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                            SERIES 1998-1 SUPPLEMENT
                            Dated as of March 1, 1998

                                       to

                                    INDENTURE
                            Dated as of March 1, 1998

                                      among

                              TRI FUNDING II, INC.
                                   ("Issuer")

                                       and

                             TRENDWEST RESORTS, INC.
                                  ("Servicer")

                                       and

                              LASALLE NATIONAL BANK
                                   ("Trustee")

               $125,000,000 6.88% Receivables-Backed Notes, Series
               1998-1, Class A $5,434,485 7.98% Receivables-Backed
                          Notes, Series 1998-1, Class B





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                                TABLE OF CONTENTS

                                                                          PAGE

Parties.....................................................................1

Preliminary Statement.......................................................1

Granting Clause.............................................................1

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

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

ARTICLE TWO                FORM OF SERIES 1998-1 NOTES......................5

Section 2.01            Form of the Series 1998-1 Notes.....................5

ARTICLE THREE              PRINCIPAL TERMS OF THE SERIES 1998-1 NOTES.......5

Section 3.01            Principal Terms of the Series 1998-1 Notes..........5

ARTICLE FOUR               REPRESENTATIONS, WARRANTIES AND COVENANTS........6

Section 4.01            Representations and Warranties......................6
Section 4.02            Covenants...........................................7

ARTICLE FIVE               MONTHLY DISTRIBUTIONS; RESERVE ACCOUNT...........7

Section 5.01.           Monthly Distributions...............................7
Section 5.02.           Reserve Account.....................................9

ARTICLE SIX                SALE OF SERIES TRUST ESTATE.....................11

Section 6.01.           Disbursements from Sales...........................11

ARTICLE SEVEN              PROVISIONS OF GENERAL APPLICATION...............12

Section 7.01            Ratification of Indenture..........................12
Section 7.02            Amendments.........................................12
Section 7.03            Effect of Headings and Table of Contents...........13
Section 7.04            Governing Law......................................13
Section 7.05            Counterparts.......................................13
Section 7.06            Initial Purchasers.................................13

Signature..................................................................14




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SCHEDULE A            Series Contract Schedule
SCHEDULE B            Pool Information


EXHIBIT A-1           Form of Series 1998-1 Class A Note
EXHIBIT A-2           Form of Series 1998-1 Class B Note
EXHIBIT B             Form of Monthly Servicer's Report




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         SERIES 1998-1 SUPPLEMENT, dated as of March 1, 1998 (herein, as amended
and  supplemented  from time to time,  called this "Series 1998-1  Supplement"),
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  (herein,  together  with  its  permitted
successors and assigns,  called the  "Servicer"),  and LASALLE NATIONAL BANK, as
trustee (the "Trustee").


                              PRELIMINARY STATEMENT

         The Issuer, the Servicer and the Trustee have entered into an Indenture
dated as of March 1,  1998  (the  "Indenture").  Section  9.01 of the  Indenture
provides,  among other things, that the Issuer, the Servicer and the Trustee may
enter into indentures supplemental to the Indenture for, among other things, the
purpose  of  establishing  the  form or  terms of the  Notes  of any  Series  as
permitted in Sections 3.01 and 4.01 of the Indenture.  In connection  therewith,
the Issuer has duly  authorized the execution and delivery of this Series 1998-1
Supplement  and the issuance of two classes of a Series of Notes  designated  as
the "6.88%  Receivables-Backed  Notes,  Series  1998-1,  Class A" (the  "Class A
Notes") and the "7.98%  Receivables-Backed  Notes, Series 1998-1,  Class B" (the
"Class B Notes"  and,  together  with the  Class A  Notes,  the  "Series  1998-1
Notes").  The  Class A Notes  are  limited  in  aggregate  principal  amount  to
$125,000,000, and the Class B Notes are limited in aggregate principal amount to
$5,434,485, all as set forth in this Series 1998-1 Supplement.

         All conditions have been complied with, all actions have been taken and
all things necessary to make this Series 1998-1  Supplement a valid agreement of
the Issuer,  the Servicer and the Trustee in  accordance  with its terms and the
terms of the Indenture have been done.


                                 GRANTING CLAUSE

         To secure the payment of the  principal  of and  interest on the Series
1998-1  Notes in  accordance  with their  terms,  the payment of all of the sums
payable under the Indenture  and this Series 1998-1  Supplement  with respect to
the Series  1998-1 Notes or  otherwise  payable to the Holders of such Notes and
the  performance  of the  covenants  contained in the  Indenture and this Series
1998-1  Supplement  with respect to the Series 1998-1  Notes,  the Issuer hereby
Grants to the Trustee, solely in trust and as collateral security as provided in
the Indenture and this Series 1998-1 Supplement,  for the benefit of the Holders
of the Notes of the Series 1998-1 Notes, 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  relating to
the  Contracts  listed on the Series  Contract  Schedule  attached as Schedule A
hereto or on any supplement to such Series Contract Schedule pursuant to Section
4.03 of the  Indenture,  including  all  proceeds  of such  Receivables  and all
payments  received  on or with  respect  to such  Receivables  and due after the
Series  Cut-Off  Date  (or the date of  transfer  to the  Issuer  in the case of
Receivables  relating to Substitute  Contracts and Upgrade  Contracts related to
the Series 1998-1 Notes);  (b) the Issuer's  rights and interests in the related
Contracts and the related Credits,  including all proceeds of such Contracts and
the  related  Credits  and all  payments  received  on or with  respect  to such
Contracts and the related Credits and due after the Series Cut-Off Date; (c) the
related  Contract Files and the related  Custodian  Files;  (d) all amounts from
time to time on deposit  in the Series  1998-1  Collection  Account,  the Series
1998-1 Distribution Account and the Series 1998-1 Reserve Account (including any
Eligible  Investments and other property in such accounts);  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) (all of the foregoing, together with the interests, rights and
properties  Granted by the Issuer to support the Series 1998-1 Notes pursuant to
the  Indenture,  the "Series  1998-1  Collateral"  or the "Series  1998-1  Trust
Estate").

                             ARTICLE ONEDEFINITIONS

             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  Series  1998-1
Supplement  and the Series 1998-1 Notes,  and the  definitions of such terms are
equally  applicable  both to the singular  and plural forms of such terms.  Each
term defined  herein  shall relate only to the Series  1998-1 Notes and no other
Series of Notes issued under the  Indenture.  Capitalized  terms used herein but
not otherwise defined shall have the respective  meanings assigned to such terms
in the Indenture.

         "Cash  Accumulation  Event":  The  occurrence  of any of the  following
events or conditions:  (i) as of any Calculation  Date, the average  Delinquency
Level for the immediately preceding three Due Periods ending on such Calculation
Date is greater than or equal to 6.67%,  (ii) as of any  Calculation  Date,  the
average Default Rate for the  immediately  preceding three Due Periods ending on
such Calculation Date is greater than or equal to 0.6%.

         "Cash  Accumulation  Event  Period":  Each  period  commencing  at  the
beginning of a Due Period in which any Cash Accumulation Event occurs and ending
immediately  prior to the  beginning of the first  subsequent  Due Period during
which no Cash Accumulation Event occurs. For purposes of this definition, a Cash
Accumulation  Event  shall be deemed to occur  during a Due  Period if as of the
Calculation  Date  occurring  on the  last day of such  Due  Period  there is an
occurrence or existence of a Cash Accumulation Event.

     "Class":  Any of the Class A Notes and Class B Notes of the  Series  1998-1
Notes.

     "Class A Note Interest Rate": 6.88% per annum.

     "Class B Note Interest Rate": 7.98% per annum.

         "Class A Principal  Distribution  Amount": With respect to each Payment
Date, (a) for any Payment Date prior to the Stated Maturity,  an amount equal to
92% of the sum (without duplication) of (i) the principal portion of the amounts
collected by or on behalf of the Issuer in the immediately  preceding Due Period
attributable  to (A) payments by or on behalf of each Obligor of amounts owed on
each Receivable  supporting the Series 1998-1 Notes,  (B) Residual  Proceeds and
Recoveries related to each such Receivable and (C) payments of Purchase Price by
TFI,  the  Issuer or  Trendwest  related to each such  Receivable,  and (ii) the
Collateral  Value as of the related  Calculation Date of any Contract related to
each  such  Receivable  that  became a  Defaulted  Contract  in the  immediately
preceding Due Period; (b) for any Payment Date on which the Principal  Shortfall
Amount is greater  than  zero,  the amount set forth in clause (a) above plus an
amount equal to the Principal Shortfall Amount relating to the Class A Notes and
(c) on the Stated Maturity, an amount equal to the aggregate principal amount of
Class A Notes Outstanding as of such date; provided,  however, any payments that
are  prepayments of principal  made in connection  with an Upgrade in accordance
with the Transaction Documents shall not be included in the determination of the
amount in clause (a) hereof.

         "Class B Principal  Distribution  Amount": With respect to each Payment
Date, (a) for any Payment Date prior to the Stated Maturity,  an amount equal to
4% of the sum (without  duplication) of (i) the principal portion of the amounts
collected by or on behalf of the Issuer in the immediately  preceding Due Period
attributable  to (A) payments by or on behalf of each Obligor of amounts owed on
each Receivable  supporting the Series 1998-1 Notes,  (B) Residual  Proceeds and
Recoveries related to each such Receivable and (C) payments of Purchase Price by
TFI,  the  Issuer or  Trendwest  related to each such  Receivable,  and (ii) the
Collateral  Value as of the related  Calculation Date of any Contract related to
each  such  Receivable  that  became a  Defaulted  Contract  in the  immediately
preceding Due Period; (b) for any Payment Date on which the Principal  Shortfall
Amount is greater  than  zero,  the amount set forth in clause (a) above plus an
amount equal to the Principal Shortfall Amount relating to the Class B Notes and
(c) on the Stated Maturity, an amount equal to the aggregate principal amount of
Class B Notes Outstanding as of such date; provided,  however, any payments that
are  prepayments of principal  made in connection  with an Upgrade in accordance
with the Transaction Documents shall not be included in the determination of the
amount in clause (a) hereof.

     "Controlling  Class":  With respect to the Series 1998-1 Notes, the Class A
Notes until the Class A Notes are paid in full, then the Class B Notes.

     "Initial Aggregate Collateral Value": $135,869,728.73.

     "Initial  Payment  Date":  April 15, 1998, the first Payment Date following
the Series Closing Date relating to the Series 1998-1 Notes.

     "Note Interest Rate":  With respect to the Class A Notes,  6.88% per annum,
and, with respect to the Class B Notes, 7.98% per annum.

     "Note Purchase Agreements":  Each of the Note Purchase Agreements, dated as
of March 1, 1998,  between the Issuer and the  purchasers  of the Series  1998-1
Notes named therein.

     "Principal  Distribution  Amount":  With respect to the Class A Notes,  the
Class A Principal  Distribution  Amount, and, with respect to the Class B Notes,
Class B Principal Distribution Amount.

     "Reserve Account Required Balance": As of any Payment Date, an amount equal
to the greatest of (i) the product of (a) the sum (expressed as a percentage) of
(1) 2% plus  (2) the  product  of .25%  and the  total  number  of  times a Cash
Accumulation  Event has occurred  (for the purposes of this  definition,  a Cash
Accumulation  Event shall be deemed to have occurred only once for any period of
consecutive  Due  Periods  occurring  during a single  Cash  Accumulation  Event
Period) and (b) the principal  balance of the Series 1998-1 Notes Outstanding as
of such Payment Date (after any distributions  made pursuant to Section 12.02(d)
hereof on such date), (ii) $500,000 and (iii) during a Cash  Accumulation  Event
Period, $500,000,000.

     "Reserve Account Standard Balance": As of any Payment Date, an amount equal
to the Reserve  Account  Required  Balance without giving effect to clause (iii)
thereof.

     "Securities Act": Securities Act of 1933, as amended from time to time.

     "Series Closing Date":  With respect to the Series 1998-1 Notes,  March 12,
1998.

     "Series  Cut-Off Date":  With respect to the Series 1998-1 Notes,  March 2,
1998.

     "Series 1998-1 Collection Account":  The Collection Account established for
the Series 1998-1 Notes pursuant to Section 12.02 of the Indenture.

     "Series 1998-1 Distribution  Account":  The Distribution Account related to
the Series 1998-1 Notes pursuant to Section 12.02 of the Indenture.

     "Series 1998-1 Monthly  Servicer's  Report":  The Monthly Servicer's Report
relating to the Series  1998-1  Notes,  a form of which is attached as Exhibit B
hereto.

     "Series 1998-1 Reserve  Account":  The Reserve Account  established for the
Series 1998-1 Notes pursuant to Section 12.03 of the Indenture.

     "Stated Maturity": April 15, 2009.

     "Trigger Event":  Any of the following events or conditions:  (1) if, as of
any  Calculation  Date,  the aggregate  Collateral  Value of Contracts  that are
Delinquent Contracts is greater than or equal to 10% of the Aggregate Collateral
Value  as of the  immediately  preceding  Calculation  Date;  (2) if,  as of any
Calculation  Date, the aggregate  Collateral  Value of Defaulted  Contracts that
became Defaulted Contracts in the related Due Period is greater than or equal to
0.80%  of  the  Aggregate  Collateral  Value  as of  the  immediately  preceding
Calculation  Date;  (3) an Event of Default  or  Servicer  Event of Default  has
occurred and is continuing;  (4) (a) WorldMark voluntarily incurs or is any time
voluntarily  liable  for any  debt,  or any of its  property  voluntarily  is or
voluntarily  becomes  subject to any Liens  (other  than (i)  utility or similar
easements  or licenses  which do not relate to  borrowings  by WorldMark or (ii)
Liens that in the aggregate for all properties do not exceed  $100,000),  or (b)
WorldMark involuntarily incurs or is any time involuntarily liable for any debt,
or any of its property  involuntarily is or involuntarily becomes subject to any
Liens (other than utility or similar  easements or licenses  which do not relate
to borrowings by WorldMark) that  individually or in the aggregate (with respect
to all  such  debt  and  the  obligations  secured  by all  such  Liens)  exceed
$1,000,000;  (5) WorldMark sells, leases or otherwise  transfers  voluntarily or
otherwise, any of its real estate properties or any interest therein so that, in
the  aggregate,  there is a net  decrease  in Credits  available  for member use
greater than or equal to 10% from the number of Credits available for member use
on the Closing Date;  (6) if on the Payment Date after the fifth  anniversary of
the Closing Date, the aggregate principal amount of Notes Outstanding is greater
than  $15,000,000;  (7) WorldMark  exchanges one of its present  properties  for
another property that is worth fewer Credits than the property so exchanged;  or
(8)  WorldMark  has  interests  in  units  at  fewer  than 20  developed  resort
properties.

     "Trigger  Event Period":  Each period  commencing at the beginning of a Due
Period in which any Trigger Event occurs or exists and ending  immediately prior
to the beginning of the first subsequent Due Period that follows a period of six
consecutive Due Periods during which no Trigger Event occurs or exists.

                     ARTICLE TWO FORM OF SERIES 1998-1 NOTES

             Section 2.01 Form of the Series 1998-1 Notes. The Class A Notes and
the Class B Notes  shall be in  substantially  the form set forth in Exhibit A-1
and Exhibit A-2,  respectively,  to this Series 1998-1  Supplement as such forms
may be completed  pursuant to Section 3.01 hereof,  the terms of which  Exhibits
are herein  incorporated  by reference  and which are made a part of this Series
1998-1 Supplement,  with such appropriate insertions,  omissions,  substitutions
and other  variations  as are required or permitted by the Indenture and by this
Series 1998-1 Supplement.

            ARTICLE THREE PRINCIPAL TERMS OF THE SERIES 1998-1 NOTES

             Section  3.01  Principal  Terms of the  Series  1998-1  Notes.  The
Principal Terms of the Series 1998-1 Notes shall be as follows:

     (a) There is hereby  created a Series of Notes to be issued in two  classes
under the Indenture and this Series 1998-1  Supplement  designated as the "6.88%
Receivables-Backed   Notes,   Series   1998-1,   Class   A"   and   the   "7.98%
Receivables-Backed Notes, Series 1998-1, Class B," collectively being the Series
1998-1 Notes herein referred to.

     (b) The Series  1998-1 Notes shall  constitute a single Series of the Notes
under the Indenture,  which Series is limited in aggregate  principal  amount to
$130,434,485,  consisting  of the  Class A  Notes,  which  Class is  limited  in
aggregate  principal amount to $125,000,000,  and the Class B Notes, which Class
is limited in aggregate principal amount to $5,434,485 (except for Series 1998-1
Notes of each Class authenticated and delivered upon registration of transfer or
in exchange for or in lieu of, other Series 1998-1 Notes of such Class  pursuant
to Sections 3.04, 3.05, 3.06 or 9.05 of the Indenture).

     (c) The  Series  1998-1  Notes  shall be  originally  issued on the  Series
Closing Date. The Class A Notes shall bear interest monthly at the rate of 6.88%
per annum and the Class B Notes shall bear interest monthly at the rate of 7.98%
per annum,  payable  with  respect to each Class from and  including  the Series
Closing Date or the most recent Payment Date to which interest has been paid, on
each Payment Date, commencing on the Initial Payment Date.


             ARTICLE FOUR REPRESENTATIONS, WARRANTIES AND COVENANTS

     Section 4.01  Representations  and Warranties.  The Issuer hereby makes the
following  representations  and warranties as of the Series Closing Date for the
benefit of the Holders of the Series 1998-1 Notes.

     (a) No Untrue  Statements of Material Fact.  None of the information in the
Transaction Documents or in any other document, certificate,  written statement,
report,  financial statement or schedule furnished by or on behalf of the Issuer
in connection with the issuance of the Series 1998-1 Notes,  contains any untrue
statement of a material fact, and all of such documents when read together,  but
not  independently,  do not omit any statement of a material  fact  necessary in
order to make the statements contained therein not misleading.

     (b) Private Offering by the Issuer. Neither the Issuer nor anyone acting on
its behalf  has  offered  the Notes or any  similar  securities  for sale to, or
solicited  any offer to buy any of the same from,  or  otherwise  approached  or
negotiated in respect  thereof with, any person other than the purchasers of the
Series 1998-1 Notes and not more than 49 other institutional investors.  Neither
the Issuer nor anyone acting on its behalf has taken,  or will take,  any action
which would  subject  the  issuance  or sale of the Series  1998-1  Notes to the
registration requirement of Section 5 of the Securities Act.

     (c) Pool  Information.  As of the Series Cut-Off Date, the  information set
forth on Schedule B hereto is true and correct.

     (d) Number of Credits.  As of February 15, 1998,  the  aggregate  number of
Credits was 411,470,000.

     Section  4.02  Covenants.  (a) The Issuer  will,  upon receipt of a written
request  from any  Holder of a Series  1998-1  Note,  promptly  provide  to such
Holder,  or any  prospective  purchaser of such Series 1998-1 Note designated by
such Holder, any information necessary to permit compliance with Rule 144A under
the Securities Act, or any successor rule.

     (b) Each of the  Issuer,  the  Servicer  and the Trustee  shall  deliver to
Structured Finance Advisors,  Inc. ("SFA"),  17 Talcott Notch Road,  Farmington,
Connecticut 06032, Attention:  Asset Manager, copies of all notices, reports and
other  documents  that it is  required  to deliver  to the Rating  Agency or the
Holders of the Series 1998-1 Notes  pursuant to the Servicing  Agreement and the
Indenture.


               ARTICLE FIVE MONTHLY DISTRIBUTIONS; RESERVE ACCOUNT

     Section  5.01.  Monthly  Distributions.  On each Payment Date, if either no
Default or Event of Default shall have  occurred and be continuing  with respect
to the Series  1998-1 Notes or a Default or Event of Default shall have occurred
and be  continuing  with respect to such Notes but the entire  unpaid  principal
amount of such Notes shall not have been declared,  have automatically become or
otherwise  have  become,  due  and  payable  pursuant  to  Section  6.02  of the
Indenture,  then on such Payment  Date,  after making all transfers and deposits
into the Series 1998-1  Distribution  Account from the Series 1998-1  Collection
Account  pursuant to Section 12.02(a) of the Indenture or from the Series 1998-1
Reserve  Account  pursuant to clauses (i) and (iii) of Section 5.02 hereof,  the
Trustee shall withdraw from the Series 1998-1  Distribution  Account (other than
amounts  representing  payments of Receivables due after the related Calculation
Date  immediately  preceding  such Payment  Date),  and shall make the following
disbursements  in the following  order in accordance  with the provisions of and
instructions on the Series 1998-1 Monthly Servicer's  Report;  provided that the
Trustee  shall,  to  the  extent  funds  are  available  in  the  Series  1998-1
Distribution  Account,  make  payments  under  clauses  (i) and (ii)  below  and
interest  payments  based on the  outstanding  principal  balance  of the Series
1998-1  Notes (to the  extent it can do so  without  withdrawing  funds from the
Series  1998-1  Reserve  Account)  even if it shall not have received the Series
1998-1 Monthly Servicer's Report:

     (i) to pay to the Trustee the  Trustee  Fee  relating to the Series  1998-1
Notes and any  expenses  incurred  by the  Trustee  relating  to such  Series in
accordance with Section 7.07(ii) of the Indenture then due;

     (ii) to pay to the Servicer (during a Cash  Accumulation  Event Period,  or
during a Trigger Event Period or if such Servicer is not the initial Servicer or
an Affiliate thereof): (A) the Servicer Fee relating to the Series 1998-1 Notes;
and (B) the amounts  necessary  to  reimburse  the  Servicer  and any  successor
Servicer as provided in Section 3.09 of the Servicing  Agreement for  reasonable
costs and expenses  incurred by the Servicer  relating to such Series (including
reasonable  attorney's fees and  out-of-pocket  expenses) in connection with the
realization,  attempted  realization  or enforcement of rights and remedies upon
Defaulted  Contracts  related  to such  Series  and  from  amounts  received  as
Recoveries from such Defaulted Contracts;

     (iii) to pay the aggregate interest due on the Outstanding Class A Notes on
that Payment Date and any overdue interest, to be applied as provided in Section
3.07 of the Indenture;

     (iv) to pay the aggregate  interest due on the Outstanding Class B Notes on
that Payment Date and any overdue interest, to be applied as provided in Section
3.07 of the Indenture;

     (v) to pay the Class A Principal  Distribution  Amount for all  Outstanding
Class A Notes on that Payment Date, to be applied to the payment of Class A Note
principal as provided in Section 3.07 of the Indenture;

     (vi) on each  Payment  Date  relating  to a Due Period  occurring  during a
Trigger Event Period, apply any remaining funds to the payment of principal on a
pro  rata  basis to the  Holders  of the  Class A Notes  Outstanding  until  the
principal  outstanding  on such Notes is paid in full (after taking into account
the payments of Note principal  made pursuant to clause (v) above),  then to the
Holders of the Class B Notes  Outstanding until the principal owed on such Notes
is paid in full;

     (vii) to  deposit  into the Series  1998-1  Reserve  Account  (A) an amount
necessary to bring the balance therein to an amount equal to the Reserve Account
Required  Balance or (B) on each Payment Date relating to a Due Period occurring
during a Cash Accumulation Event Period, all remaining funds in the Distribution
Account;

     (viii) to pay the Class B Principal Distribution Amount for all Outstanding
Class B Notes on that Payment Date, to be applied to the payment of Class B Note
principal as provided in Section 3.07 of the Indenture;

     (ix)  to pay to the  Servicer  (so  long  as  the  initial  Servicer  or an
Affiliate  thereof is the  Servicer and without  duplication  of amounts paid to
such Servicer  pursuant to clause (ii) of this Section  5.01):  (A) the Servicer
Fee  relating  to the Series  1998-1  Notes;  and (B) the amounts  necessary  to
reimburse the Servicer and any successor Servicer as provided in Section 3.09 of
the  Servicing  Agreement  for  reasonable  costs and  expenses  incurred by the
Servicer  relating  to such Series  (including  reasonable  attorney's  fees and
out-of-pocket   expenses)  in  connection   with  the   realization,   attempted
realization  or  enforcement  of rights and remedies  upon  Defaulted  Contracts
related  to such  Series  and from  amounts  received  as  Recoveries  from such
defaulted Contracts;

     (x) to reimburse  the  Noteholders  for any  reasonable  costs and expenses
incurred  in  connection  with  any  enforcement  action  with  respect  to this
Indenture or the Notes or any other Transaction Documents;

     (xi) to pay to TFI  the  interest  due  TFI  under  the  Subordinated  Note
relating to the Series 1998-1 Notes;

     (xii) to pay to TFI,  to the extent  available,  the  principal  due to TFI
under the Subordinated Note relating to the Series 1998-1 Notes;

     (xiii) to pay to the  Trustee any other  amounts  due to the  Trustee  with
respect to the  Series  1998-1  Notes as  expressly  provided  herein and in the
Servicing Agreement;

     (xiv) to pay to the  Servicer  any  other  amounts  due the  Servicer  with
respect to the  Series  1998-1  Notes as  expressly  provided  herein and in the
Servicing Agreement; and

     (xv) to remit any excess funds to or at the direction of the Issuer.

     Prior to each Payment Date, the Trustee shall review the Monthly Servicer's
Report relating to the Series 1998-1 Notes and shall determine that the Servicer
has  properly  calculated  the  aggregate  amounts  that  are to be  distributed
pursuant to clauses (i),  (ii)(A),  (iii),  (iv), (v), (vi), (vii) and (viii) of
this Section 5.01 on such Payment Date.

     The  Trustee,  based  solely on the  information  set forth on the  Monthly
Servicer's Report, shall cause the funds necessary to make the distributions set
forth in this Section 5.01 to be transferred into the Series 1998-1 Distribution
Account from funds in the Series 1998-1  Collection  Account on the Business Day
immediately preceding the related Payment Date.

     The foregoing  provisions  of paragraph  5.01  notwithstanding,  any monies
deposited in the Series  1998-1  Distribution  Account for purposes of redeeming
the Series 1998-1 Notes pursuant to Article Ten of the Indenture shall,  subject
to Section 11.02(o) of the Indenture,  remain in the Series 1998-1  Distribution
Account until used to redeem such Notes.

     Section 5.02. Reserve Account. Disbursements from the Series 1998-1 Reserve
Account  shall be made,  to the extent  funds  therefor are  available,  only as
follows:

     (i) in the event that the amount in the Series 1998-1 Collection Account at
1:00 p.m.,  Chicago time, on the  Determination  Date immediately  preceding any
Payment Date (other than amounts representing  payments of Receivables due after
the related  Calculation Date  immediately  preceding such Payment Date) is less
than the sum of the amounts  required  to be  transferred  to the Series  1998-1
Distribution Account on the related Remittance Date for distribution pursuant to
clauses (i) through (v) of Section 5.01 hereof, the Trustee shall, in accordance
with the Series 1998-1 Monthly Servicer's Report, withdraw funds from the Series
1998-1 Reserve  Account on or prior to 4:00 p.m.,  Chicago time, on the Business
Day immediately preceding such Payment Date to the extent necessary to make such
payments  on such  Payment  Date and deposit  such funds into the Series  1998-1
Distribution Account;

     (ii) subject to subparagraphs  (iii), (iv) and (v) of this Section 5.02 and
Section  5.01,  in the event that on any Payment  Date the balance in the Series
1998-1  Reserve  Account  equals  an amount  greater  than the  Reserve  Account
Required  Balance  (after giving effect to the  distributions  listed in Section
5.01(i)  through (v) hereof on such Payment Date in  accordance  with the Series
1998-1  Monthly  Servicer's  Report),  the Trustee shall  withdraw  funds in the
Series 1998-1 Reserve Account in such amount so that the remaining amount in the
Series  1998-1  Reserve  Account  after such  withdrawal  will equal the Reserve
Account  Required  Balance,  and the Trustee shall deposit such withdrawn  funds
into the  Distribution  Account for distribution in accordance with Section 5.01
hereof;

     (iii) in the event that on any Payment  Date a Trigger  Event has  occurred
and is continuing  with respect to the Series 1998-1 Notes,  the Trustee  shall,
but only at the  direction  of  Holders of not less than  66-2/3%  in  principal
amount of the Controlling Class of the Series 1998-1 Notes Outstanding, withdraw
all funds from the Series 1998-1  Reserve  Account (or any such lesser amount of
such funds as such  Holders may  direct) and deposit  such funds into the Series
1998-1  Distribution  Account for disbursement in accordance with the provisions
of Section 5.01 hereof;

     (iv) subject to subparagraph  (iii) of this Section 5.02, in the event that
on any Payment Date a Trigger Event has occurred and is continuing  with respect
to the  Series  1998-1  Notes at a time  when the  amount in the  Series  1998-1
Reserve  Account is greater  than the  Reserve  Account  Standard  Balance,  the
Trustee shall withdraw funds from the Series 1998-1 Reserve  Account and deposit
such funds into the Series  1998-1  Distribution  Account  for  disbursement  in
accordance with the provisions of Section 5.01 hereof to the extent necessary so
that after such  withdrawal  the amount in the  Series  1998-1  Reserve  Account
equals the Reserve Account Standard Balance;

     (v) in the event that a Cash Accumulation  Event occurs with respect to the
Series 1998-1 Notes and is  subsequently  cured,  the Trustee shall withdraw the
amount that is in the Series  1998-1  Reserve  Account  that is greater than the
Reserve  Account  Required  Balance  (after giving  effect to the  distributions
listed in clauses  (i)  through (v) of Section  5.01 on such  Payment  Date) and
distribute  such amount pursuant to clauses (viii) through (xv) of Section 5.01,
in accordance with the Series 1998-1 Monthly Servicer's Report; and

     (vi) on the Final  Payment  Date,  to the  extent  any funds  remain in the
Series  1998-1  Reserve  Account  after  distributions  pursuant  to clauses (i)
through (v) of Section  5.01,  such  remaining  amounts shall be used to pay the
amounts set forth in clauses (viii) through (xv) of Section 5.01 hereof.


                     ARTICLE SIX SALE OF SERIES TRUST ESTATE

     Section  6.01.  Disbursements  from Sales.  If the Series 1998-1 Notes have
been declared,  have  automatically  become, or otherwise become due and payable
following an Event of Default and such declaration of automatic acceleration has
not been rescinded or annulled,  any money collected by the Trustee with respect
to the Series 1998-1 Notes pursuant to Article Six of the Indenture or otherwise
and any other money that may be held  thereafter  by the Trustee as security for
the Series 1998-1 Notes,  including without limitation the amounts in the Series
1998-1 Reserve Account,  shall be applied in the following order, 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 of the Series
1998-1 Notes:

     FIRST: To the payment to the Trustee of the Trustee Fee with respect to the
Series  1998-1  Notes and its  expenses  then due and to the  Trustee  its costs
incurred in connection  with enforcing the remedies  provided for in Article Six
of the Indenture, in each case, with respect to such Series;

     SECOND:  To the payment of, if Trendwest or an Affiliate thereof is not the
Servicer,  all amounts due the Servicer  with respect to the Series 1998-1 Notes
pursuant to Section 3.09 of the Servicing Agreement and Section 5.01 hereof;

     THIRD:  To the payment of the amounts  then due and unpaid upon the Class A
Notes  for  interest,  with  interest  (to the  extent  such  interest  has been
collected by the Trustee or a sum sufficient  therefor has been so collected and
payment  thereof  is  legally  enforceable  at  the  respective  rate  or  rates
prescribed  therefor in such Notes) on overdue principal and interest,  ratably,
without  preference  or priority of any kind,  according  to the amounts due and
payable on such Notes for interest;

     FOURTH:  To the payment of the amounts then due and unpaid upon the Class B
Notes  for  interest,  with  interest  (to the  extent  such  interest  has been
collected by the Trustee or a sum sufficient  therefor has been so collected and
payment  thereof  is  legally  enforceable  at  the  respective  rate  or  rates
prescribed  therefor in such Notes) on overdue principal and interest,  ratably,
without  preference  or priority of any kind,  according  to the amounts due and
payable on such Notes for interest;

     FIFTH: To the payment of the remaining outstanding principal balance of the
Class A Notes  ratably  without  preference  or priority of any kind within such
Class;

     SIXTH: To the payment of the remaining outstanding principal balance of the
Class B Notes  ratably  without  preference  or priority of any kind within such
Class;

     SEVENTH: To the payment to the Trustee any other amounts due to the Trustee
with respect to the Series 1998-1 Notes as expressly  provided in the Indenture,
herein or in the Servicing Agreement;

     EIGHTH:  To  reimburse  the  Holders  of the Class A Notes for any costs or
expenses incurred in connection with any enforcement action with respect to this
Indenture or such Notes or any other Transaction Document;

     NINTH:  To the  payment of, if  Trendwest  or an  Affiliate  thereof is the
Servicer,  all amounts due the Servicer  with respect to the Series 1998-1 Notes
pursuant to Section 3.09 of the Servicing Agreement and Section 5.01 hereof;

     TENTH:  To  reimburse  the  Holders  of the  Class B Notes for any costs or
expenses incurred in connection with any enforcement action with respect to this
Indenture or such Notes or any other Transaction Document; and

     ELEVENTH:  To the payment of any surplus to or at the written  direction of
the Issuer or any other person legally entitled thereto.

                 ARTICLE SEVEN PROVISIONS OF GENERAL APPLICATION

     Section 7.01  Ratification  of Indenture.  As  supplemented  by this Series
1998-1  Supplement,  the Indenture is in all respects ratified and confirmed and
the Indenture as so supplemented by this Series 1998-1 Supplement shall be read,
taken and construed as one and the same  instrument.  In the event that any term
or provision  contained  herein shall conflict with or be inconsistent  with any
term or provision  contained in the Indenture,  the terms and provisions of this
Series 1998-1 Supplement shall be controlling.

     Section 7.02  Amendments to the Documents.  With the consent of the Holders
of not less  than  66-2/3%  in  principal  amount  of the  Series  1998-1  Notes
Outstanding, 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  or  to  the  Indenture  or  amendments  to  the  Servicing
Agreement,  the Receivables  Purchase Agreement,  the Custodian Agreement or the
Sale  Agreement  for the purpose of adding any  provisions to or changing in any
manner or eliminating any of the provisions of the  Transaction  Documents or of
modifying  in any manner the rights of the  Holders of the Notes of such  Series
under the Indenture and this Series 1998-1 Supplement,  provided,  however, that
this  provision  shall in no way affect the  requirement  in Section 9.02 of the
Indenture  that  all of the  affected  Holders  consent  to  certain  amendments
specified in such Section.  Notwithstanding the foregoing and anything contained
herein to the  contrary,  the  Issuer  may amend the  Series  Contract  Schedule
attached hereto as Schedule A from time to time with a supplement, substantially
in the form of Exhibit B to the Indenture,  in accordance  with Section  4.03(e)
and Section  4.03(g) of the Indenture  without the consent of the Holders of the
Series 1998-1 Notes.

     Section  7.03 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 7.04 Governing  Law. This Series 1998-1  Supplement and each Series
1998-1 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 7.05 Counterparts. This Series 1998-1 Supplement 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 7.06 Initial  Purchasers.  The Trustee hereby  acknowledges that it
has received and has  reflected in the Note Register for the Series 1998-1 Notes
the  information  relating to the initial  purchasers of the Series 1998-1 Notes
set forth in Annex 1 to the Note Purchase Agreements.



<PAGE>



     IN WITNESS  WHEREOF,  the Issuer,  the Servicer and the Trustee have caused
this Series 1998-1  Supplement to be duly executed by their respective  officers
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>


===============================================================================
                                    EXHIBIT A
===============================================================================


                                   EXHIBIT A-1

                       FORM OF SERIES 1998-1 CLASS A NOTE






<PAGE>


==============================================================================
                                    EXHIBIT A
==============================================================================


                                   EXHIBIT A-2

                       FORM OF SERIES 1998-1 CLASS B NOTE






<PAGE>


==============================================================================
                                    EXHIBIT A
==============================================================================


                                    EXHIBIT B

                 FORM OF SERIES 1998-1 MONTHLY SERVICER'S REPORT






<PAGE>


==============================================================================
                                    EXHIBIT A
==============================================================================



                                   SCHEDULE A

                            SERIES CONTRACT SCHEDULE







<PAGE>


==============================================================================
                                    EXHIBIT A
==============================================================================




                                   SCHEDULE B
                                POOL INFORMATION