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                                    INDENTURE

                                      among


                              TRI FUNDING II, INC.
                                   ("Issuer")

                                       and


                             TRENDWEST RESORTS, INC.
                                  ("Servicer")

                                       and


                              LASALLE NATIONAL BANK
                                   ("Trustee")





                            Dated as of March 1, 1998






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                                TABLE OF CONTENTS


SECTION        DESCRIPTION                                               PAGE


Parties 1
Preliminary Statement.......................................................1
Granting Clause.............................................................1

ARTICLE ONE       DEFINITIONS...............................................2

Section 1.01   Definitions..................................................2

ARTICLE TWO           NOTE FORM............................................15

Section 2.01   Form........................................................15

ARTICLE THREE         THE NOTES............................................15

Section 3.01   Denomination................................................15
Section 3.02   Execution, Authentication, Delivery and Dating..............16
Section 3.03   Notes as Debt...............................................17
Section 3.04   Registration, Registration of Transfer and Exchange.........17
Section 3.05   Limitation on Transfer and Exchange.........................18
Section 3.06   Mutilated, Destroyed, Lost or Stolen Notes..................19
Section 3.07   Payment of Principal and Interest; Principal and Interest Rights
               Preserved...................................................20
Section 3.08   Persons Deemed Owner........................................21
Section 3.09   Cancellation................................................21

ARTICLE FOUR    ORIGINAL ISSUANCE OF NOTES; SUBSTITUTIONS OF COLLATERAL....21

Section 4.01   Conditions to Original Issuance of Notes....................21
Section 4.02   Security for Notes..........................................24
Section 4.03   Substitution and Purchase of Receivables; Upgrade Contracts.24
Section 4.04   Releases....................................................26
Section 4.05   Trust Estate................................................28
Section 4.06   Notice of Release...........................................28
Section 4.07   Opinions as to Trust Estate.................................28
Section 4.08.  Classes.....................................................29

ARTICLE FIVE          SATISFACTION AND DISCHARGE...........................29

Section 5.01   Satisfaction and Discharge of Indenture.....................29

ARTICLE SIX           DEFAULTS AND REMEDIES.................................29

Section 6.01   Events of Default............................................29
Section 6.02   Acceleration of Maturity; Rescission and Annulment...........31
Section 6.03   Collection of Indebtedness and Suits for Enforcement 
               by Trustee...................................................32
Section 6.04   Remedies.....................................................32
Section 6.05   Optional Preservation of Trust Estate........................33
Section 6.06   Trustee May File Proofs of Claim.............................33
Section 6.07   Trustee May Enforce Claims Without Possession of Notes.......34
Section 6.08   Application of Money Collected...............................34
Section 6.10   Unconditional Right of Noteholders to Receive Principal 
                                   and Interest.............................35
Section 6.11   Restoration of Rights and Remedies...........................35
Section 6.12   Rights and Remedies Cumulative...............................36
Section 6.13   Delay or Omission; Not Waiver................................36
Section 6.14   Control by Noteholders.......................................36
Section 6.15   Waiver of Past Defaults......................................37
Section 6.16   Undertaking for Costs........................................37
Section 6.17   Waiver of Stay or Extension Laws.............................37
Section 6.18   Sale of Trust Estate.........................................37
Section 6.19   Action on Notes..............................................38

ARTICLE SEVEN         THE TRUSTEE...........................................39

Section 7.01   Certain Duties and Responsibilities..........................39
Section 7.02   Notice of Default............................................41
Section 7.03   Certain Rights of Trustee....................................41
Section 7.04   Not Responsible for Recitals or Issuance of Notes............42
Section 7.05   May Hold Notes...............................................43
Section 7.06   Money Held in Trust..........................................43
Section 7.07   Compensation and Reimbursement...............................43
Section 7.08   Corporate Trustee Required; Eligibility......................44
Section 7.09   Resignation and Removal; Appointment of Successor............45
Section 7.10   Acceptance of Appointment by Successor.......................45
Section 7.11   Merger, Conversion, Consolidation or Succession to Business of
               Trustee......................................................46
Section 7.12   Co-Trustees and Separate Trustees............................46
Section 7.13   Rights with Respect to the Servicer..........................47
Section 7.14   Appointment of Authenticating Agent..........................47
Section 7.15   Custodian to Hold Contracts..................................49

ARTICLE EIGHT         OPTIONAL PURCHASE OF RECEIVABLES......................49

Section 8.01   Optional Purchase of All Receivables.........................49

ARTICLE NINE          SUPPLEMENTAL INDENTURES...............................50

Section 9.01   Supplemental Indentures Without Consent of Noteholders.......50
Section 9.02   Supplemental Indentures with Consent of Noteholders..........51
Section 9.03   Execution of Supplemental Indentures.........................52
Section 9.04   Effect of Supplemental Indentures............................52
Section 9.05   Reference in Notes to Supplemental Indentures................52

ARTICLE TEN           REDEMPTION OF NOTES..................................53

Section 10.01  Redemption at the Option of the Issuer; Election to Redeem...53
Section 10.02  Notice to Trustee............................................53
Section 10.03  Notice of Redemption by the Issuer...........................53
Section 10.04  Deposit of the Redemption Price..............................54
Section 10.05  Notes Payable on Redemption Date.............................54

ARTICLE ELEVEN        REPRESENTATIONS, WARRANTIES AND COVENANTS.............54

Section 11.01  Representations and Warranties...............................54
Section 11.02  Covenants....................................................58
Section 11.03  Other Matters as to the Issuer...............................64

ARTICLE TWELVE        ACCOUNTS AND ACCOUNTINGS..............................64

Section 12.01  Collection of Money..........................................64
Section 12.02  Collection Account...........................................64
Section 12.03  Reserve  Accounts............................................66
Section 12.04  Reports by Trustee to Noteholders............................67

ARTICLE THIRTEEN PROVISIONS OF GENERAL APPLICATION..........................67

Section 13.01  Acts of Noteholders..........................................67
Section 13.02  Notices, etc., to Trustee, Issuer, Servicer and the 
                                Rating Agency...............................68
Section 13.03  Notices and Other Documents to Noteholders; Waiver...........69
Section 13.04  Effect of Headings and Table of Contents.....................69
Section 13.05  Successors and Assigns.......................................69
Section 13.06  Separability.................................................69
Section 13.07  Benefits of Indenture........................................69
Section 13.08  Legal Holidays...............................................69
Section 13.09  Governing Law................................................70
Section 13.10  Counterparts.................................................70
Section 13.11  Obligation...................................................70
Section 13.12  Compliance Certificates and Opinions.........................70
Section 13.13  Effective Date of Transactions...............................71
Section 13.14.  Duties of the Parties.......................................71

Signatures..................................................................72



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EXHIBIT A  Form of Investment Letter
EXHIBIT B  Form of Supplement for Grant of Substitute
           Contracts and Upgrade Contracts
EXHIBIT C  Form of Certificate of Issuer and Servicer





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         INDENTURE,   dated  as  of  March  1,  1998  (herein,  as  amended  and
supplemented  from time to time as permitted hereby,  called this  "Indenture"),
among TRI FUNDING II, INC., a Delaware  corporation  (herein,  together with its
permitted successors and assigns, called the "Issuer"), TRENDWEST RESORTS, INC.,
an Oregon  corporation,  as servicer,  and LASALLE  NATIONAL  BANK, a nationally
chartered bank, as trustee.


                              PRELIMINARY STATEMENT

         The Issuer has duly  authorized  the  execution  and  delivery  of this
Indenture  to provide for the issuance  from time to time of the Issuer's  notes
(hereinafter called the "Notes"),  issuable in one or more series as provided in
this Indenture, and each Series of which shall be limited as to principal amount
as set forth in the related Series Supplement. All covenants and agreements made
by the  Issuer,  the  Servicer  and the  Trustee  herein are for the benefit and
security of the Holders of the Notes.  The Issuer,  the Servicer and the Trustee
are  entering  into this  Indenture,  and the  Trustee is  accepting  the trusts
created hereby, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged.

         All things  necessary to make this  Indenture a valid  agreement of the
Issuer,  the  Servicer  and the Trustee in  accordance  with its terms have been
done.


                                 GRANTING CLAUSE

         To secure the payment of the  principal of and interest on the Notes of
each  Series in  accordance  with their  terms,  the  payment of all of the sums
payable under this Indenture and the  performance of the covenants  contained in
this Indenture,  the Issuer hereby Grants to the Trustee, solely in trust and as
collateral  security  as  provided  in this  Indenture,  for the  benefit of the
Holders of the Notes of each  Series in so far as the  following,  in each case,
relates to the Receivables and other  interests,  rights and properties  granted
pursuant  to the  Series  Supplement  with  respect to such  Series,  all of the
Issuer's rights, title and interest in and to the following whether now owned or
hereafter acquired and any and all benefits accruing to the Issuer from: (a) the
Receivables  Purchase  Agreement;  (b) the  Sale  Agreement;  (c) the  Servicing
Agreement;  (d)  the  Clearing  Account;  and  (e)  proceeds  of  the  foregoing
(including, but not by way of limitation, all cash proceeds,  accounts, accounts
receivable, notes, drafts, acceptances, chattel paper, checks, deposit accounts,
insurance  proceeds,  condemnation  awards,  rights to  payment of any and every
kind,  and  other  forms  of  obligations  and  receivables  which  at any  time
constitute all or part or are included in the proceeds of any of the foregoing).
In addition,  the Issuer will Grant to the Trustee additional interests,  rights
and properties pursuant to the Series Supplement relating to each Series (which,
for each Series,  together with the  interests,  rights and  properties  Granted
above,  shall be  referred to as the "Series  Collateral"  or the "Series  Trust
Estate").

         The Trustee  acknowledges  such Grant,  accepts the trusts hereunder in
accordance  with the  provisions  hereof and agrees to perform the duties herein
required  to the  best of its  ability  to the end  that  the  interests  of the
Noteholders may be adequately and effectively protected.

                             ARTICLE ONE  DEFINITIONS

             Section 1.01 Definitions.  Except as otherwise  expressly  provided
herein or unless the context  otherwise  requires,  the following terms have the
respective meanings set forth below for all purposes of this Indenture,  and the
definitions of such terms are equally applicable both to the singular and plural
forms of such terms.

     "Acquisition  Consideration":  The  meaning  specified  in the  Receivables
Purchase Agreement.

     "Act":  With respect to any  Noteholder,  the meaning  specified in Section
13.01.

     "Affiliate":  At any time,  and with  respect to any Person,  (a) any other
Person  that  at  such  time  directly  or   indirectly   through  one  or  more
intermediaries  controls,  or is controlled by, or is under common control with,
such first Person, and (b) any Person beneficially  owning or holding,  directly
or  indirectly,  10% or more of any class of voting or equity  interests of such
first  mentioned  Person or any  Person of which  such  first  mentioned  Person
beneficially  owns or holds,  in the aggregate,  directly or indirectly,  10% or
more of any class of voting or  equity  interests.  As used in this  definition,
"control" means the possession,  directly or indirectly,  of the power to direct
or cause the  direction  of the  management  and  policies of a Person,  whether
through the ownership of voting securities, by contract or otherwise.

     "Aggregate  Collateral  Value":  With  respect  to any Series and as of any
date, the sum of the aggregate of the Collateral Values of the Contracts pledged
by the Issuer to the Trustee to support the Notes of such Series  outstanding at
such  date;  provided,  however,  that the  Collateral  Value  of any  Defaulted
Contract shall not be included in the calculation of Aggregate  Collateral Value
in any Due Period after the Due Period in which such Contract became a Defaulted
Contract.

     "Asset  Assignment":  The meaning  specified  in the  Receivables  Purchase
Agreement.

     "Assignment": The meaning specified in the Sale Agreement.

     "Authenticating  Agent":  With respect to each Series, any entity appointed
by the Trustee pursuant to Section 7.14 hereof.

     "Board of Directors": Either the board of directors of the Issuer or of the
Servicer,  as the context  requires,  or any duly  authorized  committee of such
Board.

         "Board Resolution": A copy of a resolution delivered to the Trustee and
     certified by the Secretary or an Assistant Secretary of the Servicer or the
Issuer, as the case may be, to have been duly adopted by its respective Board of
Directors and to be in full force and effect on the date of such certification.

         "Business  Day":  Any day other than a  Saturday,  a Sunday or a day on
     which banking institutions in New York City or in the city in which the
corporate  trust office of the Trustee is located are authorized or obligated by
law or executive order to close.

     "Calculation Date": The last day of a Due Period.

     "Cash  Accumulation  Event":  With  respect to any Series,  the meaning set
forth in the related Series Supplement.

     "Class":  With  respect to any Series of Notes,  any class of Notes of such
Series established pursuant to a Series Supplement.

     "Clearing Account": The meaning specified in the Servicing Agreement.

     "Closing Date": March 12, 1998, the date that the Transaction Documents are
originally executed and delivered by the parties thereto.

     "Club" or "WorldMark":  WorldMark,  the Club, a California nonprofit mutual
benefit corporation, and its successors in interest.

     "Code": The Internal Revenue Code of 1986, as amended.

         "Collateral   Value":  With  respect  to  each  Receivable  as  of  any
     Calculation Date, the amount of principal outstanding with respect to such
Receivable at the end of such  Calculation  Date  (without  giving effect to any
write-off or writedown of such Receivable).

     "Collection Account":  With respect to each Series, the account or accounts
created and maintained pursuant to Section 12.02 hereof.

     "Collection   Account  Bank":  The  meaning   specified  in  the  Servicing
Agreement.

     "Competitor"  shall mean any Person which is engaged in the  vacation  time
share business.

     "Contract Files": The meaning specified in the Sale Agreement.

     "Contracts":  The retail installment contracts (and all rights with respect
thereto,  including  all  guaranties  and other  agreements or  arrangements  of
whatever  character from time to time supporting or securing payment of any such
contract and all rights with  respect to the Credits to the extent  specifically
related to any such  contract),  certain  interests in which are acquired by the
Issuer from time to time pursuant to the Sale  Agreement  and  identified on the
Contract  Schedule  attached to the applicable  Series Supplement as Schedule A,
including Substitute Contracts and Upgrade Contracts, and any amendments, riders
and  annexes  thereto;  provided  that,  from  and  after  the  date on  which a
Receivable relating to a Contract is purchased or substituted by the Issuer, TFI
or Trendwest in  accordance  with Section 4.03 hereof,  such  Contract  shall no
longer constitute a "Contract" for purposes of the Transaction Documents.

     "Controlling  Class": With respect to each Series, the meaning set forth in
the related Series Supplement.

         "Corporate Trust Office":  The principal  corporate trust office of the
Trustee  located at 135 South  LaSalle  Street,  Suite 1625,  Chicago,  Illinois
60674,  Attention:  Asset  Backed  Securities  Trust  Services  Group--Trendwest
Funding II  [specify  Series],  or at such  other  address  as the  Trustee  may
designate from time to time by notice to the Noteholders and the Issuer,  or the
principal corporate trust office of any successor Trustee.

     "Credits":  The  vacation  credits  financed  by an Obligor  pursuant  to a
Contract.

     "Custodian":  With respect to each Series, Sage Systems, Inc., a Washington
corporation, and its permitted successors and assigns.

     "Custodian Files": The meaning set forth in the Sale Agreement.

     "Default": Any occurrence or circumstance which with notice or the
lapse of time or both would become an Event of Default.

     "Default Rate":  With respect to any Series for any Due Period,  the sum of
the Collateral Values as of the Calculation Date occurring in such Due Period of
all Contracts supporting such Series that became Defaulted Contracts in such Due
Period and remained  Defaulted  Contracts as of such Calculation Date divided by
the  Aggregate  Collateral  Value  for  such  Series  on  the  Calculation  Date
immediately preceding such Due Period.

     "Defaulted  Contract":  A Contract shall become a Defaulted Contract at the
earliest of (i) the date on which the Servicer  receives notice that the related
Obligor has (or, if a Contract has two Obligors,  both Obligors have) become the
subject  of  bankruptcy  proceedings,  (ii) the  Calculation  Date on which  any
portion  of the  related  Receivable  would (if such  Receivable  were  owned by
Trendwest) be written off Trendwest's  financial  statements or books of account
or would otherwise be deemed uncollectible in the normal course of business (for
reasons  other than  disputes of amounts owed with respect to such  Receivable),
(iii) the  Calculation  Date on which all or part of any Scheduled  Payment with
respect to such Contract has not been  received and remains  unpaid for a period
of 180 or more  days as of such  Calculation  Date or (iv) the date on which the
related  Obligor has (or, if a Contract has two Obligors,  both  Obligors  have)
given notice to the Servicer,  or the Servicer  otherwise has reason to believe,
that the related Receivable will not be paid (for reasons other than disputes of
amounts owed with respect to such Receivable).

         "Delinquent Contract": As of any Calculation Date, a Contract (a) as to
which a Scheduled  Payment was not received by or on behalf of the Issuer within
60 days of when such  Scheduled  Payment was due and  remains  unpaid as of such
Calculation Date and (b) is not a Defaulted Contract.

         "Delinquency Level": With respect to any Series for any Due Period, the
sum of the Collateral  Values as of the  Calculation  Date occurring in such Due
Period of all Delinquent Contracts supporting such Series as of such Calculation
Date,  divided  by  the  Aggregate  Collateral  Value  of  such  Series  on  the
Calculation Date immediately preceding such Due Period.

     "Delivery Date": The date on which a Note is issued in accordance with this
Indenture.

     "Determination Date": The fifth day preceding each Payment Date or, if such
day is not a Business Day, the next succeeding Business Day.

     "Distribution  Account":  With  respect to each Series,  the trust  account
created and maintained pursuant to Section 12.02 hereof.

     "Due Date": With respect to each Receivable, the date of the month on which
payment is due thereunder.

         "Due Period": As to any Determination Date or Payment Date, as the case
may be, the period  beginning on and  including  the first day and ending at the
end of the last day of the  calendar  month  preceding  the month in which  such
Determination Date or Payment Date, as the case may be, occurs.

         "Eligible  Account":  A  segregated  account,  which may be an  account
maintained with the Trustee,  which is maintained with a depository  institution
or trust company whose long term unsecured debt  obligations  are rated at least
A-1 by Fitch,  (or,  if not rated by Fitch,  an  equivalent  rating  from S&P or
Moody's).

         "Eligible Investments":  Any and all of the following:

                   (i) direct  obligations of, and obligations  fully guaranteed
         by, the United  States of America or any agency or  instrumentality  of
         the United States of America the obligations of which are backed by the
         full faith and credit of the United States of America;

                  (ii) (A) demand and time deposits in,  certificates of deposit
         of,  banker's  acceptances  issued  by or  federal  funds  sold  by any
         depository  institution or trust company  (including the Trustee or its
         agent acting in their respective  commercial  capacities)  incorporated
         under the laws of the United States of America or any State thereof and
         subject  to  supervision   and  examination  by  federal  and/or  state
         authorities,  so long as at the time of such  investment or contractual
         commitment providing for such investment,  such depository  institution
         or trust company has a short term  unsecured debt rating of F1+ (or its
         equivalent) of Fitch,  (or, if not rated by Fitch, an equivalent rating
         from S&P or Moody's)  and  provided  that each such  investment  has an
         original maturity of no more than 180 days, and (B) any other demand or
         time deposit or deposit which is fully  insured by the Federal  Deposit
         Insurance Corporation;

                 (iii) securities  bearing interest or sold at a discount issued
         by any corporation  incorporated under the laws of the United States of
         America  or any State  thereof  which has a long  term  unsecured  debt
         rating in the highest  available  rating  category of Fitch (or, if not
         rated by Fitch,  an equivalent  rating from S&P or Moody's) at the time
         of such investment;

                  (iv) commercial paper having, or demand notes  constituting an
         investment  vehicle in commercial paper having, an original maturity of
         less than 180 days and  issued by an  institution  having a short  term
         unsecured debt rating in the highest available rating category of Fitch
         (or, if not rated by Fitch,  an equivalent  rating from S&P or Moody's)
         at the time of such  investment  (the issuer of any demand  notes under
         this  paragraph  (iv) must also be an  institution  that  satisfies the
         unsecured debt rating test specified in this paragraph (iv));

                   (v) a guaranteed  investment  contract issued by an insurance
         company or other  corporation  having a long term unsecured debt rating
         or a claims  paying  ability  rated  in the  highest  available  rating
         category of Fitch (or, if not rated by Fitch, an equivalent rating from
         S&P or Moody's) at the time of such investment; and

                  (vi) money  market  funds  having  ratings  in the  highest or
         second highest  available rating category of Fitch (or, if not rated by
         Fitch,  an  equivalent  rating from S&P or Moody's) at the time of such
         investment  which invest only in other Eligible  Investments;  any such
         money  market  funds  which  provide  for  demand   withdrawals   being
         conclusively  deemed to satisfy any maturity  requirement  for Eligible
         Investments set forth in this Indenture.

Any  Eligible  Investments  may be purchased by or through the Trustee or any of
its Affiliates.

     "Event of Default": The meaning specified in Section 6.01 hereof.

     "Final  Due  Date":  With  respect  to each  Receivable,  the last Due Date
specified in the related Contract.

         "Final  Payment Date":  With respect to each Series,  the date on which
the final principal  payment on the Notes of such Series becomes due and payable
as therein or herein provided, whether at the Stated Maturity or by acceleration
or redemption.

         "Fitch":   Fitch IBCA, Inc. and its successors in interest.

         "Grant": To grant, bargain, sell, warrant,  alienate,  remise, release,
convey, assign, transfer, mortgage, pledge, create and grant a security interest
in and right of set-off against,  deposit,  set over and confirm. A Grant of the
Receivables,  the  related  Contracts  or of any  instrument  shall  include all
rights,  powers and options (but none of the  obligations) of the Granting party
thereunder, including, without limitation, the immediate and continuing right to
claim, collect, receive and receipt for payments in respect of the Contracts and
the  Receivables,  or any other  payment  due  thereunder,  to give and  receive
notices  and other  communications,  to make  waivers  or other  agreements,  to
exercise  all  rights  and  options,  to  bring  proceedings  in the name of the
Granting party or otherwise,  and generally to do and receive anything which the
Granting party is or may be entitled to do or receive thereunder or with respect
thereto.

     "Guaranty  Amounts":  Any and all  amounts  paid  by a  guarantor,  if any,
indicated on the applicable Contract.

     "Holder" or "Noteholder":  The person in whose name a Note is registered in
the Note Register.

         "Indenture" or "this Indenture": This instrument as originally executed
as  from  time  to  time  supplemented  or  amended  by one or  more  indentures
supplemental  hereto entered into pursuant to the applicable  provisions hereof,
as so  supplemented  or amended.  All references in this Indenture to designated
"Articles,"  "Sections,"   "Subsections"  and  other  subdivisions  are  to  the
designated  Articles,  Sections,  Subsections  and  other  subdivisions  of this
Indenture as originally executed,  or if amended or supplemented,  as so amended
and supplemented.  The words "herein," "hereof,"  "hereunder" and other words of
similar  import,  when not related to a specific  subdivision of this Indenture,
refer to this Indenture as a whole and not to any particular  Article,  Section,
Subsection or other subdivision.

         "Independent":  When used with  respect to any  specified  Person means
such a Person,  who (1) is in fact independent of the Issuer,  (2) does not have
any direct financial interest or any material indirect financial interest in the
Issuer or in any Affiliate of the Issuer,  (3) is not connected  with the Issuer
as an officer, employee,  promoter,  underwriter,  Trustee, partner, director, a
person performing  similar functions and (4) is not a brother,  sister,  spouse,
parent or child of any Person  listed in clauses (2) and (3) above.  Whenever it
is herein provided that any Independent Person's opinion or certificate shall be
furnished to the  Trustee,  such Person shall be appointed by a Issuer Order and
approved by the Trustee in the exercise of reasonable  care, and such opinion or
certificate  shall state that the signer has read this  definition  and that the
signer is Independent within the meaning hereof.

     "Initial Aggregate  Collateral Value": The meaning set forth in the related
Series Supplement.

         "Initial  Payment Date":  With respect to the Notes of any Series,  the
first Payment Date  following the related  Series  Closing Date, as specified in
such Notes and in the related Series Supplement.

         "Institutional  Investor": Any original purchaser of a Note, any holder
of a Note holding more than 5% of the  aggregate  principal  amount of the Notes
Outstanding  of any  Series  and any  bank,  trust  company,  savings  and  loan
association  or other  financial  institution,  any pension plan, any investment
company,  any insurance company,  any broker or dealer, or any similar financial
institution  or entity,  regardless of legal form, or any other Person more than
50% of the  ownership  interests  of  which  are  owned  by one or more  Persons
previously described in this definition.

         "Issuer":  TRI  Funding  II,  Inc.,  a  Delaware  corporation,  until a
successor  Person  shall  have  become  the Issuer  pursuant  to the  applicable
provisions of this Indenture,  and thereafter "Issuer" shall mean such successor
Person.

         "Issuer Order" and "Issuer Request":  A written order or request signed
in the name of the  Issuer  by the  Chairman  of the  Board,  President,  a Vice
President,  the  Treasurer  or  Secretary  of the Issuer,  and  delivered to the
Trustee.

         "Lien": Any mortgage, deed of trust, pledge, hypothecation, assignment,
participation or equity interest, deposit arrangement, encumbrance, charge, lien
(statutory  or other),  preferences  priority  or other  security  agreement  or
preferential  arrangement of any kind or nature whatsoever,  including,  without
limitation,  any  conditional  sale or  other  title  retention  agreement,  any
financing  lease having  substantially  the same  economic  effect as any of the
foregoing  and the filing of any financing  statement  under the UCC (other than
any  such  financing  statement  filed  for  informational   purposes  only)  or
comparable law of any jurisdiction to evidence any of the foregoing.

     "Monthly  Servicer's  Report":  For each Series, the report prepared by the
Servicer pursuant to Section 4.01 of the Servicing Agreement.

     "Moody's: Moody's Investors Service, Inc. and its successors in interest.

     "Note" or "Notes": Any note or notes authenticated and delivered under this
Indenture and the related Series Supplement.

     "Noteholder" or "Holder":  The Person in whose name a Note is registered in
the Note Register.

         "Note  Interest  Rate":  With  respect to the Notes of any Class of any
Series, the rate per annum at which such Notes accrue interest,  as specified in
such Notes and the related Series Supplement.

         "Note Purchase  Agreements":  Each of the note purchase agreements,  if
any,  entered  into with  respect to the  initial  issuance  of any Class of any
Series of Notes, as specified in the related Series Supplement.

     "Note Register" and "Note Registrar":  The respective meanings specified in
Section 3.04 hereof.

         "Obligor":  The borrower  under each related  Contract,  including  any
guarantor of such borrower, and their respective successors and assigns.

         "Officer's  Certificate":  A certificate  signed by the Chairman of the
Board,  the President,  a Vice  President,  the Treasurer,  the  Controller,  an
Assistant  Controller  or the  Secretary  of the  company  on whose  behalf  the
certificate is delivered,  and delivered to the Trustee, which certificate shall
comply  with  the  applicable  requirements  of  Section  13.12  hereof.  Unless
otherwise specified, any reference in this Indenture to an Officer's Certificate
shall be to an Officer's Certificate of the Issuer.

         "Opinion  of  Counsel":  A  written  opinion  of  counsel  who  must be
Independent  of the  Issuer  and its  Affiliates  and who  shall  be  reasonably
satisfactory  to the Trustee and which opinion shall comply with the  applicable
requirements of Section 13.12 hereof.

         "Outstanding":   With  respect  to  the  Notes,   as  of  any  date  of
determination,  all Notes  theretofore  authenticated  and delivered  under this
Indenture except:

     (i) Notes  theretofore  canceled by the Note  Registrar or delivered to the
Note Registrar for cancellation; and

                  (ii) Notes in  exchange  for or in lieu of which  other  Notes
         have been  authenticated  and  delivered  pursuant  to this  Indenture,
         unless proof  satisfactory  to the Trustee is  presented  that any such
         Notes are held by a bona fide purchaser;

provided,  however,  that for purposes of determining whether the Holders of the
requisite  principal  amount of the  Outstanding  Notes have given any  request,
demand,  authorization,  direction,  notice, consent or waiver hereunder,  Notes
owned by the Issuer or any other  obligor upon such Notes,  any Affiliate of the
Issuer or  Trendwest  shall be  disregarded  and deemed  not to be  Outstanding,
except that,  in  determining  whether the Trustee shall be protected in relying
upon any such request,  demand,  authorization,  direction,  notice, consent, or
waiver,  only  Notes  which  the  Trustee  knows  to be  so  owned  shall  be so
disregarded.

         "Overdue  Payment":  With  respect  to a Due  Period  and a  Delinquent
Contract, all payments due in a prior Due Period that the Servicer receives from
or on behalf of an Obligor  during  the  related  Due Period on such  Delinquent
Contract, including any Servicing Charges.

         "Paying  Agent":  The  Trustee  or any  other  Person  that  meets  the
eligibility  standards  for the Trustee  specified in Section 7.08 hereof and is
authorized  by the  Issuer  pursuant  to  Section  11.02(o)  hereof  to pay  the
principal of, or interest on, any Notes on behalf of the Issuer.

         "Payment Date": With respect to the Notes of any Series,  the fifteenth
day of each  calendar  month  (or if such day is not a  Business  Day,  the next
succeeding Business Day) commencing on the Initial Payment Date for such Notes.

         "Permitted  Institutional Investor" means (a) any original purchaser of
a Note and (b) any bank,  trust company,  savings and loan  association or other
financial  institution,  any pension plan, any investment company, any insurance
company,  any broker or dealer,  or any other similar  financial  institution or
entity, regardless of legal form.

         "Person":  Any  individual,  corporation,  limited  liability  company,
partnership,  association, joint-stock company, trust (including any beneficiary
thereof),  unincorporated  organization or government or any agency or political
subdivision thereof.

       "Placement Agent":  SPP Hambro & Co., LLC or its successors in interest.

         "Principal  Distribution  Amount":  With  respect  to any  Class of any
Series of Notes,  the  monthly  principal  distribution  for such  Class of such
Series set forth in the related Series Supplement.

         "Principal  Shortfall Amount":  With respect to any Class of any Series
of Notes and any  Payment  Date,  an  amount  equal to the  aggregate  amount of
principal  payments on such Class that were owed on prior  Payment Dates but not
made to the Holders of such Class prior to such Payment Date.

         "Principal Terms":  The meaning specified in Section 3.01 hereof.

     "Prior  Issuer":  TRI Funding  Company I,  L.L.C.,  and its  successors  in
interest.

     "Proceeding":  Any  suit in  equity,  action  at law or other  judicial  or
administrative proceeding.

         "Purchase  and  Substitution  Limit":  With  respect  to the  Contracts
supporting any Series of Notes, 10% of the Initial Aggregate Collateral Value of
such Series.

         "Purchase  Price":  With  respect to any  Contract or interest  therein
repurchased  by the Issuer,  TFI or Trendwest,  as the case may be,  pursuant to
Section 3.03 of the  Receivables  Purchase  Agreement,  Section 3.03 of the Sale
Agreement,  Section 4.03 hereof or Section  3.10(b) of the Servicing  Agreement,
the sum of (i) the  Collateral  Value of related  Receivable on the  Calculation
Date on or  immediately  succeeding  the date when the Receivable is repurchased
and (ii) any  interest  portion  of  Scheduled  Payments  with  respect  to such
Receivable  due on or prior to such  Calculation  Date but not received  through
such Calculation Date.

         "Rating Agency":  Fitch.

         "Receivables":  With respect to any Contract,  all of, and the right to
receive all of (i) the Scheduled Payments,  (ii) any Guaranty Amounts, (iii) any
Residual Proceeds, (iv) any Recoveries and (v) any Servicing Charges.

         "Receivables  Purchase Agreement":  The Receivables Purchase Agreement,
dated as of March 1, 1998, by and among TFI, the Prior Issuer,  Trendwest and TW
Holdings, as amended and supplemented from time to time, together with the Asset
Assignment and each Subsequent Asset Assignment,  if any, executed in connection
therewith.

         "Receivables  Transfer  Agreement":  The Second  Amended  and  Restated
Receivables Transfer Agreement,  dated as of June 1, 1997, as amended,  among TW
Holdings,  as Seller,  Bank of America  National  Trust and Savings  Association
d/b/a SeaFirst Bank, as agent for the  purchasers  named therein,  and Trendwest
Resorts, Inc.

         "Record  Date":  The  close of  business  on the last day of the  month
preceding the  applicable  Payment Date,  whether or not a Business Day,  except
with respect to the Initial Payment Date for the Notes of any Series, the Record
Date shall be the related Series Closing Date.

         "Recoveries":  For any Due Period occurring during or after the date on
which any  Contract  becomes  a  Defaulted  Contract  and with  respect  to such
Defaulted Contract, all payments that the Servicer received from or on behalf of
an Obligor during such Due Period in respect of such Defaulted  Contract or from
liquidation or reselling the related Credits  (including  purchases by Trendwest
pursuant  to Section  3.10(e) of the  Servicing  Agreement),  including  but not
limited to Scheduled Payments, Overdue Payments and Guaranty Amounts, as reduced
by any reasonably  incurred  out-of-pocket  expenses incurred by the Servicer in
enforcing such Defaulted Contract.

     "Redemption  Date":  With  respect to any Note,  a date fixed  pursuant  to
Section 10.01 hereof.

         "Redemption  Price": With respect to any Note, and as of any Redemption
Date,  the  Outstanding  principal  amount of such Note,  together with interest
accrued  thereon  through the Redemption  Date at the related Note Interest Rate
(exclusive of installments of interest and principal maturing on or prior to the
related  Redemption Date, payment of which shall have been made or duly provided
for to the Holder of such Note on the  applicable  Record  Date or as  otherwise
provided in this Indenture).

     "Redemption  Record  Date":  With respect to any  redemption of any Note, a
date fixed pursuant to Section 10.01 hereof.

         "Registered Holder": The Person whose name appears on the Note Register
on the applicable Record Date or Redemption Record Date.

         "Reinvestment  Income":  With  respect to any Series,  any  interest or
other earnings earned on all or part of the related Series Trust Estate.

     "Remittance  Date":  The Business Day  immediately  preceding  each Payment
Date.

     "Reserve  Account":  With respect to each Series, the trust account created
and maintained pursuant to Section 12.03 hereof.

     "Reserve Account Required Balance": With respect to any Series, the meaning
set forth in the related Series Supplement.

         "Residual Proceeds": With respect to a Contract that is not a Defaulted
Contract  and the  related  Credits,  the net  proceeds  of any  resale or other
disposition of such Credits.

         "Responsible  Officer":  When used with  respect  to the  Trustee,  any
officer assigned to the Asset Backed  Securities  Trust Services  Department (or
any successor thereto), including any Vice President,  Assistant Vice President,
Trust  Officer,  Assistant  Secretary  or  any  other  officer  of  the  Trustee
customarily  performing functions similar to those performed by any of the above
designated  officers and having direct  responsibility for the administration of
this Indenture, and also, with respect to a particular matter, any other officer
to whom such  matter is  referred  because of such  officer's  knowledge  of and
familiarity with the particular subject.

         "Restricted  Investor" means (a) any investment company or pension plan
(other  than a pension  plan held or  managed  by an  insurance  company)  that,
directly or indirectly  through any subsidiary or through any parent corporation
is engaged in the vacation time share  business and (b) any other Person that is
not a Permitted  Institutional Investor that, directly or indirectly through any
subsidiary  or through any parent  corporation  is engaged in the vacation  time
share business.

     "S&P":  Standard & Poor's Ratings Group, a division of  McGraw-Hill,  Inc.,
and its successors in interest.

         "Sale":  The meaning specified in Section 6.18 hereof.

         "Sale Agreement": The Purchase and Sale Agreement, dated as of March 1,
1998, by and among TFI,  Trendwest and the Issuer,  as amended and  supplemented
from time to time, together with the Assignment and each Subsequent  Assignment,
if any, executed in connection therewith.

         "Scheduled Payment": With respect to a Payment Date and a Contract, the
periodic  payment set forth in such Contract due from the Obligor in the related
Due Period.  Scheduled  Payments shall not include any membership  dues or other
housekeeping payments relating to the use of the Club.

     "Series": Any series of Notes established pursuant to a Series Supplement.

     "Series Closing Date": With respect to any Series,  the date of the initial
issuance of the Notes of such Series.

     "Series  Collateral":  The meaning specified in the Granting Clause of this
Indenture.

         "Series Contract Schedule":  With respect to any Series, the listing of
Contracts and  Receivables  on Schedule A to the related Series  Supplement,  as
amended from time to time  pursuant to Section  4.03,  which shall  include with
respect to each Contract listed on such schedule:  (a) a number identifying such
Contract,  (b) the Collateral Value of the related  Receivable as of the date of
execution  and as of the Series  Cut-Off  Date,  (c) the  Obligor,  (d) the date
entered  into,  (e) the original  term and the number of payments made as of the
Series  Cut-Off Date, (f) the Scheduled  Payment,  (g) the interest rate and (h)
the  number of  Credits  financed,  as such  schedule  may be  amended  upon any
purchase or  substitution  of Contracts made in accordance with the terms of the
Transaction Documents.

         "Series Cut-Off Date": With respect to the Contracts  identified on any
Series  Contract  Schedule,  the cut-off date  specified  in the related  Series
Supplement,  and, with respect to any Substitute  Contract or Upgrade  Contract,
the date on which such Contract is pledged to the Trustee by the Issuer.

         "Series   Supplement":   With  respect  to  any  Series,  an  indenture
supplemental to this Indenture  establishing such Series of Notes,  executed and
delivered  pursuant  to Section  4.01  hereof,  and all  amendments  thereof and
supplements thereto.

     "Series Trust Estate": The meaning specified in the Granting Clause of this
Indenture.

         "Servicer":  With respect to each Series,  Trendwest Resorts,  Inc., an
Oregon  corporation,  and any successor  Servicer  appointed pursuant to Section
6.02 of the Servicing Agreement.

         "Servicer Fee":  With respect to each Series,  on each Payment Date, an
amount equal to the product of (i)  one-twelfth of 1.75% and (ii) the sum of the
Aggregate Collateral Values of such Series of Notes Outstanding on the preceding
Payment Date, after distributions made on such date.

         "Servicing  Agreement":  The Servicing Agreement,  dated as of March 1,
1998, by and among the Issuer, the Servicer, the Subservicer and the Trustee, as
amended or supplemented from time to time.

         "Servicing  Charges":  The sum of (i) all late payment  charges paid by
Obligors on Delinquent Contracts after payment in full of any Scheduled Payments
due in a prior Due Period and Scheduled  Payments for the related Due Period and
(ii) any other incidental  charges or fees received from an Obligor,  including,
but not limited to, late fees, collection fees and bounced check charges.

     "Servicing Officers":  The meaning set forth in the Servicing Agreement.

     "State":  Any state of the United  States of America and, in addition,  the
District of Columbia and Puerto Rico.

     "Stated  Maturity":  With  respect  to the  Notes of any  Series,  the date
specified  in such  Notes  and the  related  Series  Supplement  as the  "Stated
Maturity."

         "Subordinated  Note": With respect to any Series, the subordinated note
dated as of the related Series Closing Date, made by the Issuer to TFI as a part
of the  consideration  for the Purchased  Assets  related to such Series and the
payments  of  which  are  subordinated  as  set  forth  in  the  related  Series
Supplement.  The form of the Subordinated Note is attached to the Sale Agreement
as Exhibit D.

         "Subsequent Assignment":  The meaning specified in the Sale Agreement.

     "Subservicer":  With respect to each  Series,  Sage  Systems,  Inc. and its
permitted successors and assigns.  This Indenture has been drafted assuming that
at all times one Person shall serve as Subservicer for all Series Outstanding.

         "Substitute Contract":  The meaning specified in the Sale Agreement.

         "Substitute Receivable":  The meaning specified in the Sale Agreement.

         "Substitution  Limit":  With respect to the  Contracts  supporting  any
Series of Notes, 1.5% of the Initial Aggregate Collateral Value of such Series.

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

     "Transaction Documents":  This Indenture, each Series Supplement,  the Note
Purchase  Agreements,   the  Servicing   Agreement,   the  Receivables  Purchase
Agreement, the Custodian Agreement, the Sale Agreement and the Notes.

     "Trendwest":  Trendwest  Resorts,  Inc.,  an  Oregon  corporation,  and its
permitted successors and assigns.

     "Trigger Event":  With respect to any Series,  the meaning specified in the
related Series Supplement.

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

         "Trustee  Fee":  With respect to each  Series,  the fee payable on each
Payment Date to the Trustee in  consideration  for the Trustee's  performance of
its duties with respect to such Series pursuant to this Indenture as Trustee, in
an amount  equal to the product of (i)  one-twelfth  of the Trustee Fee Rate and
(ii) he aggregate  principal  amount of Notes  Outstanding of such Series on the
preceding Payment Date after giving effect to distributions on such date (or, in
the case of the Initial Payment Date, the initial aggregate  principal amount of
the Notes of such Series).

         "Trustee Fee Rate":  0.04% per annum.

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

     "UCC": The Uniform Commercial Code as it may from time to time be in effect
in the applicable State.

         "Upgrade":  The  prepayment of a Contract and entry into a new contract
by an Obligor, WorldMark and Trendwest,  pursuant to which the Obligor purchases
additional  Credits in exchange for an increase in the principal balance owed by
the Obligor.

         "Upgrade  Contract":  The new  contract  entered  into  by an  Obligor,
Trendwest  and the Club related to an Upgrade by such  Obligor.  The  Receivable
relating to each Upgrade  Contract  shall be pledged to the Trustee  pursuant to
Section 4.03(g) hereof.

     "Vice  President":  With  respect  to the Issuer or the  Trustee,  any vice
president, whether or not designated by a number or a word or words added before
or after the title "vice president."

     "WorldMark"  or the "Club":  WorldMark,  the Club, a  California  nonprofit
mutual benefit corporation, and its successors in interest.

                              ARTICLE TWO NOTE FORM

             Section  2.01 Form.  The Notes of each  Series,  together  with the
certificates of authentication, shall be in substantially the forms set forth in
the related Series  Supplement,  with such  appropriate  insertions,  omissions,
substitutions  and  other  variations  as are  required  or  permitted  by  this
Indenture or the related Series Supplement,  and may have such letters,  numbers
or other  marks  of  identification  and such  legends  or  endorsements  placed
thereon, as may, consistently  herewith, be determined by the officers executing
such Notes, as evidenced by their execution of such Notes.

         The definitive  Notes shall be  typewritten,  printed,  lithographed or
engraved or produced by any  combination  of these methods or may be produced in
any manner  acceptable  to the Trustee and the initial  purchasers of the Notes,
all as determined by the officers  executing  such Notes,  as evidenced by their
execution of such Notes.

                             ARTICLE THREE THE NOTES

             Section 3.01 Denomination.  The aggregate principal amount of Notes
of all Series which may be  authenticated  and delivered under this Indenture is
not  limited,  except  as may  be  otherwise  provided  in  the  related  Series
Supplement  (except for Notes  authenticated  and delivered upon registration of
transfer or in  exchange  for or in lieu of,  other  Notes  pursuant to Sections
3.04, 3.05, 3.06 or 9.05 hereof). The Notes shall be issuable only as registered
Notes  without  coupons in the  denominations  of at least  $100,000;  provided,
however,  that the  foregoing  shall not  restrict  or prevent  the  transfer in
accordance  with  Sections  3.04 and 3.05  hereof of any Note  with a  remaining
balance of less than $100,000.

         The Notes may be issued in one or more Series and,  within each Series,
in one or more Classes.  With respect to the Notes of any Series, there shall be
established in the related Series  Supplement prior to the issuance of the Notes
of such Series (collectively, the "Principal Terms"):

     (a) the title of the Notes and the Series and the Class or Classes in which
such Notes shall be included;

     (b) the limit, if any, upon the aggregate  principal amount of the Notes of
such title and the Notes of each Class of such Series which may be authenticated
and  delivered   under  this   Indenture   (except  for  Notes  of  such  Series
authenticated  and delivered upon registration of transfer or in exchange for or
in lieu of, other Notes of such Series pursuant to Sections 3.04,  3.05, 3.06 or
9.05 hereof);

     (c) the Stated Maturity of such Notes;

     (d) the Note Interest Rate at which such Notes shall bear interest;

     (e) the Series  Closing  Date and the Initial  Payment Date with respect to
such Notes;

     (f) any additional covenants of the Issuer relating to such Notes; and

     (g) any other terms of such Notes (which terms shall  control to the extent
they are inconsistent with the provisions of this Indenture).

     Section 3.02  Execution,  Authentication,  Delivery  and Dating.  The Notes
shall be  executed  on behalf of the  Issuer by the  President,  one of the Vice
Presidents  or the Treasurer of the Issuer.  The signature of these  officers on
the Notes must be manual.

     Notes bearing the manual signatures of individuals who were at any time the
proper officers of the Issuer shall bind the Issuer,  notwithstanding  that such
individuals  or any of them  have  ceased  to hold  such  offices  prior  to the
authentication  or delivery of such Notes or did not hold offices at the date of
authentication or delivery of such Notes.

     Each Note shall bear on its face the appropriate Delivery Date and be dated
as of the date of its authentication.

     No Note shall be entitled to any benefit  under this  Indenture or be valid
or obligatory  for any purpose,  unless there appears on such Note a certificate
of authentication  substantially in the form provided for herein executed by the
Trustee or by any  Authenticating  Agent by the manual  signature  of one of its
authorized  officers,  and such  certificate  upon any Note shall be  conclusive
evidence, and the only evidence,  that such Note has been duly authenticated and
delivered hereunder.

             Section  3.03  Notes as Debt.  For all  federal,  State,  local and
foreign tax  purposes,  all  Noteholders  shall treat the Notes of each Class of
each Series as debt of the Issuer.

             Section 3.04  Registration,  Registration of Transfer and Exchange.
(a) The Issuer shall cause to be kept initially at the Corporate Trust Office of
the  Trustee  a  register  (the  "Note  Register"),  in which,  subject  to such
reasonable  regulations  as it may  prescribe,  the Issuer shall provide for the
registration  of Notes and the  registration  of  transfers  of  Notes.  LaSalle
National Bank, 135 South LaSalle Street,  Suite 1625,  Chicago,  Illinois 60674,
Attention:  Asset Backed  Securities,  TRI Funding II [specify Series] is hereby
appointed "Note Registrar" for the purpose of registering Notes and transfers of
Notes as herein provided.  The Trustee shall have the right to rely conclusively
upon a  certificate  of the Note  Registrar as to the names and addresses of the
holders  of the Notes and the  principal  amounts  and  numbers of such Notes as
held.  Upon  request of any  Holder,  the  Trustee  shall,  to the extent it may
lawfully do so,  furnish  such Holder with a list of the names and  addresses of
all Holders  entered on the Note Register  indicating  the principal  amount and
serial number, if any, of each Note held by each Holder.

           (b) Only upon surrender for  registration  of transfer of any Note at
the  office or agency of the  Issuer to be  maintained  as  provided  in Section
11.02(n)  hereof and  subject to the  conditions  set forth in Section  3.05 and
Section 3.06  hereof,  the Issuer  shall  execute,  and the Trustee or its agent
shall  authenticate  and deliver,  in the name of the  designated  transferee or
transferees,  one or more new  Notes  of any  authorized  denominations  of such
Series and, if applicable,  such Class, and of a like aggregate principal amount
and Stated Maturity.

           (c) At the option of the  Holder,  Notes may be  exchanged  for other
Notes of the same Class and Series of any authorized denominations and of a like
aggregate principal amount and Stated Maturity, only upon surrender of the Notes
to be  exchanged  at such  office or agency,  subject to  Section  3.06  hereof.
Whenever any Notes are so  surrendered  for exchange,  the Issuer shall execute,
and the Trustee or its agent shall authenticate and deliver, the Notes which the
Noteholder making the exchange is entitled to receive.

           (d) All Notes issued upon any registration of transfer or exchange of
Notes shall be the valid obligations of the Issuer, evidencing the same debt and
entitled to the same benefits  under this  Indenture,  as the Notes  surrendered
upon such registration of such transfer or exchange.

         Every Note presented or  surrendered  for  registration  of transfer or
exchange  shall (if so  required  by the Issuer or the Note  Registrar)  be duly
endorsed  or  be  accompanied  by a  written  instrument  of  transfer  in  form
reasonably  satisfactory to the Issuer and the Note Registrar duly executed,  by
the Holder thereof or his attorney duly authorized in writing.

         No service  charge  shall be made to a Holder for any  registration  of
transfer  or  exchange  of Notes,  but the Issuer may  require  payment of a sum
sufficient to cover any tax or other governmental  charge that may be imposed in
connection with any  registration  of transfer or exchange of Notes,  other than
exchanges pursuant to Section 3.04 or 9.05 hereof not involving any registration
of transfer.

         Notwithstanding  anything  else  to  the  contrary  contained  in  this
Indenture,  the obligation of the Issuer to pay the principal of and interest on
the Notes of each  Series  is not a general  obligation  of the  Issuer,  but is
limited  solely to the amounts  available out of the related  Series  Collateral
pledged to the Trustee under this Indenture.

             Section 3.05  Limitation on Transfer and  Exchange.  The Notes will
not be registered or qualified under the Securities Act of 1933, as amended (the
"1933 Act"),  or the securities laws of any State. No transfer of any Note shall
be made unless that  transfer  is made in a  transaction  which does not require
registration  or  qualification  under  the 1933 Act or under  applicable  State
securities laws. In the event that a transfer is to be made without registration
or  qualification,  such  Noteholder's  prospective  transferee shall either (i)
deliver to the Trustee an investment letter  substantially in the form set forth
on Exhibit A hereto (the "Investment  Letter") or (ii) deliver to the Trustee an
opinion of counsel  that the  transfer  is exempt from the 1933 Act and will not
result in the Issuer being required to register as an "investment company" under
the Investment Company Act of 1940, as amended.  Such opinion may be given by an
attorney that is an employee or officer of such  transferee.  Neither the Issuer
nor the Trustee is obligated to register or qualify the Notes under the 1933 Act
or any other securities law.

         Each prospective transferee acquiring a Note and each prospective owner
of a beneficial  interest in a Note  acquiring  such  beneficial  interest  (the
prospective  transferee  and the  prospective  owner of a  beneficial  interest,
collectively,  the "Prospective Owner") shall represent and warrant, in writing,
to the Issuer,  TFI, the Servicer,  the Trustee and any of their successors that
(A) the  Prospective  Owner (1) is not an  "employee  benefit  plan"  within the
meaning of Section 3(3) of the Employee  Retirement Income Security Act of 1974,
as amended  ("ERISA"),  or a "plan" within the meaning of Section  4975(e)(1) of
the  Code  (each  a  "Plan")  and  (2) is not  acquiring  (or  considered  to be
acquiring)  the Note  with the  assets of any  entity  whose  underlying  assets
include  the  assets  of a Plan by reason  of such a Plan's  investment  in such
entity,  or (B) the Prospective  Owner is an insurance company that is acquiring
the Note for its own account, with its general corporate assets and not with the
assets of a "separate  account" within the meaning of Section 3(17) of ERISA and
the  conditions  of Prohibited  Transaction  Class  Exemption  83-1 and/or Class
Exemption  95-60  have been  satisfied  by such  Prospective  Owner,  or (C) the
Prospective  Owner is an insurance  company that is acquiring  the Note with the
assets of a separate  account  within the meaning of Section  3(17) of ERISA and
the  conditions  of  Prohibited  Transaction  Class  Exemption  90-1  have  been
satisfied by such  Prospective  Owner,  or (D) the  Prospective  Owner is a bank
collective  investment fund and the conditions of Prohibited  Transaction  Class
Exemption 91-38 have been satisfied by such Prospective Owner.

         The Trustee  shall have no  liability to any Series Trust Estate or any
Noteholder  arising  from a  transfer  of  any  such  Note  in  reliance  upon a
certification or opinion described in this Section 3.05.

         Each Holder,  by acceptance  of any Note,  agrees that such Holder will
not offer, sell or transfer any Note to a Restricted  Investor.  Notwithstanding
the  foregoing  restrictions  on the offer,  transfer or sale of the Notes,  any
Noteholder  may  offer,  sell or  transfer  any of its  Notes  to any  Permitted
Institutional  Investor (other than a Restricted Investor) holding securities in
a Competitor  as part of its  investment  portfolio.  In  determining  whether a
transferee is a Restricted Investor, a Noteholder shall be entitled to rely on a
certificate to that effect executed by an authorized officer of such Person.

             Section 3.06 Mutilated, Destroyed, Lost or Stolen Notes. If (i) any
mutilated  Note is surrendered to the Note  Registrar,  or the Trustee  receives
evidence  to its  satisfaction  of the  destruction,  loss or  theft of any Note
(which evidence shall be, in the case of an Institutional Investor,  notice from
such Institutional Investor of such ownership and such destruction,  loss, theft
or  mutilation),  and (ii) there is delivered  to the Trustee  such  security or
indemnity  as may be  required by the Trustee to save the Issuer and the Trustee
or any agent of any of them  harmless,  then,  in the  absence  of notice to the
Issuer or the Note  Registrar  that such Note has been  acquired  by a bona fide
purchaser,  the Issuer shall  execute and,  upon its request,  the Trustee shall
authenticate  and  deliver,  in exchange  for or in lieu of any such  mutilated,
destroyed,  lost or stolen Note, a new Note of the same tenor, initial principal
amount,   Series,   Class   and   Stated   Maturity,   bearing   a  number   not
contemporaneously  outstanding.  If the  Holder of such Note is, or is a nominee
for, an  original  purchaser  of the Notes or another  Holder with a minimum net
worth  of at  least  $50,000,000,  such  Person's  own  unsecured  agreement  of
indemnity  shall be deemed to be  satisfactory  for the  purposes of clause (ii)
above.  If after the  delivery of such new Note,  a bona fide  purchaser  of the
original  Note in lieu of which such new Note was issued  presents  for  payment
such original Note, the Issuer and the Trustee shall be entitled to recover such
new  Note  from  the  person  to  whom it was  delivered  or any  person  taking
therefrom,  except a bona fide purchaser,  and shall be entitled to recover upon
the security or indemnity  provided therefor to the extent of any loss,  damage,
cost or  expenses  incurred  by the Issuer or the Trustee or any agent of any of
them in connection therewith. If any such mutilated,  destroyed,  lost or stolen
Note shall have  become or shall be about to become  due and  payable,  or shall
have become  subject to redemption in full,  instead of issuing a new Note,  the
Issuer may pay such Note without  surrender  thereof,  except that any mutilated
Note shall be surrendered.

         Upon the issuance of any new Note under this Section  3.06,  the Issuer
may  require  the  payment  of a sum  sufficient  to  cover  any  tax  or  other
governmental  charge  that may be  imposed  in  relation  thereto  and any other
expenses (including the fees and expenses of the Trustee) connected therewith.

         Every new Note issued  pursuant to this  Section  3.06,  in lieu of any
destroyed,  lost  or  stolen  Note,  shall  constitute  an  original  additional
contractual  obligation  of the Issuer,  whether or not the  destroyed,  lost or
stolen Note shall be at any time enforceable by anyone, and shall be entitled to
all the benefits of this Indenture equally and proportionately  with any and all
other Notes of the same Class and Series duly issued hereunder.

         The  provisions of this Section 3.06 are  exclusive and shall  preclude
(to the  extent  lawful)  all other  rights  and  remedies  with  respect to the
replacement or payment of mutilated, destroyed, lost or stolen Notes.

             Section 3.07  Payment of  Principal  and  Interest;  Principal  and
Interest Rights Preserved. (a) The Notes of each Class of each Series shall bear
interest on the unpaid  principal  amount thereof from and including the related
Series  Closing Date at the  applicable  Note Interest Rate  (calculated  on the
basis of a 360-day year consisting of 12 months of 30 days each) through the day
immediately  preceding the Initial  Payment Date for such Series and thereafter,
monthly  from and  including  the  most  recent  Payment  Date  through  the day
immediately  preceding the  applicable  Payment Date and (to the extent that the
payment  of  such  interest  shall  be  legally   enforceable)  on  any  overdue
installment  of principal or interest  from the date such  principal or interest
became due and payable  until fully paid.  Interest  shall be due and payable in
arrears on each  Payment  Date,  with each  payment of  interest  calculated  as
described above on the unpaid principal amount of the Outstanding  Notes of each
Class of each Series on the day immediately preceding such Payment Date or, with
respect to interest payable on the Initial Payment Date for such Series,  on the
principal  amount of the  Outstanding  Notes on the related Series Closing Date;
provided,  however,  that  in  making  any  interest  payment,  if the  interest
calculation  with  respect to any Note shall result in a portion of such payment
being less than $.01,  then such payment shall be decreased to the nearest whole
cent, and no subsequent adjustment shall be made in respect thereof.

           (b) The  principal  of each Note  shall be  payable  in  installments
ending no later than the Stated  Maturity  thereof  unless such Note becomes due
and payable at an earlier  date by  declaration  of  acceleration  or  automatic
acceleration,  call for redemption or otherwise. All reductions in the principal
amount of any Note effected by payments of installments of principal made on any
Payment Date shall be binding upon all future  Holders of such Note,  and of any
Note issued upon the registration of transfer thereof or in exchange therefor or
in lieu  thereof,  whether  or not such  payment  is noted  on such  Note.  Each
installment of principal payable on the Notes of each Class of each Series shall
be in an amount equal to the Principal  Distribution  Amount  applicable to such
Class.  The principal  payable on the Notes of each Series shall be paid on each
Payment Date beginning on the Initial Payment Date for such Series and ending on
the Final  Payment  Date for such Series on a pro rata basis based upon the face
amount of each Note of each Class of such Series; provided,  however, that if as
a result of such proration a portion of such principal  would be less than $.01,
then such payment shall be decreased to the nearest whole cent, and such portion
shall be applied to the next succeeding principal payment.

           (c) The  principal  of and interest on the Notes are payable by check
mailed by  first-class  mail to the Person whose name appears as the  Registered
Holder of such Note on the Note  Register  at the  address of such  Person as it
appears on the Note Register or, if requested by such Registered Holder, by wire
transfer in immediately  available funds to the account  specified in writing to
the Trustee by such  Registered  Holder at least five Business Days prior to the
Record Date for the Payment Date on which wire transfers will commence,  in such
coin or  currency  of the United  States of America as at the time of payment is
legal  tender for the payment of public and private  debts;  provided,  however,
that  the  Trustee  shall,  unless  and  until  otherwise   instructed  by  such
Noteholder,  pay each  initial  Noteholder  via  wire  transfer  in  immediately
available funds to the accounts specified,  if any, in the related Note Purchase
Agreement.  All payments on the Notes shall be paid without any  requirement  of
presentment. The Issuer shall notify the Trustee at the close of business on the
Record Date next preceding the Payment Date on which the Issuer expects that the
final installment of principal of such Note will be paid that the Issuer expects
that such final  installment will be paid on such Payment Date.  Notice of final
payment on any Note shall be mailed by the Trustee to the Holder of such Note in
accordance with Section  12.04(a)  hereof.  Funds  representing  any such checks
returned  undeliverable shall be held in accordance with Section 11.02(o).  Upon
payment in full of all  amounts  owed to the  Noteholders  under the Notes,  the
Notes shall be void and the Noteholders  shall use reasonable  efforts to return
their Notes to the Trustee at the Corporate Trust Office for  cancellation  upon
written request of the Trustee or the Issuer.  In the event a Noteholder  cannot
return its Note to the Trustee within 60 days  following  payment in full of the
Note, it shall send the Trustee an affidavit certifying such loss upon request.

             Section 3.08 Persons  Deemed Owner.  Prior to due  presentment  for
registration  of transfer of any Note, the Issuer,  the Trustee and any agent of
the  Issuer or the  Trustee  shall  treat the  Person in whose  name any Note is
registered  as the owner of such Note for the purpose of  receiving  payments of
principal  of and interest on such Note and for all other  purposes  whatsoever,
whether or not such Note be overdue, and neither the Issuer, the Trustee nor any
agent of the Issuer or the Trustee shall be affected by notice to the contrary.

             Section 3.09 Cancellation. All Notes surrendered to the Trustee for
payment,  registration of transfer or exchange  (including Notes  surrendered to
any Person other than the Trustee which shall be delivered to the Trustee) shall
be promptly canceled by the Trustee.  No Notes shall be authenticated in lieu of
or in exchange for any Notes  canceled as provided in this Section 3.09,  except
as expressly permitted by this Indenture. All canceled Notes held by the Trustee
shall be disposed of by the Trustee as is customary with its standard practice.

      ARTICLE FOUR ORIGINAL ISSUANCE OF NOTES; SUBSTITUTIONS OF COLLATERAL

             Section  4.01  Conditions  to Original  Issuance of Notes.  (a) The
Issuer may from time to time direct the Trustee to authenticate  one or more new
Series of Notes,  with or without Classes within such Series.  The Notes of each
Series shall be payable only out of the Series Trust Estate with respect to such
Series and in accordance with the Transaction Documents. The Receivables and any
collections  relating  thereto  that  the  Issuer  pledged  to  the  Trustee  in
connection  with the  issuance of a Series shall not be available to pay amounts
owed under the Notes of any other  Series  unless the Trustee  has  specifically
released a  Receivable  from the Lien created by this  Indenture  and the Issuer
subsequently  pledges  such  Receivable  to the  Trustee  in  support of another
Series.

           (b) The Trustee  shall,  upon receipt of an Issuer Order and upon the
satisfaction  of the  conditions set forth below,  authenticate  and deliver the
Notes of a Series on the related Series Closing Date. The  Outstanding  Notes of
each Class of each Series shall be equally and ratably entitled,  with all other
Notes of such  Class as  provided  herein,  to the  benefits  of this  Indenture
without  preference,  priority or distinction,  all in accordance with the terms
and provisions of this Indenture and the related Series Supplement.

           (c) On or before the Series  Closing Date relating to any new Series,
the parties  hereto will  execute  and deliver a Series  Supplement  which shall
specify  the  Principal  Terms  of such new  Series.  The  terms of such  Series
Supplement may modify or amend the terms of this Indenture  solely as applied to
such new Series.  The  obligation  of the Trustee to  authenticate,  execute and
deliver the Notes of each  Series and to execute and deliver the related  Series
Supplement is subject to the satisfaction of the following conditions:

                   (i)  the  Issuer   shall  have   executed  the  Notes  to  be
         authenticated  and  delivered  on the related  Series  Closing Date and
         shall  have  delivered  such  Notes to the  Trustee  on or prior to the
         related Series Closing Date;

                  (ii) the Issuer shall have  delivered  to the  Custodian on or
         prior  to  the  related  Series  Closing  Date  the  original  executed
         counterpart  of each  Contract  (and  the rest of the  contents  of the
         related  Custodian  File)  identified  in the related  Series  Contract
         Schedule  on such  Series  Closing  Date,  and the  Trustee  shall have
         received a receipt from the Custodian evidencing such delivery;

                 (iii) the Issuer and the Servicer  shall have  delivered to the
         Trustee on or prior to the related  Series  Closing  Date an  Officer's
         Certificate  dated as of such Series Closing Date of each of the Issuer
         and the Servicer,  stating, as applicable,  that (A) such Person is not
         in Default under this Indenture or the Servicing Agreement and that the
         issuance  of the Notes of such  Series will not result in any breach of
         any of the terms,  conditions or provisions of, or constitute a default
         under,  such Person's  certificate of  incorporation,  by-laws or other
         organizational  documents,  as applicable,  or any material  indenture,
         mortgage,  deed of trust or other agreement or instrument to which such
         Person is a party or by which it is bound, or any order of any court or
         administrative agency entered in any proceeding to which such Person is
         a party or by which it may be bound or to which it may be subject;  and
         (B) that all conditions  precedent  provided in this Indenture relating
         to the  authentication  and  delivery  of the Notes of such Series have
         been complied with;

                  (iv) each of the Issuer,  TFI, the  Custodian and the Servicer
         shall have  delivered to the Trustee on or prior to the related  Series
         Closing Date a Board Resolution of its board of directors  authorizing,
         as  applicable,  the  execution,   delivery  and  performance  of  this
         Indenture,  the related  Series  Supplement  and the other  Transaction
         Documents  and  the  transactions   contemplated  hereby  and  thereby,
         certified  by an officer  of the  Issuer,  TFI,  the  Custodian  or the
         Servicer, as applicable;

                   (v) each of the Issuer,  TFI, the  Custodian and the Servicer
         shall have  delivered to the Trustee on or prior to the related  Series
         Closing Date a copy of an officially certified document, dated not more
         than 30 days prior to such  Series  Closing  Date,  evidencing  its due
         organization and good standing;

                  (vi) each of the Issuer,  TFI, the  Custodian and the Servicer
         shall have  delivered to the Trustee on or prior to the related  Series
         Closing  Date  copies  of its  charter  and  by-laws  certified  by its
         Secretary or an Assistant Secretary;

                 (vii)  the  Issuer  shall  have  delivered,   or  cause  to  be
         delivered,  to the Trustee,  on or prior to the related  Series Closing
         Date,  evidence of filing (a) with the  Secretary of State of the State
         of the Issuer's chief  executive  office,  UCC-1  financing  statements
         executed  by the  Issuer,  as debtor,  and naming the  Trustee  for the
         benefit of the  Noteholders  of such Series as secured  party,  and the
         Series  Trust  Estate of such  Series as  collateral;  and (b) with the
         Secretary of State of the States in which the chief executive office of
         each of Trendwest,  TW Holdings and TFI and is located, UCC-1 financing
         statements  executed by the applicable  transferor as debtor and naming
         the applicable transferee as secured party and naming as collateral the
         collateral transferred by each transferor;

                (viii) the  Servicer  shall have  delivered to the Trustee on or
         prior to the related  Series  Closing  Date a  certificate  listing the
         Servicing  Officers of the Servicer as of such Series  Closing Date and
         setting forth specimen signatures of such Servicing Officers;

                  (ix) the Issuer  shall  have  delivered  to the  Trustee on or
         prior  to the  related  Series  Closing  Date an  executed  copy of the
         Servicing  Agreement,  the Receivables  Purchase Agreement and the Sale
         Agreement and all amendments and supplements thereto;

                   (x) TFI shall have  delivered  to the  Trustee on or prior to
         the related  Series  Closing Date an executed  copy of the  Receivables
         Purchase  Agreement  and the  Sale  Agreement  and all  amendments  and
         supplements thereto;

                  (xi) the Custodian  shall have  delivered to the Trustee on or
         prior to the related Series Closing Date an Officer's Certificate dated
         as of such Series Closing Date stating that (A) the execution, delivery
         and performance of the Custodian  Agreement will not result in a breach
         of any of the terms, conditions, provisions of, or constitute a default
         under,  the Custodian's  certificate of incorporation or by-laws or any
         material  indenture,  mortgage,  deed of trust or  other  agreement  or
         instrument to which such Person is a party or by which it is bound,  or
         any order of any court or  administrative  agency  entered  into in any
         proceeding  to  which  the  Custodian  is a party or by which it may be
         bound or to which it may be subject;

                 (xii)  the  Rating   Agency   shall  have   delivered   written
         confirmation  that,  with respect to each existing  rated Class of each
         Series  Outstanding,  the issuance of Notes on such Series Closing Date
         will not result in a downgrade or withdrawal  of such existing  Classes
         or Series of Notes; and

                (xiii)  the  senior  Class of the Notes  issued  on such  Series
         Closing Date must constitute  more than 50% of the aggregate  principal
         balance of Notes of such  Series and must be rated at least  investment
         grade by the Rating Agency.

The Issuer  shall  deliver the written  confirmation  specified  in clause (xii)
above and the letter of the Rating Agency contemplated in clause (xiii) above to
the  Noteholders  of each Series  Outstanding  prior to such Series Closing Date
promptly upon receipt of such documents.

             Section 4.02 Security for Notes. (a) Filing.  The Issuer shall file
UCC-1  financing   statements   described  in  Section  4.01(c)(vii)  hereof  in
accordance with such Section 4.01(c)(vii). From time to time, the Servicer shall
take or cause  to be taken  such  actions  and  execute  such  documents  as are
necessary or deemed by the Trustee to be  appropriate  to perfect the  Trustee's
interests in the Receivables  and protect the Trustee's  interest in the related
Contracts and Credits against all other Persons, including,  without limitation,
the  filing  of  financing  statements,   amendments  thereto  and  continuation
statements, the execution of transfer instruments and the making of notations on
or taking possession of all records or documents of title.

           (b) Name Change or  Relocation.  If any change in the Issuer's  name,
identity,  structure or the location of its principal place of business or chief
executive  office  occurs,  then the Issuer shall deliver 30 days' prior written
notice of such change or  relocation to the  Servicer,  the Trustee,  the Rating
Agency and the  Noteholders  and no later than the effective date of such change
or relocation,  the Servicer shall file such  amendments or statements as may be
required to preserve  and protect the  Trustee's  interests in each Series Trust
Estate.

     (c) Chief Executive Office.  During the term of this Indenture,  the Issuer
will maintain its chief executive  office and principal place of business in one
of the States of the United States.

           (d) Costs and  Expense.  The  Servicer  agrees to pay all  reasonable
costs and disbursements in connection with the perfection and the maintenance of
perfection,  as against all third  parties,  of the Trustee's  right,  title and
interest in and to each Series Trust Estate.

             Section  4.03  Substitution  and Purchase of  Receivables;  Upgrade
Contracts.  (a) If at any time  the  Issuer  or the  Trustee  obtains  knowledge
(within the meaning of 7.01(e) hereof), discovers or is notified by the Servicer
that any of the  representations  and warranties of Trendwest or TFI in the Sale
Agreement  or  Trendwest,  the Prior  Issuer or TW Holdings  in the  Receivables
Purchase  Agreement were incorrect at the time as of which such  representations
and warranties were made, then the Person discovering such defect,  omission, or
circumstance  shall  promptly  notify the other parties to this  Indenture,  the
Noteholders and Trendwest.

           (b) In the event any  representation  or warranty of Trendwest or TFI
in the Sale  Agreement  or  Trendwest,  the Prior  Issuer or TW  Holdings in the
Receivables Purchase Agreement is incorrect and materially and adversely affects
the value of a Contract,  the related Receivable or the related Credits,  or the
interests  of the Holders of the Notes,  or in the event of any breach of any of
the   representations   and  warranties   set  forth  in  Sections   3.01(a)(v),
3.01(a)(vi),   3.01(a)(vii),    3.01(a)(xiii),    3.01(a)(xiv),    3.01(a)(xvi),
3.01(a)(xxii) or 3.01(a)(xxiii) of each of the Sale Agreement or the Receivables
Purchase Agreement, then the Issuer shall require TFI or Trendwest,  pursuant to
the Sale Agreement or the  Receivables  Purchase  Agreement,  as applicable,  to
eliminate or otherwise cure the  circumstance or condition which has caused such
representation or warranty to be incorrect within 30 days of discovery or notice
thereof.  If TFI or Trendwest  fails or is unable to cure such  circumstance  or
condition in  accordance  with the Sale  Agreement or the  Receivables  Purchase
Agreement,  as  applicable,  then the Issuer  shall  require TFI or Trendwest to
substitute  or  purchase  pursuant  to the  Sale  Agreement  or the  Receivables
Purchase Agreement, as applicable,  any Receivable related to any Contract as to
which such  representation or warranty is incorrect within the time specified in
Section 3.03 of the Sale Agreement or the Receivables  Purchase  Agreement.  The
Servicer shall remit the proceeds of a purchase to the  Subservicer  for deposit
into the Clearing Account upon receipt of such amounts by the Servicer  pursuant
to  Section  3.03 of the  Sale  Agreement  or  Section  3.03 of the  Receivables
Purchase Agreement, as applicable.

           (c) If the  Issuer  fails to enforce  the  purchase  or  substitution
obligation  of TFI or  Trendwest  under the Sale  Agreement  or the  Receivables
Purchase Agreement,  the Trustee is hereby appointed  attorney-in-fact to act on
behalf  of  and  in  the  name  of  the  Issuer  to  require  such  purchase  or
substitution.

           (d) With respect to any Defaulted  Contract or  Delinquent  Contract,
the Issuer shall be entitled to purchase the Receivable related to such Contract
or to deliver a Substitute  Receivable  meeting the same  requirements  as those
specified  in  Section  3.04 of each of the Sale  Agreement  or the  Receivables
Purchase  Agreement for  substitutions  and  purchases by TFI or Trendwest  upon
breaches of a representation or warranty by TFI, Trendwest,  the Prior Issuer or
TW Holdings thereunder;  provided, however, that the cumulative Collateral Value
of  Defaulted  Contracts  and  Delinquent   Contracts  which  are  purchased  or
substituted by the Issuer with respect to the Receivables  supporting any Series
of Notes (measured as of the date of substitution) shall not exceed the Purchase
and Substitution Limit;  provided,  further, that the aggregate Collateral Value
of all  Substitute  Receivables  with respect to any Series in any calendar year
cannot exceed the Substitution Limit.

           (e) The Issuer shall provide to the Trustee,  or with respect to item
(ii) below the Custodian, on the date of delivery of any Substitute Contract the
items listed in (i) and (ii) below.

                   (i) a supplement to the Sale Agreement  substantially  in the
         form of Annex A to the Sale Agreement and Exhibit B hereto,  subjecting
         such Substitute Contract to the provisions thereof and hereof, amending
         the Series  Contract  Schedule for the applicable  Series and providing
         with respect to such  Substitute  Contract the information set forth in
         the Contract Schedule; and

     (ii) the original  executed  counterpart  of the Contract and the Custodian
File relating to such Substitute Contract.

           (f) If a  Contract  becomes a  Defaulted  Contract,  the  Issuer  may
purchase  such  Contract  by paying to the Trustee out of the amount paid to the
Issuer pursuant to Section 5.01 of the applicable Series Supplement the Purchase
Price for such Defaulted Contract; provided, however, the Issuer cannot purchase
a Defaulted Contract if the Collateral Value of all such Defaulted  Contracts so
purchased would exceed the amount paid to the Issuer pursuant to Section 5.01 of
such Series  Supplement;  further provided,  that the purchases pursuant to this
Section  4.03(f)  shall be deemed to be  purchases  subject to the  Purchase and
Substitution Limit as if repurchased pursuant to Section 4.03(b).

           (g) If an Obligor  desires to enter into an Upgrade  Contract and the
Issuer  purchases  the  Receivable  relating to such Upgrade  Contract  from TFI
pursuant to Section 3.04(e) of the Sale Agreement, then the Servicer shall cause
Trendwest  to deliver  such  Upgrade  Contract  to the Issuer  immediately  upon
execution by Trendwest,  WorldMark and the Obligor,  and the Issuer shall pledge
the Receivable relating to such Upgrade Contract to the Trustee immediately upon
such execution by delivering (i) to the Trustee a supplemental grant in the form
of Annex A to the Sale Agreement and Exhibit B hereto,  subjecting  such Upgrade
Contract  and the  related  Receivable  to the  provisions  thereof  and hereof,
amending the Series  Contract  Schedule for the applicable  Series and providing
with respect to such Upgrade  Contract the information set forth in the Contract
Schedule and (ii) to the  Custodian  the original  executed  counterpart  of the
Upgrade Contract and the rest of the contents of the related Custodian File.

             Section 4.04 Releases. (a) The Issuer shall be entitled to obtain a
release from the lien of this Indenture for any Contract, the related Receivable
and the related  Credits at any time (i) after a payment by TFI or  Trendwest of
the  Purchase  Price of the  Receivable,  (ii) after a  Substitute  Contract  is
substituted  for such  Contract,  or (iii) upon the  purchase  of a Contract  in
accordance  with  Section  3.10(b)  of the  Servicing  Agreement,  if the Issuer
delivers to the Trustee an Officer's  Certificate (A) identifying the Receivable
and the related Contract and the related Credits to be released,  (B) requesting
the release  thereof,  (C) setting  forth the amount  deposited  in the Clearing
Account with respect thereto,  in the event a Contract,  the related  Receivable
and the  related  Credits  are being  released  from the lien of this  Indenture
pursuant to (i) or (iii) above,  and (D) certifying that the amount deposited in
the Clearing Account equals (x) the Purchase Price of the Receivable  related to
such Contract,  in the event a Contract,  the related Receivable and the related
Credits are being released from the lien of this Indenture pursuant to (i) above
or (y) the entire amount set forth in Section 3.10(b) of the Servicing Agreement
with respect to such Contract, the related Receivable and related Credits in the
event of a release  from the lien of this  Indenture  pursuant  to (iii)  above;
provided,  however,  that  upon the  termination  of a  Contract,  any  residual
proceeds from the related Credits shall be placed in the Clearing  Account prior
to the Trustee or the Issuer  releasing  the related  Credits  from the security
interest  granted to the Trustee by the Issuer  pursuant to this Indenture or to
the Issuer by TFI pursuant to the Sale Agreement.

           (b) Upon  satisfaction of the conditions  specified in subsection (a)
above or upon the  satisfaction  of the  conditions  in  Section  4.03(e) or the
remittance of the Purchase  Price by the Issuer  pursuant to Section  4.03(d) or
Section  4.03(f) hereof and Section 3.04 of the Sale Agreement with respect to a
Contract,  the  Trustee  shall  release  from  the  lien of this  Indenture  the
Contract,  the related  Receivable  and the  related  Credits  described  in the
Issuer's  request for release and shall  deliver,  or instruct the  Custodian to
deliver,  to or upon the  order of the  Issuer  such  Contract  and the  related
Custodian File.

           (c) In  connection  with the  issuance of a new Series of Notes,  the
Trustee,  without the consent of the Holders of Notes of any Series, shall, upon
Issuer Order, on a Series Closing Date release to the Issuer  Receivables (which
shall be specified in such Issuer Order) from the Series  Collateral  supporting
any existing  Series of Notes but only if the following  conditions  are met (as
certified  by the  Issuer  and the  Servicer  to the  Trustee  in  writing  in a
certificate  substantially  in the  form of  Exhibit  C  hereto):  (i)  there is
currently no Default, Event of Default, Trigger Event or Cash Accumulation Event
that has occurred and is  continuing  (nor has any Default,  Event of Default or
Cash Accumulation  Event existed for a period of 90 consecutive days immediately
preceding such proposed release nor is a Trigger Event Period  continuing on the
date of such release) with respect to the Series related to any Receivable  that
the Issuer desires to have released from the Lien of the Trustee with respect to
such  Series;  (ii) with  respect  to each  Series  from which  Receivables  are
proposed to be released,  after giving effect to such release, (A) the Aggregate
Collateral Value of such Series  (including only Receivables  which, on the date
of such release,  satisfy all of the representations and warranties set forth in
paragraphs  (a)  and  (b) of  Section  3.01  of the  Sale  Agreement  as if such
representations and warranties were made as of the date of such release) must be
greater than or equal to the product of (x) the aggregate  principal  balance of
all  Notes  Outstanding  of such  Series  on such  date and (y) a  fraction  the
numerator of which is the Initial Aggregate Collateral Value for such Series and
the denominator of which is the initial aggregate principal balance of the Notes
of such Series as of the Series  Closing  Date of such Series (the Issuer  Order
shall  specify the minimum  Collateral  Value  required  for each such Series to
satisfy this  condition),  and (B) the amount in the Reserve Account is equal to
the Reserve Account Required Balance for such Series;  (iii)  simultaneous  with
such release, the Issuer pledges all of such released Receivables to the Trustee
in connection  with the issuance of a new Series of Notes in accordance with the
terms  of  the  Transaction  Documents  and  (iv)  the  Independent  Accountants
specified in Section 4.03 of the Servicing Agreement have delivered, at the sole
expense of the Issuer,  the agreed-upon  procedures letter, in substantially the
form  attached as Exhibit A to the  Servicing  Agreement,  to the Trustee,  with
respect to such release  (which  indicates that the Series Trust Estate for such
Series contains the minimum Collateral Value necessary to satisfy clause (ii)(A)
above).  If a release  occurs prior to the Payment Date in any given month,  the
calculations  of Aggregate  Collateral  Value and the  principal  balance of the
Notes  Outstanding  for any Series made pursuant to this section  4.04(c) may be
made as of such Payment Date (after giving effect to the  distributions  made on
such Payment Date) instead of as of the date of the proposed release;  provided,
that,  the  appropriate  amounts  for such  distribution  are being  held in the
Collection  Account or the  Distribution  Account  for each  applicable  Series;
otherwise,  the  calculations  shall  be  made as of the  immediately  preceding
Payment Date. The Issuer shall deliver (1) the  certification  of the Issuer and
the Servicer and (2) the  agreed-upon  procedures  letter to each  Noteholder of
each applicable Series promptly after each such release.

             Section  4.05 Trust  Estate.  When  required by the  provisions  of
Articles  Four,  Six and Twelve  hereof,  the Trustee for a Series shall execute
instruments to release  property from the lien of this Indenture and the related
Series  Supplement,  or convey such Trustee's  interest in the same, in a manner
and under  circumstances  which are not inconsistent with the provisions of this
Indenture.  No party  relying  upon an  instrument  executed by such  Trustee as
provided  in this  Article  Four  shall  be bound to  ascertain  such  Trustee's
authority,  inquire into the satisfaction of any conditions  precedent or see to
the application of any monies.

             Section  4.06 Notice of Release.  The Trustee  shall be entitled to
receive at least 10 days'  notice of any action to be taken  pursuant to Section
4.04(a) hereof, accompanied by copies of any instruments involved.

             Section  4.07  Opinions  as to  Trust  Estate.  (a) On each  Series
Closing  Date,  the Issuer  shall  furnish to the  Trustee an Opinion of Counsel
either stating that, in the opinion of such counsel,  such action has been taken
with  respect to the  recording  and filing of this  Indenture,  any  indentures
supplemental hereto, and any other requisite documents,  and with respect to the
execution  and  filing  of  any  UCC  financing   statements  and   continuation
statements,  as are  necessary to (x) perfect the  transfers  from and grants of
security  interests by, (i)  Trendwest,  the Prior Issuer and TW Holdings to TFI
and  (ii) TFI to the  Issuer,  and (y)  perfect  and make  effective  the  first
priority lien and security interest in favor of the Trustee,  for the benefit of
the  Noteholders of the related  Series,  created by this Indenture and reciting
the details of such action, or stating that, in the opinion of such counsel,  no
such action is necessary to make such lien and security interest effective.

           (b) With respect to each Series, on or before each anniversary of the
related  Series  Closing  Date,  the Issuer shall furnish to the Trustee (with a
copy to each of the  Noteholders)  an Opinion of  Counsel  with  respect to each
jurisdiction  in which a UCC financing  statement has been filed against each of
TFI,  the Prior  Issuer,  Trendwest,  TW Holdings and the Issuer with respect to
such Series either stating that, in the opinion of such counsel, such action has
been taken with respect to the recording,  filing,  re-recording and refiling of
this Indenture and the related Series  Supplement,  any indentures  supplemental
hereto and thereto and any other  requisite  documents  and with  respect to the
execution and filing of any UCC financing statements and continuation statements
as is  necessary  to maintain  the first  priority  lien and  security  interest
created by this Indenture and the Series Supplement with respect to such Series,
and the security interest,  if applicable,  created by the Sale Agreement or the
Receivables  Purchase  Agreement  with  respect to such Series and  reciting the
details of such action or stating  that in the  opinion of such  counsel no such
action is necessary to maintain such lien and security interest. Such Opinion of
Counsel shall also describe the recording,  filing, re-recording and refiling of
this  Indenture,  the related Series  Supplement,  any  indentures  supplemental
hereto and thereto  and any other  requisite  documents  and the  execution  and
filing of any UCC financing statements and continuation statements that will, in
the opinion of such  counsel,  be required  to  maintain  the lien and  security
interest of this  Indenture and the related  Series  Supplement and the security
interest,  if  applicable,  created  by the Sale  Agreement  or the  Receivables
Purchase   Agreement  with  respect  to  such  Series  until  the  next  date  a
continuation  statement must be filed to maintain the Trustee's  interest in the
related Series Collateral.

            Section 4.08. Classes. This Indenture has been drafted assuming that
each  Series  will be made up of more  than one Class of  Notes.  If the  Issuer
issues a Series  that is not  comprised  of Classes of Notes,  the Notes of such
Series  shall be deemed to comprise  one Class of the Notes for the  purposes of
this Indenture.


                     ARTICLE FIVE SATISFACTION AND DISCHARGE

             Section 5.01 Satisfaction and Discharge of Indenture. (a) Following
payment in full of (i) the Notes of any Series, (ii) the fees and charges of the
Trustee  related to such  Series and (iii) all other  obligations  of the Issuer
with  respect  to such  Series  under  this  Indenture  and the  related  Series
Supplement, and the release by the Trustee of the related Series Trust Estate in
accordance with Section  5.01(b)  hereof,  this Indenture and the related Series
Supplement shall be discharged with respect to such Series.

           (b) In  connection  with  the  discharge  of this  Indenture  and the
related  Series  Supplement  and the release of the related Series Trust Estate,
the Trustee shall release from the lien of this Indenture and the related Series
Supplement and shall deliver,  or instruct the Custodian to deliver,  to or upon
the order of the Issuer all  property  remaining  in the  related  Series  Trust
Estate and shall execute and file,  at the expense of the Issuer,  UCC financing
statements evidencing such discharge and release.


                        ARTICLE SIX DEFAULTS AND REMEDIES

     Section  6.01 Events of Default.  "Event of Default"  wherever  used herein
means any one of the following events:

     (1) default in the payment of any interest upon any Note of a Series within
one Business Day after the same becomes due and payable; or

     (2) default in the payment of any  principal of any Note of a Series within
one Business Day after the same becomes due and payable; or

     (3) default in the  observance or  performance of any covenant or agreement
of the Issuer made in this Indenture,  any Series Supplement,  the Note Purchase
Agreements,  the  Sale  Agreement,  the  Custodian  Agreement  or the  Servicing
Agreement  (other  than a  covenant  or  warranty  default,  the  observance  or
performance of which is elsewhere in this Section 6.01 specifically dealt with),
or any  representation  or warranty of the Issuer  made in this  Indenture,  any
Series  Supplement,  the  Note  Purchase  Agreements,  the Sale  Agreement,  the
Custodian  Agreement,  the Servicing  Agreement or in any  certificate  or other
writing  delivered  pursuant  hereto or thereto  or in  connection  herewith  or
therewith  proving to have been incorrect in any material respect as of the time
when the same shall have been made and such  default  shall  continue  or not be
cured, or the circumstance or condition in respect of which such  representation
or warranty was incorrect shall not have been eliminated or otherwise cured, for
a period of 30 days (except for defaults relating to Sections 4.03 and 11.02(a),
(b), (i),  (j), (l), (q) and (s) hereof,  which shall have no grace period) from
the earlier of the Issuer  obtaining  actual knowledge of, or receiving from the
Trustee or any Holder  notice of, such  default or incorrect  representation  or
warranty; or

     (4) the Issuer becomes subject to  registration as an "investment  company"
under the Investment Company Act of 1940, as amended; or

     (5) the filing of a  petition  or the entry of a decree or order for relief
by a court  having  jurisdiction  in the premises in respect of the Issuer under
the Federal Bankruptcy Code or any other applicable federal or State bankruptcy,
insolvency, reorganization, liquidation or other similar law now or hereafter in
effect or any arrangement  with creditors or appointing a receiver,  liquidator,
assignee, trustee, or sequestrator (or other similar official) for the Issuer or
for any substantial part of its property in an involuntary case, or ordering the
winding up or liquidation of the Issuer's  affairs,  and the  continuance of any
such petition  undismissed or of any such decree or order unstayed and in effect
for a period of 60 consecutive days; or

     (6) the  institution  by the  Issuer of  proceedings  to be  adjudicated  a
bankrupt  or  insolvent,  or the  consent  by the Issuer to the  institution  of
bankruptcy or insolvency  proceedings  against the Issuer,  or the filing by the
Issuer of a petition or answer or consent seeking reorganization or relief under
the Federal Bankruptcy Code or any other applicable federal or State bankruptcy,
insolvency, reorganization, liquidation or other similar law now or hereafter in
effect,  or the  consent by the Issuer to the filing of any such  petition or to
the appointment of or possession by a receiver, liquidator, assignee, custodian,
trustee or  sequestrator  (or other  similar  official)  of the Issuer or of any
substantial  part of the Issuer's  property,  or the making by the Issuer of any
assignment  for the benefit of creditors,  or the admission by either in writing
of its  inability,  or the  failure  by it  generally,  to pay its debts as they
become due, or the taking of corporate  action by the Issuer in  furtherance  of
any such action; or

     (7) (i) the  impairment  of the  validity of any  security  interest of the
Trustee in the Trust Estate, except as expressly permitted,  or (ii) creation of
any encumbrance  not otherwise  permitted which is not stayed or released within
10 days of the Issuer having knowledge of its creation; or

     (8) a default in the observance or performance by both TFI and Trendwest of
their repurchase  obligations  pursuant to Section 3.03 of the Sale Agreement or
by Trendwest of its repurchase  obligations under Section 3.03 of the Receivable
Purchase Agreement;

     provided,  however, that to the extent that the occurrence of the events in
clauses  (3),  (7) or (8) above do not affect  the rights of the  Holders of all
Series of Notes, then such events shall be an Event of Default only with respect
to the Series so affected;  provided, further, that the occurrence of the events
in clauses (1) and (2) above shall only be an Event of Default  with  respect to
the Series so affected.

             Section 6.02 Acceleration of Maturity; Rescission and Annulment. If
an Event  of  Default  with  respect  to the  Notes  of any  Series  at the time
Outstanding  occurs and is continuing,  then Holders of not less than 66-2/3% in
aggregate  principal amount of the Controlling Class of the Notes Outstanding of
such Series may declare,  by notice in writing to the Trustee and the Issuer, or
may  direct the  Trustee to  declare,  by notice in writing to the  Issuer,  the
principal of all the Notes of such Series to be immediately due and payable, and
upon any such  declaration,  such  principal  shall become  immediately  due and
payable  without any  presentment,  demand,  protest or other notice of any kind
(except such notices as shall be expressly  required by the  provisions  of this
Indenture), all of which are hereby expressly waived; provided, however, that if
an Event of Default  under  paragraph  (5) or (6) of Section 6.01 hereof  occurs
with respect to the Issuer, the Notes of all Series shall  automatically  become
due and payable without any declaration notice to the Issuer or the Trustee. The
Trustee shall send a copy of any such notice to the Rating Agency.

         At any time after such a declaration of acceleration  has been made, or
after such acceleration has automatically become effective,  with respect to any
Series of Notes but before any Sale of the related  Series Trust Estate has been
made or a judgment or decree for  payment of the money due has been  obtained by
the Trustee as  hereinafter  in this Article  provided,  the Holders of not less
than 66-2/3% in aggregate  principal  amount of the  Controlling  Class of Notes
Outstanding of such Series, by written notice to the Issuer and the Trustee, may
rescind  and  annul  such   declaration  or  automatic   acceleration   and  its
consequences  (except that in the case of a payment  default on the Notes of any
Series,  the consent of not less than 66-2/3% in aggregate  principal  amount of
the Controlling  Class of Notes  Outstanding of such Series shall be required to
rescind  and  annul  such   declaration  or  automatic   acceleration   and  its
consequences) if:

     (1) the Issuer has paid or deposited  with the Trustee a sum  sufficient to
pay

     (A) all overdue installments of interest on all Notes of such Series,

                            (B) the  principal of any Notes of such Series which
                  has  become  due  otherwise   than  by  such   declaration  of
                  acceleration or automatic acceleration and interest thereon at
                  the rate  borne by such  Notes  from the time  such  principal
                  first became due until the date when paid, and

                            (C)  all  sums  paid  or  advanced,   together  with
                  interest thereon, by the Trustee or any Holder of the Notes of
                  such  Series   hereunder  and  the  reasonable   compensation,
                  expenses,  disbursements  and advances of the Trustee and such
                  Noteholders,  their agents and counsel  incurred in connection
                  with the  enforcement  of this  Indenture  to the date of such
                  payment or deposit; and

                   (2) all Events of Default,  other than the  nonpayment of the
         principal of the Notes which have become due solely by such declaration
         of acceleration or by automatic acceleration, have been cured or waived
         as provided in Section 6.15 hereof.

No such  rescission  shall  affect  any  subsequent  default or impair any right
consequent thereon.

             Section 6.03 Collection of  Indebtedness  and Suits for Enforcement
by Trustee.  The Issuer covenants that if an Event of Default shall occur and be
continuing  with  respect  to any  Series  of Notes  and such  Notes  have  been
declared,  or  automatically  become,  due and payable and such  declaration  or
automatic  acceleration  has not been  rescinded and annulled,  the Issuer will,
upon demand of the Trustee,  pay to the Trustee,  for the benefit of the Holders
of such Notes, the whole amount then due and payable on such Notes for principal
and interest,  with interest upon the overdue  principal and overdue interest at
the applicable Note Interest Rate and, in addition thereto,  such further amount
as shall be sufficient to cover the costs and expenses of collection,  including
the  reasonable  compensation,  expenses,  disbursements  and  advances  of  the
Trustee, its agents and counsel.

         If the Issuer fails to pay such amount forthwith upon such demand,  the
Trustee,  in its own name and as  trustee of an  express  trust  may,  institute
Proceedings for the collection of the sums so due and unpaid, and prosecute such
Proceeding to judgment or final decree,  and enforce the same against the Issuer
and collect the monies  adjudged or decreed to be payable in the manner provided
by law out of the property of the Issuer, wherever situated.

         If an Event of Default  occurs and is  continuing  with  respect to the
Notes of any Series,  the Trustee may in its  discretion  proceed to protect and
enforce  its  rights  and  the  rights  of the  Holders  of such  Notes  by such
appropriate  Proceedings as the Trustee shall deem most effectual to protect and
enforce any such rights, whether for the specific enforcement of any covenant or
agreement  in this  Indenture  or in aid of the  exercise  of any power  granted
herein, or to enforce any other proper remedy.

             Section 6.04  Remedies.  If an Event of Default shall have occurred
and be  continuing  with respect to the Notes of any Series,  the Trustee may do
one or more of the following:

                   (a) institute  Proceedings  for the collection of all amounts
         then due and payable on such Notes or under this Indenture,  whether by
         declaration,  automatic acceleration or otherwise, enforce any judgment
         obtained, and collect from the Issuer the monies adjudged due;

                   (b) take  possession  of and sell the  related  Series  Trust
         Estate securing such Notes or any portion thereof or rights or interest
         therein,  at one or more  Sales  called  and  conducted  in any  manner
         permitted by law;

                   (c)  institute  any  Proceedings  from  time to time  for the
         complete or partial  foreclosure  of the lien created by this Indenture
         with respect to the related Series Trust Estate securing such Notes;

     (d) during the  continuance of a default under a Contract,  exercise any of
the rights of the lender under such Contract; and

                   (e) exercise any remedies of a secured party under the UCC or
         any applicable law and take any other appropriate action to protect and
         enforce  the rights and  remedies of the Trustee or the Holders of such
         Notes hereunder;

provided,  however,  that  without  the  consent of the Holders of not less than
66-2/3% in principal  amount of the  Controlling  Class of Notes  Outstanding of
such Series, the Trustee may not sell or otherwise  liquidate any portion of the
related  Series  Trust Estate  unless the  proceeds of such Sale or  liquidation
distributable  to the  Holders  of the Notes of such  Series are  sufficient  to
discharge in full the amounts then due and unpaid upon such Notes for  principal
and interest.

             Section 6.05 Optional Preservation of Trust Estate. If (i) an Event
of Default shall have  occurred and be  continuing  with respect to the Notes of
any  Series  and  (ii) no Notes  of such  Series  have  been  declared,  or have
automatically  become,  due  and  payable,  or  such  declaration  or  automatic
acceleration and its consequences have been annulled and rescinded, the Trustee,
upon  request  from  the  Holders  of a  majority  in  principal  amount  of the
Controlling Class of the Notes Outstanding of such Series,  may elect, by giving
written notice of such election to the Issuer,  to take possession of and retain
the portion of the related  Series  Trust  Estate  securing  such Notes  intact,
collect or cause the  collection of the proceeds  thereof and make and apply all
payments  and  deposits  and  maintain  all accounts in respect of such Notes in
accordance  with the  provisions  of Article  Twelve of this  Indenture.  If the
Trustee is unable to or is stayed  from giving such notice to the Issuer for any
reason  whatsoever,  such  election  shall be  effective  as of the time of such
determination  or request,  as the case may be,  notwithstanding  any failure to
give such  notice,  and the  Trustee  shall give such notice upon the removal or
cure of such  inability  or stay (but shall have no  obligation  to effect  such
removal or cure). Any such election may be rescinded with respect to any portion
of the Series Trust  Estate  securing  such Notes  remaining at the time of such
rescission by written notice to the Trustee and the Issuer from the Holders of a
majority in principal  amount of the Controlling  Class of Notes  Outstanding of
such Series.

             Section  6.06  Trustee  May File  Proofs of  Claim.  In case of the
pendency   of   any   receivership,    insolvency,   liquidation,    bankruptcy,
reorganization,   arrangement,   adjustment,   composition   or  other  judicial
Proceeding  relating to the Issuer or any other obligor upon any of the Notes of
any  Series or the  property  of the  Issuer or of such  other  obligor or their
creditors, the Trustee (irrespective of whether the principal of any Notes shall
then be due and  payable  as  therein  expressed  or by  declaration,  automatic
acceleration  or otherwise  and  irrespective  of whether the Trustee shall have
made any demand on the Issuer for the payment of overdue  principal or interest)
shall be entitled and empowered to intervene in such proceeding or otherwise,

                   (i) to file  and  prove  a claim  for  the  whole  amount  of
         principal, premium, if any, and interest owing and unpaid in respect of
         the Notes issued  hereunder  and to file such other papers or documents
         as may be  necessary  or  advisable  in order to have the claims of the
         Trustee (including any claim for the reasonable compensation, expenses,
         disbursements  and advances of the Trustee,  its agents and counsel and
         any other amounts due the Trustee under Section 7.07 hereof) and of the
         Noteholders allowed in such judicial Proceeding, and

     (ii) to  collect  and  receive  any  monies or other  property  payable  or
deliverable on any such claims and to distribute the same;

and any receiver,  assignee,  trustee,  liquidator,  or  sequestrator  (or other
similar  official) in any such judicial  Proceeding is hereby authorized by each
Noteholder  to make such  payments  to the  Trustee,  and in the event  that the
Trustee  shall  consent  to  the  making  of  such  payments   directly  to  the
Noteholders,  to pay to the  Trustee  any  amount  due to it for the  reasonable
compensation,  expenses,  disbursements and advances of the Trustee,  its agents
and counsel, and any other amounts due the Trustee under Section 7.07 hereof.

         Nothing  herein  contained  shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any  Noteholder any plan
of reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder thereof, or to authorize the Trustee to vote in respect
of the claim of any Noteholder in any such Proceeding.

             Section  6.07  Trustee May Enforce  Claims  Without  Possession  of
Notes.  (a) In all Proceedings  brought by the Trustee (and also any Proceedings
involving the  interpretation  of any provision of the Transaction  Documents to
which the Trustee shall be a party),  the Trustee shall be held to represent all
of the Noteholders, and it shall not be necessary to make any Noteholder a party
to any such Proceedings.

           (b) All rights of actions and claims under the Transaction  Documents
or  the  Notes  may be  prosecuted  and  enforced  by the  Trustee  without  the
possession  of any of the  Notes or the  production  thereof  in any  Proceeding
relating  thereto,  and any such Proceedings  instituted by the Trustee shall be
brought in its own name as Trustee of an express trust, and any recovery whether
by judgment,  settlement or otherwise shall,  after provision for the payment of
the  reasonable  compensation,  expenses,  disbursements  and  advances  of  the
Trustee,  its agents and counsel, be for the benefit of the Holders of the Notes
and shall be distributed as set forth in Section 6.08 hereof.

             Section 6.08  Application of Money  Collected.  If the Notes of any
Series have been declared,  have  automatically  become, or otherwise become due
and payable  following  an Event of Default and such  declaration  or  automatic
acceleration  has not been  rescinded  or annulled,  any money  collected by the
Trustee with respect to such Notes pursuant to this Article Six or otherwise and
any other money that may be held  thereafter by the Trustee as security for such
Notes,  including without  limitation the amounts in the Reserve Account related
to such Series,  shall be applied as set forth, for each Series,  in the related
Series Supplement, at the date or dates fixed by the Trustee and, in case of the
distribution  of such  money  on  account  of  principal  or  interest,  without
presentation of any Notes of such Series.

             Section  6.09  Limitation  on  Suits.  No Holder of any Note of any
Series shall have any right to institute any Proceeding,  judicial or otherwise,
with respect to this Indenture or for the  appointment of a receiver or trustee,
or for any other remedy hereunder, unless

     (1) such Holder has  previously  given  written  notice to the Trustee of a
continuing Event of Default;

                   (2) the Holders of not less than 66-2/3% in principal  amount
         of the  Outstanding  Notes of the  applicable  Series  shall  have made
         written  request to the Trustee to institute  Proceedings in respect of
         such Event of Default in its own name as Trustee hereunder;

                   (3) such  Holder  or  Holders  have  offered  to the  Trustee
         reasonable indemnity against the costs,  expenses and liabilities to be
         incurred in compliance with such request;

     (4) the Trustee for 30 days after its receipt of such  notice,  request and
offer of security or indemnity has failed to institute any such Proceedings; and

                   (5) no direction  inconsistent  with such written request has
         been given to the Trustee  during such 30-day  period by the Holders of
         not less than  66-2/3% or more in principal  amount of the  Outstanding
         Notes of the applicable Series;

it being  understood  and  intended  that no one or more Holders of Notes of any
Class of any Series shall have any right in any manner whatever by virtue of, or
by availing of, any provision of this Indenture to affect,  disturb or prejudice
the rights of any other Holders of Notes of such Class or any other  Series,  or
to obtain or to seek to obtain  priority or preference over any other Holders of
Notes of such Class or to enforce any right under this Indenture,  except in the
manner herein  provided and for the equal and ratable benefit of all the Holders
of Notes of such Class.

             Section  6.10   Unconditional   Right  of  Noteholders  to  Receive
Principal and Interest.  Notwithstanding  any other provision in this Indenture,
the Holders of Notes of each Series shall have the right,  which is absolute and
unconditional,  to receive payment of the principal,  interest,  and premium, if
any, on such Note as such principal,  interest, and premium, if any, becomes due
and payable and to institute  any  Proceeding  for the  enforcement  of any such
payment,  and such  right  shall not be  impaired  without  the  consent of such
Noteholder.

             Section 6.11 Restoration of Rights and Remedies.  If the Trustee or
any  Noteholder  has  instituted  any  Proceeding to enforce any right or remedy
under this Indenture and such Proceeding has been  discontinued or abandoned for
any  reason,  or has  been  determined  adversely  to  the  Trustee  or to  such
Noteholder, then, and in every case, the Issuer, the Trustee and the Noteholders
shall,  subject to any determination in such Proceeding,  be restored  severally
and respectively to their former positions hereunder,  and thereafter all rights
and remedies of the Trustee and the Noteholders shall continue as though no such
Proceeding had been instituted.

             Section  6.12 Rights and Remedies  Cumulative.  Except as otherwise
provided with respect to the  replacement  or payment of  mutilated,  destroyed,
lost or stolen Notes in the last  paragraph of Section 3.06 hereof,  no right or
remedy herein conferred upon or reserved to the Trustee or to the Noteholders is
intended  to be  exclusive  of any other  right or remedy,  and every  right and
remedy shall,  to the extent  permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or  otherwise.  The  assertion or employment of any right or remedy
hereunder,  or  otherwise,   shall  not  prevent  the  concurrent  assertion  or
employment of any other appropriate right or remedy.

             Section 6.13 Delay or Omission; Not Waiver. No delay or omission of
the  Trustee  or of any  Holder  of any Note to  exercise  any  right or  remedy
accruing  upon any Event of  Default  shall  impair  any such right or remedy or
constitute  a waiver of any such Event of Default or any  acquiescence  therein.
Every right and remedy  given by this Article Six or by law to the Trustee or to
the  Noteholders  may be  exercised  from  time to time,  and as often as may be
deemed expedient, by the Trustee or by the Noteholders, as the case may be.

             Section 6.14 Control by  Noteholders.  The Holders of not less than
66-2/3% in principal  amount of the  Controlling  Class of Notes  Outstanding of
each affected Series,  shall have the right to direct the time, method and place
of  conducting  any  Proceeding  for any  remedy  available  to the  Trustee  or
exercising any trust or power conferred on the Trustee; provided that:

                   (1) such direction  shall not be in conflict with any rule of
         law or with this Indenture including, without limitation, any provision
         hereof which expressly  provides for greater percentage of principal of
         Outstanding Notes of a Series;

                   (2) any direction to the Trustee by the Holders of Notes of a
         Series to undertake a private Sale of the portion of the related Series
         Trust  Estate  shall be by the  Holders  of not less  than  66-2/3%  in
         principal amount of the Controlling  Class of Notes Outstanding of such
         Series unless the condition set forth in Section  6.18(b)(ii) hereof is
         met;

                   (3) the Trustee may take any other  action  deemed  proper by
         the Trustee which is not  inconsistent  with such direction;  provided,
         however,  that,  subject to Section 7.01  hereof,  the Trustee need not
         take any action which a Responsible  Officer or Officers of the Trustee
         in good faith determines  might involve it in personal  liability or be
         unjustly  prejudicial to the Noteholders of such Series not consenting;
         and

                   (4) the  Trustee  has  been  furnished  reasonable  indemnity
         against  costs,  expenses  and  liabilities  which  it  might  incur in
         connection  therewith as provided in Section 7.01(f) hereof;  provided,
         that the  unsecured  agreement to  indemnify  the Trustee by any Holder
         (or, in the case of any Note held in nominee  name,  the  principal  of
         such nominee) that is an Institutional  Investor that has a minimum net
         worth of at least $50,000,000 shall be deemed to be satisfactory.

             Section 6.15 Waiver of Past Defaults.  The Holders of not less than
66-2/3% in principal amount of the Controlling  Class of Notes  Outstanding of a
Series may on behalf of the  Holders of all the Notes of such  Series  waive any
past Default with respect to such Series hereunder and its consequences,  except
a Default:

     (1) in the payment of the principal of, or premium,  if any, or interest on
any Note of such  Series,  or a Default  described  in Sections  6.01(5) and (6)
hereof, or

                   (2) in respect of a covenant or provision  hereof which under
         Article Nine hereof  cannot be modified or amended  without the consent
         of the Holder of each Outstanding Note affected.

         Upon any such waiver,  such Default shall cease to exist, and any Event
of  Default  arising  therefrom  shall be deemed  to have  been  cured for every
purpose of this Indenture;  but no such waiver shall extend to any subsequent or
other Default or impair any right consequent thereon.

             Section 6.16  Undertaking for Costs.  All parties to this Indenture
agree, and each Holder of any Note by his acceptance  thereof shall be deemed to
have agreed,  that any court may in its discretion  require, in any suit for the
enforcement of any right or remedy under this Indenture,  or in any suit against
the Trustee  for any action  taken,  suffered  or omitted by it as Trustee,  the
filing by any party  litigant in such suit of an undertaking to pay the costs of
such suit, and that such court may in its discretion  assess  reasonable  costs,
including  reasonable  attorneys' fees, against any party litigant in such suit,
having due regard to the merits and good faith of the claims or defenses made by
such party litigant; but notwithstanding such assessment, the provisions of this
Section 6.16 shall not apply to any suit  instituted  by the Trustee,  or to any
suit  instituted by any Noteholder or group of Noteholders of a Series,  holding
in the aggregate more than 50% in principal  amount of the Outstanding  Notes of
such Series,  or to any suit instituted by any Noteholder for the enforcement of
the payment of the  principal  of or interest on any Note on or after the Stated
Maturity  provided  that  such  suit is not  deemed  to be  frivolous  under the
applicable rules of civil procedure by such court.

             Section 6.17 Waiver of Stay or Extension Laws. The Issuer covenants
(to the extent that it may lawfully do so) that it will not, at any time, insist
upon,  or  plead,  or in any  manner  whatsoever  claim or take the  benefit  or
advantage  of, any stay or extension  law wherever  enacted,  now or at any time
hereafter in force,  which may affect the  covenants or the  performance  of the
Transaction Documents; and the Issuer (to the extent that it may lawfully do so)
hereby  expressly  waives all benefit or advantage of any such law and covenants
that it will not  hinder,  delay or impede  the  execution  of any power  herein
granted to the Trustee,  but will suffer and permit the  execution of every such
power as though no such law had been enacted.

             Section 6.18 Sale of Trust Estate. (a) The power to effect any sale
(a "Sale") of any portion of any Series  Trust  Estate  pursuant to Section 6.04
hereof shall not be exhausted by any one or more Sales as to any portion of such
Series Trust Estate remaining  unsold,  but shall continue  unimpaired until the
entire  Series  Trust  Estate  securing  such Series shall have been sold or all
amounts  payable  on the Notes of such  Series  and under  this  Indenture  with
respect thereto shall have been paid. The Trustee may from time to time postpone
any Sale by public announcement made at the time and place of such Sale.

           (b) To the extent permitted by applicable law, the Trustee shall not,
in any  private  Sale,  sell to a third  party the  Series  Trust  Estate of any
Series, or any portion thereof unless:

                   (i) the Holders of not less than 66-2/3% in principal  amount
         of the Controlling  Class of Notes  Outstanding of the affected Series,
         consent to or direct the Trustee to make such Sale; or

                  (ii) the  proceeds of such Sale would not be less than the sum
         of all  amounts  due to the  Trustee  hereunder  and the entire  unpaid
         principal  amount of the Notes of such  Series and  interest  due or to
         become due thereon on the Payment Date next succeeding such Sale.

           (c) The  Trustee  or the  Noteholders  may bid  for and  acquire  any
portion of a Series Trust Estate in connection  with a public Sale thereof,  and
in lieu of paying cash  therefor,  any  Noteholder  may make  settlement for the
purchase price by crediting against amounts owing on the Notes of such Holder or
other amounts owing to such Holder  secured by this  Indenture,  that portion of
the net  proceeds  of such  Sale to  which  such  Holder  would be  entitled  in
accordance  with the priorities set forth in Section 6.08 and the related Series
Supplement,  after deducting the reasonable costs, charges and expenses incurred
by the Trustee or the  Noteholders in connection with such Sale. Such Notes need
not be  produced  in order to  complete  any such Sale,  or in order for the net
proceeds of such Sale to be  credited  against  such Notes.  The Trustee or such
Noteholders may hold, lease, operate, manage or otherwise deal with any property
so acquired in any manner permitted by law.

           (d) The Trustee shall execute and deliver an  appropriate  instrument
of  conveyance  transferring  its  interest in any  portion of any Series  Trust
Estate in  connection  with a Sale thereof.  In addition,  the Trustee is hereby
irrevocably  appointed the agent and  attorney-in-fact of the Issuer to transfer
and convey its interest in any portion of such Series Trust Estate in connection
with a Sale  thereof,  and to take all action  necessary to effect such Sale. No
purchaser or transferee at such a sale shall be bound to ascertain the Trustee's
authority,  inquire into the satisfaction of any conditions  precedent or see to
the application of any monies.

           (e) The method,  manner,  time, place and terms of any Sale of all or
any portion of any Series Trust Estate shall be commercially reasonable.

             Section  6.19 Action on Notes.  The right of a Trustee for a Series
to seek and recover judgment on the Notes of such Series or under this Indenture
shall not be affected by the  seeking,  obtaining  or  application  of any other
relief  under  or with  respect  to this  Indenture.  Neither  the  lien of this
Indenture  nor any rights or remedies of the Trustee or the  Noteholders  of any
Series shall be impaired by the recovery of any judgment by the Trustee  against
the Issuer or by the levy of any execution  under such judgment upon any portion
of the related Series Trust Estate or upon any of the assets of the Issuer.


                            ARTICLE SEVEN THE TRUSTEE

             Section 7.01 Certain Duties and Responsibilities.  (a) With respect
to each Series of Notes,  except during the  continuance  of an Event of Default
relating to such Series  known to the  Trustee as  provided  in  subsection  (e)
below:

                   (i) the Trustee  undertakes  to perform  such duties and only
         such duties as are  specifically  set forth in this  Indenture,  and no
         implied  covenants  or  obligations  shall be read into this  Indenture
         against the Trustee; and

                  (ii) in the  absence of bad faith or  negligence  on its part,
         the Trustee may conclusively rely as to the truth of the statements and
         the correctness of the opinions expressed therein, upon certificates or
         opinions furnished to the Trustee and conforming to the requirements of
         this Indenture;  but in the case of any such  certificates or opinions,
         which by any provision hereof are specifically required to be furnished
         to the Trustee,  the Trustee  shall be under a duty to examine the same
         and to  determine  whether or not they conform to the  requirements  of
         this Indenture.

           (b) In case an Event of  Default  relating  to a Series  known to the
Trustee as provided in subsection (e) below has occurred and is continuing, with
respect to such  Series and the  related  portion of the  related  Series  Trust
Estate, the Trustee shall exercise such of the rights and powers vested in it by
this Indenture, and shall use the same degree of care and skill in its exercise,
as a reasonable  person  would  exercise or use under the  circumstances  in the
conduct of his or her own affairs.

           (c) No provision of this Indenture  shall be construed to relieve the
Trustee from liability for its own negligent  action,  its own negligent failure
to act, or its own willful misconduct or bad faith, except that:

     (i) this  subsection  (c) shall  not be  construed  to limit the  effect of
subsection (a) of this Section 7.01;

                  (ii) the Trustee shall not be liable for any error of judgment
         made in good faith by a Responsible  Officer of the Trustee,  unless it
         shall be proved that the  Trustee was  negligent  in  ascertaining  the
         pertinent facts;

                 (iii)  the  Trustee  shall not be liable  with  respect  to any
         action  taken or omitted to be taken by it in good faith in  accordance
         with the direction the Holders of a majority (or other such  percentage
         as may be  required  by the terms  hereof) in  principal  amount of the
         Controlling  Class  of  Notes  Outstanding  of an  affected  Series  in
         accordance  with Section 6.14 hereof  relating to the time,  method and
         place of  conducting  any  Proceeding  for any remedy  available to the
         Trustee,  or exercising any trust or power  conferred upon the Trustee,
         under this  Indenture,  the Sale Agreement or the Servicing  Agreement;
         and

                  (iv) no provision of this Indenture  shall require the Trustee
         to  expend  or risk its own  funds or  otherwise  incur  any  financial
         liability in the performance of any of its duties hereunder,  or in the
         exercise  of any of its rights or powers,  if it shall have  reasonable
         grounds  for  believing  that  repayment  of  such  funds  or  adequate
         indemnity  against such risk or liability is not reasonably  assured to
         it.

           (d) Whether or not therein expressly so provided,  every provision of
this  Indenture  relating  to the  conduct  or  affecting  the  liability  of or
affording  protection to the Trustee shall be subject to the  provisions of this
Section 7.01.

           (e) For all purposes under this  Indenture,  the Trustee shall not be
deemed to have notice or knowledge of any Event of Default  described in Section
6.01(4),  6.01(5) or 6.01(6)  hereof,  any Default  described in Section 6.01(3)
hereof or  Section  4.03(a)  hereof  unless a  Responsible  Officer  has  actual
knowledge thereof or unless written notice of any event which is in fact such an
Event of Default or Default is received by the  Trustee at the  Corporate  Trust
Office,  and such notice  references the Notes  generally,  the Issuer, a Series
Trust Estate or this Indenture.

           (f) The Trustee  shall be under no  obligation to institute any suit,
or to take any  remedial  proceeding  under  this  Indenture,  or to  enter  any
appearance  or in any way defend in any suit in which it may be made  defendant,
or to take any steps in the  execution  of the trusts  hereby  created or in the
enforcement of any rights and powers  hereunder until it shall be indemnified to
its reasonable satisfaction against any and all costs and expenses,  outlays and
counsel  fees and other  reasonable  disbursements  and against  all  liability,
except liability  resulting from the Trustee's  negligence or willful misconduct
as  adjudicated,  in  connection  with any action so taken;  provided,  that the
unsecured  agreement to indemnify  the Trustee by any Holder (or, in the case of
any Note  held in  nominee  name,  the  principal  of such  nominee)  that is an
Institutional  Investor  that has a minimum  net  worth of at least  $50,000,000
shall be deemed to be satisfactory.

         (g) Notwithstanding any extinguishment of all right, title and interest
of the Issuer in and to all or a portion of any Series Trust Estate following an
Event of Default and a  consequent  declaration  of  acceleration  or  automatic
acceleration  of the  maturity  of one or more  Series  of Notes,  whether  such
extinguishment  occurs  through a Sale of such  Series  Trust  Estate to another
person,  the acquisition of the relevant  portion of such Series Trust Estate by
the Trustee with  respect to such Series Trust Estate (or the proceeds  thereof)
and the  Noteholders  and the rights of the  Noteholders  shall  continue  to be
governed by the terms of this Indenture.

           (h)  Notwithstanding  anything to the contrary  contained herein, the
provisions of subsections (e) through (g), inclusive, of this Section 7.01 shall
be subject to the provisions of subsections (a) through (c), inclusive,  of this
Section 7.01.

     (i) The Trustee  shall  provide the  reports  and  accountings  as required
pursuant to Section 12.04 hereof.

         (j) The duties  and  obligations  of the  Trustee  shall be  determined
solely by the express  provisions  of this  Indenture.  The Trustee shall not be
liable  except  for  the  performance  of such  duties  and  obligations  as are
specifically set forth in this Indenture, no implied covenant shall be read into
this Indenture and, in the absence of bad faith on the part of the Trustee,  the
Trustee may conclusively  rely on the truth of the statements and corrections of
the opinions furnished to the Trustee.

             Section 7.02 Notice of Default.  Promptly  after the  occurrence of
any Default known to the Trustee  (within the meaning of Section 7.01(e) hereof)
which is continuing, the Trustee shall transmit by mail to the Rating Agency and
all  Holders of Notes of each  affected  Series,  as their  names and  addresses
appear on the Note  Register,  notice  of such  Default  hereunder  known to the
Trustee.

     Section 7.03  Certain  Rights of Trustee.  Except as otherwise  provided in
Section 7.01,

                   (a) the Trustee may rely and shall be  protected in acting or
         refraining  from acting upon any  resolution,  certificate,  statement,
         instrument,  opinion,  report,  notice,  request,  direction,  consent,
         order, bond, note or other obligation, paper or document believed by it
         to be genuine and to have been signed or  presented by the proper party
         or parties;

                   (b) any request or direction of the Issuer  mentioned  herein
         shall be  sufficiently  evidenced by an Issuer  Request or Issuer Order
         and any  resolution  of the  Board  of  Directors  may be  sufficiently
         evidenced by a Board Resolution;

                   (c)  whenever in the  administration  of this  Indenture  the
         Trustee shall deem it desirable  that a matter be proved or established
         prior to  taking,  suffering  or  omitting  any action  hereunder,  the
         Trustee (unless other evidence be herein specifically  prescribed) may,
         in the  absence  of bad  faith  on its  part,  rely  upon an  Officer's
         Certificate;

                   (d) the  Trustee  may  consult  with  counsel and the written
         advice of such  counsel  selected by the  Trustee  with due care or any
         Opinion  of  Counsel  shall  be full  and  complete  authorization  and
         protection  in respect of any action  taken,  suffered or omitted by it
         hereunder in good faith and in reliance thereon;

                   (e) the Trustee  shall be under no obligation to exercise any
         of the rights or powers  vested in it by this  Indenture at the request
         or  direction  of any of the  Noteholders  pursuant to this  Indenture,
         unless such  Noteholders  shall have offered to the Trustee  reasonable
         security or indemnity against the costs, expenses and liabilities which
         might be incurred by it in  compliance  with such request or direction;
         provided,  that the unsecured agreement to indemnify the Trustee by any
         Holder (or, in the case of any Note held in nominee name, the principal
         of such nominee) that is an  Institutional  Investor that has a minimum
         net worth of at least $50,000,000 shall be deemed to be satisfactory.

                   (f) the Trustee shall not be bound to make any  investigation
         into the  facts  or  matters  stated  in any  resolution,  certificate,
         statement,  instrument,  opinion,  report, notice, request,  direction,
         consent, order, bond, note or other paper or document, but the Trustee,
         in its discretion,  may make such further inquiry or investigation into
         such facts or  matters as it may see fit,  and,  if the  Trustee  shall
         determine to make such further  inquiry or  investigation,  it shall be
         entitled to examine the books, records and premises of the Issuer, upon
         reasonable  notice and at  reasonable  times  personally or by agent or
         attorney; and

                   (g) the  Trustee  may  execute  any of the  trusts  or powers
         hereunder  or perform  any duties  hereunder  either  directly or by or
         through  agents or attorneys and the Trustee  shall not be  responsible
         for any  misconduct or negligence on the part of any agent or attorney,
         appointed with due care by it hereunder.

             Section 7.04 Not Responsible for Recitals or Issuance of Notes. (a)
The  recitals  contained  herein and in the Notes,  except the  certificates  of
authentication on the Notes, shall be taken as the statements of the Issuer, and
the Trustee assumes no responsibility for their  correctness.  The Trustee makes
no representations as to the validity or condition of any Series Trust Estate or
any part thereof, or as to the title of the Issuer thereto or as to the security
afforded  thereby  or  hereby,  or as to  the  validity  or  genuineness  of any
securities at any time pledged and deposited with the Trustee hereunder or as to
the validity or sufficiency of this Indenture or of the Notes. The Trustee shall
not be  accountable  for the use or  application  by the  Issuer of Notes or the
proceeds  thereof or of any money paid to the Issuer or upon Issuer  Order under
any provisions hereof.

           (b)  Except  as  otherwise  expressly  provided  herein  and  without
limiting  the   generality  of  the   foregoing,   the  Trustee  shall  have  no
responsibility  or liability for or with respect to the existence or validity of
any of the  Credits  or  Contracts,  the  perfection  of any  security  interest
(whether as of the date hereof or at any future time), the maintenance of or the
taking of any action to maintain such perfection, the validity of the assignment
of any portion of any Series Trust  Estate to the Trustee or of any  intervening
assignment, the review of any Contract (it being understood that the Trustee has
not  reviewed  and does not intend to review the  substance  or form of any such
Contract), the performance or enforcement of any Contract, the compliance by the
Issuer,  Trendwest,  TFI or the Servicer  with any covenant or the breach by the
Issuer,  Trendwest,  TFI or the Servicer of any warranty or representation  made
hereunder  or in any related  document or the  accuracy of any such  warranty or
representation,  any  investment  of monies  in any  Collection  Account  or any
Reserve  Account or any loss resulting  therefrom,  the acts or omissions of the
Issuer,  Trendwest, TFI, the Servicer or any Obligor, any action of the Servicer
taken in the name of the Trustee,  or the validity of the  Servicing  Agreement,
the Sale Agreement or the Receivables Purchase Agreement.

           (c) The Trustee shall not have any obligation or liability  under any
Contract  by reason of or arising  out of this  Indenture  or the  granting of a
security  interest in such  Contract  hereunder or the receipt by the Trustee of
any payment relating to any Contract  pursuant hereto,  nor shall the Trustee be
required or obligated in any manner to perform or fulfill any of the obligations
of the Seller under or pursuant to any Contract,  or to make any payment,  or to
make any inquiry as to the nature or the sufficiency of any payment  received by
it, or the sufficiency of any performance by any party, under any Contract.

             Section 7.05 May Hold Notes. The Trustee, the Servicer,  any Paying
Agent, the Note Registrar,  any  Authenticating  Agent or any other agent of the
Issuer, in its individual or any other capacity, may become the owner or pledgee
of Notes,  and if operative,  may  otherwise  deal with the Issuer with the same
rights  it would  have if it were not  Trustee,  Servicer,  Paying  Agent,  Note
Registrar, Authenticating Agent or such other agent.

             Section  7.06 Money Held in Trust.  Money and  investments  held in
trust by the Trustee or any Paying Agent  hereunder shall be held in one or more
trust accounts  hereunder but need not be segregated  from other funds except to
the extent  required  herein or required by law. The Trustee or any Paying Agent
shall be under no liability  for interest on any money  received by it hereunder
except as otherwise  agreed with the Issuer or otherwise  specifically  provided
herein.

             Section 7.07    Compensation and Reimbursement.  The Issuer agrees:

                   (i) to pay the  Trustee  monthly  its  fee  for all  services
         rendered by it  hereunder  as Trustee for any Series,  in the amount of
         the Trustee Fee related to such Series  (which  compensation  shall not
         otherwise  be  limited  by  any  provision  of  law  in  regard  to the
         compensation of a trustee of an express trust);

                  (ii)  except  as  otherwise   expressly  provided  herein,  to
         reimburse the Trustee upon its request for all reasonable out-of-pocket
         expenses, disbursements and advances incurred or made by the Trustee in
         accordance  with  any  provision  of this  Indenture  or the  Servicing
         Agreement  (including the reasonable  compensation and the expenses and
         disbursements  of the Trustee's  agents and  counsel),  except any such
         expense,  disbursement  or  advance  as  may  be  attributable  to  its
         negligence, bad faith or willful misconduct; and

                 (iii) to indemnify  and hold  harmless each Series Trust Estate
         and the Trustee from and against any loss, liability,  expense,  damage
         or injury sustained or suffered pursuant to this Indenture by reason of
         any  acts,  omissions  or  alleged  acts or  omissions  arising  out of
         activities  of such  Series  Trust  Estate  or the  Trustee  (including
         without  limitation any violation of any applicable  laws by the Issuer
         as a  result  of the  transactions  contemplated  by  this  Indenture),
         including,  but  not  limited  to,  any  judgment,  award,  settlement,
         reasonable  attorneys'  fees and other expenses  incurred in connection
         with the  defense of any actual or  threatened  action,  proceeding  or
         claim; provided that the Issuer shall not indemnify the Trustee if such
         loss,  liability,  expense,  damage or  injury is due to the  Trustee's
         negligence or willful  misconduct,  willful misfeasance or bad faith in
         the performance of duties. Any indemnification pursuant to this Section
         7.07 shall only be payable  from the assets of the Issuer and shall not
         be payable from the assets of any Series Trust Estate.  The  provisions
         of this  indemnity  shall  run  directly  to and be  enforceable  by an
         injured   person   subject   to  the   limitations   hereof   and  this
         indemnification   agreement  shall  survive  the  termination  of  this
         Indenture.

         Upon the  occurrence  of an Event of Default with respect to any Series
resulting  in an  acceleration  of maturity of the Notes of such Series that has
not been  rescinded  and  annulled,  the Trustee shall have, as security for the
performance  of the Issuer under this Section 7.07, a lien ranking senior to the
lien of the Notes of such Series with  respect to which any claim of the Trustee
under this  Section  7.07 arose upon all property and funds held or collected as
part of the  related  Series  Trust  Estate by the  Trustee in its  capacity  as
Trustee for such Series.  The Trustee shall not institute any Proceeding seeking
the  enforcement  of such lien against any Series  Trust Estate  unless (i) such
Proceeding  is in connection  with a proceeding  in accordance  with Article Six
hereof for  enforcement  of the lien of this  Indenture  for the  benefit of the
Holders of the Notes secured by such Series Trust Estate after the occurrence of
an Event of Default  (other  than an Event of Default  due solely to a breach of
this Section  7.07) and a resulting  declaration  of  acceleration  or automatic
acceleration of maturity of such Notes that has not been rescinded and annulled,
or (ii) such Proceeding does not result in or cause a Sale or other  disposition
of such Series Trust  Estate.  All monies so  collected by the Trustee  shall be
applied in  accordance  with Section 6.08 hereof,  and the Trustee shall receive
amounts  pursuant to Section 6.08 hereof only to the extent that payment thereof
will not result in a subsequent  Event of Default caused by such payments to the
Trustee.

             Section 7.08 Corporate Trustee Required;  Eligibility.  There shall
at all times be a trustee for each Series hereunder which shall be a corporation
or association  organized and doing business under the laws of the United States
of America or of any State,  authorized  under such laws to  exercise  corporate
trust powers, having a combined capital and surplus of at least $100,000,000, or
be a member of a consolidated  bank holding company with a combined  capital and
surplus of at least  $100,000,000,  subject to  supervision  or  examination  by
Federal  or state  authority  and having an office  within the United  States of
America, and, except with respect to the initial Trustee hereunder,  which shall
have a commercial  paper or other  short-term  rating of the highest  short term
rating  categories  by Fitch (or,  if not rated by Fitch,  by S&P or Moody's) or
otherwise acceptable to the Holders of not less than 66-2/3% in principal amount
of the Controlling  Class of the Notes  Outstanding of each affected Series.  If
any such entity  publishes  reports of condition at least annually,  pursuant to
law or to the requirements of the aforesaid  supervising or examining authority,
then for the purposes of this Section 7.08, the combined  capital and surplus of
each such entity shall be deemed to be its  combined  capital and surplus as set
forth in its most recent  report of condition so  published.  If at any time the
Trustee  for a  Series  shall  cease  to be  eligible  in  accordance  with  the
provisions of this Section 7.08, it shall resign  immediately  in the manner and
with the effect hereinafter specified in this Article Seven.

             Section 7.09 Resignation and Removal; Appointment of Successor. (a)
No  resignation or removal of the Trustee for any Series and no appointment of a
successor  Trustee  pursuant to this Article Seven shall become  effective until
the  acceptance of  appointment  by the successor  Trustee for such Series under
Section 7.10 hereof.

           (b) The  Trustee  may  resign at any time by giving 60 days'  written
notice  thereof  to the  Issuer  and to each  Noteholder.  If an  instrument  of
acceptance by a successor  Trustee shall not have been  delivered to the Trustee
within 60 days after the giving of such  notice of  resignation,  the  resigning
Trustee may petition any court of competent  jurisdiction for the appointment of
a successor Trustee. Such court may thereupon,  after such notice, if any, as it
may deem proper and prescribe, appoint a successor Trustee.

           (c) The Trustee for any Series may be removed  with or without  cause
by the Act of the Holders of not less than  66-2/3% in  principal  amount of the
Controlling  Class of Outstanding  Notes of such Series by notice to the Trustee
at any time.

           (d) If the Trustee for any Series shall resign,  be removed or become
incapable  of acting,  or if a vacancy  shall occur in the office of the Trustee
for any cause with respect to the Notes of such Series,  the Holders of not less
than 66-2/3% in principal amount of the Controlling  Class of Notes  Outstanding
of such  Series or the Issuer,  with the written  consent of Holders of not less
than 66-2/3% in principal amount of the Controlling  Class of Notes  Outstanding
of such Series, may appoint a successor Trustee.

           (e) The Issuer shall give notice to the  Servicer,  the Custodian and
the Noteholders of such Series in the manner provided in Section 13.03 hereof of
each  resignation  and each  removal  of the  Trustee  of such  Series  and each
appointment  of a successor  Trustee  with  respect to the Notes of such Series.
Each notice shall include the name of the  successor  Trustee and the address of
its Corporate Trust Office.

             Section  7.10   Acceptance  of  Appointment  by  Successor.   Every
successor Trustee appointed hereunder shall execute,  acknowledge and deliver to
the Issuer,  each Noteholder of each affected Series and the retiring Trustee an
instrument accepting such appointment,  and thereupon the resignation or removal
of the retiring  Trustee  shall become  effective  and such  successor  Trustee,
without any further act,  deed or  conveyance,  shall become vested with all the
rights,  powers,  trusts and duties of the  retiring  Trustee for each  affected
Series,  but, on request of the Issuer or the successor  Trustee,  such retiring
Trustee shall, upon payment of its reasonable  out-of-pocket costs and expenses,
execute and deliver an instrument transferring to such successor Trustee all the
rights,  powers and trusts of the retiring  Trustee with respect to such Series,
and shall duly  assign,  transfer  and  deliver to such  successor  Trustee  all
property  and money held by such  retiring  Trustee  with respect to such Series
hereunder,  subject  nevertheless  to its lien, if any,  provided for in Section
7.07  hereof.  Upon  request of any such  successor  Trustee,  the Issuer  shall
execute  any and all  instruments  for more fully and  certainly  vesting in and
confirming  to such  successor  Trustee all such rights,  powers and trusts with
respect to such Series.

         No successor Trustee shall accept its appointment unless at the time of
such  acceptance  such  successor  Trustee shall be eligible  under this Article
Seven.

             Section 7.11 Merger,  Conversion,  Consolidation  or  Succession to
Business  of  Trustee.  Any Person  into which the Trustee for any Series may be
merged  or  converted  or  with  which  it may be  consolidated,  or any  Person
resulting  from any merger,  conversion or  consolidation  to which such Trustee
shall be a party, or any entity  succeeding to all or  substantially  all of the
corporate trust business of such Trustee, shall be the successor of such Trustee
hereunder,  provided such Person shall be otherwise qualified and eligible under
this Article Seven,  without the execution or filing of any paper or any further
act on the part of any of the  parties  hereto.  In case  any  Notes  have  been
authenticated,  but not delivered,  by the related  Trustee then in office,  any
successor by merger,  conversion or consolidation to such authenticating Trustee
may adopt such  authentication  and deliver the Notes so authenticated  with the
same effect as if such successor Trustee had itself authenticated such Notes.

             Section  7.12  Co-Trustees  and Separate  Trustees.  At any time or
times, for the purpose of meeting the legal  requirements of any jurisdiction in
which any portion of any Series  Trust  Estate may at the time be  located,  the
Issuer,  and the Trustee for such Series shall have power to appoint,  and, upon
the written request of such Trustee, or of the Holders representing at least 25%
of the aggregate  principal amount of the Controlling Class of Notes Outstanding
of such  Series,  the Issuer shall for such purpose join with the Trustee in the
execution,  delivery and performance of all instruments and agreements necessary
or proper to appoint,  one or more Persons  approved by such Trustee,  either to
act as  co-Trustee,  jointly with such Trustee of all or any part of such Series
Trust  Estate  for  such  Series,  or to act as  separate  Trustee  of any  such
property,  in either case with such powers as may be provided in the  instrument
of appointment, and to vest in such Person or persons in the capacity aforesaid,
any property,  title,  right or power deemed necessary or desirable,  subject to
the other  provisions  of this Section 7.12. If the Issuer does not join in such
appointment  within 15 days after the receipt by it of a request so to do, or in
case an Event of Default has  occurred  and is  continuing  with respect to such
Series,  the  Trustee  for such  Series  alone  shall  have  power to make  such
appointment.

         Should any written instrument from the Issuer be reasonably required by
any  co-Trustee or separate  Trustee so appointed  for more fully  confirming to
such co-Trustee or separate  Trustee such property,  title,  right or power, any
and all such  instruments  shall,  on request,  be  executed,  acknowledged  and
delivered by the Issuer.

         Every  co-Trustee  or  separate  Trustee for any Series  shall,  to the
extent  permitted by law, but to such extent only,  be appointed  subject to the
following terms:

                   (i) the  Notes  of such  Series  shall be  authenticated  and
         delivered by, and all rights,  powers, duties and obligations hereunder
         in  respect  of the  custody  of  securities,  cash and other  personal
         property  held by, or required to be  deposited  or pledged  with,  the
         Trustee of such Series  hereunder,  shall be  exercised  solely by such
         Trustee;

                  (ii)  the  rights,   powers,  duties  and  obligations  hereby
         conferred  or imposed upon the Trustee of such Series in respect of any
         property covered by such appointment shall be conferred or imposed upon
         and  exercised or performed by such Trustee or by such Trustee and such
         co-Trustee  or separate  Trustee  jointly,  as shall be provided in the
         instrument  appointing such co-Trustee or separate  Trustee,  except to
         the  extent  that  under  any  law of any  jurisdiction  in  which  any
         particular act is to be performed, such Trustee shall be incompetent or
         unqualified  to perform such act, in which event such  rights,  powers,
         duties  and  obligations  shall  be  exercised  and  performed  by such
         co-Trustee or separate Trustee;

                 (iii) the Trustee for any Series at any time,  by an instrument
         in writing executed by it, with the concurrence of the Issuer evidenced
         by a Board  Resolution,  may  accept the  resignation  of or remove any
         co-Trustee or separate  Trustee for such Series,  appointed  under this
         Section  7.12,  and,  in case an Event of Default has  occurred  and is
         continuing, such Trustee shall have power to accept the resignation of,
         or  remove,  any  such  co-Trustee  or  separate  Trustee  without  the
         concurrence  of the Issuer.  Upon the written  request of such Trustee,
         the Issuer shall join with such Trustee in the execution,  delivery and
         performance of all  instruments  and agreements  necessary or proper to
         effectuate such  resignation or removal.  A successor to any co-Trustee
         or  separate  Trustee  that  has so  resigned  or been  removed  may be
         appointed in the manner provided in this Section 7.12;

                  (iv)  no  co-Trustee  or  separate   Trustee  for  any  Series
         hereunder  shall be personally  liable by reason of any act or omission
         of the Trustee for such Series or any other such Trustee  hereunder nor
         shall  the  Trustee  for any  Series  be liable by reason of any act or
         omission of any co-Trustee or separate Trustee selected by such Trustee
         with  due care or  appointed  in  accordance  with  directions  to such
         Trustee pursuant to Section 6.14 hereof; and

                   (v) any Act of  Noteholders  for any Series  delivered to the
         Trustee for such Series shall be deemed to have been  delivered to each
         the co-Trustee and separate Trustee for any Series.

             Section  7.13 Rights with Respect to the  Servicer.  The rights and
obligations  of the Trustee for any Series with  respect to the Servicer for any
Series shall be governed by the Servicing Agreement.

             Section 7.14 Appointment of  Authenticating  Agent. The Trustee for
any Series may appoint an  Authenticating  Agent or Agents  with  respect to the
Notes of such Series which shall be  authorized to act on behalf of such Trustee
to  authenticate  Notes  of such  Series  issued  upon  original  issue  or upon
exchange, registration of transfer or pursuant to Section 3.06 hereof, and Notes
of such  Series so  authenticated  shall be  entitled  to the  benefits  of this
Indenture and shall be valid and obligatory for all purposes as if authenticated
by such Trustee  hereunder.  Wherever reference is made in this Indenture to the
authentication and delivery of Notes by the Trustee or the Trustee's certificate
of  authentication  or the delivery of Notes to the Trustee for  authentication,
such reference shall be deemed to include  authentication and delivery on behalf
of the Trustee by an  Authenticating  Agent and a certificate of  authentication
executed on behalf of the Trustee by an Authenticating Agent and delivery of the
Notes to the Authenticating Agent on behalf of the Trustee.  Each Authenticating
Agent  shall be  acceptable  to the Issuer and a majority  in  principal  amount
Outstanding  of the  Noteholders  and shall at all  times be an entity  having a
combined  capital and surplus of not less than the equivalent of $50,000,000 and
subject to  supervision  or  examination  by Federal or state  authority  or the
equivalent foreign authority,  in the case of an Authenticating Agent who is not
organized and doing business under the laws of the United States of America, any
state  thereof  or the  District  of  Columbia.  If  such  Authenticating  Agent
publishes  reports of  condition  at least  annually,  pursuant to law or to the
requirements of said supervising or examining  authority,  then for the purposes
of this Section 7.14,  the combined  capital and surplus of such  Authenticating
Agent shall be deemed to be its combined capital and surplus as set forth in its
most recent report of condition so published.  If at any time an  Authenticating
Agent  shall  cease to be eligible in  accordance  with the  provisions  of this
Section 7.14, such  Authenticating  Agent shall resign immediately in the manner
and with the effect specified in this Section 7.14.

         Any  entity  into  which  an  Authenticating  Agent  may be  merged  or
converted or with which it may be consolidated, or any entity resulting from any
merger,  conversion or consolidation to which such Authenticating Agent shall be
a party,  or any  entity  succeeding  to the  corporate  agency or entity  trust
business of such  Authenticating  Agent,  shall continue to be an Authenticating
Agent  without  the  execution  or filing of any paper or any further act on the
part of the Trustee or such Authenticating Agent; provided, such entity shall be
otherwise eligible under this Section 7.14.

         An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Issuer.  The Trustee for any Series may at any
time terminate the agency of an  Authenticating  Agent for such Series by giving
written  notice  thereof to such  Authenticating  Agent and to the Issuer.  Upon
receiving such a notice of resignation or upon such a termination, or in case at
any time such Authenticating Agent shall cease to be eligible in accordance with
the  provisions  of this  Section  7.14,  such  Trustee  may appoint a successor
Authenticating  Agent  which  shall be  acceptable  to the Issuer and shall mail
written notice of such appointment by first-class mail, postage prepaid,  to all
Holders  of  Notes  for  such  Series,  if  any,  with  respect  to  which  such
Authenticating Agent will serve, as their names and addresses appear in the Note
Register. Any successor  Authenticating Agent upon acceptance of its appointment
hereunder  shall  become  vested with all the  rights,  powers and duties of its
predecessor   hereunder,   with  like  effect  as  if  originally  named  as  an
Authenticating  Agent.  No  successor  Authenticating  Agent shall be  appointed
unless eligible under the provisions of this Section 7.14.

         The Trustee for each Series agrees to pay to each Authenticating  Agent
for such Series from time to time reasonable compensation for its services under
this Section 7.14,  but each Trustee shall not be entitled to be reimbursed  for
such payments.

         If an  appointment  is made pursuant to this Section 7.14, the Notes of
each Series may have endorsed thereon, in addition to the Trustee's  certificate
of authentication,  an alternate  certificate of authentication in the following
form:

         This  is one of the  Notes  described  in the  within-mentioned  Series
Supplement.

                                      [NAME OF TRUSTEE], as Trustee



                                       By
                                         As Authenticating Agent



                                       By
                                          Authorized Officer

             Section 7.15 Custodian to Hold Contracts.  The Custodian,  as agent
(solely for the purpose of  perfecting  the security  interest of the Trustee of
each Series in the Contracts and the related  Custodian Files) and bailee of the
Trustee of each Series,  shall hold each  Contract,  together with any documents
relating thereto that may from time to time be delivered to the Custodian, until
such time as such Contract is released from the lien of this Indenture  pursuant
to the terms hereof.  Within 10 days of the related  Series  Closing  Date,  the
Custodian  will review each  Custodian  File related to such Series to determine
whether or not such file is complete, and it shall file an exception report with
the Issuer, the Trustee,  the Servicer and each Noteholder of the related Series
within such time  period.  If an  exception  is not cured  within 40 days of the
related  Series  Closing  Date,  the related  Contract  must be  repurchased  by
Trendwest within 30 days of the end of such 40-day period.  The Trustee for such
Series shall have no responsibility or liability for the actions or inactions of
the Custodian.

         The  Trustee of each  Series  shall be under no duty or  obligation  to
inspect,  review or examine the Contracts or the related Custodian Files for any
purpose, including,  without limitation, to determine that the same are genuine,
enforceable  or  appropriate  for the  represented  purpose  or that  they  have
actually  been  recorded or that they are other than what they  purport to be on
their face.


                  ARTICLE EIGHT  OPTIONAL PURCHASE OF RECEIVABLES

             Section 8.01 Optional  Purchase of All Receivables;  Liquidation of
Trust Estate.  On the Business Day immediately  preceding any Payment Date after
the aggregate  principal amount of the then  Outstanding  Notes of any Series is
less than 10% of the original  aggregate  principal  amount of the Notes of such
Series,  the initial Servicer and TFI each shall have the option to purchase all
of the Series Collateral  related to such Series;  provided,  however,  that the
amount to be paid for such  purchase  (as set forth in the  following  sentence)
shall be sufficient to pay any amounts then due and payable with respect to such
Series to the  Trustee  and the  Servicer,  and the full  amount  of  principal,
premium,  if any, and interest then due and payable on the Notes of such Series,
and the  Issuer  shall  redeem  the Notes of such  Series on such  Payment  Date
pursuant to Article X hereof.  To exercise such option,  the initial Servicer or
TFI, as the case may be, shall pay the aggregate  Purchase  Price for all of the
Receivables  supporting  the  Notes of such  Series  and  shall  succeed  to all
interests in and to the Series  Collateral  supporting  such  Series.  The party
exercising such option to repurchase shall deposit the aggregate  Purchase Price
for such  Receivables  into the  Collection  Account  for such  Series,  and the
Trustee shall  distribute  the amounts so deposited in  accordance  with Section
12.02.


                      ARTICLE NINE SUPPLEMENTAL INDENTURES

             Section   9.01   Supplemental   Indentures   Without   Consent   of
Noteholders.  (a) The Issuer, the Servicer and the Trustee,  without the consent
of the Holders of any Notes,  at any time and from time to time,  may enter into
one or more indentures supplemental hereto, in form satisfactory to the Trustee,
for  any of the  following  purposes,  provided  that  any  such  amendment,  as
evidenced by an Opinion of Counsel,  will not have a material  adverse effect on
Noteholders:

                   (1) to correct or amplify the  description of any property at
         any time  subject to the lien of this  Indenture,  or better to assure,
         convey and confirm unto the Trustee any property subject or required to
         be subjected to the lien of this  Indenture,  or to subject to the lien
         of this Indenture additional property; or

                   (2) to  evidence  the  succession  of  another  Person to the
         Issuer,  and the  assumption by such  successor of the covenants of the
         Issuer herein and in the Notes  contained,  in accordance  with Section
         11.02(q) hereof; or

     (3) to add to the  covenants of the Issuer,  for the benefit of the Holders
of all Notes of one or more Series,  or to  surrender  any right or power herein
conferred upon the Issuer; or

     (4) to convey, transfer, assign, mortgage or pledge any property to or with
the Trustee for the benefit of the Noteholders; or

     (5) to evidence the  succession  of the Trustee  pursuant to Article  Seven
hereof.

         No  supplemental  indenture  that  permits the issuance of the Notes in
coupon  form will be of any force and effect  unless the  Trustee and the Issuer
shall have received an Opinion of Counsel to the effect that such amendment will
not  adversely  affect the Issuer's  ability to deduct the interest  paid on the
Notes.  The Trustee is hereby  authorized  to join in the  execution of any such
supplemental  indenture  and to make  any  further  appropriate  agreements  and
stipulations  that  may be  therein  contained,  but the  Trustee  shall  not be
obligated  to enter  into any  such  supplemental  indenture  that  affects  the
Trustee's own rights, duties,  liabilities or immunities under this Indenture or
otherwise.

         Promptly  after the  execution  by the  Issuer,  the  Servicer  and the
Trustee of any supplemental  indenture pursuant to this Section 9.01, the Issuer
shall  mail  to  each  Noteholder  and to the  Rating  Agency  a  copy  of  such
supplemental indenture.

           (b) The Issuer, the Servicer and the Trustee,  without the consent of
the  Holders of the Notes  Outstanding,  at any time and from time to time,  may
enter into one or more Series Supplements,  in form satisfactory to the Trustee,
for the  purpose of issuing a new Series of Notes in  accordance  with the terms
hereof.  Any  Series  Supplement  may  supplement  or  modify  the terms of this
Indenture,  but such  supplements or  modifications  shall only affect the Notes
issued pursuant to such Series Supplement.

             Section 9.02  Supplemental  Indentures with Consent of Noteholders.
With the consent of the Holders of not less than 66-2/3% in principal  amount of
the Controlling  Class of the Notes  Outstanding of each affected Series, by Act
of said  Holders  delivered  to the  Issuer and the  Trustee,  the  Issuer,  the
Servicer and the Trustee may enter into an indenture or indentures  supplemental
hereto for the purpose of adding any  provisions to or changing in any manner or
eliminating  any of the provisions of this Indenture  relating to such Series or
of modifying in any manner the rights of the Holders of the Notes of such Series
under  this  Indenture;  provided,  however,  that the  number of Holders of any
Series required for any  supplemental  indenture may be modified as set forth in
the related Series  Supplement;  provided,  further,  that no such  supplemental
indenture shall,  without the consent of the Holders of each Outstanding Note of
each Series affected thereby:

                   (1) change the Stated Maturity of any Note or the due date of
         any installment of principal of, or any installment of interest on, any
         Note, or reduce the principal  amount thereof or the Note Interest Rate
         or change any place of payment where, or the coin or currency in which,
         any Note or the  interest  thereon is  payable,  or impair the right to
         institute suit for the enforcement of any such payment; or

                   (2)  reduce  the  percentage  in  principal   amount  of  the
         Outstanding  Notes, the consent of the Holders of which is required for
         any such supplemental indenture, or the consent of the Holders of which
         is required for any waiver of  compliance  with certain  provisions  of
         this Indenture or Events of Default or their consequences; or

     (3) impair or adversely  affect the related  Series Trust Estate  except as
otherwise permitted herein; or

     (4) modify or alter the  provisions of the proviso to the definition of the
term "Outstanding"; or

                   (5) modify any of the provisions of this Section 9.02, except
         to increase the percentage of Holders of the  Outstanding  Notes of one
         or more Series  required for any  modification  or waiver or to provide
         that certain other  provisions of this Indenture  cannot be modified or
         waived  without  the  consent  of the Holder of each  Outstanding  Note
         affected thereby; or

                   (6) permit the creation of any lien ranking  prior to or on a
         parity with the lien of this  Indenture with respect to any part of the
         related  Series Trust Estate or terminate the lien of this Indenture on
         any  property at any time  subject  hereto or deprive the Holder of any
         Note of the security afforded by the lien of this Indenture; or

     (7) modify any of Sections  6.01(l) or (2),  6.02,  6.03,  6.08,  6.18,  or
12.02(d) hereof.

         It shall be  necessary  for any Act of  Noteholders  under this Section
9.02 to approve the particular form of any proposed supplemental indenture.

         Promptly  after the  execution  by the  Issuer,  the  Servicer  and the
Trustee of any supplemental  indenture pursuant to this Section 9.02, the Issuer
shall mail to the  Holders of the Notes and the  Placement  Agent a copy of such
supplemental indenture.

             Section 9.03 Execution of Supplemental Indentures. In executing any
supplemental  indenture  permitted  by this  Article  Nine or the  modifications
thereby of the trusts created by this  Indenture,  the Trustee shall be entitled
to receive upon  request,  and  (subject to Section 7.01 hereof)  shall be fully
protected  in  relying  in good faith  upon,  an  Opinion of Counsel  reasonably
acceptable  to the  Trustee  stating  that the  execution  of such  supplemental
indenture is  authorized  or permitted by this  Indenture.  The Trustee may, but
shall not be obligated  to,  enter into any such  supplemental  indenture  which
affects  the  Trustee's  own  duties  or  immunities  under  this  Indenture  or
otherwise.

             Section 9.04 Effect of Supplemental Indentures.  Upon the execution
of any  supplemental  indenture under this Article Nine, this Indenture shall be
modified in accordance therewith,  and such supplemental  indenture shall form a
part of this Indenture for all purposes;  and every Holder of Notes  theretofore
or thereafter authenticated and delivered hereunder shall be bound thereby.

             Section 9.05 Reference in Notes to Supplemental  Indentures.  Notes
authenticated  and delivered after the execution of any  supplemental  indenture
pursuant to this Article Nine may, and if required by the Trustee shall,  bear a
notation in form  approved by the Trustee as to any matter  provided for in such
supplemental indenture. If the Issuer shall so determine,  new Notes so modified
as to  conform,  in the  opinion  of the  Trustee  and the  Issuer,  to any such
supplemental   indenture  may  be  prepared  and  executed  by  the  Issuer  and
authenticated and delivered by the Trustee in exchange for Outstanding Notes.


                         ARTICLE TEN REDEMPTION OF NOTES

            Section 10.01  Redemption  at the Option of the Issuer;  Election to
Redeem.  The Issuer shall have the option to redeem the Notes of any Series,  in
whole but not in part, as to the then Outstanding  Notes of such Series,  on any
Payment Date (the "Redemption Date") after the aggregate principal amount of the
then Outstanding Notes of such Series is less than 10% of the original aggregate
principal amount of the Notes of such Series, at the applicable Redemption Price
plus any fees due hereunder.

         The Issuer shall set the Redemption Date and the Redemption Record Date
for any such Series and give notice  thereof to the Trustee  pursuant to Section
10.02 hereof.

         Installments  of interest and principal due on or prior to a Redemption
Date for a Series  shall  continue to be payable to the Holders of Notes of such
Series called for redemption as of the relevant  Record Dates according to their
terms and the  provisions of Section 3.07 hereof.  The election of the Issuer to
redeem the Notes of any Series pursuant to this Section 10.01 shall be evidenced
by a  Board  Resolution  directing  the  Trustee  to  make  the  payment  of the
applicable  Redemption  Price on all of the Notes of such  Series to be redeemed
from monies deposited with the Trustee pursuant to Section 10.04 hereof.

            Section  10.02  Notice  to  Trustee.  In the case of any  redemption
pursuant to Section  10.01 hereof,  the Issuer shall,  at least 15 days prior to
the Redemption Date, notify the Trustee of such Redemption Date.

            Section 10.03 Notice of  Redemption  by the Issuer.  Upon receipt of
such notice and such deposit set forth in Section 10.02 above, the Trustee shall
provide  notice of redemption  pursuant to Section  10.01 hereof by  first-class
mail,  postage  prepaid,  mailed no later than the  Business Day  following  the
Calculation  Date on which such deposit was made,  to each Holder of Notes whose
Notes are to be redeemed, at his address in the Note Register.

         All notices of redemption shall state:

                   (1)     the Redemption Date;

                   (2)     the Redemption Price; and

                   (3) that on the Redemption  Date,  the Redemption  Price will
         become due and payable upon each such Note,  and that interest  thereon
         shall cease to accrue on the Redemption Date if the Redemption Price is
         paid on such date.

         Notice of  redemption  of the Notes of any Series shall be given by the
Trustee in the name and at the expense of the Issuer.  Failure to give notice of
redemption,  or any  defect  therein,  to any  Holder of any Note  selected  for
redemption  shall not impair or affect the  validity  of the  redemption  of any
other Note.

            Section  10.04  Deposit of the  Redemption  Price.  On or before the
Business Day next preceding any  Redemption  Date, the Issuer shall deposit with
the Trustee or, if there is a Paying  Agent,  with the Paying Agent an amount of
monies  sufficient  to pay the  Redemption  Price of all  Notes  which are to be
redeemed on such Redemption Date plus any fees due hereunder.

            Section 10.05 Notes Payable on Redemption Date. Notice of redemption
having been given as provided in Section 10.03 hereof,  the Notes of each Series
being redeemed shall, on the applicable  Redemption Date, become due and payable
at the  applicable  Redemption  Price and on such  Redemption  Date  (unless the
Issuer shall default in the payment of such  Redemption  Price) such Notes shall
cease to bear  interest.  The Holders of such Notes shall be paid the applicable
Redemption Price by the Paying Agent on behalf of the Issuer; provided, however,
that  installments  of principal and interest  which are due on or prior to such
Redemption  Date  shall be payable  to the  Holders of the Notes of such  Series
registered as such on the relevant Record Dates according to their terms and the
provisions of Section 3.07 hereof.

         If the Holders of any Note called for redemption  shall not be so paid,
the principal and premium,  if any,  shall,  until paid,  bear interest from the
applicable Redemption Date at the applicable Note Interest Rate.


            ARTICLE ELEVEN REPRESENTATIONS, WARRANTIES AND COVENANTS

            Section  11.01  Representations  and  Warranties.  The Issuer hereby
makes the  following  representations  and  warranties  for the  benefit  of the
Trustee and the Noteholders of a Series on which the Trustee relies in accepting
the related Series Trust Estate in trust and in authenticating the Notes of each
Series.  Such  representations and warranties are made as of each Series Closing
Date (and only on the  related  Series  Closing  Date with  respect  to the Note
Purchase Agreements and each Series Supplement), but shall survive the transfer,
grant and assignment of the related Series Trust Estate to the Trustee.

           (a) Organization and Good Standing.  The Issuer is a corporation duly
organized,  validly  existing and in good standing under the law of the State of
Delaware  and each other State where the nature of its  business  requires it to
qualify,  except to the extent that the  failure to so qualify  would not in the
aggregate  materially  adversely affect the ability of the Issuer to perform its
obligations under this Indenture,  each Series  Supplement,  the Notes, the Note
Purchase Agreements, the Custodian Agreement or the Sale Agreement.

           (b)  Authorization.  The Issuer has the  power,  authority  and legal
right to execute,  deliver and perform this Indenture,  each Series  Supplement,
the Notes, the Note Purchase  Agreements,  the Custodian  Agreement and the Sale
Agreement and the execution,  delivery and performance of this  Indenture,  each
Series  Supplement,  the Notes,  the Note  Purchase  Agreements,  the  Custodian
Agreement and the Sale Agreement have been duly  authorized by the Issuer by all
necessary action.

           (c) Binding Obligation.  This Indenture, each Series Supplement,  the
Notes,  the Note  Purchase  Agreements,  the  Custodian  Agreement  and the Sale
Agreement have been duly executed and delivered by the Issuer,  and each of this
Indenture and each Series Supplement, assuming due authorization,  execution and
delivery by the Trustee  and the  Servicer,  the Sale  Agreement,  assuming  due
authorization,  execution and delivery by TFI and Trendwest,  each Note Purchase
Agreement,  assuming due  authorization,  execution and delivery by each initial
purchaser  of  related  Notes,  and  the  Custodian   Agreement,   assuming  due
authorization,  execution  and delivery by the Trustee,  the  Custodian  and the
Servicer,  each constitutes a legal, valid and binding obligation of the Issuer,
enforceable against the Issuer in accordance with its terms except that (A) such
enforcement may be subject to bankruptcy, insolvency, reorganization, moratorium
or other  similar laws (whether  statutory,  regulatory  or  decisional)  now or
hereafter in effect relating to creditors'  rights  generally and (B) the remedy
of specific  performance and injunctive and other forms of equitable  relief may
be subject to certain  equitable  defenses  and to the  discretion  of the court
before which any proceeding therefor may be brought, whether a proceeding at law
or in equity.

           (d) No Violation.  The consummation of the transactions  contemplated
by the fulfillment of the terms of this Indenture,  each Series Supplement,  the
Notes,  the Note  Purchase  Agreements,  the  Custodian  Agreement  and the Sale
Agreement will not conflict  with,  result in any breach of any of the terms and
provisions of or constitute  (with or without  notice,  lapse of time or both) a
default  under the  organizational  documents  or bylaws of the  Issuer,  or any
material indenture,  agreement,  mortgage,  deed of trust or other instrument to
which  the  Issuer  is a party or by which it is bound,  or in the  creation  or
imposition of any Lien upon any of its properties  pursuant to the terms of such
indenture,  agreement,  mortgage, deed of trust or other such instrument,  other
than any Lien created or imposed  pursuant to the terms of this Indenture,  each
Series  Supplement or the Sale Agreement,  or violate any law or, to the best of
the  Issuer's  knowledge,  after  due  inquiry,  any  material  order,  rule  or
regulation  applicable  to the  Issuer of any court or of any  federal  or state
regulatory body,  administrative  agency or other  governmental  instrumentality
having jurisdiction over the Issuer or any of its properties.

           (e) No  Proceedings.  There are no Proceedings or  investigations  to
which the Issuer, or any of the Issuer's Affiliates,  is a party pending, or, to
the  knowledge  of  Issuer,  threatened,  before  any  court,  regulatory  body,
administrative  agency or other  tribunal or  governmental  instrumentality  (A)
asserting the  invalidity of this  Indenture,  any Series  Supplement,  the Sale
Agreement, the Receivables Purchase Agreement, the Note Purchase Agreements, the
Custodian  Agreement  or the Notes,  (B) seeking to prevent the  issuance of the
Notes of any Series or the consummation of any of the transactions  contemplated
by the Sale Agreement,  the Receivables Purchase Agreement,  this Indenture, any
Series Supplement,  the Note Purchase Agreements, the Custodian Agreement or the
Notes of any  Series or (C)  seeking  any  determination  or ruling  that  would
materially and adversely affect the performance by the Issuer of its obligations
under,  or the  validity  or  enforceability  of,  this  Indenture,  any  Series
Supplement,  the Sale Agreement,  the Receivables  Purchase Agreement,  the Note
Purchase Agreements, the Custodian Agreement or the Notes.

           (f) Approvals.  All approvals,  authorizations,  consents,  orders or
other  actions of any Person,  or of any court,  governmental  agency or body or
official,  required  in  connection  with the  execution  and  delivery  of this
Indenture, each Series Supplement,  the Note Purchase Agreements,  the Custodian
Agreement  or the Sale  Agreement  and with the valid and proper  authorization,
issuance and sale of the Notes of each Series pursuant to this Indenture and the
related  Series  Supplement  and the related Note  Purchase  Agreements  (except
approvals of State securities  officials under the Blue Sky laws),  have been or
will be taken or obtained on or prior to the applicable Series Closing Date.

           (g) Name and Place of  Business.  The  Issuer's  legal name is as set
forth in this  Indenture.  The  Issuer has not used or done  business  under any
other name in the previous  five-year  period.  The Issuer's  principal place of
business  and chief  executive  office is  located at 3250  Lakeport  Boulevard,
Klamath Falls, Oregon 97601, or at such other location where all action required
by Section  11.02(f)  hereof  shall have been  taken  place with  respect to the
related  Series Trust  Estate.  The Issuer has not used any other address in the
previous five-year period.

           (h) Transfer and  Assignment.  Upon the delivery to the  Custodian of
the  Contracts  and the  filing of the UCC  financing  statements  described  in
Sections  4.01(c)(vii)  and 4.02(a)  hereof,  the Trustee for the benefit of the
Noteholders  of any  Series  shall  have a  first  priority  perfected  security
interest  in  the  Receivables,  the  Contracts  and  in  the  proceeds  thereof
supporting such Series,  except for Liens  permitted under Section  11.02(a) and
limited to the extent set forth in Section  9-306 of the UCC as in effect in the
applicable  jurisdiction.   All  filings  (including,  without  limitation,  UCC
filings) as are  necessary  in any  jurisdiction  to perfect the interest of the
Trustee in the related  Series Trust Estate (other than the Credits),  including
the transfer of the  Contracts and the payments to become due  thereunder,  have
been made.

           (i) Stockholders of the Issuer.  TFI is the sole holder of all of the
issued and  outstanding  stock of the Issuer;  all of such shares has been fully
paid and are  owned of  record,  free and clear of all  mortgages,  assignments,
pledges,  security  interests,  warrants,  options and rights to  purchase.  The
Issuer  will not permit TFI to transfer  such  shares of the Issuer  without the
consent of the Holders of a majority in principal amount of Notes Outstanding of
each Series.

           (j) Sale  Agreement.  As of the Closing Date,  the Issuer has entered
into the Sale Agreement and the Assignment  with TFI relating to its acquisition
of the Receivables  related to the Contracts  identified  therein and a security
interest in such Contracts and the related Credits,  and the representations and
warranties  made  by  TFI  and  Trendwest  relating  to  such  Contracts,   such
Receivables and such interests in the related Credits have been validly assigned
to and are for the benefit of the Issuer,  the Trustee and the  Noteholders  and
such  representations  and  warranties  are true  and  correct  in all  material
respects.

           (k) Bulk Transfer  Laws.  The transfer,  assignment and conveyance of
the  Receivables and the grant of a security  interest in the related  Contracts
and the related  Credits by TFI to the Issuer  pursuant to the Sale Agreement or
by the Issuer  pursuant to this Indenture is not subject to the bulk transfer or
any similar statutory provisions in effect in any applicable jurisdiction.

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

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

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

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

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

           (n) Tax  Reporting.  The  Issuer  will treat the  acquisition  of the
Receivables and the security  interest in the related  Contracts and the related
Credits  as a sale to the  Issuer  for  federal,  State  and  local  income  tax
reporting and accounting purposes.

           (o)    Subsidiaries.  The Issuer has no subsidiaries.

           (p) Pension Plans.  Each pension plan or profit sharing plan to which
the Issuer is a party has been fully funded in accordance  with the  obligations
of the Issuer set forth in such plan.

     (q)  Constituent  Documents.  The Issuer will not amend its  Certificate of
Incorporation  or its By-Laws without the consent of the Trustee and the Holders
of a majority in principal amount of the Notes Outstanding of each Series.

           (r) Value of  Receivables.  With  respect to each  Series,  as of the
applicable  Series Cut-Off Date, the aggregate  principal balance of the related
Receivables equaled the related Initial Aggregate Collateral Value.

           (s) Term of Contracts. With respect to each Series, as of the related
Series  Closing  Date,  the Series  Contract  Schedule  accurately  reflects the
duration of each related Contract.

            Section  11.02  Covenants.  The Issuer  hereby  makes the  following
covenants  on which the Trustee  relies in  accepting  the Series  Trust  Estate
related to any Series in trust and in  authenticating  the Notes of such Series.
Such covenants are made as of the related Series Closing Date, but shall survive
the transfer, grant and assignment of such Series Trust Estate to the Trustee.

           (a) No  Liens.  Except  for the  conveyances  and  grant of  security
interests hereunder, the Issuer will not sell, pledge, assign or transfer to any
other Person, or grant, create, incur, assume or suffer to exist any Lien on any
portion of the Series Trust Estate  supporting  any Series of Notes now existing
or hereafter  created,  or any interest therein prior to the termination of this
Indenture pursuant to Section 5.01 hereof; the Issuer will notify the Trustee of
the  existence of any such Lien  immediately  upon  discovery  thereof;  and the
Issuer  shall  defend the right,  title and  interest  of the Trustee in, to and
under each Series Trust Estate now  existing or hereafter  created,  against all
claims of third parties claiming through or under the Issuer; provided, however,
that nothing in this Section 11.02(a) shall prevent or be deemed to prohibit the
Issuer  from  suffering  to exist  upon any  Series  Trust  Estate any Liens for
municipal or other local taxes and other  governmental  charges if such taxes or
governmental  charges  shall not at the time be due and payable or if the Issuer
shall currently be contesting the validity  thereof in good faith by appropriate
proceedings and shall have set aside on its books adequate reserves with respect
thereto.

           (b) Delivery of  Collections.  The Issuer agrees to hold in trust and
promptly pay to the  Servicer  all amounts  received by the Issuer in respect of
each Series Trust Estate (other than amounts  distributed  to or for the benefit
of the Issuer pursuant to Article Twelve hereof).

           (c)  Obligations  with  Respect to  Contracts.  The Issuer  will duly
fulfill all  obligations on its part to be fulfilled under or in connection with
each Receivable and will do nothing to impair the rights of the Trustee (for the
benefit of the Noteholders) in the Receivables, the Contracts and any other part
of each Series Trust  Estate.  As long as there is no event of default under the
applicable  Contract,  the Issuer will not disturb the Obligor's use of the Club
in accordance with the rules of the Club.

           (d)  Compliance  with Law.  The Issuer will  comply,  in all material
respects, with all acts, rules,  regulations,  orders, decrees and directions of
any  governmental  authority  applicable  to the  Contracts or any part thereof,
provided,  however,  that the Issuer may  contest  any act,  regulation,  order,
decree or direction in any  reasonable  manner  which shall not  materially  and
adversely  affect the rights of the Trustee (for the benefit of the Noteholders)
in the  Receivables,  the  Contracts  and the related  Credits.  The Issuer will
comply, in all material respects, with all requirements of law applicable to the
Issuer.

           (e) Preservation of Security  Interest.  The Issuer shall execute and
file such continuation  statements and any other documents which may be required
by law or which the Trustee deems  appropriate to fully preserve and protect the
interest of the Trustee (for the benefit of the Noteholders) in the Series Trust
Estate supporting each such Series of Notes.

           (f)  Maintenance  of  Office,  etc.  The  Issuer  will  not,  without
providing 30 days' prior written  notice to the Trustee and each  Noteholder and
without filing such amendments to any previously  filed financing  statements as
the Trustee may require or as may be required in order to maintain the Trustee's
perfected  security interest in the Series Trust Estate (other than the Credits)
supporting  each such  Series of Notes,  (a)  change the  location  of its chief
executive office, or (b) change its name, identity or corporate structure in any
manner which would make any financing statement or continuation  statement filed
by the Issuer in  accordance  with the  Servicing  Agreement  or this  Indenture
seriously  misleading  within the meaning of Article  9-402(7) of any applicable
enactment of the UCC.

           (g) Further Assurances.  Except as set forth in Section 11.02(e), the
Issuer will make,  execute or endorse,  acknowledge,  and file or deliver to the
Trustee from time to time such schedules, confirmatory assignments, conveyances,
transfer  endorsements,  powers of  attorney,  certificates,  reports  and other
assurances  or  instruments  and take such other  steps  relating to each Series
Trust Estate, as the Trustee may request and reasonably require.

           (h) Notice of Liens.  The Issuer  shall  notify the  Trustee and each
Noteholder promptly after becoming aware of any Lien on any Series Trust Estate,
except for any Liens for  municipal or other local taxes if such taxes shall not
at the time be due or payable without penalty.

           (i) Activities of the Issuer. The Issuer (a) shall engage in only (1)
the acquisition, ownership, selling and pledging of the property acquired by the
Issuer pursuant to the Sale Agreement (including the ability to enter into a new
installment  contract with an Obligor  pursuant to an Upgrade),  and causing the
issuance of,  receiving and selling the Notes issued  pursuant to this Indenture
and (2) the exercise of any powers  permitted to corporations  under the General
Corporation  Law of the State of Delaware  which are incidental to the foregoing
or necessary to accomplish  the  foregoing;  (b) will (1) maintain its books and
records  separate from the books and records of any other  entity,  (2) maintain
separate bank accounts and no funds of the Issuer shall be commingled with funds
of any  other  entity,  (3)  keep in  full  effect  its  existence,  rights  and
franchises  as a corporation  under the laws of the State of Delaware,  and will
obtain and preserve its qualification to do business as a foreign corporation in
each  jurisdiction  in which  such  qualification  is or shall be  necessary  to
protect the  validity  and  enforceability  of this  Indenture,  (4) conduct its
business  from an office or office  space  separate  from the  office of TFI and
Trendwest  and will  maintain a telephone  number  separate from that of TFI and
Trendwest,  and (5) operate its business generally so as not to be substantively
consolidated  with  any of its  Affiliates;  and (c) will  not (1)  dissolve  or
liquidate  in whole or in part,  (2) own any  subsidiary  or lend or advance any
moneys  to,  or  make an  investment  in,  any  Person,  (3)  make  any  capital
expenditures,  (4)(A)  commence any case,  proceeding  or other action under any
existing  or future  bankruptcy,  insolvency  or similar  law seeking to have an
order  for  relief  entered  with  respect  to it,  or  seeking  reorganization,
arrangement, adjustment, wind-up, liquidation, dissolution, composition or other
relief  with  respect to it or its debts,  (B) seek  appointment  of a receiver,
trustee,  custodian or other similar  official for it or any part of its assets,
(C) make a general  assignment  for the  benefit  of  creditors  (other  than as
contemplated herein), or (D) take any action in furtherance of, or consenting or
acquiescing  in, any of the foregoing,  (5) guarantee  (directly or indirectly),
endorse or otherwise become contingently liable (directly or indirectly) for the
obligations  of, or own or purchase any stock,  obligations  or securities of or
any other  interest in, or make any capital  contribution  to, any other Person,
(6) merge or consolidate with any other Person,  except as permitted pursuant to
Section 11.02(q) hereof,  (7) engage in any other action that adversely  affects
whether the separate legal  identity of the Issuer will be respected,  including
without  limitation  (A) holding itself out as being liable for the debts of any
other party or (B) acting other than in its corporate  name and through its duly
authorized  officers or agents, or (8) create,  incur,  assume, or in any manner
become liable in respect of any indebtedness other than that contemplated herein
or trade  payables  and  expense  accruals  incurred in the  ordinary  course of
business and which are incidental to its business purpose.  The Issuer shall not
amend any article in its Certificate of  Incorporation or its By-Laws that deals
with any matter discussed above without the prior written consent of the Holders
of not less than 66-2/3% in aggregate principal amount of the Outstanding Notes.

           (j)  Directors.  The  Issuer  agrees  that at all  times at least one
director and one executive officer of the Issuer will not be a director, officer
or employee of any direct or ultimate parent,  or Affiliate of such parent or of
the  Issuer  or a  brother,  sister,  parent,  child  or  spouse  of  any of the
foregoing; provided, however, that (a) such independent director may also be the
independent  officer  and (b) such  independent  director  and such  independent
officer may serve in similar capacities for other "special purpose corporations"
formed  by  the  Issuer  and  its  Affiliates.   The  Issuer's   Certificate  of
Incorporation  shall at all times provide that such  independent  director shall
have a fiduciary duty to the Holders of the Notes.

           (k) Consolidated  Return. The Issuer is not a member of an affiliated
group with TFI or  Trendwest  within the meaning of Section 1504 of the Code and
will not file a consolidated  return with either of TFI or Trendwest for federal
income tax purposes at any time until after the termination of this Indenture.

           (1) Security  Interest in the Contracts  and the Credits.  The Issuer
warrants that it has a valid security  interest in the Contracts and the Credits
and that it will  defend its  security  interest in such  Contracts  and Credits
against all Persons, claims and demands whatsoever. The Issuer shall not assign,
sell,  pledge,  or exchange,  or in any way encumber or otherwise dispose of its
interest  in the  Contracts  and the  Credits,  except as  permitted  under this
Indenture.

           (m) Taxable Income from the  Receivables.  The Issuer shall treat the
Receivables as owned by it for federal, State and local income tax purposes, and
any  affiliated  group of which the  Issuer is a member  within  the  meaning of
section 1504 of the Code shall treat the  Receivables as owned by the Issuer for
federal,  State and local income tax  purposes,  shall report and include in the
computation  of  the  Issuer's  gross  income  for  such  tax  purposes  in  its
consolidated  or  combined  return  the  income  from  the  Receivables  and the
Contracts,  and shall  deduct the  interest  paid or accrued with respect to the
Notes in accordance with its applicable method of accounting for such purposes.

           (n)  Maintenance  of Office or Agency.  The Issuer  will  maintain an
office  or  agency  within  the  United  States of  America  where  Notes may be
presented  or  surrendered  for  payment,  where  Notes may be  surrendered  for
registration of transfer or exchange and where notices and demand to or upon the
Issuer in respect  of the Notes and this  Indenture  may be  served.  The Issuer
hereby initially  appoints the Trustee at the Corporate Trust Office for each of
said purposes. The Issuer will give 30 days' prior written notice to the Trustee
and the Noteholders of any change in the location, of any such office or agency.
If at any time the Issuer  shall fail to  maintain  any such office or agency or
shall fail to furnish the Trustee and the Noteholders  with the address thereof,
such presentations, surrenders, notices and demands may be made or served at the
Trustee,  and the Issuer  hereby  appoints  the Trustee its agent to receive all
such presentations, surrenders, notices and demands.

           (o) Money for Note  Payments to Be Held in Trust.  The Trustee  shall
execute and  deliver,  and if there is any Paying  Agent other than the Trustee,
the Issuer  will cause each  Paying  Agent other than the Trustee to execute and
deliver to the Trustee an instrument in which such Paying Agent shall agree with
the Trustee that,  subject to the provisions of this Section 11.02,  such Paying
Agent will:

                   (i) hold all sums held by it for the payment of  principal of
         or  interest  on Notes  in trust  for the  benefit  of the  Noteholders
         entitled  thereto  until  such sums  shall be paid to such  Persons  or
         otherwise disposed of as herein provided;

     (ii) give the  Trustee  notice of any  Default  by the Issuer (or any other
obligor  upon the Notes) in the making of any payment of  principal or interest;
and

                 (iii) at any time during the  continuance  of any such Default,
         upon the written  request of the Trustee,  forthwith pay to the Trustee
         all sums so held in trust by such Paying Agent.

         The  Issuer  may  at  any  time,  for  the  purpose  of  obtaining  the
satisfaction  and discharge of this Indenture or for any other purpose,  pay, or
by Issuer  Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by such Paying  Agent,  such sums to be held by the Trustee  upon the same
trusts as those upon which such sums were held by such Paying  Agent;  and, upon
such  payment by any Paying  Agent to the  Trustee,  such Paying  Agent shall be
released from all further liability with respect to such money.

           (p)  Enforcement  of  Servicing  Agreement,  the Sale  Agreement  and
Receivables Purchase Agreement.  The Issuer will take all actions necessary, and
diligently  pursue all  remedies  available  to it, to the  extent  commercially
reasonable,  to enforce the  obligations  of the  Servicer  under the  Servicing
Agreement,  TFI and Trendwest under the Sale Agreement and Trendwest,  the Prior
Issuer and TW Holdings under the  Receivables  Purchase  Agreement and to secure
its rights thereunder.

           (q) Issuer May  Consolidate,  etc., Only on Certain Terms. The Issuer
shall  not  consolidate  or merge  with or into any  other  Person  or convey or
transfer its properties and assets  substantially  as an entirety to any Person,
unless:

                   (i) the  Person  (if  other  than the  Issuer)  formed  by or
         surviving such  consolidation or merger or which acquires by conveyance
         or transfer the properties and assets of the Issuer substantially as an
         entirety shall be a Person  organized and existing as a limited purpose
         entity  under the laws of the  United  States of  America  or any State
         thereof and shall have expressly assumed, by an indenture  supplemental
         hereto,  executed  and  delivered to the  Trustee,  in form  reasonably
         satisfactory  to the Trustee,  the  obligation to make due and punctual
         payments of the  principal  of and  interest on all of the Notes and to
         perform every  covenant of this  Indenture on the part of the Issuer to
         be performed or observed; and

     (ii)  immediately  after  giving  effect to such  transaction,  no Event of
Default or Default shall have occurred and be continuing; and

                 (iii)  the  Issuer  shall  have  delivered  to the  Trustee  an
         Officer's  Certificate and an Opinion of Counsel each stating that such
         consolidation,  merger,  conveyance  or transfer and such  supplemental
         indenture  comply  with this  Article  Eleven  and that all  conditions
         precedent  herein relating to such transaction have been complied with;
         and

                  (iv) such consolidation,  merger, conveyance or transfer shall
         be on such terms as shall fully preserve the lien and security  hereof,
         the  perfection  and priority  thereof and the rights and powers of the
         Trustee and the Holders of the Notes hereunder; and

                   (v) the surviving entity shall be a "special purpose entity";
         i.e., shall have an organizational charter substantially similar to the
         Certificate of  Incorporation  and the By-Laws of the Issuer  including
         specific  limitations  on the business  purposes,  and  provisions  for
         independent directors; and

                  (vi) the Issuer shall have obtained the prior written  consent
         of the Holders of the Notes, which shall not be unreasonably withheld.

           (r) Successor  Substituted.  Upon any consolidation or merger, or any
conveyance or transfer of the properties and assets of the Issuer  substantially
as an entirety in accordance with Section 11.02(q) hereof,  the Person formed by
or  surviving  such  consolidation  or merger (if other than the  Issuer) or the
Person to which such  conveyance  or transfer  is made shall  succeed to, and be
substituted  for,  and may  exercise  every right and power of, the Issuer under
this  Indenture  with the same  effect as if such  Person  had been named as the
Issuer herein. In the event of any such conveyance or transfer, the Person named
as the "Issuer" in the first paragraph of this instrument or any successor which
shall  theretofore  have become such in the manner  prescribed  in this  Article
Eleven shall be released  from its  liabilities  as obligor and maker on all the
Notes  and from its  obligations  under  this  Indenture  and may be  dissolved,
wound-up and liquidated at any time thereafter.

           (s) Use of Proceeds.  The proceeds from the sale of the Notes of each
Series  will  be  used  by  the  Issuer  (i)  to  pay  the  related  Acquisition
Consideration,  (ii) to pay the  expenses  associated  with the issuance of such
Notes  pursuant to this  Indenture  and the related  Series  Supplement  and the
transactions  contemplated  hereby,  thereby  and by  the  Sale  Agreement,  the
Receivables  Purchase  Agreement and the  Servicing  Agreement and (iii) for the
Issuer's general  business  purposes.  None of the transactions  contemplated in
this Indenture,  each Series  Supplement,  the Sale  Agreement,  the Receivables
Purchase Agreement or the Servicing Agreement (including the use of the proceeds
from the sale of the  Notes)  will  result in a  violation  of  Section 7 of the
Securities  Exchange Act of 1934, as amended, or any regulations issued pursuant
thereto,  including  Regulations  G, T, U and X of the Board of Governors of the
Federal Reserve System, 12 C.F.R., Chapter II. The Issuer does not own or intend
to carry or purchase any "margin security" within the meaning of said Regulation
G, including  margin  securities  originally  issued by it or any "margin stock"
within the meaning of said Regulation U.

           (t)  Investment  Company  Act of 1940.  The Issuer  will at all times
conduct its operations in a manner which will not subject it to  registration as
an "investment company" under the Investment Company Act of 1940, as amended.

           (u) Transactions  with Affiliates.  The Issuer will not enter into or
cause,  suffer or permit to exist any  arrangement  or contract  with any of its
Affiliates  unless such  arrangement  or contract is fair and  equitable  to the
Issuer,  is  commercially  reasonable  and is an arrangement or contract no less
favorable  to the Issuer than  generally  available on an  arms-length  basis in
equitable transactions with third parties.

           (v) Delivery of Custodian Files.  The Issuer shall deliver,  or cause
to be delivered,  to the Custodian the Custodian  Files related to the Contracts
identified on each Series Contract Schedule within 10 days of the related Series
Closing Date in accordance with Section 4.01(c)(ii) hereof.

           (w) Rule 144A  Transfers.  The Issuer will  deliver  with  reasonable
promptness  any  financial  or other  information  that a Holder may  reasonably
request from time to time to permit such Holder to comply with the  requirements
of Rule 144A under the  Securities Act of 1933, as amended,  in connection  with
the resale of Notes by such Holder.

           (x) The Issuer will not, and will not permit any of its Affiliate to,
purchase,  redeem, prepay or otherwise acquire,  directly or indirectly,  any of
the Notes except in accordance with Article 10 hereof.

           (y) The Issuer  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 each Series Trust Estate  (including  the Contract  Schedule) that the
Issuer may possess,  such access being afforded at no cost to the Issuer (except
during  the  continuance  of an  Event of  Default  hereunder),  but  only  upon
reasonable  request  and during  normal  business  hours so as not to  interfere
unreasonably  with the  Issuer's  normal  operations  or  customer  or  employee
relations, at offices designated by the Issuer.

            Section  11.03 Other  Matters as to the Issuer.  (a)  Limitation  on
Liability of Directors,  Officers,  or Employees of the Issuer.  The  directors,
officers,  or employees  of the Issuer  shall not be under any  liability to the
Trustee, the Noteholders, the Issuer, the Servicer or any other Person hereunder
or pursuant to any document delivered  hereunder,  it being expressly understood
that all such liability is expressly  waived and released as a condition of, and
as  consideration  for, the execution of this Indenture and the issuance of each
Series of Notes.

           (b) Parties Will Not  Institute  Insolvency  Proceedings.  So long as
this  Indenture  is in  effect,  and for one  year  and  one day  following  its
termination,  none of the parties hereto or any Affiliate  thereof will (i) file
any involuntary  petition  against or by the Issuer or (ii) otherwise  institute
any   bankruptcy,   reorganization,   arrangement,   insolvency  or  liquidation
proceeding or other  proceeding under any federal or State bankruptcy or similar
law against or by the Issuer, or (iii) directly or indirectly, collude or act in
concert with, or coerce, entice or provide other encouragement to, the Issuer or
any  creditor of the Issuer in  connection  with any such  filing or  proceeding
described  in clause  (i) or clause  (ii) of this  Section  11.03(b);  provided,
however,  that the Trustee shall not be prohibited  from taking any such actions
after an Event of  Default  if it is acting at the  direction  of Holders of not
less than 66-2/3% in principal amount of Notes  Outstanding (or, with respect to
an Event of  Default  that does not  affect  all  Series  of Notes  Outstanding,
66-2/3% in principal amount of Notes Outstanding of each such affected Series).


                     ARTICLE TWELVE ACCOUNTS AND ACCOUNTINGS

            Section  12.01  Collection of Money.  Except as otherwise  expressly
provided  herein,  the  Trustee  may demand  payment or  delivery  of, and shall
receive and collect,  directly and without  intervention  or  assistance  of any
fiscal agent or other  intermediary,  all money and other property payable to or
receivable by the Trustee pursuant to this Indenture. The Trustee shall hold all
such money and property so received by it as part of the applicable Series Trust
Estate and shall apply it as provided in this Indenture. If any Contract becomes
a Defaulted Contract, the Trustee, upon the written request of the Issuer or the
Servicer  may,  and upon the request of the  Holders of a majority in  principal
amount of the  Outstanding  Notes shall,  take such action as may be  reasonably
necessary  to assist the  Servicer  to  enforce  such  payment  or  performance,
including the institution and prosecution of appropriate  Proceedings.  Any such
action  shall be without  prejudice  to any right to claim a Default or Event of
Default under this  Indenture  and to proceed  thereafter as provided in Article
Six hereof.

            Section 12.02 Collection Account; Distribution Account. (a) Prior to
each Series  Closing  Date,  the Trustee  shall open and maintain an account for
such  Series  (which  shall be  comprised  of a  depository  account and a daily
investment account (collectively,  for each Series, the "Collection  Account")),
which at all times shall be an Eligible  Account and which may be established at
the Collection  Account Bank, for the benefit of the Noteholders of such Series,
for the receipt of (i) amounts  deposited by the  Subservicer  into the Clearing
Account  attributable  to such Series and (ii) any  Reinvestment  Income on such
account. Funds in each Collection Account shall not be commingled with any other
monies.  All monies deposited from time to time in the Collection  Account for a
Series  pursuant to this  Indenture  shall be held in the name of the Trustee as
part of the related Series Trust Estate as herein provided. The fees relating to
each  Collection  Account  shall be paid out of the  investment  income  of such
Collection  Account,  and the Servicer and the Issuer shall be  responsible  for
paying any fees or expenses not paid out of such investment  income. The Trustee
shall not be responsible for paying such fees and expenses.

         Prior to each Series  Closing Date, the Trustee shall open and maintain
a trust account for such Series (for each Series,  the "Distribution  Account"),
which  at all  times  shall  be an  Eligible  Account  for  the  benefit  of the
Noteholders of such Series, for the receipt of (i) amounts  transferred from the
Collection Account for such Series pursuant to Section 12.02(d) hereof, and (ii)
amounts  transferred from the Reserve Account for such Series in accordance with
Section  12.03  hereof  and the  applicable  Series  Supplement.  Funds  in each
Distribution Account shall not be commingled with any other monies. All payments
to be made from time to time by the Issuer to the Noteholders of a Series out of
funds in the related  Distribution  Account  pursuant to this Indenture shall be
made by the Trustee or the Paying Agent of the Issuer. All monies deposited from
time to time in each  Distribution  Account  pursuant to this Indenture shall be
held by the  Trustee  as part of the  related  Series  Trust  Estate  as  herein
provided.   Amounts  deposited  in  each   Distribution   Account  shall  remain
uninvested; provided, however, that if the Trustee has actual knowledge that any
such  amounts will remain in the  Distribution  Account for any Series more than
one  Business  Day after the day amounts are  deposited  in such  account,  such
amounts  shall be deposited in Eligible  Investments,  and any earnings  thereon
shall be remitted by the Trustee to the Collection Account for such Series.

           (b) Upon  Issuer  Order,  the  Trustee  shall  direct the  depository
institution or trust company holding any Collection  Account to invest the funds
in such  Collection  Account in  Eligible  Investments.  The Issuer  Order shall
specify the Eligible Investments in which such amounts shall be invested,  shall
state that the same are  Eligible  Investments  and shall  further  specify  the
percentage of funds to be invested in each Eligible Investment. No such Eligible
Investment shall mature later than the Business Day preceding the next following
Remittance  Date and shall not be sold or disposed of prior to its maturity.  In
the  absence  of an  Issuer  Order,  the  Trustee  shall  invest  funds  in such
Collection  Account in  Eligible  Investments  described  in clause  (vi) of the
definition  thereof.  Eligible  Investments  shall  be made  in the  name of the
Trustee for the benefit of the  Noteholders of the related  Series.  The Trustee
shall have no responsibility for verifying that any investments  directed by the
Issuer are Eligible Investments.

           (c) Any income or other gain from investments in Eligible Investments
as outlined in (b) above shall be credited to the applicable  Collection Account
and any loss resulting from such  investments  shall be charged to such account;
provided,  however, that the Issuer shall make or cause to be made no later than
the applicable  Payment Date a deposit to the applicable  Collection  Account to
the extent of any losses therein  caused as a result of the Issuer's  investment
instructions  provided for herein.  The Trustee shall not be liable for any loss
incurred  on  any  funds  invested  in  Eligible  Investments  pursuant  to  the
provisions of this Section 12.02.

           (d) On each Payment  Date,  the Trustee  shall pay amounts out of the
Collection  Account  for  each  Series  as  set  forth  in  the  related  Series
Supplement.

           (e) Upon the Issuer's or the Trustee's  obtaining actual knowledge of
the  occurrence of any Trigger  Event with respect to any Series,  the Issuer or
the Trustee,  as the case may be,  shall  within two Business  Days of obtaining
such actual knowledge notify the Noteholders of such Series of such occurrence.

            Section  12.03 Reserve  Accounts (a) Prior to the Closing Date,  the
Trustee shall open and maintain a trust account for each Series (with respect to
each  Series,  the  "Reserve  Account"),  which at all times will be an Eligible
Account,  for the benefit of the Noteholders of such Series,  for the receipt of
the deposit of the initial Reserve Account  Required  Balance for such Series by
Issuer  and of  deposits  pursuant  to  Section  5.01 of the  applicable  Series
Supplement.  The Issuer agrees to deposit the initial Reserve  Account  Required
Balance  for each  Series  in the  related  Reserve  Account  on or prior to the
related  Series  Closing Date.  Monies  received in the Reserve  Account for any
Series  will be  invested  at the  written  direction  of the Issuer in Eligible
Investments  during  the term of this  Indenture,  and any  income or other gain
realized  from such  investment,  shall be held by the  Trustee in such  Reserve
Account as part of the related  Series  Trust  Estate as security  for the Notes
subject to disbursement and withdrawal as herein provided.  Unless otherwise set
forth in the applicable Series Supplement, monies shall be subject to withdrawal
in accordance with Section 12.03(d) hereof.

           (b) Upon Issuer Order all or a portion of each Reserve  Account shall
be invested and  reinvested at TFI's  written  direction in one or more Eligible
Investments.  In the absence of an Issuer Order,  the Trustee shall invest funds
in any Reserve Account in Eligible  Investments  described in clause (vi) of the
definition  thereof.  All  income or other gain from such  investments  shall be
credited to the  applicable  Reserve  Account and any loss  resulting  from such
investments  shall be  charged  to the  applicable  Reserve  Account;  provided,
however, that the Issuer shall make or cause to be made on any Remittance Date a
deposit to the  applicable  Reserve  Account to the extent of any losses therein
caused  as a  result  of  the  Issuer's  investment  instructions.  No  Eligible
Investment shall mature later than the Business Day preceding the next following
Payment  Date and  shall  not be sold or  disposed  of  prior  to its  maturity.
Eligible Investments shall be made in the name of the Trustee for the benefit of
the  Noteholders  of the  applicable  Series.  The Trustee  shall provide to the
Servicer a monthly account  statement  showing  deposits and withdrawals in such
month and listing such investments, describing the Eligible Investments in which
such amounts have been invested.

           (c) If any amounts  invested as provided in Section  12.03(b)  hereof
shall be  needed  for  disbursement  from any  Reserve  Account  as set forth in
Section  12.03(d)  hereof,  the  Trustee  shall cause such  investments  of such
Reserve Account to be sold or otherwise  converted to cash to the credit of such
Reserve  Account.  The  Trustee  shall not be  liable  for any  investment  loss
resulting  from  investment  of money in any  Reserve  Account  in any  Eligible
Investment  in  accordance  with the terms hereof (other than in its capacity as
obligor under any Eligible Investment).

           (d)  Disbursements  from the Reserve Account  relating to each Series
shall be made, to the extent funds therefor are available,  only as set forth in
the related Series Supplement.

            Section 12.04 Reports by Trustee to Noteholders. (a) On each Payment
Date,  the Servicer,  on behalf of the Trustee,  shall account to the Holders of
Notes of each Series and to Fitch on which  payments of  principal  and interest
are then being made the amount which  represents  principal and the amount which
represents interest, and shall  contemporaneously  advise the Issuer of all such
payments.  The Servicer,  on behalf of the Trustee,  may satisfy its obligations
under this Section 12.04 by  delivering  the Monthly  Servicer's  Report to each
such  Noteholder,  Fitch and the Issuer.  On or before the 10th day prior to the
Final Payment Date for a Series,  the Trustee shall provide  notice to Fitch and
to the  Holders of the Notes of such  Series of such Final  Payment  Date.  Such
notice  shall  include a statement  that if the Notes of such Series are paid in
full on such Final Payment Date,  interest  shall cease to accrue as of the last
day preceding the date on which such Final Payment Date occurs.

           (b) The  Issuer  shall,  on a monthly  basis  beginning  on the first
Calculation  Date,  confirm the credit rating or, if more than one credit rating
has been  assigned,  each such credit rating of each  institution in which funds
are invested  pursuant to clause (vi) of the definition of Eligible  Investments
and shall  promptly  notify the Trustee and the  Noteholders  if any such credit
rating has been lowered.

           (c) At least  annually,  the Trustee shall  distribute to Noteholders
any Form 1099 or similar  information  returns required by applicable tax law to
be  distributed  to the  Noteholders  and received in  accordance  with the next
sentence. The Trustee shall prepare or cause to be prepared all such information
for distribution by the Trustee to the Noteholders.


               ARTICLE THIRTEEN PROVISIONS OF GENERAL APPLICATION

            Section  13.01  Acts  of  Noteholders.   (a)  Any  request,  demand,
authorization,  direction,  notice,  consent, waiver or other action provided by
this  Indenture  to be  given or taken by  Noteholders  may be  embodied  in and
evidenced by one or more  instruments of  substantially  similar tenor signed by
such Noteholders in person or by an agent duly appointed in writing; and, except
as herein otherwise expressly provided,  such action shall become effective when
such  instrument or instruments  are delivered to the Trustee,  and, where it is
hereby expressly  required,  to the Issuer.  Such instrument or instruments (and
the action embodied therein and evidenced thereby) are herein sometimes referred
to as the "Act" of the Noteholders signing such instrument or instruments. Proof
of execution of any such  instrument or of a writing  appointing  any such agent
shall be  sufficient  for any purpose of this  Indenture and (subject to Section
7.01 hereof)  conclusive in favor of the Trustee and the Issuer,  if made in the
manner provided in this Section 13.01.

           (b) The fact  and date of the  execution  by any  Person  of any such
instrument  or  writing  may be proved in any  manner  which the  Trustee  deems
sufficient.

           (c)    The ownership of Notes shall be proved by the Note Register.

           (d) Any request, demand,  authorization,  direction, notice, consent,
waiver or other  action by the Holder of any Note shall bind the Holder of every
Note issued upon the registration of transfer thereof or in exchange therefor or
in lieu thereof,  in respect of anything done, omitted or suffered to be done by
the Trustee or the Issuer in reliance  thereon,  whether or not notation of such
action is made upon such Note.

           (e) The Holders of not less than 66-2/3% in  principal  amount of the
Controlling  Class of Notes Outstanding of a Series may on behalf of the Holders
of all the Notes of such  Series  waive any Cash  Accumulation  Event or Trigger
Event that occurs with respect to such Series.

            Section 13.02 Notices,  etc., to Trustee,  Issuer,  Servicer and the
Rating Agency. Any request, demand,  authorization,  direction, notice, consent,
waiver or Act of  Noteholders  or other  document  provided or permitted by this
Indenture 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 and the Servicer; 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 and the Servicer
         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 and the Issuer; or

                   (d) to Fitch at One State Street  Plaza,  New York,  New York
         10004  (facsimile  number  (212)  480-4438),  Attention:   Asset-Backed
         Securities,  or at any other address previously furnished in writing to
         the Trustee , the Noteholders or the Issuer.

            Section 13.03 Notices and Other  Documents to  Noteholders;  Waiver.
(a) Where this Indenture  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  (i) to 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.

         Notice  under this  Section  13.03 will be deemed to be given only when
actually received.

         (b) Where this Indenture 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 13.04 Effect of Headings and Table of Contents.  The Article
and Section  headings herein and the Table of Contents are for convenience  only
and shall not affect the construction hereof.

            Section 13.05  Successors and Assigns.  All covenants and agreements
in this Indenture by the Issuer shall bind its  successors and assigns,  whether
so expressed or not.

            Section 13.06 Separability.  In case any provision in this Indenture
or in the Notes  shall be  invalid,  illegal  or  unenforceable,  the  validity,
legality and enforceability of the remaining  provisions shall not in any way be
affected or unpaired thereby.

            Section 13.07 Benefits of Indenture. Nothing in this Indenture or in
the Notes, express or implied,  shall give to any Person, other than the parties
hereto, the Noteholders, and any Paying Agent which may be appointed pursuant to
the provisions hereof, and any of their successors hereunder, any benefit or any
legal or  equitable  right,  remedy or claim under this  Indenture  or under the
Notes.

            Section 13.08 Legal  Holidays.  In any case in which the date of any
Payment  Date or the Stated  Maturity  of any Note shall not be a Business  Day,
then  (notwithstanding  any  other  provision  of the  Notes or this  Indenture)
payment of  principal,  interest,  or premium,  if any, need not be made on such
date,  but may be made on the next  succeeding  Business Day with the same force
and effect as if made on the nominal date of any such Stated Maturity or Payment
Date and,  assuming  such payment is actually made on such  subsequent  Business
Day, no  additional  interest  shall accrue on the amount so paid for the period
from and after any such nominal date.

            Section 13.09  Governing  Law. This Indenture and each Note shall be
construed in  accordance  with and governed by the internal laws of the State of
New York  applicable to  agreements  made and to be performed  therein,  without
regard to the conflict of laws provisions of any State.

            Section 13.10  Counterparts.  This  Indenture may be executed in any
number  of  counterparts,  each of which so  executed  shall be  deemed to be an
original,  but all such counterparts  shall together  constitute but one and the
same instrument.

            Section  13.11  Obligation.  No recourse  may be taken,  directly or
indirectly,   against  any  incorporator,   subscriber  to  the  capital  stock,
stockholder,  partner,  employee,  officer or  director  of the Issuer or of any
predecessor or successor of the Issuer with respect to the Issuer's  obligations
on the  Notes  or under  this  Indenture  or any  certificate  or other  writing
delivered in connection  herewith;  provided,  however,  that this Section 13.11
shall  not  protect  any  Person  from  his,  her or its own  fraud  or  willful
misconduct or from any liability that such Person may incur in another  capacity
under the Transaction Documents.

            Section  13.12  Compliance   Certificates  and  Opinions.  Upon  any
application,  order or request by the Issuer or the  Servicer  to the Trustee to
take any  action  under any  provision  of this  Indenture  for which a specific
request  is  required  under this  Indenture,  the  Issuer or the  Servicer,  as
applicable,  shall furnish to the Trustee an Officer's Certificate of the Issuer
or the Servicer, as applicable,  stating that all conditions precedent,  if any,
provided  for in this  Indenture  relating  to the  proposed  action  have  been
complied with,  except that in the case of any such application or request as to
which the furnishing of a different  certificate is specifically required by any
provision of this Indenture relating to such particular  application or request,
no additional certificate need be furnished.

         Every  certificate  or  opinion  with  respect  to  compliance  with  a
condition or covenant provided for in this Indenture shall include:

                   (a) a statement that each individual signing such certificate
         or opinion has read or has caused to be read such covenant or condition
         and the definitions herein relating thereto;

               (b)  a  brief  statement  as to  the  nature  and  scope  of  the
          examination  or  investigation  upon which the  statements or opinions
          contained in such certificate or opinion are based;

                   (c) a statement that, in the opinion of each such individual,
         such  individual  has made  such  examination  or  investigation  as is
         necessary to enable such  individual to express an informed  opinion as
         to whether or not such covenant or condition  has been  complied  with;
         and

               (d) a  statement  as to  whether,  in the  opinion  of each  such
          individual, such condition or covenant has been complied with.

            Section 13.13 Effective Date of Transactions. This Indenture and the
other  Transaction  Documents shall be deemed to be effective and shall be valid
and enforceable as of the Closing Date, except that each Series Supplement shall
be effective, valid and enforceable as of the related Series Closing Date.

           Section 13.14. Duties of the Parties. This Indenture 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,  the  Servicer  and the Trustee  have
caused  this  Indenture  to be  duly  executed  by the  persons  thereunto  duly
authorized as of the day and year first above written.


                          TRI FUNDING II, INC., Issuer



                                       By:
                                      Name:
                                     Title:


                        TRENDWEST RESORTS, INC., Servicer



                                       By:
                                      Name:
                                     Title:


                         LASALLE NATIONAL BANK, Trustee



                                       By:
                                      Name:
                                     Title:





<PAGE>


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


                                  EXHIBIT A

                            FORM OF INVESTMENT LETTER

                                                         _______________, 19__

[Issuer]
[TFI]
[Servicer]
[Trustee]
[Transferor]


               Re: TRI  Funding II, Inc.  Receivables-Backed  Notes,  Series ___
          [Class___]         No.         R_________         (the         "Note")
          ------------------------------------------- Dear Sirs:

         The undersigned  hereby certifies with respect to the  above-referenced
notes (the "Notes") on behalf of the purchaser named below (the  "Purchaser") as
follows:

               1. I __________________, am the chief financial officer, a person
          fulfilling an equivalent  function or other  executive  officer of the
          Purchaser.

                    2. I am  familiar  with the  provisions  of Rule 144A ("Rule
         144A") under the  Securities  Act of 1933,  as amended (the "1933 Act")
         and Rule 3(c)(7) ("Rule  3(c)(7)") under the Investment  Company Act of
         1940, as amended (the "1940 Act").

               3. The Purchaser is a "qualified institutional buyer," as defined
          in Rule 144A, and a "qualified purchaser," as used in Rule 3(c)(7).

                    4. The  Purchaser is aware that the  addressees  may rely on
         the  exemption  from  the  registration  requirements  of the  1933 Act
         provided by Rule 144A and on the exemption from the investment  company
         registration requirements of the 1940 Act provided by Rule 3(c)(7).

                    5. The  Purchaser  acknowledges  that the  Purchaser has (i)
         received  such  information  regarding  the  issuer of the Notes as the
         Purchaser  may require  pursuant to Rule 144A or (ii) the Purchaser has
         determined not to request such information.

                    6. The Purchaser understands that the Notes are being issued
         only in  transactions  not  involving  any public  offering  within the
         meaning of the 1933 Act.

                    7. The  Purchaser  acknowledges  that transfer of a Note can
         only  be  effected  in  accordance  with  the  Indenture  executed  and
         delivered in connection with the issuance of the Notes.

                    8. The Purchaser  warrants and  represents to, and covenants
         with,  TFI, the Servicer,  the Trustee and the Issuer that either:  (A)
         the Purchaser (i) is not an "employee  benefit plan" within the meaning
         of section 3(3) of the Employee Retirement Income Security Act of 1974,
         as  amended  ("ERISA")  or a  "plan"  within  the  meaning  of  section
         4975(e)(1) of the Internal Revenue Code of 1986 ("Code") (any such plan
         or employee  benefit  plan,  a "Plan"),  and (ii) the  Purchaser is not
         acquiring (or  considered to be acquiring)  the Note with the assets of
         any entity  whose  underlying  assets  include  the assets of a Plan by
         reason of such a Plan's investment in such entity, or (B) the Purchaser
         is an insurance company that is acquiring the Note for its own account,
         with  its  general  corporate  assets  and not  with  the  assets  of a
         "separate  account,"  within the meaning of Section 3(17) of ERISA,  or
         (B) the Prospective Owner is an insurance company that is acquiring the
         Note for its own  account,  with its general  corporate  assets and not
         with the assets of a "separate  account"  within the meaning of Section
         3(17) of ERISA  and the  conditions  of  Prohibited  Transaction  Class
         Exemption 83-1 and/or Class Exemption 95-60 have been satisfied by such
         Prospective Owner, or (C) the Prospective Owner is an insurance company
         that is acquiring the Note with the assets of a separate account within
         the meaning of Section 3(17) of ERISA and the  conditions of Prohibited
         Transaction   Class   Exemption   90-1  have  been  satisfied  by  such
         Prospective  Owner, or (D) the  Prospective  Owner is a bank collective
         investment  fund and the  conditions  of Prohibited  Transaction  Class
         Exemption 91-38 have been satisfied by such Prospective Owner.

         The  representations  and warranties  contained herein shall be binding
upon  the  heirs,   executors,   administrators  and  other  successors  of  the
undersigned.  If  there is more  than one  signatory  hereto,  the  obligations,
representations,  warranties and agreements of the  undersigned are made jointly
and severally.

         Executed at _________________________,  ____________________, this ____
day of ______________, 19__.




--------------------------------     ----------------------------------------
Purchaser's Name and Title (Print)    Signature of Purchaser


--------------------------------
Address of Purchaser


--------------------------------
Purchaser's Taxpayer
Identification or Social
Note Number




<PAGE>


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

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


                                     EXHIBIT B


                  FORM OF SUPPLEMENT FOR GRANT OF INTERESTS IN
                   SUBSTITUTE CONTRACTS AND UPGRADE CONTRACTS


         Pursuant to Section 4.03(e) and Section 4.03(g) of the Indenture, dated
as of March 1, 1998,  among TRI  Funding  II,  Inc.  (the  "Issuer"),  Trendwest
Resorts,  Inc.  (the  "Servicer")  and LaSalle  National  Bank,  as Trustee (the
"Trustee"),  (such Indenture as amended and supplemented  from time to time, the
"Indenture"),  attached  hereto as Annex I is a supplement  to Schedule A of the
Series  Supplement  for the Issuer's  Receivables-Backed  Notes,  Series ______,
which includes information regarding certain interests in certain Contracts, the
related  Receivables  and the  related  Credits  that are hereby  Granted by the
Issuer to the Trustee in  accordance  with the  Indenture.  For purposes of this
Supplement, all defined terms used herein and not otherwise defined herein shall
have the meanings assigned to them in the Indenture.

Dated:

                           TRENDWEST FUNDING II, INC.




                                       By
                                      Name:
                                     Title:




<PAGE>


===============================================================================
                                       -1-
===============================================================================


                                     ANNEX I


                       SUPPLEMENT FOR SUBSTITUTE CONTRACTS
                              AND UPGRADE CONTRACTS






<PAGE>


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

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

                                   EXHIBIT C


                       CERTIFICATE OF ISSUER AND SERVICER
                  PURSUANT TO SECTION 4.04(C) OF THE INDENTURE


         Each of the  undersigned  hereby  certify on behalf of TRI  Funding II,
Inc. (the "Issuer") and Trendwest Resorts, Inc. (the "Servicer"),  respectively,
I have read  Section  4.04(c)  of the  Indenture  dated as of March 1, 1998 (the
"Indenture"),  among the Issuer,  the Servicer  and LaSalle  National  Bank,  as
Trustee (the "Trustee"),  together with the definitions  contained  elsewhere in
the Indenture relating to such Section,  and further, as of the date hereof that
all conditions precedent provided in the Section 4.04(c) relating to the release
of  collateral  from the Series _____ Trust  Estate for  inclusion in the Series
_____ Trust Estate have been complied with.

         IN  WITNESS  WHEREOF,  I have  hereunto  set my hand,  this ____ day of
____________, _______.


                         TRI FUNDING II, INC., as Issuer



  By
       Name:_______________________________________________________
       Title:______________________________________________________



                       TRENDWEST RESORTS, INC., as Issuer



 By
        Name:_______________________________________________________
        Title:______________________________________________________