ------------------------
         ------------------------
         ------------------------

TO:
         ------------------------
         ------------------------
         ------------------------

     The undersigned,  as Agent under the Purchase Agreement dated as of January
7, 2000 by and among TW Holdings III, Inc., as Seller,  Trendwest Resorts, Inc.,
as Servicer,  Sage Systems,  Inc., as  Custodian,  International  Securitization
Corporation,  Bank One, NA (Main Office Chicago), as Paying Agent and Agent, and
the  Financial  Institutions  party  thereto,  hereby  acknowledges  receipt  of
executed   counterparts  of  a  completed   Assignment  Agreement  dated  as  of
____________,    ____    between    __________________,     as    Seller,    and
__________________, as Purchaser. Terms defined in such Assignment Agreement are
used herein as therein defined.

     1.  Pursuant  to such  Assignment  Agreement,  you  are  advised  that  the
Effective Date will be _______________________, ____.

     2.  Conduit  hereby  consents to the  Assignment  Agreement  as required by
Section 12.1(b) of the Purchase Agreement.

     3. Pursuant to such Assignment Agreement,  the Purchaser is required to pay
$____________  to the Seller at or before  12:00 noon (local time of the Seller)
on the Effective Date in immediately available funds.

<PAGE>


                                  Very truly yours,

                                  BANK ONE, NA, individually and as Agent


                                  By: _____________________________

                                  Title: ____________________________

                                  INTERNATIONAL SECURITIZATION
                                  CORPORATION


                                  By: ______________________________
                                  Authorized Signatory

                                       2

<PAGE>

                                   EXHIBIT VII

                          CREDIT AND COLLECTION POLICY


<PAGE>

                                  EXHIBIT VIII

                        FORM OF VACATION OWNER AGREEMENTS

<PAGE>

                                   EXHIBIT IX

                             FORM OF MONTHLY REPORT

<PAGE>

                                    EXHIBIT X

                           FORM OF REQUEST FOR RELEASE

                               SAGE SYSTEMS, INC.

2135 112th Avenue, N.E., Suite 101
Bellevue, Washington 98004

     Re:  Receivables  Purchase  Agreement dated as of January 7, 2000, among TW
Holdings  III,  Inc., as Seller,  Trendwest  Resorts,  Inc.,  as Servicer,  Sage
Systems, Inc., as Custodian,  International Securitization Corporation, and Bank
One NA, as Agent and Paying Agent (the "RPA")

     Pursuant  to  Sections  2.10 and  15.3(d) of the  above-referenced  RPA, in
connection with the Receivables  indicated on Schedule A hereto,  we request the
release of the related Receivable  Documents [specify  documents] for the reason
indicated  below.  Capitalized  terms used but not defined herein shall have the
meanings given them in "Definitions" attached as Exhibit I to the RPA.

Purchase Number:

Reason for Requesting Release (check all that apply)

___ 1.   Liquidation
___ 2.   Breach of representation and warranty
___ 3.   Missing Receivable Documents
___ 4.   Failure to file financing statements
___ 5.   Cease to be an Eligible Receivable
___ 6.   Paid in Full
___ 7.   Upgrade

                                            BANK ONE, NA(Main Office Chicago),
                                            By:___________________________
                                               Name:
                                               Title:

<PAGE>

Release consented to:

[PURCHASERS]

By:      __________________________
         Name:
         Title:

<PAGE>

                                   EXHIBIT XI

                                 FORM OF RECEIPT

RECEIPT NO.[Date]

Re:  Receivables  Purchase  Agreement  dated as of  January  7,  2000,  among TW
Holdings  III,  Inc., as Seller,  Trendwest  Resorts,  Inc.,  as Servicer,  Sage
Systems, Inc., as Custodian,  International Securitization Corporation, and Bank
One, NA, as Agent and Paying Agent (the "RPA")

Ladies and Gentlemen:

     In accordance  with the provisions of Section 15.2 of the  above-referenced
RPA, the undersigned,  as Custodian, hereby certifies that as to each Receivable
described in the Schedule of Receivables, a copy of which is attached hereto, it
has reviewed each Receivable  Document and has determined that (i) all documents
required to be  delivered to it pursuant to the RPA are in its  possession,  and
(ii) based on its examination of the foregoing documents,  such documents appear
regular on their face and relate to the  appropriate  Receivable and none of the
Receivable Documents contains evidence of any claims,  liens, security interests
or encumbrances (other than the lien of the Agent).

     The  Custodian  hereby  confirms  that it is holding  each such  Receivable
Document as agent and bailee of the Agent, as agent for the Purchasers, pursuant
to the terms of the RPA. The Custodian hereby confirms it will act in accordance
with  the  standard  of  care  standard   provided  in  the  RPA  and  under  no
circumstances  shall the  Custodian  (i) deliver  possession  of any  Receivable
Document to the Seller or any other  Person,  or (ii) take any  directions  with
respect to any  Receivable  Documents  from the  Borrower  or any other  Person,
without the express written consent of the Agent.

                                            SAGE SYSTEMS, INC.,
                                                  as Custodian




                                            By:      __________________________
                                            Name:
                                            Title:

<PAGE>

                              SCHEDULE A TO RECEIPT

                             SCHEDULE OF RECEIVABLES



<PAGE>

                                   EXHIBIT XII

                                 ACCOUNT NUMBERS

Account             Bank     Name and Address                   Account Number
--------------------------------------------------------------------------------
Clearing Account    Commerce Bank of Washington                     1146602
                    601 Union Street
                    Suite 3900
                    Seattle, WA 98101
------------------- ---------------------------------------------- -------------

Collection Account  Bank One, NA (Main Office Chicago)              0400045000
                    1 Bank One Plaza
                    Chicago, Illinois  60670-0019
------------------- ---------------------------------------------- -------------

Reserve Account     Bank One, NA (Main Office Chicago)              0400045001
                    1 Bank One Plaza
                    Chicago, Illinois  60670-0019
------------------- ---------------------------------------------- -------------

Hedge Account       Bank One, NA (Main Office Chicago)
                    1 Bank One Plaza
                    Chicago, Illinois  60670-0019                   0400045002
------------------- ---------------------------------------------- -------------

<PAGE>

                                   SCHEDULE A

                      COMMITMENTS OF FINANCIAL INSTITUTIONS


Financial Institution                             Commitment
---------------------                             ----------

Bank One, NA (Main Office Chicago)                $76,500,000

<PAGE>

                                   SCHEDULE B

                     DOCUMENTS TO BE DELIVERED TO THE AGENT
                       ON OR PRIOR TO THE INITIAL PURCHASE

1.   Copy of the Resolutions of the Board of Directors of each Originating Party
     certified by its Secretary  authorizing such Originating Party's execution,
     delivery and  performance of this  Agreement and the other  documents to be
     delivered by it hereunder.

2.   Articles  or  Certificate  of  Incorporation  of  each  Originating   Party
     certified by the Secretary of State of its jurisdiction of incorporation on
     or within thirty (30) days prior to the initial Purchase.

3.   Good  Standing  Certificate  for  each  Originating  Party  issued  by  the
     Secretaries of State of California, Oregon and Washington.

4.   A certificate of the Secretary of each Originating Party certifying (i) the
     names and  signatures  of the officers  authorized on its behalf to execute
     this Agreement and any other documents to be delivered by it thereunder and
     (ii) a copy of such Originating Party's By-Laws.

5.   Time stamped  receipt  copies of proper  financing  statements,  duly filed
     under  the  UCC on or  before  the  date of such  initial  Purchase  in all
     jurisdictions  as  may  be  necessary  or,  in the  opinion  of the  Agent,
     desirable, under the UCC of all appropriate jurisdictions or any comparable
     law in  order to  perfect  the  ownership  interests  contemplated  by this
     Agreement.

6.   Delivered  simultaneous to the Initial Purchase,  executed copies of proper
     releases  and  UCC  termination  statements,  ready  for  filing,  if  any,
     necessary to release all security  interests and other rights of any Person
     in the  Receivables,  Contracts or Related Security  previously  granted by
     Originator.

7.   A favorable opinion of legal counsel for the Originating Parties reasonably
     acceptable  to the Agent which  addresses  the  following  matters and such
     other matters as the Agent may reasonably request:

                  --       Each   Originating   Party  is  a  corporation   duly
                           incorporated,  validly existing, and in good standing
                           under the laws of its state of incorporation.

                  --       Each Originating Party has all requisite authority to
                           conduct  its  business  in  each  jurisdiction  where
                           failure  to be so  qualified  would  have a  material
                           adverse effect on such Originating Party's business.

                  --       The execution and delivery by each Originating  Party
                           of this Agreement and each other Transaction Document

<PAGE>

                           to which  it is a party  and its  performance  of its
                           obligations  thereunder  have been duly authorized by
                           all necessary corporate action and proceedings on the
                           part of such Originating Party and will not:

                           (a)      require  any action by or in respect  of, or
                                    filing with, any governmental  body,  agency
                                    or  official  (other  than the filing of UCC
                                    financing statements);

                           (b)      contravene,  or constitute a default  under,
                                    any   provision   of   applicable   law   or
                                    regulation    or   of   its    Articles   of
                                    Incorporation or Bylaws or of any agreement,
                                    judgment, injunction, order, decree or other
                                    instrument  binding  upon  such  Originating
                                    Party; or

                           (c)      result in the creation or  imposition of any
                                    Adverse Claim on assets of such  Originating
                                    Party or any of its Subsidiaries  (except as
                                    contemplated by this Agreement).

                  --       This Agreement and each other Transaction Document to
                           which such Originating Party is a Party has been duly
                           executed and delivered by such Originating  Party and
                           constitutes the legal,  valid, and binding obligation
                           of such Originating Party,  enforceable in accordance
                           with its terms,  except to the extent the enforcement
                           thereof may be limited by  bankruptcy,  insolvency or
                           similar laws affecting the  enforcement of creditors'
                           rights generally and subject also to the availability
                           of  equitable  remedies  if  equitable  remedies  are
                           sought.

                  --       Seller  has a valid,  perfected  and  first  priority
                           ownership interest in each Receivable in existence as
                           of the date of the  Agreement  and,  if a Purchase is
                           made as of such  date,  the Agent for the  benefit of
                           the  Purchasers   shall  acquire  a  first  perfected
                           priority ownership  interest in each Receivable,  the
                           related Collections and the Related Security.

                  --       To the best of the opinion giver's  knowledge,  there
                           is no action,  suit or other  proceeding  against any
                           Originating Party or any Affiliate of any Originating
                           Party,  which would  materially  adversely affect the
                           business or financial  condition of such  Originating
                           Party  and its  Affiliates  taken as a whole or which
                           would  materially  adversely  affect  the  ability of
                           Seller  to  perform   its   obligations   under  this
                           Agreement.

                  --       None of the  Originating  Parties  is an  "investment
                           company"  registered  or  required  to be  registered
                           under the Investment Company Act of 1940.

8.   If requested by Conduit or the Agent, a favorable  opinion of legal counsel
     for each Financial  Institution,  reasonably  acceptable to the Agent which
     addresses the following matters:

                                       2

<PAGE>

                  --       This  Agreement  has  been  duly  authorized  by  all
                           necessary    corporate    action  of  the   Financial
                           Institution.

                  --       This  Agreement  has been duly executed and delivered
                           by  the  Financial   Institution  and,  assuming  due
                           authorization,  execution and delivery by each of the
                           other parties thereto, constitutes a legal, valid and
                           binding  obligation  of  the  Financial  Institution,
                           enforceable  against  the  Financial  Institution  in
                           accordance with its terms.

9.   A Compliance Certificate.

10.  The Fee Letter.

11.  A form of Monthly Report.

12.  Executed copies of (i) all consents from and  authorizations by any Persons
     and (ii) all waivers and amendments to existing credit facilities, that are
     necessary in connection with this Agreement.

13.  For each  Purchaser that is not  incorporated  under the laws of the United
     States of America, or a state thereof,  two duly completed copies of United
     States  Internal  Revenue  Service Form 1001 or 4224,  certifying in either
     case  that  such  Purchaser  is  entitled  to  receive  payments  under the
     Agreement  without  deduction or  withholding  of any United States federal
     income taxes.

14.  An executed copy of the Receivables Sale Agreement, together with copies of
     each of the documents delivered pursuant to Section 3.1 thereof.

15.  State of Washington Public Offering Documents  including (i) Declaration of
     Vacation  Owner  Program for  WorldMark  certified  by State of  Washington
     Department of Real Estate,  (ii)  statement  compliance  with  registration
     requirements of Oregon, Hawaii and California, and (iii) statement of clear
     title to WorldMark properties.

16.  Initial Purchase Notice.

17.  Results of UCC searches  conducted in the States of Washington,  Oregon and
     Delaware  as  of a  date  on  or  after  December  20,  1999  against  each
     Originating Party as debtor showing no liens or financing  statements filed
     against either  Originating  Party which create  security  interests in the
     Receivables that would rank prior to the security  interests  granted under
     the Transaction Documents.

                                       3

<PAGE>

                                   SCHEDULE C

                          EXISTING ENVIRONMENTAL CLAIMS



                                      None