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                               SERVICING AGREEMENT

                                      among



                              TRI FUNDING II, INC.
                                   ("Issuer")

                                       and



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

                                       and



                               SAGE SYSTEMS, INC.
                                 ("Subservicer")

                                       and



                        LASALLE NATIONAL BANK, as Trustee
                                   ("Trustee")

                            Dated as of March 1, 1998




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                                TABLE OF CONTENTS

SECTION HEADING                                                           PAGE

     ARTICLE 1
     
     
DEFINITIONS...................................................................1
       Section 1.01.           Defined Terms..................................1

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

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

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

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

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

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

ARTICLE 5                  THE SERVICER, THE SUBSERVICER AND THE ISSUER......20

Section 5.01.    Servicer and Subservicer Indemnification....................20
Section 5.02.    Corporate Existence; Reorganizations........................20
Section 5.03.    Limitation on Liability of the Servicer, the Subservicer and 
                                         Others..............................21
Section 5.04 The Servicer and Subservicer Not to Resign......................21
Section 5.05. Issuer Indemnification.........................................22

ARTICLE 6                  SERVICING TERMINATION.............................22

Section 6.01.           Servicer Events of Default...........................22
Section 6.02.           Appointment of Successor Servicer....................25
Section 6.03.           Notification to Noteholders..........................25
Section 6.04.           Waiver of Past Defaults..............................26
Section 6.05.           Effects of Termination of Servicer...................26
Section 6.06.           No Effect on Other Parties...........................26

ARTICLE 7                  THE SUBSERVICER...................................27

Section 7.01.           Representations and Warranties.......................27
Section 7.02.           Subservicer Events of Default........................28
Section 7.03.           Appointment of Successor Subservicer.................29
Section 7.04.           Notification to Noteholders..........................30
Section 7.05.           Waiver of Past Defaults..............................30
Section 7.06.           Effects of Termination of Subservicer................30

ARTICLE 8                  MISCELLANEOUS PROVISIONS..........................31

Section 8.01.           Termination of the Servicing Agreement...............31
Section 8.02.           Amendments...........................................31
Section 8.03.           Governing Law........................................32
Section 8.04.           Notices, etc., to Trustee, Issuer, Servicer and 
                        Subservicer..........................................32
Section 8.05.           Notices and Other Documents to Noteholders; Waiver...33
Section 8.06.           Severability of Provisions...........................33
Section 8.07.           Binding Effect.......................................33
Section 8.08.           Article Headings and Captions........................33
Section 8.09.           Legal Holidays.......................................34
Section 8.10.           Assignment for Security for the Notes................34
Section 8.11.           No Servicing Assignment..............................34
Section 8.12.           Counterparts.........................................34
Section 8.13.           Duties of the Parties................................34

Signatures...................................................................35


EXHIBIT A -- Form of Report of Independent Accountants
EXHIBIT B -- Permitted Changes to Property Management Agreement




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                               SERVICING AGREEMENT


         THIS SERVICING AGREEMENT,  dated as of March 1, 1998 (the "Agreement"),
by and among TRI FUNDING II, Inc., a Delaware corporation (herein, together with
its permitted successors and assigns, the "Issuer"), TRENDWEST RESORTS, INC., an
Oregon  corporation,  for itself  (together  with its  successors  and  assigns,
"Trendwest")  as  servicer  hereunder  (herein,   together  with  its  permitted
successors  and  assigns,  the  "Servicer"),  SAGE  SYSTEMS,  INC., a Washington
corporation,  as  subservicer  hereunder  (herein,  together  with its permitted
successors and assigns, the "Subservicer") and LASALLE NATIONAL BANK, as trustee
(herein,  together with its permitted  successors  and assigns,  the  "Trustee")
under the Indenture (defined below).


                              PRELIMINARY STATEMENT

         The Issuer has entered into an Indenture, dated as of March 1, 1998 (as
amended and supplemented from time to time, the  "Indenture"),  with the Trustee
and the  Servicer,  pursuant  to which the Issuer  intends to issue from time to
time in series its Receivables-Backed Notes (collectively, the "Notes").

         The Issuer, Trendwest Resorts, Inc. (not as Servicer, but acting on its
own behalf, "Trendwest"), and Trendwest Funding II, Inc., a Delaware corporation
("TFI"),  have entered into a Purchase and Sale Agreement,  dated as of March 1,
1998 (as  amended and  supplemented  from time to time,  the "Sale  Agreement"),
providing  for,  among  other  things,  the  sale  by TFI to the  Issuer  of the
Purchased  Assets,  as  defined  in the Sale  Agreement.  Under  the  terms  and
conditions set forth in the  Indenture,  the Issuer is and will be pledging such
Purchased  Assets to the Trustee as security for the Notes. As a precondition to
the  effectiveness of the Sale Agreement,  the Sale Agreement  requires that the
Servicer, the Subservicer,  the Issuer and the Trustee enter into this Agreement
to provide for the servicing of the Purchased Assets.

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


                              ARTICLE 1   DEFINITIONS

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

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

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

         "Collection  Account Bank" shall mean Wells Fargo Bank (or an affiliate
thereof) and its successors or assigns.

        "Contract Files" shall have the meaning specified in the Sale Agreement.

         "Custodian  Agreement" shall mean the Custodian Agreement,  dated as of
March 1, 1998, among Sage Systems,  Inc., as Custodian,  the Trustee, the Issuer
and Trendwest, as amended and supplemented from time to time.

     "Custodian Files" shall have the meaning specified in the Sale Agreement.

         "Independent  Accountants" shall mean KPMG Peat Marwick or another firm
of public  accountants  of nationally  recognized  standing  (except that,  with
respect to Section 4.03, Independent Accountants shall include Molatore,  Peugh,
McDaniel,  Scroggin & Co. LLP and its  successors in interest);  provided,  that
such firm is independent  with respect to the Servicer within the meaning of the
Securities Act of 1933, as amended.

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

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

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

         "Monthly  Servicer's  Report"  shall  mean the report  prepared  by the
Servicer for each Series  pursuant to Section  4.01  hereof,  a form of which is
attached to the related Series Supplement.

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

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

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

         "Projected  Income"  shall mean,  with respect to each Due Period,  the
amount set forth under the line item "Amount  Billed" on the Monthly  Servicer's
Report.

     "Purchased Assets" shall have the meaning specified in the Sale Agreement.

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

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

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

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

         "Sage" shall mean Sage Systems,  Inc., a Washington corporation and its
successors in interest.

         "Sale Agreement"  shall mean the Purchase and Sale Agreement,  together
with any annexes,  appendices,  exhibits or schedules  attached thereto,  by and
among TFI,  Trendwest and the Issuer dated as of the date hereof,  and including
the  Assignment  and  any  Subsequent  Assignments  executed  and  delivered  in
connection therewith.

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

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

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

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

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

         "Subservicer"  with  respect to each Series shall  initially  mean Sage
until a  successor  Person  shall have  become the  Subservicer  pursuant to the
applicable provisions of this Agreement, and thereafter "Subservicer" shall mean
such successor Person.

         "Subservicer   Default"   shall  mean  each  of  the   occurrences   or
circumstances  which  with  notice  or the  lapse  of time or  both  would  be a
Subservicer Event of Default under this Agreement.

         "Subservicer  Event of Default"  shall mean each of the  occurrences or
circumstances enumerated in Section 7.02 hereof.

     "Substitution  Criterion"  shall  have the  meaning  specified  in the Sale
Agreement.

     "Substitute  Receivable"  shall  have  the  meaning  specified  in the Sale
Agreement.

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

         "Trustee"  with  respect to each Series  shall  initially  mean LaSalle
National Bank,  until a successor  Person shall have become the Trustee pursuant
to the applicable  provisions of the Indenture,  and thereafter  "Trustee" shall
mean such successor Person.

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

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


           ARTICLE 2 SERVICER REPRESENTATIONS, WARRANTIES AND COVENANTS

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

     (a) Organization and Good Standing. The Servicer has been duly incorporated
and is validly existing in good standing as a corporation  under the laws of the
State of  Oregon,  with  requisite  corporate  power  and  authority  to own its
properties,  perform its obligations  under this Agreement and the Indenture and
to transact  the  business in which it is now engaged or in which it proposes to
engage; the Servicer is duly qualified to do business and is in good standing in
each State in which the nature of its business  requires it to be so  qualified,
except where failure to so qualify would not have a material  adverse  effect on
the ability of the Servicer to perform its obligations  under this Agreement and
the Indenture.

     (b)  Authorization and Binding  Obligation.  Each of this Agreement and the
Indenture has been duly  authorized,  executed and delivered by the Servicer and
constitutes the valid and legally binding obligation of the Servicer enforceable
against the Servicer in accordance with its terms,  subject as to enforcement to
any  bankruptcy,  insolvency,  reorganization  and other similar laws of general
applicability  relating  to or  affecting  creditors'  rights  generally  and to
general  principles of equity  regardless of whether  enforcement is sought in a
court of equity or law.

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

     (d) No Proceedings.  There are no proceedings or investigations pending, or
to the knowledge of the Servicer,  threatened  against or affecting the Servicer
or any  subsidiary in or before any court,  governmental  authority or agency or
arbitration board or tribunal,  including but not limited to any such proceeding
or investigation with respect to any environmental or other liability  resulting
from the ownership or use of any of the Credits,  which,  individually or in the
aggregate,  involve the  possibility of materially  and adversely  affecting the
properties,  business,  prospects, profits or condition (financial or otherwise)
of the Servicer and its subsidiaries,  or the ability of the Servicer to perform
its  obligations  under this Agreement or the Indenture.  The Servicer is not in
default with respect to any order of any court, governmental authority or agency
or arbitration board or tribunal.

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

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

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

     (h) Pension Funds. The Servicer does not maintain any pension plans.

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

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

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

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

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

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

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


               ARTICLE 3 ADMINISTRATION AND SERVICING OF CONTRACTS

            Section 3.01.  Responsibilities of Servicer.  (a) The Servicer,  for
the  benefit  of the  Noteholders,  shall be  responsible  for,  and  shall,  in
accordance  with  its  customary  practices,  pursue  the  managing,  servicing,
administering,  enforcing  and  making  of  collections  on the  Contracts,  the
Credits,  the enforcement of the Trustee's  security interest in the Receivables
and the Credits  granted  pursuant to the  Indenture,  and, if  applicable,  the
resale of the Credits,  each in accordance with applicable law and the standards
and  procedures  set forth in this  Agreement and any related  provisions of the
Indenture,  the Sale  Agreement  and the  Receivables  Purchase  Agreement.  The
Servicer's   responsibilities  shall  include  collecting  and  posting  of  all
payments,  responding  to inquiries of  Obligors,  investigating  delinquencies,
accounting for collections and furnishing  monthly and annual  statements to the
Trustee and the Noteholders  with respect to payments and using its best efforts
to maintain the perfected  security interest of the Trustee in each Series Trust
Estate (except with respect to the Credits). Subject to the terms and conditions
of this  Agreement,  the  Servicer (at its  expense),  acting alone or through a
subservicer,  including the  Subservicer,  shall have full power and  authority,
acting at its sole discretion,  to do any and all things in connection with such
managing, servicing, administration,  enforcement, collection and such resale of
the Credits that it may deem necessary or desirable and in the best interests of
the  Noteholders,  including the prudent  delegation  of such  responsibilities.
Without limiting the generality of the foregoing,  the Servicer, in its own name
or in the name of the Subservicer, shall, and is hereby authorized and empowered
by the  Trustee,  subject to Section  3.02  hereof,  to execute  and deliver (on
behalf of  itself,  the  Noteholders,  the  Trustee  or any of them) any and all
instruments of  satisfaction or  cancellation,  or of partial or full release or
discharge, and all other comparable instruments,  with respect to the Contracts,
the Custodian Files and the Contract Files.  Subject to the terms and conditions
of this Agreement, the Servicer,  acting alone or through the Subservicer,  also
may, in its sole  discretion,  waive any late payment charge or penalty,  or any
other  fees  that may be  collected  in the  ordinary  course of  servicing  any
Contract.   Notwithstanding  the  foregoing,   neither  the  Servicer,  nor  the
Subservicer,  shall,  except  pursuant to an Upgrade or a judicial  order from a
court of  competent  jurisdiction,  or as otherwise  expressly  provided in this
Agreement,  release or waive the right to collect the Scheduled  Payments or any
unpaid  balance  on any  Contract.  The  Trustee  shall,  at the  expense of the
Servicer,  furnish  the  Servicer,  or at  the  request  of  the  Servicer,  the
Subservicer,  with any  powers of  attorney  and other  documents  necessary  or
appropriate  to  enable  the  Servicer  or the  Subservicer  to carry  out their
servicing  and  administrative  duties  hereunder,  and the Trustee shall not be
responsible  for  the  Servicer's  or  the  Subservicer's  application  thereof.
Notwithstanding  the  appointment  by the  Servicer  of the  Subservicer  or any
delegation  of  its  responsibilities   hereunder,  the  Servicer  shall  remain
primarily  liable  for  the  full  performance  of  its  obligations  hereunder;
provided, however, that if the Servicer requests from the Holders the removal of
the Subservicer with respect to any Series after the occurrence of a Subservicer
Event of Default,  or any act or omission that with the passage of time would be
a Subservicer  Event of Default,  and the Holders of 66-2/3% in principal amount
of the Notes of the Controlling Class of such Series  Outstanding do not consent
to such request,  the Servicer shall no longer be liable for any subsequent acts
of the  Subservicer  except  any  acts  taken  by Sage at the  direction  of the
Servicer.

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

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

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

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

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

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

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

            Section  3.02.   Standard  of  Care.  In  managing,   administering,
servicing,  enforcing  and making  collections  on the Contracts and the Credits
pursuant  to this  Agreement,  each of the  Servicer  and the  Subservicer  will
provide such services in a manner  consistent  with past practice and applicable
law and will not change  such  practice  in any way that would  cause an adverse
material  change in such  practice.  In any event,  each of the Servicer and the
Subservicer  warrants  that in providing  such  services it will  exercise  that
degree of skill and care  consistent  with that  which  other  servicers  in the
industry  customarily  exercise  with respect to similar  contracts and vacation
credits  owned or serviced by them.  Each of the  Servicer  and the  Subservicer
shall  punctually  perform  all of its  obligations  and  agreements  under this
Agreement  and shall  comply  with all  applicable  federal  and state  laws and
regulations,  shall  maintain  all state and  federal  licenses  and  franchises
necessary for it to perform its servicing responsibilities  hereunder, and shall
not materially impair the rights of the Noteholders in any Contracts or payments
thereunder.

            Section   3.03.   Clearing   Account,   ACH  Payments  and  Servicer
Remittances.  (a) The Servicer has  previously  instructed  (or, with respect to
Substitute  Contracts,  will have  instructed)  each Obligor to remit his or her
payments to the  Subservicer.  The  Subservicer  shall  deposit all payments for
principal and interest on the Receivables  that it receives into an account (the
"Clearing Account")  maintained at the Clearing Account Bank in the name of, and
in the sole control of, the Subservicer.  The Servicer or the Subservicer  shall
cause payments made by automated  clearing house debit to be deposited  directly
into the Clearing Account from the Obligor's relevant account.  On each Business
Day,  the  Subservicer  shall,  or shall  cause the  Clearing  Account  Bank to,
transfer all amounts in the Clearing Account collected relating to the Contracts
and the Receivables to the Collection Account for the appropriate Series,  which
shall be an Eligible  Account at the Collection  Account Bank in the name of the
Trustee on behalf of the Noteholders of such Series.  The Trustee,  based solely
on information set forth in the Monthly  Servicer's  Report for a Series,  shall
cause the amounts in the  Collection  Account for such Series to be deposited in
the  Distribution  Account for such Series on the  Remittance  Date in an amount
necessary  to make the  distributions  set  forth  in  Section  12.02(d)  of the
Indenture and Section 5.01 of the  applicable  Series  Supplement on the related
Payment Date.

           (b) Except as otherwise provided in this Agreement,  the Servicer, as
agent of the Issuer,  shall remit or cause to be remitted to the Subservicer for
deposit in the Clearing Account by 4:00 p.m., Seattle time, on each Business Day
the amounts described below that have been received by the Servicer through 4:00
p.m., Seattle time, on the preceding Business Day of such Series:

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

                  (ii)     all Residual Proceeds and Recoveries;

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

                  (iv)     all Guaranty Amounts.

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

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

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

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

            Section 3.06.    [Reserved.]

            Section 3.07.    [Reserved.]

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

            Section  3.09.  Servicing  Compensation.  As  compensation  for  the
performance  of its  obligations  under  this  Agreement  for each  Series,  the
Servicer  shall be entitled to receive the  Servicer Fee related to such Series.
The  Servicer  Fee for each  Series  shall be paid  monthly,  commencing  on the
Initial  Payment  Date  related to such Series and  terminating  on the first to
occur of (i) the receipt of the last  Scheduled  Payment  related to such Series
and  related  Residual  Proceeds  with  respect to the last  remaining  Contract
supporting such Series,  (ii) the receipt of Recoveries with respect to the last
remaining  Contract  supporting  such  Series,  or (iii)  the date on which  the
Issuer, Trendwest or TFI purchases the last remaining Contract or Receivable, as
the case may be, supporting such Series.  The Servicer Fee for each Series shall
be paid by the Issuer to the  Servicer  at the times and in the  priority as set
forth in the Indenture and the related Series Supplement. The Servicer shall pay
all  expenses  incurred  by it  in  connection  with  its  servicing  activities
hereunder,  including, without limitation, payment of the fees and disbursements
of the Independent Accountants,  payment of expenses incurred in connection with
distributions  and reports to the Trustee and the  Noteholders  and shall not be
entitled  to  reimbursement  for  such  expenses;  provided,  however,  that the
Servicer will be entitled to prompt reimbursement from the Issuer for reasonable
costs and expenses  incurred by the Servicer  (including  reasonable  attorney's
fees and out-of-pocket  expenses) in connection with the realization,  attempted
realization or enforcement of rights and remedies upon Defaulted  Contracts of a
Series,  from  amounts  received  as  Recoveries  from any  Defaulted  Contracts
supporting such Series. The Servicer of a Series shall pay the fees and expenses
of the  Subservicer  for such Series and shall not be entitled to  reimbursement
therefor.

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

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

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

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

           (e) On any  Determination  Date  after,  with  respect to any Series,
Trendwest and TFI  collectively  have  repurchased  Defaulted  Contracts with an
aggregate Collateral Value equal to the Purchase and Substitution Limit for such
Series (or within  $5,000 of such  Purchase and  Substitution  Limit),  if after
giving effect to all  distributions  to be made on the related Payment Date, the
Reserve  Account  balance  for any Series  will be equal to or greater  than the
Reserve  Account  Required  Balance  for such  Series and on such date there are
sufficient  amounts to pay interest and the Principal  Distribution  Amount with
respect to all Notes of such Series,  Trendwest may, at its option, purchase, in
its own right and not as Servicer hereunder, the Credits relating to a Defaulted
Contract  supporting  such  Series  at a price  equal to 25% of (i) the  initial
principal  balance of the related  Contract with respect to Contracts which have
not been  "upgraded,"  or (ii) the sum of the initial  principal  balance of the
original  Contract and the increase in  principal  balance due to Upgrades  with
respect to Contracts that have been "upgraded." On such Determination  Date, the
proceeds of such sale shall be  remitted by  Trendwest  to the  Subservicer  for
immediate  deposit  into  the  Clearing  Account  and  shall be  deemed  to be a
collection of principal with respect to such Contract.

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


                  ARTICLE 4 ACCOUNTINGS, STATEMENTS AND REPORTS

            Section 4.01. Monthly Servicer's  Reports.  No later than 1:00 p.m.,
Chicago  time, on each  Determination  Date,  the Servicer  shall deliver to the
Issuer,  the  Placement  Agent,  the  Trustee  and each  Noteholder  the Monthly
Servicer's  Report in the form  attached as Exhibit B to the  applicable  Series
Supplement with respect to the activity in the immediately preceding Due Period.
In the course of preparing the Monthly  Servicer's  Report,  the Servicer  shall
seek  direction  from the Issuer as to remittance of the funds to be paid to the
Issuer after all other  distributions  in accordance  with the Indenture and the
applicable  Series  Supplement.   Contracts  and  Receivables  which  have  been
substituted  for or purchased by Trendwest or the Issuer shall be  identified by
the related Obligor number.  On each  Determination  Date, the Subservicer shall
deliver to the Trustee, in the form of a computer disk or tape or via electronic
transmission  in  a  format  acceptable  to  the  Trustee,  containing  all  the
information  in  the  Subservicer's  electronic  files  regarding  each  of  the
Receivables as well as any additional  information  reasonably  requested by the
Trustee prior to the related  Payment Date.  The Monthly  Servicer's  Report for
each Series prepared for each Due Period for June, September, December and March
shall also include a summary of the following  information as of the end of such
Due Period: the total number of Credits,  whether sold or unsold; and the number
of developed  properties of the Club; the name of each such  developed  property
and the total number of Credits allocated to each developed property.

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

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

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

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

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

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

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

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

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

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

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

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

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

           (b) For each  fiscal  year  (commencing  with the fiscal  year ending
December  31,  1998),  the Servicer at its expense  shall cause the  Independent
Accountants  (who may also render and deliver other services to the Servicer and
its Affiliates) to prepare a report that shall include the information set forth
in the report set forth in  paragraph  (a) of this  Section 4.03 and which shall
also include a report addressed to the Servicer, the Trustee and the Noteholders
as of the close of such year,  to the effect  that the  Independent  Accountants
have  compared  the  information  contained  in the Monthly  Servicer's  Reports
delivered  for a random  three-month  period  during the  relevant  period  with
information  contained in the accounts and records for such period,  and,  where
applicable, on the basis of such procedures and comparison, report matters which
come to the Independent  Accountants' attention to indicate that the information
contained  in the  Monthly  Servicer's  Reports  does  not  reconcile  with  the
information  contained in the  Servicer's  accounts  and records.  If any letter
delivered  pursuant to this Section 4.03 (commencing with the letter relating to
the fiscal year  ending  December  31,  1998)  discloses  such  exceptions,  the
Servicer at its expense shall cause the  Independent  Accountants  to deliver an
agreed-upon  procedures  letter  addressed to the Servicer,  the Trustee and the
Noteholders  for each  subsequent  three-month  period.  Such  obligation  shall
continue  until  the  Independent  Accountants  deliver a letter  relating  to a
three-month period that does not disclose any such exceptions.  Thereafter,  the
Servicer  shall cause a letter to be  delivered  relating to each fiscal year in
accordance  with the first  sentence of this Section  4.03.  The Servicer  shall
deliver to the Trustee a copy of any such reports within 90 days of the close of
the relevant period.

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

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

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

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

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

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

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

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

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

     (ii) that the amounts credited to and withdrawn from the Collection Account
and the  Reserve  Account,  and to be  transferred  to and  withdrawn  from  the
Distribution  Account and the balance of each such account,  as set forth in the
records of the  Trustee,  are the same as the  amount set forth in such  Monthly
Servicer's Report;

     (iii) that the Servicer has properly calculated certain of the amounts that
are to be distributed  pursuant to Section 5.01 of the related Series Supplement
on such Payment Date, as specified in such Series Supplement; and

     (iv)  based  solely on  information  set forth in such  Monthly  Servicer's
Report,  determine  that the Projected  Income for the related Due Period equals
the sum of payments received as principal and interest from Obligors due in such
Due Period plus the amount of  principal  and  interest  not paid on  Delinquent
Contracts and Defaulted  Contracts  (including amounts due by virtue of canceled
or bounced  checks or other reversed  payments)  minus any payments due in other
Due  Periods  that  were  paid  in such  Due  Period  (both  late  payments  and
prepayments).

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

           (c) Based solely on the  information  included in the Series Contract
Schedule delivered on the related Series Closing Date and the electronic reports
provided on each Payment Date  thereafter,  the Trustee shall determine that any
Substitute  Contracts  delivered  under  Section 3.10  satisfy the  Substitution
Criterion  described in clause (i) of the second  sentence of Section 3.04(b) of
the Sale Agreement and clause (i) of the second  sentence of Section  3.04(b) of
the Receivables Purchase Agreement.

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

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

           (f) The  Subservicer  shall  provide the  Trustee  with a copy of the
Subservicer's  proprietary  software  that  the  Subservicer  currently  uses to
service the  Contracts,  which  software shall be held in escrow by the Trustee,
only to be used  solely by the  Trustee  in the event  that the  Subservicer  is
removed or  otherwise  ceases to act in the  capacity as  Subservicer,  and only
until such time as the  Trustee  can obtain  replacement  software  or appoint a
successor  Subservicer  in  accordance  with Section 7.03 (up to a maximum of 90
days from the date that the Subservicer  ceases  performing  services under this
Agreement); if the Trustee needs to use such software beyond such 90-day period,
Trendwest  will pay the  Subservicer,  on  behalf of the  Trustee  (prior to the
expiration  of such 90 day  period)  a license  fee of  $10,000.00  (payable  in
advance),  which payment shall extend the Trustee's license to use such software
until  the  earlier  to occur  of:  (i) two (2)  years  from  the date  that the
Subservicer  ceases  performing  services  under this  Agreement;  or (ii) final
payment of all amounts due on the Notes of each Series Outstanding.  The Trustee
may extend such license for successive  two-year periods upon payment of $10,000
per period (which fees shall be paid by  Trendwest),  due prior to the beginning
of each such period.  The limited license to use the Subservicer's  software set
forth in this paragraph may not be  sublicensed,  assigned or transferred by the
Trustee without  Subservicer's prior written consent,  and such license does not
include the right to reverse  assemble,  reverse engineer or reverse compile the
software.  The Trustee  agrees to take all  appropriate  measures to protect the
confidentiality  of such  software  and will return all copies of such  software
upon the earlier to occur of: (i) the expiration of Trustee's license to use the
software (as detailed above); (ii) Trustee's  conversion to replacement software
or alternative servicing arrangements; or (iii) final payment of all amounts due
on the Notes of each Series Outstanding.


             ARTICLE 5 THE SERVICER, THE SUBSERVICER AND THE ISSUER

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

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

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

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

           (b)  Neither  the  Servicer  nor the  Subservicer  shall (i)  convey,
transfer or lease  substantially all of its assets as an entirety to any Person,
or (ii) merge or  consolidate  with  another  Person,  unless such Person or the
merged or  consolidated  entity  acquires  substantially  all the  assets of the
Servicer or the Subservicer, as the case may be, as an entirety and executes and
delivers  to the Issuer  and the  Trustee an  agreement,  in form and  substance
reasonably  satisfactory  to the  Issuer  and the  Trustee,  which  contains  an
assumption  by such  Person or entity of the due and  punctual  performance  and
observance  of each  covenant  and  condition to be performed or observed by the
Servicer or the Subservicer, as the case may be, under this Agreement;  provided
that nothing  herein  shall  prevent the Servicer  from  selling  contracts  and
receivables which are not Purchased Assets pursuant to a receivables financing.

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

            Section  5.04.  The  Servicer  and  Subservicer  Not to Resign.  (a)
Neither  the  Servicer  nor the  Subservicer  (except  as set  forth in the last
sentence of this  subsection  (a) shall  resign from the duties and  obligations
hereby imposed on it by this Agreement  except upon a determination by the Board
of Directors of the Servicer or Subservicer,  as the case may be, that by reason
of  change  in  applicable  legal  requirements,  with  which  the  Servicer  or
Subservicer,  as the  case  may be,  cannot  reasonably  comply,  the  continued
performance  by the  Servicer  or the  Subservicer,  as the case may be,  of its
duties  under this  Agreement  would cause it to be in  violation  of such legal
requirements,  said  determination  to be  evidenced  by a  resolution  from the
appropriate  Board of  Directors to such  effect,  accompanied  by an Opinion of
Counsel  to  such  effect  and  reasonably  satisfactory  to  the  Trustee.  The
Subservicer  may resign as  Subservicer  hereunder  upon the  termination of the
Service Agreement between the Servicer and the Subservicer,  dated as of January
1, 1996 or any successor agreement thereto.

           (b) No such  resignation  shall  become  effective  until a successor
Servicer  or   Subservicer,   as  the  case  may  be,  shall  have  assumed  the
responsibilities and obligations of the Servicer or Subservicer hereunder.

           (c) Except as provided in Sections  5.02 and 6.01 hereof,  the duties
and  obligations  of the Servicer and  Subservicer  under this  Agreement  shall
continue until this Agreement  shall have been terminated as provided in Section
8.01 hereof,  and shall survive the exercise by the Issuer or the Trustee of any
right or remedy under this  Agreement,  or the  enforcement  by the Issuer,  the
Trustee or any Noteholder of any provision of the Notes or this Agreement.

            Section 5.05. Issuer Indemnification. The Issuer shall indemnify and
hold harmless the Servicer and the  Subservicer  (but solely from the amounts to
be  distributed  to the  Issuer  as set forth in  Sections  5.01 and 5.02 of the
applicable  Series  Supplement) from and against any loss,  liability,  expense,
damage or injury  suffered or  sustained  by the  Servicer  or the  Subservicer,
including  but  not  limited  to any  judgment,  award,  settlement,  reasonable
attorneys'  fees and other costs and expenses  incurred in  connection  with the
defense of any actual or threatened  action,  proceeding or claim,  which arises
out of the  Servicer's  or the  Subservicer's  activities  hereunder;  provided,
however,  that the Issuer shall not indemnify the Servicer or the Subservicer if
the  Servicer's  or the  Subservicer's  activities  constituted  fraud,  willful
misconduct,  negligence (which includes negligence with respect to the duties of
the Servicer  which are  explicitly  set forth in this  Agreement)  or breach of
fiduciary duty by the Servicer or the  Subservicer for any amounts for which the
Servicer or  Subservicer  is obligated to indemnify  the Issuer or other Persons
pursuant to Section 5.01 hereof.


                         ARTICLE 6  SERVICING TERMINATION

     Section 6.01. Servicer Events of Default.  (a) With respect to each Series,
any of the following  acts or occurrences  shall  constitute a Servicer Event of
Default with respect to such Series:

     (i) any failure by the Servicer to deliver to the  Subservicer  for payment
to Noteholders  any proceeds or payments  received from an Obligor or in respect
of the related  Series Trust  Estate and  required to be so delivered  under the
terms of the Indenture and this Agreement that continues  unremedied  until 1:00
p.m.,  Chicago  time,  on the second  successive  Business  Day  following  such
failure;  provided,  however,  that  the  Subservicer,   upon  receiving  actual
knowledge  of such  failure,  shall give the  Servicer  and the  Trustee  prompt
written,  telecopied or telephonic notice of such failure.  Notwithstanding  the
foregoing, any failure by the Subservicer to deliver such notice to the Servicer
shall not prevent the occurrence of a Servicer Event of Default; or

     (ii) any  failure by the  Servicer to deliver a Monthly  Servicer's  Report
pursuant  to Section  4.01  hereof that  continues  unremedied  until 1:00 p.m.,
Chicago time, the following Business Day; provided, however, that if the Trustee
has actual knowledge that the Servicer has not delivered such Monthly Servicer's
Report by 1:00 p.m.,  Chicago time, on a  Determination  Date, the Trustee shall
give the Servicer  written,  telecopied  or  telephonic  notice of such failure.
Notwithstanding the foregoing, any failure by the Trustee to deliver such notice
to the Servicer shall not prevent the occurrence of a Servicer Event of Default;
or

     (iii) any failure by the Servicer to remit any Purchase  Price  received by
it to the Subservicer that continues  unremedied until 4:00 p.m.,  Chicago time,
the following  Business  Day;  provided,  however,  that if the Servicer has not
remitted  any Purchase  Price  received by it to the  Subservicer  by 2:00 p.m.,
Chicago time,  on the  Determination  Date and the Trustee has received  written
notification  from the Subservicer by way of the applicable  Monthly  Servicer's
Report or  otherwise  that such  Purchase  Price has not been paid,  the Trustee
shall give the Servicer prompt written,  telecopied or telephonic notice of such
failure.  Notwithstanding  the foregoing,  any failure by the Trustee to deliver
such notice to the Servicer shall not prevent the occurrence of a Servicer Event
of Default; or

     (iv)  any  failure  by the  Servicer  to  make  remittances  (other  than a
remittance  of  Purchase  Price  referred to in clause  (iii)  above) or deliver
notices  pursuant to Section 3.03 hereof,  that continues  unremedied until 1:00
p.m., Chicago time, of the second successive Business Day; or

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

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

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

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

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

     (x) the  occurrence  of a  Trigger  Event if the  initial  Servicer  is the
Servicer; or

     (xi) the occurrence of a Subservicer Event of Default.

           (b) If a  Servicer  Event  of  Default  shall  have  occurred  and be
continuing with respect to any Series, the Trustee shall, upon written direction
of the Holders of Notes  representing  not less than 66-2/3% in principal amount
of the  Controlling  Class of Notes  Outstanding of such Series,  by notice (the
"Servicer  Termination  Notice") given in writing to the Servicer of such Series
terminate all, but not less than all, of the rights and  obligations  (except as
expressly  provided herein) of the Servicer under this Agreement with respect to
such Series. Notwithstanding the foregoing, a delay in or failure of performance
under Sections  6.01(a)(ii) or 6.01(a)(v) hereof for a period of 30 or more days
shall not  constitute a Servicer Event of Default if such delay or failure could
not have been prevented by the exercise of reasonable  diligence by the Servicer
and such delay or failure  was caused by acts of  declared  or  undeclared  war,
public disorder, rebellion or sabotage, epidemics, landslides,  lightning, fire,
hurricanes,  earthquakes,  floods or similar causes; provided,  however, that in
any event, such delay or failure shall constitute a Servicer Event of Default if
it continues  unremedied for a period of 35 days.  The preceding  sentence shall
not relieve the Servicer from using its best efforts to perform its  obligations
in a timely  manner  in  accordance  with the terms of this  Agreement,  and the
Servicer shall provide the Trustee,  the Issuer and the Noteholders  with prompt
notice  of such  failure  or delay  by it or the  Subservicer,  together  with a
description of its efforts to so perform its obligations.

           (c)    [Reserved]

           (d) On or after the receipt by the Servicer of a Servicer Termination
Notice,  all  authority  and power of the  Servicer  with respect to such Series
under this Agreement, whether with respect to the Notes or the Contracts of such
Series or  otherwise,  shall  pass to and be vested  in the  successor  Servicer
appointed  pursuant  to Section  6.02  hereof,  and,  without  limitation,  such
successor Servicer is hereby authorized and empowered to execute and deliver, on
behalf of such Servicer, as attorney-in-fact or otherwise, any and all documents
and  other  instruments,  and to do or  accomplish  all  other  acts  or  things
necessary or appropriate  to effect the purposes of such notice of  termination,
whether to complete the transfer of the Contracts and related  documents related
to such Series, or otherwise.  The Servicer agrees to cooperate with the Trustee
and the successor Servicer in effecting the termination of the  responsibilities
and  rights  of the  Servicer  hereunder,  including,  without  limitation,  the
transfer to the successor  Servicer for administration by it of all cash amounts
that  shall at the time be held by the  Servicer  for  deposit  related  to such
Series,  or have been  deposited by the  Servicer or  thereafter  received  with
respect to Contracts related to such Series. To assist the successor Servicer in
enforcing all rights under such  Contracts,  the outgoing  Servicer,  at its own
expense,  shall transfer its records (electronic and otherwise) relating to such
Contracts to the successor  Servicer in such form as the successor  Servicer may
reasonably  request and shall transfer the related  Contracts (to the extent not
held by the  Trustee)  and  all  other  records,  correspondence  and  documents
relating to such Contracts that it may possess to the successor  Servicer in the
manner and at such times as the successor Servicer shall reasonably request.

            Section 6.02. Appointment of Successor Servicer. (a)(i) On and after
the time at which the  Servicer  with  respect to a Series  resigns as  Servicer
pursuant to Section 5.04 hereof or is terminated as Servicer pursuant to Section
6.01  hereof,   the  Trustee  shall,  at  the  direction  of  Holders  of  Notes
representing not less than 66-2/3% in principal amount of the Controlling  Class
of Notes Outstanding of such Series appoint a successor Servicer with respect to
such Series.

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

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

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

            Section 6.04.  Waiver of Past Defaults.  The Trustee with respect to
such Series  shall,  at the direction of the Holders of Notes  representing  not
less  than  66-2/3%  in  principal  amount  of the  Controlling  Class  of Notes
Outstanding of such Series,  on behalf of all Noteholders of such Series,  waive
any default by the Servicer with respect to a Series in the  performance  of its
obligations hereunder and its consequences, other than a default with respect to
required  deposits and payments in accordance with Article 3 or a default of the
type set forth in clause (vii) or (viii) of Section 6.01(a) hereof, which waiver
shall  require  the consent of each  Noteholder  of such  Series.  Upon any such
waiver of a past default,  such default  shall cease to exist,  and any Servicer
Event of Default  arising  therefrom  shall be deemed to have been  remedied for
every purpose of this  Agreement.  No such waiver shall extend to any subsequent
or other  default or impair any right  consequent  thereon  except to the extent
expressly waived.

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

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

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


                            ARTICLE 7 THE SUBSERVICER

     Section 7.01.  Representations  and Warranties.  The Subservicer  makes the
following  representations  and warranties to the Trustee and for the benefit of
the Noteholders which shall survive the Closing Date:

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

     (b)  Authorization  and Binding  Obligation.  This  Agreement has been duly
authorized,  executed and delivered by the Subservicer and constitutes the valid
and  legally  binding  obligation  of the  Subservicer  enforceable  against the
Subservicer  in  accordance  with its terms,  subject as to  enforcement  to any
bankruptcy,  insolvency,  reorganization  and  other  similar  laws  of  general
applicability  relating  to or  affecting  creditors'  rights  generally  and to
general  principles of equity  regardless of whether  enforcement is sought in a
court of equity or law.

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

     (d) No Proceedings.  There are no proceedings or investigations pending, or
to the  knowledge  of the  Subservicer,  threatened  against  or  affecting  the
Subservicer or any subsidiary in or before any court,  governmental authority or
agency or arbitration  board or tribunal,  including but not limited to any such
proceeding or investigation with respect to any environmental or other liability
resulting from its business which, individually or in the aggregate, involve the
possibility  of materially  and adversely  affecting the  properties,  business,
prospects,  profits or condition (financial or otherwise) of the Subservicer, or
the ability of the Subservicer to perform its obligations  under this Agreement.
The  Subservicer  is not in  default  with  respect  to any order of any  court,
governmental authority or agency or arbitration board or tribunal.

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

     Section  7.02.  Subservicer  Events of  Default.  (a) With  respect to each
Series,  any of the following acts or occurrences shall constitute a Subservicer
Event of Default with respect to such Series:

     (i) any failure by the Subservicer to deliver to the Clearing  Account Bank
for deposit in the Clearing  Account any proceeds or payments  received  from an
Obligor or the  Servicer or in respect of the related  Series  Trust  Estate and
required to be so delivered  under the terms of the Indenture and this Agreement
that  continues  unremedied  until  1:00  p.m.,  Chicago  time,  on  the  second
successive  Business Day following  such failure;  provided,  however,  that the
Trustee,  upon  receiving  actual  knowledge  of such  failure,  shall  give the
Subservicer  prompt  written,  telecopied or telephonic  notice of such failure.
Notwithstanding the foregoing, any failure by the Trustee to deliver such notice
to the  Subservicer  shall not prevent the occurrence of a Subservicer  Event of
Default; or

     (ii) any failure on the part of the Subservicer  duly to observe or perform
any  other  covenants  or  agreements  of the  Subservicer  set  forth  in  this
Agreement,  or any  representation  or warranty of the  Subservicer set forth in
Section  7.01 of this  Agreement  shall prove to be  incorrect  in any  material
respect,  which failure or breach  continues  unremedied for a period of 30 days
after the date on which the Subservicer becomes aware of such failure or breach,
or receives written notice of such failure or breach; or

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

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

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

     (b) If a Subservicer Event of Default with respect to any Series shall have
occurred and be continuing,  then the Trustee shall,  upon written  direction of
the Holders of Notes representing 66-2/3% in principal amount of the Controlling
Class of the Notes  Outstanding  of such  Series,  by notice  (the  "Subservicer
Termination  Notice")  given in  writing  to the  Subservicer  for  such  Series
terminate  all,  but not less than all,  of the rights and  obligations  of such
Subservicer under this Agreement.  Notwithstanding the foregoing,  a delay in or
failure of performance under Sections  7.02(a)(ii)  hereof for a period of 30 or
more days shall not  constitute a Subservicer  Event of Default if such delay or
failure could not have been prevented by the exercise of reasonable diligence by
the  Subservicer  and such delay or failure  was caused by acts of  declared  or
undeclared war, public disorder, rebellion or sabotage,  epidemics,  landslides,
lightning,  fire, hurricanes,  earthquakes,  floods or similar causes; provided,
however, that in any event, such delay or failure shall constitute a Subservicer
Event  of  Default  if it  continues  unremedied  for a period  of 35 days.  The
preceding sentence shall not relieve the Subservicer from using its best efforts
to perform its  obligations  in a timely manner in accordance  with the terms of
this Agreement,  and the Subservicer  shall provide the Trustee,  the Issuer and
the Noteholders with prompt notice of such failure or delay by it, together with
a description of its efforts to so perform its obligations.

            Section 7.03.  Appointment of Successor  Subservicer.  (a)(i) On and
after the time at which  Subservicer  for a Series  resigns  pursuant to Section
5.04 hereof or is terminated as Subservicer  pursuant to Section 7.02(b) hereof,
the Trustee shall,  at the direction of Holders of Notes  representing  at least
66-2/3% in principal  amount of the  Controlling  Class of Notes  Outstanding of
such Series appoint a successor Subservicer.

          (ii) The successor  Subservicer for a Series shall be the successor in
all respects to the  Subservicer  for such Series in its capacity as Subservicer
under this Agreement,  and the transactions set forth or provided for herein and
shall be subject to all the  responsibilities,  duties and liabilities  relating
thereto placed on the  Subservicer  with respect to such Series by the terms and
provisions  hereof;  provided,  however,  that any such successors  shall not be
liable for any acts or omissions of the  outgoing  Subservicer,  as the case may
be,  or  for  any  breach  by  either  the  outgoing  Subservicer  of any of its
representations  and warranties  contained  herein or in any related document or
agreement.

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

            Section 7.04.  Notification  to  Noteholders.  The Subservicer for a
Series shall  promptly  notify the  Servicer,  the Issuer and the Trustee of any
Subservicer  Event of Default with respect to such Series upon actual  knowledge
thereof  by the  Subservicer.  Upon any  termination  of,  or  appointment  of a
successor  to, the  Subservicer  for a Series  pursuant  to this  Article 7, the
Trustee shall give prompt  written  notice  thereof to the  Noteholders at their
respective addresses appearing in the Note Register.

            Section 7.05.  Waiver of Past Defaults.  The Trustee  shall,  at the
direction  of the Holders of Notes  representing  more than 66-2/3% in principal
amount of the Controlling Class of the Notes Outstanding of any affected Series,
on  behalf  of  all  Noteholders  of  such  Series,  waive  any  default  by the
Subservicer   in  the   performance  of  its   obligations   hereunder  and  its
consequences,  other  than a default  with  respect  to  required  deposits  and
payments  in  accordance  with  Article 3 or a default  of the type set forth in
clause (iv) or (v) of Section  7.02(a)  hereof,  which waiver shall  require the
consent  of each  Noteholder  of such  Series.  Upon any such  waiver  of a past
default, such default shall cease to exist, and any Subservicer Event of Default
arising  therefrom  shall be deemed to have been  remedied for every  purpose of
this  Agreement.  No such waiver shall extend to any subsequent or other default
or impair any right consequent thereon except to the extent expressly waived.

            Section 7.06.  Effects of Termination of  Subservicer.  (a) Upon the
appointment of a successor Subservicer for a Series, the predecessor Subservicer
shall  remit  any  Scheduled  Payments  relating  to such  Series  and any other
payments or proceeds that such  predecessor may receive pursuant to any Contract
or  otherwise  relating  to such  Series to such  successor  after  such date of
appointment.

           (b) After the  delivery  of a  Subservicer  Termination  Notice,  the
outgoing  Subservicer of a Series shall have no further obligations with respect
to the management, administration, servicing, enforcement, custody or collection
of the Contracts  relating to such Series,  and the successor  Subservicer shall
have all of such obligations, except that the outgoing Subservicer will transmit
or cause to be transmitted  directly to such successor  Subservicer  promptly on
receipt and in the same form in which received, any amounts held by the outgoing
Subservicer  (properly  endorsed  where  required for such  successor to collect
them)  received as payments upon or otherwise in  connection  with the Contracts
relating to such Series.


                       ARTICLE 8 MISCELLANEOUS PROVISIONS

            Section 8.01.  Termination of the Servicing Agreement.  (a) Absent a
termination  pursuant to Section 6.01 or 7.02 hereof,  the respective duties and
obligations of the Servicer, the Subservicer, the Issuer and the Trustee created
by this  Agreement  shall  terminate  upon the  discharge  of the  Indenture  in
accordance  with its terms;  and the  respective  duties and  obligations of the
Trustee  shall  terminate  with  respect to the Trustee in the event the Trustee
resigns or is replaced under Section 7.09 of the Indenture;  provided,  however,
that no  resignation or removal of the Trustee and no appointment of a successor
Trustee  shall become  effective  until the  acceptance  of  appointment  by the
successor  Trustee under Section 7.10 of the Indenture.  Upon the termination of
this Agreement  pursuant to this Section  8.01(a),  each of the Servicer and the
Subservicer  shall pay all monies with  respect to the  Receivables  and Credits
held by the  Servicer or the  Subservicer,  as the case may be, and to which the
Servicer  and the  Subservicer  or the  Subservicer,  as the case may be, is not
entitled,  to the Issuer or upon the Issuer's order.  Each of the Servicer's and
Subservicer's  indemnification  obligations pursuant to Section 5.01 hereof will
survive the termination of this Agreement.

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

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

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

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

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

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

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

     (a) to the  Trustee  at 135 South  LaSalle  Street,  Suite  1625,  Chicago,
Illinois  60674  (facsimile  number  (312)  904-2084),  Attention:  Asset Backed
Securities  Trust  Services,  TRI Funding II [specify  Series],  or at any other
address  previously  furnished in writing to the Issuer,  the  Noteholders,  the
Servicer and the Subservicer; or

     (b) to the Issuer at TRI Funding II, Inc., 3250 Lakeport Boulevard, Klamath
Falls, Oregon 97601 (facsimile number (503) 885-7454),  Attention: Treasurer, or
at any other  address  previously  furnished  in  writing  to the  Trustee,  the
Noteholders, the Servicer and the Subservicer by the Issuer; or

     (c) to the  Servicer at Trendwest  Resorts,  Inc.,  12301 N.E.  10th Place,
Bellevue,  Washington  98005  (facsimile  number  (425)  990-2302),   Attention:
Executive  Vice  President,  or at any other  address  previously  furnished  in
writing to the Trustee, the Noteholders, the Subservicer and the Issuer; or

     (d) to the Subservicer at Sage Systems, Inc., 2135 112th Avenue N.E., Suite
101,  Bellevue,  Washington 98004 (facsimile number (425) 462-0264),  Attention:
President,  or at any other  address  previously  furnished  in  writing  to the
Trustee, the Noteholders and the Servicer; or

     (e) to the Rating Agency at Fitch Investors Service, L.P., One State Street
Plaza,  New  York,  New  York  10004  (facsimile  (212)  480-4438),   Attention:
Asset-Backed  Securities or at any other address previously furnished in writing
to the Trustee, the Noteholders, the Subservicer, the Servicer and the Issuer.

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

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

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

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

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

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

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

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

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

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

            Section 8.13.  Duties of the Parties.  This Servicing  Agreement has
been drafted with the intent that one Person shall serve as Servicer, one Person
shall serve as Trustee,  and one Person shall serve as Subservicer  with respect
to all Series of Notes  Outstanding.  However,  any Series may have a  different
Person serving as Servicer,  Trustee or Subservicer  because of a resignation or
removal of such Person with  respect to such Series.  References  to each of the
Servicer, the Trustee and the Subservicer shall be read so that each such Person
shall have the rights and duties of the Servicer, Trustee or Subservicer, as the
case may be, only with  respect to each  Series for which such Person  serves in
such role.



<PAGE>



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


                        TRI 6 FUNDING II, INC., as Issuer



                                       By
                                      Name:
                                     Title:



     TRENDWEST RESORTS, INC., as Servicer and for itself



                                       By
                                      Name:
                                     Title:


     SAGE SYSTEMS, INC., as Subservicer



                                       By
                                      Name:
                                     Title:



     LASALLE NATIONAL BANK, as Trustee



                                       By
                                      Name:
                                     Title:




<PAGE>


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                                    EXHIBIT A


                                     FORM OF
                        REPORT OF INDEPENDENT ACCOUNTANTS






<PAGE>


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

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

                                    EXHIBIT B


               PERMITTED CHANGES TO PROPERTY MANAGEMENT AGREEMENT


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

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

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

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

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

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

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