RECEIVABLES SALE AGREEMENT

                           DATED AS OF JANUARY 7, 2000

                                     BETWEEN

                             TRENDWEST RESORTS, INC.

                                  as Originator

                                       AND

                              TW HOLDINGS III, INC.

                                    as Buyer

<PAGE>

                                TABLE OF CONTENTS

                                                                            Page


ARTICLE I AMOUNTS AND TERMS OF THE PURCHASES..... .............................1

         Section 1.1       Purchases of Receivables............................1
         Section 1.2       Payment for the Purchases...........................3
         Section 1.3       Adjustments for Dilutions...........................4
         Section 1.4       Repurchase of Receivables...........................5
         Section 1.5       Upgrade Contracts...................................7
         Section 1.6       Payments and Computations, Etc......................7
         Section 1.7       Transfer of Records.................................8
         Section 1.8       Characterization....................................8

ARTICLE II REPRESENTATIONS AND WARRANTIES......................................9

         Section 2.1       Representations and Warranties of Originator........9

ARTICLE III CONDITIONS OF PURCHASES...........................................14

         Section 3.1       Conditions Precedent to Initial Purchase...........14
         Section 3.2       Conditions Precedent to All Purchases..............14

ARTICLE IV COVENANTS..........................................................15

         Section 4.1       Affirmative Covenants of Originator................15
         Section 4.2       Negative Covenants of Originator...................20

ARTICLE V AMORTIZATION EVENTS.................................................21

         Section 5.1       Amortization Events................................21
         Section 5.2       Remedies...........................................22

ARTICLE VI INDEMNIFICATION....................................................23

         Section 6.1       Indemnities by Originator..........................23
         Section 6.2       Other Costs and Expenses...........................26

                                       i

<PAGE>

ARTICLE VII MISCELLANEOUS.....................................................26

         Section 7.1       Waivers and Amendments.............................26
         Section 7.2       Notices............................................26
         Section 7.3       Protection of Ownership Interests of Buyer.........27
         Section 7.4       Confidentiality....................................28
         Section 7.5       Bankruptcy Petition................................28
         Section 7.6       CHOICE OF LAW......................................28
         Section 7.7       CONSENT TO JURISDICTION............................28
         Section 7.8       WAIVER OF JURY TRIAL...............................29
         Section 7.9       Integration; Binding Effect; Survival of
                           Terms..............................................29
         Section 7.10      Counterparts; Severability; Section References.....30

                                       ii

<PAGE>

                             Exhibits and Schedules
                            ------------------------

Exhibit I         -     Definitions

Exhibit II        -     Principal Place of Business; Location(s) of Records;
                        Federal Employer Identification Number

Exhibit III       -     Account Numbers

Exhibit IV        -     Form of Compliance Certificate

Exhibit V         -     Credit and Collection Policy

Exhibit VI        -     Form of Subscription Agreement

Exhibit VII       -     Form of Subordinated Note

Exhibit VIII      -     Form of Vacation Owner Agreement

Exhibit IX        -     Form of Sale Assignment

Schedule A        -     List of Documents to Be Delivered to Buyer Prior to the
                        Initial Purchase

                                      iii

<PAGE>

                           RECEIVABLES SALE AGREEMENT

     THIS  RECEIVABLES  SALE  AGREEMENT,  dated as of  January 7, 2000 is by and
between Trendwest Resorts, Inc. ("TWRI"), an Oregon corporation  ("Originator"),
TW  Holdings  III,  Inc.,  a  Delaware  corporation  ("Buyer").  Unless  defined
elsewhere  herein,  capitalized  terms  used in this  Agreement  shall  have the
meanings assigned to such terms in Exhibit I.

                             PRELIMINARY STATEMENTS

     Originator now owns, and from time to time hereafter will own, Receivables.
Originator wishes to sell and assign to Buyer, and Buyer wishes to purchase from
Originator,  all of  Originator's  right,  title  and  interest  in and to  such
Receivables,  together with the Related  Security and  Collections  with respect
thereto.

     Originator and Buyer intend the transactions contemplated hereby to be true
sales of the Receivables from Originator to Buyer, providing Buyer with the full
benefits of ownership of the Receivables, and Originator and Buyer do not intend
these  transactions to be, or for any purpose to be characterized as, loans from
Buyer to Originator.

     Upon  each  purchase  of  Receivables  from  Originator,  Buyer  will  sell
undivided   interests  therein  and  in  the  associated  Related  Security  and
Collections  pursuant to that certain Receivables Purchase Agreement dated as of
January  7,  2000  (as the  same May from  time to time  hereafter  be  amended,
supplemented,  restated or otherwise modified,  the "Purchase  Agreement") among
Buyer,  Originator,  as  Servicer,   International   Securitization  Corporation
("Conduit"),  the  financial  institutions  from time to time  party  thereto as
"Financial  Institutions"  and  Bank  One,  NA  (Main  Office  Chicago),  or any
successor agent appointed  pursuant to the terms of the Purchase  Agreement,  as
agent  for  Conduit  and such  Financial  Institutions  (in such  capacity,  the
"Agent").

                                   ARTICLE I
                       AMOUNTS AND TERMS OF THE PURCHASES

     Section 1.1 Purchases of Receivables.

     (a) On each  Purchase Date  hereunder,  in  consideration  for the Purchase
Price  and upon the terms  and  subject  to the  conditions  set  forth  herein,
Originator shall sell, assign, transfer, set-over and otherwise convey to Buyer,
without  recourse (except to the extent expressly  provided  herein),  and Buyer

                                       1

<PAGE>

shall purchase from Originator, all of Originator's right, title and interest in
and to all  Receivables  identified  in the  related  Schedule  of  Receivables,
together with all Related Security relating thereto and all Collections thereof;
provided,  however,  that in no event shall Buyer be obligated  to purchase,  or
Originator be obligated to sell, any Receivable  arising after the  Amortization
Date. In  accordance  with the  preceding  sentence,  on the date of the initial
Purchase,  Buyer shall acquire all of Originator's  right, title and interest in
and to all  Receivables  identified  in the  related  Schedule  of  Receivables,
together with all Related Security relating thereto and all Collections thereof.
The  acquisition by Buyer of the right,  title and interest of Originator in the
applicable Receivables in connection with each Purchase hereunder is conditioned
upon and  subject to  Originator's  receipt of the  Purchase  Price  therefor in
accordance with Section 1.2.

     (b) Not less than five  Business  Days prior to each date which  Originator
proposes to be a Purchase Date,  Originator  shall deliver to Buyer (i) a notice
that Originator  proposes to sell Receivables to Buyer on the specified Purchase
Date, and (ii) a Schedule of the Originated Receivables that Originator proposes
to sell to Buyer on such Purchase Date (a "Draft Schedule of Receivables").  The
Originator shall also deliver to the Custodian,  for each Originated  Receivable
on the Draft Schedule of  Receivables,  each  Receivable  Document listed in the
definition of "Receivable Documents."

     (c) If Buyer is  unwilling  to effect a  Purchase  of  Receivables  on such
proposed Purchase Date, or if Buyer is willing to purchase some, but not all, of
such  Originated  Receivables on such proposed  Purchase Date,  then Buyer shall
deliver to Purchaser,  within two Business  Days  following  Buyer's  receipt of
Originator's notice, a notice to such effect,  including (if Buyer is willing to
purchase  some but not all  such  Originated  Receivables),  a  Schedule  of the
Originated Receivables which Buyer is willing to purchase. If Buyer is unwilling
to effect a Purchase of Receivables  on such Purchase  Date,  then such proposed
Purchase Date shall be abandoned.  Otherwise,  on such Purchase Date, a purchase
and sale of the Originated  Receivables  specified on the Schedule  delivered by
Originator  (or, if Buyer  delivered  a Schedule  as  provided in the  preceding
sentence,  then a purchase and sale of the Originated  Receivables  specified on
such Schedule (the applicable  Schedule being the "Schedule of Receivables"  for
such Purchase  Date),  shall occur  pursuant to Section  1.1(a) on such Purchase
Date (subject to compliance with the conditions specified in Article III).

     (d) In connection with consummation of any Purchase  hereunder,  Originator
will deliver to the Custodian an (i) executed Sale Assignment  (substantially in
the form as Exhibit IX hereto) and (ii) the Schedule of  Receivables.  Buyer May

                                       2

<PAGE>

request that Originator deliver,  and Originator shall deliver,  such approvals,
opinions, information, reports or documents as Buyer May reasonably request.

     (e) It is the  intention  of the  parties  hereto  that  each  Purchase  of
Receivables  made  hereunder  shall  constitute a "true  sale",  which sales are
absolute and  irrevocable  and provide Buyer with the full benefits of ownership
of the Receivables. Except for adjustments for dilution pursuant to Section 1.3,
each sale of  Receivables  hereunder  is made  without  recourse to  Originator;
provided,  however,  that (i)  Originator  shall  be  liable  to  Buyer  for all
representations,  warranties  and covenants  made by Originator  pursuant to the
terms of the Transaction Documents to which Originator is a party, and (ii) such
sale does not constitute and is not intended to result in an assumption by Buyer
or any assignee  thereof of any  obligation  of  Originator  or any other Person
arising in connection with the Receivables,  the related  Contracts and/or other
Related  Security  or any  other  obligations  of  Originator.  In  view  of the
intention of the parties hereto that the Purchases of Receivables made hereunder
shall constitute  sales of such  Receivables  rather than loans secured thereby,
Originator agrees that it will, on or prior to the date hereof and in accordance
with Sections  4.1(e)(ii) and 4.2(f),  mark its master data  processing  records
relating to the Receivables  with a legend  acceptable to Buyer and to the Agent
(as Buyer's  assignee),  evidencing that Buyer has purchased such Receivables as
provided in this  Agreement  and to note in its financial  statements  that such
Receivables have been sold to Buyer.  Upon the request of Buyer or the Agent (as
Buyer's  assignee),  Originator  or its  Affiliate  will  execute  and file such
financing or  continuation  statements,  or  amendments  thereto or  assignments
thereof,  and  such  other  instruments  or  notices,  as  May be  necessary  or
appropriate to perfect and maintain the perfection of Buyer's ownership interest
in the  Receivables  and the  Related  Security  and  Collections  with  respect
thereto, or as Buyer or the Agent (as Buyer's assignee) May reasonably request.

     Section 1.2 Payment for the Purchases.

     (a)  Upon  acceptance  and  approval  by the  Custodian  of  the  documents
specified in Section 1.1(d) , the Buyer will transfer or cause to be transferred
to the  Originator,  an amount equal to the Purchase  Price with respect to such
Purchase of  Receivables.  The Purchase Price for each Purchase shall be payable
in full by Buyer to Originator on the date of such  Purchase,  and shall be paid
to Originator in the following manner:

               (i) by delivery of immediately  available funds, to the extent of
          (x) funds made  available to Buyer in connection  with its  subsequent
          sale of an interest in such  Receivables to the  Purchasers  under the

                                       3

<PAGE>

          Purchase  Agreement and (y) any  Collections  on  Receivables or other
          funds available to Buyer on such Purchase Date; and

               (ii) the  balance,  by  accepting a  contribution  to its capital
          and/or  with  the  proceeds  of  a  borrowing  from  Originator  of  a
          subordinated  revolving  loan (each,  a  "Subordinated  Loan") in such
          amounts as determined by Buyer,  provided that the  Subordinated  Loan
          made on the date of the initial  Purchase by the Originator  shall not
          cause Net Worth to be less than the Required Capital Amount.

Subject to the  limitations set forth in the preceding  clause (ii),  Originator
irrevocably agrees to advance each Subordinated Loan requested of it by Buyer on
or prior to the  Facility  Termination  Date.  The  Subordinated  Loans owing to
Originator  shall be evidenced by, and shall be payable in  accordance  with the
terms and provisions of, the Subordinated  Note and shall be payable solely from
funds which the Buyer is not required under the Purchase  Agreement to set aside
for the benefit of, or  otherwise  pay over to, the Agent for the benefit of the
Purchasers.

     (b)  On  each  Settlement  Date  related  to  a  Calculation   Period,  all
Collections paid to Buyer pursuant to the terms of the Purchase  Agreement shall
be paid to the  Originator  to reduce the  amounts  owed by Buyer to  Originator
under the Subordinated  Note. If the balance on the  Subordinated  Note has been
reduced to zero and all other amounts owed thereunder have been paid, then Buyer
shall be entitled to retain any remaining Collections.

     (c) In addition to such other information as May be included therein,  each
Monthly  Report  shall set forth  the  following  with  respect  to the  related
Calculation Period: (i) the aggregate Outstanding Balance of Receivables created
by the Originator and conveyed in Purchases during such Calculation  Period,  as
well as the Net  Receivables  Balance  (as  defined in the  Purchase  Agreement)
included therein, (ii) the aggregate Purchase Price payable to the Originator in
respect of such Purchases,  (iii) the aggregate amount of funds received by such
Originator  during such  Calculation  Period which are to be applied  toward the
aggregate Purchase Price owing for such Calculation Period pursuant to the first
sentence  of this  paragraph,  (iv)  the  increase  or  decrease  in the  amount
outstanding under the Subordinated Note as of the end of such Calculation Period
after giving effect to the  application  of funds in paragraph (b) above and the
restrictions on Subordinated Loans set forth in paragraph (a) above, and (v) the
amount  of any  capital  contribution  made  by to  Buyer  as of the end of such
Calculation Period pursuant to paragraph (a) above.

     Section 1.3 Adjustments for Dilutions. If on any day:

                                       4

<PAGE>

     (a) the Outstanding Balance of a Receivable is:

               (i) reduced as a result of any  defective  or  rejected  goods or
          services,  rescission of a Contract, any discount or any adjustment or
          otherwise by Originator (other than cash Collections on account of the
          Receivables),

               (ii)  reduced or  canceled  as a result of a setoff in respect of
          any claim by any Person  (whether such claim arises out of the same or
          a related transaction or an unrelated transaction), or

     (b) any of the  representations  and warranties set forth in Article II are
no longer true with respect to any Receivable,

then, in such event, Originator shall deposit into the Collection Account on the
second Business Day following the date (the "Dilution Date") of occurrence of an
event  described  in  paragraphs  (a) or (b) of this  Section  1.3, an amount in
immediately  available  funds equal to the Accrued Balance of such Receivable as
of the Dilution Date.

     Section 1.4 Repurchase of Receivables.

     (a)  From  time to time  the  Buyer  May  convey  back  to  Originator,  at
Originator's option, (x) to the extent permitted pursuant to Section 1.4(c), any
Receivable which constituted a Charged-Off  Receivable or a Defaulted Receivable
as of the last  day of the  related  Calculation  Period  and (y) to the  extent
permitted by Section 1.4(e), any Vacation Credit which constituted a Repossessed
Vacation Credit as of the last day of the related Calculation Period. Originator
shall provide the Agent with  irrevocable  written notice prior to the date upon
which such reconveyance  shall occur of its intention to cause such reconveyance
to occur,  which notice shall (i) state the amount of each form of consideration
described  in  Sections  1.4(b) and 1.4(e)  which shall be paid to Buyer on such
Settlement  Date,  (ii)  identify  the  Charged-Off   Receivables  or  Defaulted
Receivables to be reconveyed to Seller and (iii)  otherwise be  satisfactory  in
form and substance to Buyer.

     (b) As  consideration  for the  reconveyance  of a  Receivable  pursuant to
Section 1.4(a)(x),  Originator shall provide to Buyer, in immediately  available
funds, an amount equal to the Outstanding  Balance of such Receivable  (prior to
any write-off thereof).

     (c)  The  aggregate  Outstanding  Balance  of  Receivables  (prior  to  any
write-off thereof) reconveyed pursuant to Section 1.4(a)(x) shall (i) at no time
exceed 10% of the result of (a) the aggregate initial Outstanding Balance of all

                                       5

<PAGE>

Receivables  conveyed  from the  Originator  to the Buyer on any  Purchase  Date
reduced  by (b)  the  aggregate  Outstanding  Balance  (prior  to any  write-off
thereof)  of all  Receivables  subsequently  reconveyed  from  the  Buyer to the
Originator, and (ii) in no one calendar year exceed $7,500,000.

     (d) As consideration for any reconveyance  pursuant to Section 1.4(a)(y) of
a Repossessed  Vacation Credit,  on the applicable  Settlement Date,  Originator
shall pay to Buyer in immediately  available funds an amount equal to 25% of the
original purchase price paid by the defaulting Obligor for such Vacation Credit.

     (e) Originator May not repurchase  Repossessed Vacation Credits at any time
pursuant  to  Section  1.4(a)(y)  unless  each of the  following  conditions  is
satisfied:

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

               (ii) Originator has theretofore repurchased the maximum amount of
          Charged-off  Receivables  and  Defaulted  Receivables  permitted to be
          repurchased  at such time  pursuant to Sections  1.4(a)(x) and 1.4(c);
          and

               (iii)  the  aggregate  Outstanding  Balance  of  all  Charged-off
          Receivables and Defaulted  Receivables related to Repossessed Vacation
          Credits  which have been  repurchased  pursuant to Section  1.4(a)(y),
          including the Repossessed  Vacation  Credits to be repurchased on such
          Settlement  Date,  does  not  exceed  an  amount  equal to 5.0% of the
          Outstanding Balance of Eligible Receivables as of the earlier to occur
          of the Amortization Date and the Revolving Period Termination Date.

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

     (f) The rights of  Originator  pursuant to this  Section 1.4 to  repurchase
Charged-off Receivables,  Defaulted Receivables and Repossessed Vacation Credits
shall be subject and  subordinate to the rights of the Agent pursuant to Section
10.2 of the Purchase  Agreement  to sell,  dispose or  otherwise  liquidate  the
Receivables and the Related Security following the occurrence of an Amortization
Event.  Such  rights  of the  Originator  shall  not  apply  to any  Charged-off
Receivables,  Defaulted  Receivables or Repossessed  Vacation  Credits which the
Agent or any  Servicer  has  sold,  nor  shall  they  apply  to any  Charged-off
Receivables,  Defaulted  Receivables or Repossessed Vacation Credits as to which

                                       6

<PAGE>

the Agent or any Servicer has provided at least five  Business Days prior notice
to the Seller of its  intention so to sell (unless,  prior to the  expiration of
such five Business Days,  Originator has irrevocably  committed to purchase such
Charged-off  Receivables,  Defaulted Receivables or Repossessed Vacation Credits
on the next succeeding Settlement Date).

     Section 1.5 Upgrade Contracts.

     (a) If at any time the  Obligor  of a  Receivable  enters  into an  Upgrade
Contract,  Originator  shall deliver (i) to the Buyer a notice  indicating  such
Upgrade and identifying the Receivable (the "Upgrade Receivable") represented by
such  Upgrade  Contract  and (ii) to the  Custodian,  the  Receivable  Documents
related to such Upgrade Receivable.

     (b) Buyer shall pay to  Originator,  in  immediately  available  funds,  an
amount  equal to the  excess,  if any,  of (x) the  Outstanding  Balance of such
Upgrade Receivable over (y) the Outstanding  Balance of the existing  receivable
(the "Pre-Upgrade Receivable") to which it is related.

     (c) The Buyer will subsequently deliver to the Agent a notice in accordance
with  Section  2.10  of the  Purchase  Agreement  indicating  such  Upgrade  and
identifying the Upgrade Receivable and the Pre-Upgrade Receivable.

     (d) There shall be no limit on the number of Receivables related to Upgrade
Contracts substituted for under this Agreement.

     Section  1.6  Payments  and  Computations,  Etc.  All amounts to be paid or
deposited by Buyer  hereunder  shall be paid or deposited in accordance with the
terms of the Agreement on the day when due in immediately available funds to the
account of Originator designated from time to time by Originator or as otherwise
directed  by  Originator.  In the  event  that any  payment  owed by any  Person
hereunder  becomes due on a day that is not a Business  Day,  then such  payment
shall be made on the next  succeeding  Business  Day. If any Person fails to pay
any amount hereunder when due, such Person agrees to pay, on demand, the Default
Fee in respect thereof until paid in full; provided,  however, that such Default
Fee shall not at any time exceed the maximum rate  permitted by applicable  law.
All c Payments  and  Computations,  Etc.  All  omputations  of interest  payable
hereunder shall be made on the basis of a year of 360 days for the actual number
of days (including the first but excluding the last day) elapsed.

                                       7

<PAGE>

     Section 1.7 Transfer of Records.

     (a) In connection with the Purchases of Receivables  hereunder,  Originator
hereby  sells,  transfers,  assigns  and  otherwise  conveys  to  Buyer  all  of
Originator's  right and title to and  interest  in the  Records  relating to all
Receivables sold hereunder.  There will be no need for any further documentation
in connection with any Purchase,  other than documents  specifically required by
this Agreement.  In connection with such transfer,  Originator  hereby grants to
each of Buyer, the Agent and the Servicer an irrevocable,  non-exclusive license
to use,  without royalty or payment of any kind, all software used by Originator
to account  for the  Receivables,  to the extent  necessary  to  administer  the
Receivables,  whether such software is owned by Originator or is owned by others
and used by Originator under license  agreements with respect thereto,  provided
that  should the  consent of any  licensor  of  Originator  to such grant of the
license  described  herein be required,  Originator  hereby agrees that upon the
request of Buyer (or the Agent as  Buyer's  assignee),  Originator  will use its
reasonable  efforts to obtain  the  consent of such  third-party  licensor.  The
license  granted hereby shall be  irrevocable,  and shall  terminate on the date
this Agreement terminates in accordance with its terms.

     (b)  Originator  (i) shall take such action  requested  by Buyer and/or the
Agent (as Buyer's assignee),  from time to time hereafter, that May be necessary
or appropriate to ensure that Buyer and its assigns under the Purchase Agreement
have  an  enforceable   ownership  interest  in  the  Records  relating  to  the
Receivables  purchased  from  Originator  hereunder,  and  (ii)  shall  use  its
reasonable  efforts to ensure that Buyer, the Agent and the Servicer each has an
enforceable  right (whether by license or sublicense or otherwise) to use all of
the computer  software  used to account for the  Receivables  and/or to recreate
such Records.

     Section 1.8  Characterization.  If,  notwithstanding  the  intention of the
parties  expressed in Section 1.1(c),  any sale or contribution by Originator to
Buyer of Receivables  hereunder shall be characterized as a secured loan and not
a sale, then this Agreement  shall be deemed to constitute a security  agreement
under the UCC and other  applicable  law. For this purpose and without  being in
derogation of the parties'  intention  that each sale of  Receivables  hereunder
shall constitute a true sale thereof,  Originator  hereby grants to Buyer a duly
perfected security interest in all of Originator's right, title and interest in,
to and under all Receivables now existing and hereafter arising, all Collections
and Related  Security  with respect  thereto,  each  Collection  Account and all
proceeds of the foregoing,  which security  interest shall be prior to all other
Adverse Claims thereto. After the occurrence of an Amortization Event, Buyer and
its assigns  shall have,  in addition to the rights and remedies  which they May
have under this Agreement,  all other rights and remedies  provided to a secured

                                       8

<PAGE>

creditor after default under the UCC and other  applicable law, which rights and
remedies shall be cumulative.

                                   ARTICLE II
                         REPRESENTATIONS AND WARRANTIES

     Section 2.1 Representations and Warranties of Originator. Originator hereby
represents  and  warrants  to Buyer,  as to itself and as to  WorldMark  (to the
extent specific reference to WorldMark is made) that:

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

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

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

     (d)  Governmental  Authorization.  Other than the  filing of the  financing
statements required hereunder,  no authorization or approval or other action by,

                                       9

<PAGE>

and no notice to or filing with, any  governmental  authority or regulatory body
is required for the due execution  and delivery by Originator of this  Agreement
and each other  Transaction  Document to which it is a party and the performance
of its obligations hereunder and thereunder.

     (e) Actions, Suits.

               (i) There are no actions, suits or proceedings pending, or to the
          best of  Originator's  knowledge,  threatened,  against  or  affecting
          Originator,  or any of its or WorldMark's properties, in or before any
          court that could be  reasonably  expected  to have a Material  Adverse
          Effect.

               (ii)  Originator  is not in default  with respect to any order of
          any court, arbitrator or governmental body.

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

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

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

     (i) Good Title.  Immediately prior to each Purchase  hereunder,  Originator
shall be the legal and beneficial  owner of the Receivables and Related Security
with respect thereto,  free and clear of any Adverse Claim, except as created by

                                       10

<PAGE>

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

     (j) Perfection.  This Agreement,  together with the filing of the financing
statements  contemplated  hereby, is effective to, and shall, upon each Purchase
hereunder, transfer to Buyer (and Buyer shall acquire from Originator) legal and
equitable title to, with the right to sell and encumber each Receivable existing
and hereafter  arising,  together with the Related Security and Collections with
respect thereto,  free and clear of any Adverse Claim,  except as created by the
Transaction  Documents.  There have been duly filed all financing  statements or
other  similar  instruments  or  documents  necessary  under  the  UCC  (or  any
comparable law) of all appropriate  jurisdictions  to perfect Buyer's  ownership
interest in the Receivables, the Related Security and the Collections.

     (k)  Places  of  Business.  The  principal  places  of  business  and chief
executive office of Originator and the offices where it keeps all of its Records
are located at the  address(es)  listed on Exhibit II or such other locations of
which Buyer has been notified in accordance with Section 4.2(a) in jurisdictions
where all  action  required  by Section  4.2(a)  has been  taken and  completed.
Originator's  Federal Employer  Identification  Number is correctly set forth on
Exhibit II.

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

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

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

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

                                       11

<PAGE>

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

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

     (r) Compliance with Credit and Collection  Policy.  Originator has complied
in all material  respects with the Credit and  Collection  Policy with regard to
each Receivable and the related  Contract,  and has not made any material change
to such Credit and Collection  Policy,  except such material  change as to which
Buyer (or its assigns) has been notified in accordance with Section 4.1(a)(vii).

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

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

     (u) Eligible  Receivables.  Each Receivable included in the Net Receivables
Balance was an Eligible Receivable on the date of its Purchase hereunder.

                                       12

<PAGE>

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

     (w)  Accounting.   The  manner  in  which   Originator   accounts  for  the
transactions  contemplated  by this  Agreement does not jeopardize the true sale
analysis.

     (x) No Adverse Selection. Originator has not selected the Receivables to be
transferred hereunder from all eligible Originated Receivables based on criteria
which it believes would result in such transferred  Receivables  being of lesser
quality than the Originated Receivables not transferred hereunder.

     (y) Title to Properties.  WorldMark,  directly or  beneficially,  owns good
record and marketable  title in fee simple to, or valid leasehold  interests in,
all real property  necessary or used in the ordinary conduct of their respective
businesses,  except for such defects in title as could not,  individually  or in
the aggregate, have a Material Adverse Effect.

     (z) Liabilities of WorldMark. WorldMark:

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

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

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

     (aa) Environmental Matters. The Originator has conducted its operations and
kept and maintained its property in compliance with all Environmental  Laws. The

                                       13

<PAGE>

Originator  has  performed  its  duties  under  its  management  agreement  with
WorldMark in material compliance with all Environmental Laws.

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

     (cc) No Subsidiaries of WorldMark. WorldMark has no Subsidiaries.

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

     (ee)  Compliance  with  Representations.  On  and as of the  date  of  each
Purchase Date hereunder,  Originator  hereby represents and warrants that all of
the other  representations  and warranties set forth in this Article II are true
and correct on and as of the date of such  Purchase  (and after giving effect to
such Purchase) as though made on and as of each such Purchase Date.

                                  ARTICLE III
                             CONDITIONS OF PURCHASES

     Section 3.1 Conditions Precedent to Initial Purchase.  The initial Purchase
under this Agreement is subject to the conditions  precedent that () Buyer shall
have received on or before the applicable  Purchase Date those documents  listed
on Schedule A and () all of the  conditions  to the initial  purchase  under the
Purchase  Agreement  shall have been satisfied or waived in accordance  with the
terms thereof.

     Section 3.2 Conditions  Precedent to All Purchases.  Each Purchase shall be
subject to the further conditions precedent that:

     (a) the Facility Termination Date shall not have occurred;

     (b) Buyer (or its  assigns)  shall  have  received  such  other  approvals,
opinions or documents as it May reasonably request;

     (c) no  Amortization  Event or  Potential  Amortization  Event  shall  have
occurred.

                                       14

<PAGE>

As a further  condition  to each  Purchase,  on the  applicable  Purchase  Date,
Originator  represents and warrants that the  representations and warranties set
forth in Article II are true and  correct on and as of such  Purchase  Date (and
after giving effect thereto) as though made on and as of such date.

                                   ARTICLE IV
                                    COVENANTS

     Section 4.1  Affirmative  Covenants of Originator.  Until the date on which
this  Agreement  terminates  in  accordance  with its terms,  Originator  hereby
covenants as set forth below:

     (a)  Financial  Reporting.  Originator  will  maintain  for  itself and its
Subsidiaries a system of accounting  established and  administered in accordance
with GAAP, and furnish to Buyer (or its assigns):

               (i) Annual  Reporting.  Such annual financial reports as required
          by Section 7.1(a)(i) of the Purchase Agreement.

               (ii) Quarterly  Reporting.  Such quarterly  financial  reports as
          required by Section 7.1(a)(ii) of the Purchase Agreement.

               (iii)  Compliance   Certificate.   Together  with  the  financial
          statements   required   hereunder,   a   compliance   certificate   in
          substantially  the form of Exhibit IV signed by an Authorized  Officer
          of Originator and dated the date of such annual financial statement or
          such quarterly financial statement, as the case May be.

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

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

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

                                       15

<PAGE>

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

               (viii) Other Information. Promptly, from time to time, such other
          information, documents, records or reports relating to the Receivables
          or the condition or operations,  financial or otherwise, of Originator
          and  WorldMark  as  Buyer  (or  its  assigns)  May  from  time to time
          reasonably request in order to protect the interests of Buyer (and its
          assigns) under or as contemplated by this Agreement.

     (b) Notices.  Originator  will notify the Buyer (or its assigns) in writing
of any of the  following  promptly  upon  learning  of the  occurrence  thereof,
describing  the same and, if  applicable,  the steps  being  taken with  respect
thereto:

               (i) Amortization  Events or Potential  Amortization  Events.  The
          occurrence of each Amortization Event and each Potential  Amortization
          Event, as set forth in Article V of this Agreement,  by a statement of
          an Authorized Officer of Originator.

               (ii) Judgment and Proceedings.

                    (A) The entry of any judgment or decree  against  WorldMark,
          the  Originator  or  any  of  the  Originator's  Subsidiaries  if  the
          aggregate amount of all judgments and decrees then outstanding against
          WorldMark,  the Originator or the  Originator's  Subsidiaries  exceeds
          $1,000,000.

                    (B) The institution of any material litigation,  arbitration
          proceeding  or  governmental   proceeding   against   WorldMark,   the
          Originator or the Originator's Subsidiaries.

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

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

                                       16

<PAGE>

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

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

     (c)  Compliance  with  Laws  and   Preservation  of  Corporate   Existence.
Originator will comply in all material respects with all applicable laws, rules,
regulations,  orders, writs, judgments,  injunctions, decrees or awards to which
they May be  subject.  Originator  will  preserve  and  maintain  its  corporate
existence,  rights,  franchises  and  privileges  in the  jurisdiction  of their
incorporation,  and qualify  and remain  qualified  in good  standing as foreign
corporations in each jurisdiction where their businesses are conducted.

     (d) Audits.  Originator will furnish and will cause WorldMark to furnish to
Buyer (or its assigns) from time to time such information with respect to it and
the Receivables as Buyer (or its assigns) May reasonably request. Originator and
WorldMark will, from time to time during regular  business hours as requested by
Buyer (or its assigns), upon reasonable notice, permit Buyer (or its assigns) or
their respective  agents or  representatives,  (i) to examine and make copies of
and  abstracts  from all  Records  in the  possession  or under the  control  of
Originator  relating to the Receivables and the Related Security,  including the
related  Contracts,  and (ii) to visit the offices and  properties of Originator
for the purpose of examining such materials  described in clause (i) above,  and
to discuss matters relating to Originator's and WorldMark's  financial condition
or the Receivables and the Related  Security or Originator's  performance  under
any of the Transaction Documents or Originator's performance under the Contracts
and, in each case,  with any of the officers or employees of  Originator  having
knowledge of such matters. The cost of audits conducted pursuant to this Section
4.1 (d) will be borne solely by the Originator.

     (e) Keeping and Marking of Records and Books.

               (i)  Originator  will maintain and implement  administrative  and
          operating  procedures   (including  an  ability  to  recreate  records
          evidencing  Receivables  in  the  event  of  the  destruction  of  the
          originals thereof), and keep and maintain (or will cause the Custodian

                                       17

<PAGE>

          to  keep  and  maintain)  all  documents,  books,  records  and  other
          information  reasonably  necessary or advisable for the  collection of
          all Receivables  (including  records  adequate to permit the immediate
          identification  of each  new  Receivable  and all  Collections  of and
          adjustments to each existing  Receivable).  Originator will give Buyer
          (or its assigns) notice of any material  change in the  administrative
          and operating procedures referred to in the previous sentence.

               (ii) Originator will (a) on or prior to the date hereof, mark its
          master data processing records and other books and records relating to
          the Receivables  with a legend,  acceptable to Buyer (or its assigns),
          describing Buyer's ownership  interests in the Receivables and further
          describing  the  Purchaser  Interests  of the Agent (on  behalf of the
          Purchasers)  under the Purchase  Agreement and (b) upon the request of
          Buyer  (or  its  assigns),  (x)  mark  each  Contract  with  a  legend
          describing Buyer's ownership  interests in the Receivables and further
          describing  the  Purchaser  Interests  of the Agent (on  behalf of the
          Purchasers) and (y) deliver to the Custodian all Receivable  Documents
          (including all multiple  originals of any such  Contract)  relating to
          the Receivables.

     (f) Compliance with Contracts and Credit and Collection Policy.  Originator
will timely and fully (i) perform and comply with all provisions,  covenants and
other promises  required to be observed by it under the Contracts related to the
Receivables,  and (ii)  comply in all  respects  with the Credit and  Collection
Policy in regard to each  Receivable and the related  Contract.  Originator will
pay when due any taxes payable in connection with the Receivables,  exclusive of
taxes on or measured by income or gross receipts of Buyer and its assigns.

     (g) Ownership.  Originator will take all necessary  action to establish and
maintain,  irrevocably in Buyer,  legal and equitable title to the  Receivables,
the Related Security and the  Collections,  free and clear of any Adverse Claims
other than  Adverse  Claims in favor of Buyer (and its assigns)  (including  the
filing of all financing  statements or other  similar  instruments  or documents
necessary under the UCC (or any comparable law) of all appropriate jurisdictions
to  perfect  Buyer's  interest  in  such   Receivables,   Related  Security  and
Collections and such other action to perfect, protect or more fully evidence the
interest of Buyer as Buyer (or its assigns) May reasonably request).

     (h) Purchasers'  Reliance.  Originator  acknowledges that the Agent and the
Purchasers  are  entering  into the  transactions  contemplated  by the Purchase
Agreement in reliance  upon Buyer's  identity as a legal entity that is separate
from Originator and any Affiliates thereof.  Therefore,  from and after the date
of execution and delivery of this Agreement, Originator will take all reasonable

                                       18

<PAGE>

steps  including  all steps that Buyer or any assignee of Buyer May from time to
time reasonably  request to maintain Buyer's identity as a separate legal entity
and to make it manifest to third parties that Buyer is an entity with assets and
liabilities distinct from those of Originator and any Affiliates thereof and not
just a division of Originator.  Without limiting the generality of the foregoing
and in addition to the other covenants set forth herein, Originator (i) will not
hold itself out to third parties as liable for the debts of Buyer nor purport to
own the Receivables and other assets acquired by Buyer, (ii) will take all other
actions necessary on its part to ensure that Buyer is at all times in compliance
with the  covenants  set forth in Section  7.1(i) of the Purchase  Agreement and
(iii) will cause all tax liabilities arising in connection with the transactions
contemplated herein or otherwise to be allocated between Originator and Buyer on
an arm's-length  basis and in a manner  consistent with the procedures set forth
in U.S. Treasury Regulations ss.ss.1.1502-33(d) and 1.1552-1.

     (i) Taxes. Originator will file all tax returns and reports required by law
to be filed by it and  promptly  pay all taxes and  governmental  charges at any
time owing

     (j)  Insurance.  Originator  will  maintain  in  effect,  or  cause  to  be
maintained in effect, at Originator's own expense,  such property,  casualty and
liability  insurance  covering  its  real  property  and  personal  property  as
Originator deems appropriate in its good faith business judgement. The foregoing
requirements  shall not be  construed  to negate,  reduce or modify,  and are in
addition to, Originator's obligations hereunder.

     (k)   Environmental   Laws.  TWRI  shall,  and  shall  cause  each  of  its
Subsidiaries  to conduct its  operations  and keep and  maintain its property in
compliance with all Environmental  Laws. TWRI shall perform its duties under its
management agreement with WorldMark in compliance with all Environmental Laws.

     (l)  Collections.  Originator  shall cause each Obligor to remit his or her
payments to a clearing account (the "Clearing Account")  established at Commerce
Bank  of  Washington  or  another  bank  acceptable  to the  Agent  in its  sole
discretion.  The  Originator  shall cause any payments  made by Automatic  Debit
Collection  to be  deposited  directly  into  the  Clearing  Account  from  each
Obligor's  relevant  account.  In the event any payments relating to Receivables
are remitted  directly to Originator or any Affiliate of Originator,  Originator
will remit (or will cause all such payments to be remitted) directly to the bank
where the  Clearing  Account is then  established  for deposit into the Clearing
Account within two (2) Business Days following receipt thereof and, at all times
prior to such  remittance,  Originator will itself hold or, if applicable,  will
cause such payments to be held in trust for the  exclusive  benefit of Buyer and
its assigns.

                                       19

<PAGE>

     Section 4.2 Negative Covenants of Originator.  Until the date on which this
Agreement  terminates in accordance with its terms,  Originator hereby covenants
that:

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

     (b) Change in Payment Instructions to Obligors.  Originator will not add or
terminate any Clearing Account  agreement or make any change in the instructions
to Obligors regarding  payments to be made to any Clearing Account,  or amend or
supplement  any agreement  with the Custodian or grant any waiver of performance
thereunder, unless Buyer (or its assigns) shall have received, at least ten (10)
days before the proposed  effective  date  therefor,  (i) written notice of such
addition,  termination  or change  and (ii) with  respect to the  addition  of a
Clearing Account, an executed Clearing Account agreement with respect to the new
Clearing Account.

     (c) Modifications to Contracts and Credit and Collection Policy. Originator
will not make  any  change  to the  Credit  and  Collection  Policy  that  could
adversely  affect the  collectibility  of the Receivables or decrease the credit
quality of any newly created  Receivables.  Except as otherwise permitted in its
capacity  as  Servicer  pursuant to Section  8.2(d) of the  Purchase  Agreement,
Originator  will  not  extend,  amend  or  otherwise  modify  the  terms  of any
Receivable or any Contract  related  thereto  other than in accordance  with the
Credit and Collection Policy.

     (d) Sales, Liens.  Originator will not sell, assign (by operation of law or
otherwise)  or  otherwise  dispose of, or grant any option  with  respect to, or
create or suffer to exist any Adverse  Claim upon  (including  the filing of any
financing  statement) or with respect to, any  Receivable,  Related  Security or
Collections,  or upon or with respect to any Contract under which any Receivable
arises,  or any Collection  Account,  or assign any right to receive income with
respect thereto (other than, in each case, the creation of the interests therein
in favor of Buyer provided for herein),  and  Originator  will defend the right,
title and  interest  of Buyer in,  to and under any of the  foregoing  property,
against  all  claims of third  parties  claiming  through  or under  Originator.
However,  no part of this Section  4.2(d) shall be construed as  prohibiting  an
assignment pursuant to Section 13.1 or Section 2.1 of the Purchase Agreement.

                                       20

<PAGE>

     (e) No Adverse Selection. Originator shall not select the Receivables to be
transferred hereunder from all eligible Originated Receivables based on criteria
which it believes would result in such transferred  Receivables  being of lesser
quality than the Originated Receivables not transferred hereunder.

     (f) Accounting for Purchases.  Originator will not, and will not permit any
Affiliate  to,  account  for  or  treat  (whether  in  financial  statements  or
otherwise)  the  transactions  contemplated  hereby in any manner other than the
sale of the  Receivables  and the Related  Security by Originator to Buyer or in
any other respect account for or treat the transactions  contemplated  hereby in
any manner other than as a sale of the Receivables  and the Related  Security by
Originator  to  Buyer  except  to the  extent  that  such  transactions  are not
recognized on account of  consolidated  financial  reporting in accordance  with
GAAP.

                                   ARTICLE V
                               AMORTIZATION EVENTS

     Section 5.1 Amortization  Events.  The occurrence of any one or more of the
following events shall constitute an Amortization Event:

     (a)  Originator  shall fail (i) to make any  payment  or  deposit  required
hereunder  when  due,  or (ii) to  perform  or  observe  any term,  covenant  or
agreement  hereunder  (other than as referred to in clause (i) of this paragraph
(a)) or any other  Transaction  Document to which it is a party and such failure
in the case of this  clause  (ii)  shall  continue  for  three  (3)  consecutive
Business Days.

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

     (c) Failure of World Mark to pay any Indebtedness when due or of Originator
to pay any  Indebtedness  greater  than  $1,000,000  when due; or the default by
Originator in the performance of any term,  provision or condition  contained in
any agreement  under which any such  Indebtedness  greater than  $1,000,000  was
created or is governed, the effect of which is to cause, or to permit the holder
or holders of such  Indebtedness to cause, such Indebtedness to become due prior
to its stated maturity; or any such Indebtedness of Originator shall be declared

                                       21

<PAGE>

to be due and  payable or  required  to be prepaid  (other  than by a  regularly
scheduled payment) prior to the date of maturity thereof.

     (d) (i) Originator or any of its  Subsidiaries  shall generally not pay its
debts as such debts  become due or shall admit in writing its  inability  to pay
its debts  generally  or shall  make a general  assignment  for the  benefit  of
creditors; or any proceeding shall be instituted by or against Originator or any
of its Subsidiaries  seeking to adjudicate it bankrupt or insolvent,  or seeking
liquidation, winding up, reorganization,  arrangement,  adjustment,  protection,
relief or  composition  of it or its debts under any law relating to bankruptcy,
insolvency or  reorganization  or relief of debtors,  or seeking the entry of an
order for relief or the  appointment  of a  receiver,  trustee or other  similar
official for it or any  substantial  part of its property or (ii)  Originator or
any of its Subsidiaries  shall take any corporate action to authorize any of the
actions set forth in clause (i) above in this subsection (d).

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

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

     (g) WorldMark:

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

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

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

     Section 5.2 Remedies. Upon the occurrence and during the continuation of an
Amortization Event, Buyer May take any of the following actions: (i) declare the

                                       22

<PAGE>

Amortization  Date to have  occurred,  whereupon  the  Amortization  Date  shall
forthwith occur,  without demand,  protest or further notice of any kind, all of
which are hereby expressly waived by Originator;  provided,  however,  that upon
the occurrence of an Amortization  Event  described in Section 5.1(d),  or of an
actual or deemed entry of an order for relief with respect to  Originator  under
the Federal  Bankruptcy Code, the Amortization Date shall  automatically  occur,
without  demand,  protest  or any  notice of any kind,  all of which are  hereby
expressly  waived by  Originator  and (ii) to the fullest  extent  permitted  by
applicable  law,  declare  that the Default Fee shall accrue with respect to any
amounts then due and owing by Buyer to Originator. The aforementioned rights and
remedies  shall be in addition to all other rights and remedies of Buyer and its
assigns  available  under this  Agreement,  by  operation  of law,  at equity or
otherwise, all of which are hereby expressly preserved, including all rights and
remedies provided under the UCC, all of which rights shall be cumulative.

                                   ARTICLE VI
                                 INDEMNIFICATION

     Section 6.1  Indemnities by Originator.  Without  limiting any other rights
that Buyer May have hereunder or under applicable law,  Originator hereby agrees
to indemnify Buyer and its assigns,  officers,  directors,  agents and employees
(each an  "Indemnified  Party")  from and against any and all  damages,  losses,
claims, taxes,  liabilities,  costs, expenses and for all other amounts payable,
including reasonable attorneys' fees (which attorneys May be employees of Buyer)
and  disbursements  (all of the  foregoing  being  collectively  referred  to as
"Indemnified Amounts") awarded against or incurred by any of them arising out of
or as a  result  of  this  Agreement  or the  acquisition,  either  directly  or
indirectly, by Buyer of an interest in the Receivables, excluding, however:

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

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

     (c) taxes imposed by the  jurisdiction  in which such  Indemnified  Party's
principal  executive office is located, on or measured by the overall net income

                                       23

<PAGE>

of such  Indemnified  Party to the extent that the  computation of such taxes is
consistent with the Intended Characterization;

provided,  however,  that  nothing  contained in this  sentence  shall limit the
liability of Originator or limit the recourse of Buyer to Originator for amounts
otherwise specifically provided to be paid by Originator under the terms of this
Agreement.  Without  limiting the  generality of the foregoing  indemnification,
Originator shall indemnify Buyer for Indemnified  Amounts  (including  losses in
respect  of  uncollectible  receivables,  regardless  of  whether  reimbursement
therefor would constitute recourse to Originator) relating to or resulting from:

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

               (ii) the failure by  Originator ,  WorldMark  or Custodian  (with
          respect to its duties under  Article XV of the  Purchase  Agreement or
          any other  provision  of the  Purchase  Agreement)  to comply with any
          applicable  law, Rule or regulation  with respect to any Receivable or
          Contract  related thereto,  or the  nonconformity of any Receivable or
          Contract  included  therein  with any  such  applicable  law,  Rule or
          regulation or any failure of Originator,  WorldMark or Custodian (with
          respect to its duties under  Article XV of the  Purchase  Agreement or
          any other provision of the Purchase  Agreement) to keep or perform any
          of their respective  obligations,  express or implied, with respect to
          any Contract;

               (iii) any  failure of  Originator  or  Custodian  to perform  its
          duties,   covenants  or  other  obligations  in  accordance  with  the
          provisions of this Agreement or any other Transaction Document;

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

               (v) any products  liability or similar claim arising out of or in
          connection  with  rights  or  services  that  are the  subject  of any
          Contract;

               (vi) any dispute,  claim, offset or defense (other than discharge
          in  bankruptcy  of the  Obligor)  of the Obligor to the payment of any

                                       24

<PAGE>

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

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

               (viii) any investigation,  litigation or proceeding related to or
          arising from this  Agreement or any other  Transaction  Document,  the
          transactions  contemplated  hereby,  the  use  of  the  proceeds  of a
          Purchase, the ownership of the Receivables or any other investigation,
          litigation  or  proceeding   relating  to  Originator,   WorldMark  or
          Custodian in which any Indemnified  Party becomes involved as a result
          of any of the transactions contemplated hereby;

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

               (x) any Amortization Event described in Section 5.1(d);

               (xi) any  failure  to vest and  maintain  vested in Buyer,  or to
          transfer to Buyer, legal and equitable title to, and ownership of, the
          Receivables, the Related Security (and the Collections, free and clear
          of any Adverse Claim;

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

               (xiii)  any  action  or  omission  by  Originator,  WorldMark  or
          Custodian which reduces or impairs the rights of Buyer with respect to
          any Receivable or the value of any such Receivable;

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

               (xv) the Year 2000 Problem with respect to the Originator.

                                       25

<PAGE>

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

     Section  6.2 Other  Costs and  Expenses.  Originator  shall pay to Buyer on
demand all costs and out-of-pocket  expenses in connection with the preparation,
execution,  delivery and  administration  of this  Agreement,  the  transactions
contemplated  hereby  and  the  other  documents  to  be  delivered   hereunder.
Originator shall pay to Buyer on demand any and all costs and expenses of Buyer,
if any,  including  reasonable  counsel fees and expenses in connection with the
enforcement of this Agreement and the other documents delivered hereunder and in
connection  with  any  restructuring  or  workout  of  this  Agreement  or  such
documents,  or the  administration  of this Agreement  following an Amortization
Event.

                                  ARTICLE VII
                                  MISCELLANEOUS

     Section 7.1 Waivers and Amendments.

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

     (b) No provision of this Agreement May be amended,  supplemented,  modified
or waived except in writing  signed by  Originator  and Buyer and, to the extent
required under the Purchase Agreement, the Agent, the Conduit, and the Financial
Institutions or the Required Financial Institutions.

     Section 7.2  Notices.  Except as provided  below,  all  communications  and
notices  provided  for  hereunder  shall be in  writing  (including  bank  wire,
telecopy or electronic  facsimile  transmission or similar writing) and shall be
given to the other  parties  hereto at their  respective  addresses  or telecopy
numbers  set forth on the  signature  pages  hereof or at such other  address or
telecopy  number as such Person May hereafter  specify for the purpose of notice
to each of the other  parties  hereto.  Each such notice or other  communication
shall be  effective  () if given by telecopy,  upon the receipt  thereof,  () if
given by mail, at the time such  communication  is received via first class mail

                                       26

<PAGE>

or () if given by any other  means,  when  received at the address  specified in
this Section 7.2.

     Section 7.3 Protection of Ownership Interests of Buyer.

     (a)  Originator  agrees  that from time to time,  at its  expense,  it will
promptly  execute  and  deliver  all  instruments  and  documents,  and take all
actions, that May be necessary or desirable,  or that Buyer (or its assigns) May
reasonably  request,  to perfect,  protect or more fully  evidence the Purchaser
Interests,  or to enable Buyer (or its  assigns) to exercise  and enforce  their
rights and remedies  hereunder.  At any time after the  occurrence or during the
continuation  of  an  Amortization   Event,  Buyer  (or  its  assigns)  may,  at
Originator's sole cost and expense,  direct Originator to notify the Obligors of
Receivables  of the  ownership  interests of Buyer under this  Agreement and May
also direct that payments of all amounts due or that become due under any or all
Receivables be made directly to Buyer or its designee.

     (b) If  Originator  or  Custodian  fails to perform any of its  obligations
hereunder or under any other  Transaction  Document,  Buyer (or its assigns) May
(but  shall  not  be  required  to)  perform,  or  cause  performance  of,  such
obligation,  and  Buyer's  (or such  assigns')  costs and  expenses  incurred in
connection  therewith shall be payable by Originator as provided in Section 6.2.
Originator  irrevocably  authorizes Buyer (and its assigns) at any time and from
time to time in the sole  discretion  of Buyer (or its  assigns),  and  appoints
Buyer  (and  its  assigns)  as its  attorney(es)-in-fact,  to act on  behalf  of
Originator  (i) to  execute  on  behalf  of  Originator  as  debtor  and to file
financing  statements  necessary or desirable in Buyer's (or its assigns')  sole
discretion  to perfect  and to  maintain  the  perfection  and  priority  of the
interest of Buyer in the Receivables and (ii) to file a carbon,  photographic or
other reproduction of this Agreement or any financing  statement with respect to
the  Receivables  as a  financing  statement  in such  offices  as Buyer (or its
assigns) in their sole  discretion deem necessary or desirable to perfect and to
maintain the  perfection and priority of Buyer's  interests in the  Receivables.
This appointment is coupled with an interest and is irrevocable.

     (c) If, at any time following an Amortization Event, in connection with the
sale,  liquidation or disposition by the Agent, any Purchaser or any Servicer of
any Receivables,  Vacation Credits or other Related Security, it is necessary to
obtain  any  license  or to  register  or  qualify  any such  Person or any such
collateral  under any  applicable law or regulation,  Originator  shall,  at its
expense, take all actions that May be necessary or desirable,  or that the Agent
May  reasonably  request,  to  assist  in any such  licensing,  registration  or
qualification,  and the Originator shall reimburse the Agent, each Purchaser and

                                       27

<PAGE>

any such Servicer (other than Trendwest or any Affiliate  thereof) for any fees,
costs or expenses incurred thereby.

     Section 7.4 Confidentiality.

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

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

     Section 7.5 Bankruptcy  Petition.  Originator  hereby  covenants and agrees
that,  prior to the date that is one year and one day after the  payment in full
of all  outstanding  senior  Indebtedness  of  Conduit,  it will  not  institute
against,  or  join  any  other  Person  in  instituting  against,   Conduit  any
bankruptcy,  reorganization,  arrangement, insolvency or liquidation proceedings
or other similar  proceeding under the laws of the United States or any state of
the United States.

     Section 7.6 CHOICE OF LAW. THIS  AGREEMENT  SHALL BE GOVERNED AND CONSTRUED
IN ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE
OF ILLINOIS.

     Section 7.7 CONSENT TO JURISDICTION.  ORIGINATOR HEREBY IRREVOCABLY SUBMITS
TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR ILLINOIS STATE

                                       28

<PAGE>

COURT SITTING IN CHICAGO, ILLINOIS IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS  AGREEMENT OR ANY DOCUMENT  EXECUTED BY ORIGINATOR  PURSUANT TO
THIS  AGREEMENT  AND  ORIGINATOR  HEREBY  IRREVOCABLY  AGREES THAT ALL CLAIMS IN
RESPECT OF SUCH ACTION OR  PROCEEDING  MAY BE HEARD AND  DETERMINED  IN ANY SUCH
COURT AND  IRREVOCABLY  WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER  HAVE AS TO
THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT
SUCH COURT IS AN  INCONVENIENT  FORUM.  NOTHING  HEREIN SHALL LIMIT THE RIGHT OF
BUYER (OR ITS ASSIGNS) TO BRING PROCEEDINGS  AGAINST ORIGINATOR IN THE COURTS OF
ANY OTHER JURISDICTION.  ANY JUDICIAL PROCEEDING BY ORIGINATOR AGAINST BUYER (OR
ITS ASSIGNS) OR ANY AFFILIATE  THEREOF  INVOLVING,  DIRECTLY OR INDIRECTLY,  ANY
MATTER IN ANY WAY ARISING OUT OF,  RELATED TO, OR CONNECTED  WITH THIS AGREEMENT
OR ANY  DOCUMENT  EXECUTED BY  ORIGINATOR  PURSUANT TO THIS  AGREEMENT  SHALL BE
BROUGHT ONLY IN A COURT IN CHICAGO, ILLINOIS.

     Section 7.8 WAIVER OF JURY TRIAL.  EACH PARTY HERETO HEREBY WAIVES TRIAL BY
JURY IN ANY JUDICIAL PROCEEDING  INVOLVING,  DIRECTLY OR INDIRECTLY,  ANY MATTER
(WHETHER  SOUNDING IN TORT,  CONTRACT OR  OTHERWISE)  IN ANY WAY ARISING OUT OF,
RELATED  TO,  OR  CONNECTED  WITH  THIS  AGREEMENT,  ANY  DOCUMENT  EXECUTED  BY
ORIGINATOR PURSUANT TO THIS AGREEMENT OR THE RELATIONSHIP  ESTABLISHED HEREUNDER
OR THEREUNDER.

     Section 7.9 Integration; Binding Effect; Survival of Terms.

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

     (b) This  Agreement  shall be binding  upon and inure to the benefit of the
parties hereto and their respective  successors and permitted assigns (including
any trustee in  bankruptcy).  This  Agreement  shall create and  constitute  the
continuing  obligations of the parties  hereto in accordance  with its terms and
shall remain in full force and effect until  terminated in  accordance  with its

                                       29

<PAGE>

terms;  provided,  however, that the rights and remedies with respect to (i) any
breach of any representation and warranty made by Originator pursuant to Article
II, (ii) the  indemnification  and payment provisions of Article VI, and Section
7.5 shall be continuing and shall survive any termination of this Agreement.

     Section 7.10 Counterparts; Severability; Section References. This Agreement
May be executed in any number of counterparts and by different parties hereto in
separate  counterparts,  each of which when so executed shall be deemed to be an
original and all of which when taken together shall  constitute one and the same
Agreement.   Any   provisions  of  this   Agreement   which  are  prohibited  or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability  without  invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render  unenforceable such provision in any
other jurisdiction.  Unless otherwise expressly indicated, all references herein
to  "Article,"  "Section,"  "Schedule"  or  "Exhibit"  shall mean  articles  and
sections of, and schedules and exhibits to, this Agreement.

                                       30

<PAGE>

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

                                     TRENDWEST RESORTS, INC.


                                     By:________________________________
                                     Name:
                                     Title:

                                     Address: 9805 Willows Road
                                              Redmond, WA 98052



                                     TW HOLDINGS III, INC.


                                     By:__________________________________
                                     Name:
                                     Title:

                                     Address: 9805 Willows Road
                                              Redmond, WA 98052

                                       31

<PAGE>

                                    EXHIBIT I

                                   Definitions

     This is Exhibit I to the Agreement (as hereinafter defined). As used in the
Agreement and the Exhibits,  Schedules and Annexes  thereto,  capitalized  terms
have the  meanings  set forth in this  Exhibit I (such  meanings  to be  equally
applicable to the singular and plural forms thereof).  If a capitalized  term is
used in the  Agreement,  or any  Exhibit,  Schedule  or Annex  thereto,  and not
otherwise defined therein or in this Exhibit I, such term shall have the meaning
assigned thereto in Exhibit I to the Purchase Agreement.

     "Accrued Balance" means, as to any Receivable,  the Outstanding  Balance of
such Receivable plus any accrued and unpaid interest thereon.

     "Agent"  has the  meaning set forth in the  Preliminary  Statements  to the
Agreement.

     "Agreement"  means the Receivables  Sale Agreement,  dated as of January 7,
2000,  between  Originator  and Buyer,  as the same May be amended,  restated or
otherwise modified.

     "Amortization  Date"  means  the  earliest  to  occur  of (i) the  Facility
Termination  Date,  (ii) any Business Day so  designated by Originator or Buyer,
and (ii) the Business Day immediately prior to the occurrence of an Amortization
Event set forth in Section 5.1(d), (iii) the Business Day specified in a written
notice  from  Buyer  to  Originator   following  the  occurrence  of  any  other
Amortization  Event,  and (iv) the date which is 30 Business  Days after Buyer's
receipt  of written  notice  from  Originator  that it wishes to  terminate  the
Agreement.

     "Amortization  Event"  has the  meaning  set  forth in  Section  5.1 of the
Agreement.

     "Authorized  Officer"  means,  with respect to  Originator,  its  corporate
controller or chief financial officer or any other designated officer acceptable
to the Buyer.

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

                                       1

<PAGE>

     "Business  Day" means any day on which banks are not authorized or required
to close in New York,  New York or Chicago,  Illinois and The  Depository  Trust
Company of New York is open for business.

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

     "Calculation  Period"  means each calendar  month or portion  thereof which
elapses during the term of the  Agreement.  The first  Calculation  Period shall
commence on the date of the initial  Purchase of  Receivables  hereunder and the
final Calculation Period shall terminate on the Amortization Date.

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

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

     "Clearing  Account"  has the  meaning  set forth in Section  4.1(l) of this
Agreement.

     "Collection  Account"  has the meaning  set forth in Section  2.8(c) of the
Purchase Agreement.

     "Conduit"  has the meaning set forth in the  Preliminary  Statements to the
Agreement.

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

     "Credit and  Collection  Policy" means  Originator's  credit and collection
policies and  practices  relating to Contracts and  Receivables  existing on the

                                       2

<PAGE>

date  hereof  and  summarized  in Exhibit  V, as  modified  from time to time in
accordance with the Agreement.

     "Default  Fee" means a per annum rate of  interest  equal to the sum of (i)
the Prime Rate, plus (ii) 2% per annum.

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

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

     "Dilutions"  means,  at any time,  the  aggregate  amount of  reductions or
cancellations described in Section 1.3(a) of the Agreement.

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

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

          (i) the Obligor of which (a) if a natural person, is a resident of the
     United  States  or  any  Canadian  province  other  than  Quebec,  (b) if a
     corporation or other business organization,  is organized under the laws of
     the  United  States  or any  Canadian  province  other  than  Quebec or any
     political  subdivision  thereof and has its chief  executive  office in the
     United  States or any Canadian  province  other than Quebec;  (c) is not an
     Affiliate of any of the parties  hereto;  and (d) is not a government  or a
     governmental subdivision or agency,

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

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

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

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

                                       3

<PAGE>

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

          (vii) on  which  one due  payment  has been  made by the  Obligor  and
     received (other than in the case of an Upgrade Contract),

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

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

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

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

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

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

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

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

                                       4

<PAGE>

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

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

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

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

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

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

     "Federal Bankruptcy Code" means Title 11 of the United States Code entitled
"Bankruptcy", as amended and any successor statute thereto.

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

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

     "Intended   Characterization"   means,   for  income  tax   purposes,   the
characterization  of the  acquisition by the  Purchasers of Purchaser  Interests
under  the  Purchase  Agreement  as a loan or loans by the  Purchasers  to Buyer
secured by the Receivables, the Related Security and the Collections.

                                       5

<PAGE>

     "Liquidity Termination Date" means January 5, 2001.

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

     "Net Value" means, as of any date of determination,  an amount equal to the
sum of (i) the aggregate  Outstanding  Balance of the  Receivables at such time,
minus (ii) the sum of (a) the aggregate  Capital  outstanding at such time, plus
(b) the Aggregate Reserves.

     "Net Worth" means as of the last  Business Day of each  Calculation  Period
preceding any date of  determination,  the excess,  if any, of (a) the aggregate
Outstanding Balance of the Receivables at such time, over (b) the sum of (i) the
aggregate Capital outstanding at such time, plus (ii) the aggregate  outstanding
principal  balance of the Subordinated  Loans  (including any Subordinated  Loan
proposed to be made on the date of determination).

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

     "Original  Balance" means, with respect to any Receivable,  the Outstanding
Balance of such Receivable on the date it was purchased by Buyer.

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

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

                                       6

<PAGE>

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

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

     "Pre-Upgrade  Receivable"  has the meaning set forth in Section 1.5 of this
Agreement.

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

     "Purchase" means a purchase under the Agreement by Buyer from Originator of
Receivables,  the Related Security and the Collections related thereto, together
with all related rights in connection therewith.

     "Purchase   Agreement"  has  the  meaning  set  forth  in  the  Preliminary
Statements to the Agreement.

     "Purchase Date" means, as provided in Section 1.1(b) of the Agreement,  any
Business Day selected by Originator on which a Purchase shall occur.

     "Purchase  Price"  means,  with  respect to any  Purchase on any date,  the
aggregate  price  to be paid  by  Buyer  to  Originator  for  such  Purchase  in
accordance  with Section 1.2 of the Agreement for the  Receivables,  Collections
and Related  Security being sold to Buyer on such date,  which price shall equal
the product of (x) the Original Balance of such  Receivables,  multiplied by (y)
the Purchase Price Factor then in effect.

     "Purchase  Price  Credit"  has the  meaning set forth in Section 1.3 of the
Agreement.

     "Purchase Price Factor" means a percentage calculated to provide Buyer with
a reasonable return on its investment in the Receivables after taking account of
(i) the time value of money based upon the  anticipated  dates of  collection of
the  Receivables  and the cost to  Buyer  of  financing  its  investment  in the
Receivables  during such period and (ii) the risk of nonpayment by the Obligors.
Originator  and Buyer May agree from time to time to change the  Purchase  Price
Factor based on changes in one or more of the items  affecting  the  calculation
thereof, provided that any change to the Purchase Price Factor shall take effect
as of the commencement of a Calculation  Period,  shall apply only prospectively
and shall not affect the Purchase  Price  payment in respect of Purchases  which

                                       7

<PAGE>

occurred  during any Calculation  Period ending prior to the Calculation  Period
during  which  Originator  and Buyer  agree to make  such  change.  The  initial
Purchase Price Factor shall be 100.0%.

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

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

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

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

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

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

          (iv) all Records related to such Receivable, and

          (v) all proceeds of any of the foregoing.

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

     "Required Capital Amount" means, as of any date of determination, an amount
equal to 3% of the Outstanding Balance of all Eligible Receivables.

     "Resorts and Units" means those properties owned in fee simple by WorldMark
or in which  WorldMark  has a valid  leasehold  interest,  which  Obligors  have
limited  rights  to use under the  terms of the  Contracts  between  Originator,

                                       8

<PAGE>

WorldMark  and  Obligors.  This  definition  includes  all  Resorts and Units in
existence as of the date of this Agreement or which come into  existence  during
the term of this Agreement.

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

     "Sale Assignment" means the executed assignment of Originated  Receivables,
substantially in the form of Exhibit IX, in conjunction with a Purchase.

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

     "Settlement Date" means the 20th day of each calendar month (or if such day
is not a Business Day, then the next Business Day).

     "Subordinated  Loan" has the  meaning  set forth in  Section  1.2(a) of the
Agreement.

     "Subordinated  Note" means a promissory note in  substantially  the form of
Exhibit VII hereto as more fully  described in Section 1.2 of the Agreement,  as
the same May be amended, restated,  supplemented or otherwise modified from time
to time.

     "Subscription  Agreement"  means that certain  Stockholder and Subscription
Agreement,   dated  as  of  January  7,  2000,  between  Originator  and  Buyer,
substantially in the form of Exhibit VI hereto.

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

     "Transaction   Documents"   means,   collectively,   this  Agreement,   the
Receivables   Purchase  Agreement,   each  Collection  Account  Agreement,   the
Subordinated  Note,  the  Subscription  Agreement  and  all  other  instruments,
documents and agreements executed and delivered in connection herewith.

                                       9

<PAGE>

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

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

     "Upgrade  Receivable"  has the  meaning  set forth in  Section  1.5 of this
Agreement.

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

     "Vacation  Owner  Agreement"   means  such  Contract  between   Originator,
WorldMark and any Obligor in substantially  the same form as attached as Exhibit
I.

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

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

                                       10

<PAGE>

                                   EXHIBIT II

                    Places of Business; Locations of Records;
                    Federal Employer Identification Number(s)

Places of Business:

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

                  Location of Records:

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

Federal Employer Identification Number:     93-1004403

<PAGE>

                                   EXHIBIT III

                                 Account Numbers

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

<PAGE>

                                   EXHIBIT IV

                         Form of Compliance Certificate

     This  Compliance   Certificate  is  furnished   pursuant  to  that  certain
Receivables  Sale  Agreement  dated as of  January 7,  2000,  between  Trendwest
Resorts Inc. and TW Holdings, III (the "Agreement").  Capitalized terms used and
not otherwise  defined herein are used with the meanings  attributed  thereto in
the Agreement.

     THE UNDERSIGNED HEREBY CERTIFIES THAT:

     1. I am the duly elected Vice President of Originator.

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

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

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

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



_________________________________
[Name]


<PAGE>

                                    EXHIBIT V

                          Credit and Collection Policy


<PAGE>

                                   EXHIBIT VI

                         Form of Subscription Agreement

                     STOCKHOLDER AND SUBSCRIPTION AGREEMENT

     THIS STOCKHOLDER AND SUBSCRIPTION AGREEMENT (this "Agreement"), dated as of
January 7, 2000,  is entered  into by and  between TW  Holdings,  III,  Inc.,  a
Delaware corporation ("SPV"), and Trendwest Resorts, Inc., an Oregon corporation
("Parent").  Except as otherwise specifically provided herein, capitalized terms
used in this Agreement  have the meanings  ascribed  thereto in the  Receivables
Sale  Agreement,  dated as of even date  herewith,  between  SPV and  Parent (as
amended,  restated,  supplemented  or otherwise  modified from time to time, the
"Sale Agreement").

                                    RECITALS

     A. SPV has been  organized  under the laws of the State of Delaware for the
purpose of, among other things, purchasing,  holding,  financing,  receiving and
transferring accounts receivable and related assets originated or otherwise held
by Parent.

     B. Contemporaneously with the execution and delivery of this Agreement: (i)
Parent and SPV have  entered  into the Sale  Agreement  pursuant to which Parent
has,  from and after  the  initial  purchase  date  thereunder  and prior to the
termination date specified therein,  sold certain  Receivables,  Collections and
Related Security to SPV; and (ii) SPV, Parent,  as Servicer,  certain  financial
institutions  party  thereto  as  "Purchasers,"  and Bank One,  NA (Main  Office
Chicago), as the "Agent" and the "Paying Agent," have entered into a Receivables
Purchase  Agreement (as amended,  restated,  supplemented or otherwise  modified
from time to time,  the  "Purchase  Agreement")  pursuant to which SPV will sell
"Purchaser Interests" to the Agent for the benefit of the Purchasers.

     C. SPV desires to sell shares of its  capital  stock to Parent,  and Parent
desires to purchase such shares, on the terms set forth in this Agreement.

     NOW, THEREFORE, SPV and Parent agree as follows:

     Section 1. Purchase and Sale of Capital Stock. Parent hereby purchases from
SPV, and SPV hereby  issues and sells to Parent,  1,000 shares of common  stock,
par value $0.01 per share,  of SPV (the "Common  Stock") for the Stock  Purchase
Price set forth in Section  2(a).  The shares of Common  Stock  being  purchased
under this  Agreement are referred to herein as the  "Shares."  Within three (3)

                                       1

<PAGE>

Business  Days from the date hereof,  SPV shall  deliver to Parent a certificate
registered in Parent's name representing the Shares.

     Section 2. Consideration for Shares and Capital Contributions.

     (a)  Consideration  for  Shares.  To  induce  SPV to  enter  into  the Sale
Agreement and to enable SPV to fund its  obligations  thereunder by consummating
the transactions  contemplated by the Purchase  Agreement,  and in reliance upon
the representations  and warranties set forth herein,  Parent hereby pays to SPV
on the date  hereof  the sum of  $2,500,000  (the  "Stock  Purchase  Price")  in
consideration of the purchase of the Shares. The Stock Purchase Price shall take
the form of a transfer of cash,  except that Parent may, in lieu of cash payment
of the Stock  Purchase  Price,  offset  the amount of the Stock  Purchase  Price
against the  purchase  price  otherwise  payable by SPV to Parent on the initial
purchase date pursuant to the Sale Agreement.

     (b) Contributions  After Initial Closing Date. From time to time Parent May
make additional capital  contributions to SPV. All such contributions shall take
the form of a cash transfer,  except that SPV agrees to, in lieu of cash payment
thereof,  offset the amount of such contributions against the purchase price for
Receivables  otherwise  payable  by SPV to  Parent  on the date of such  capital
contributions.  All of the  Receivables  so paid for through  such offset  shall
constitute  purchased  Receivables  within the meaning of the Sale Agreement and
shall be  subject  to all of the  representations,  warranties  and  indemnities
otherwise made thereunder. It is expressly understood and agreed that Parent has
no   obligations   under  this  Agreement  or  otherwise  to  make  any  capital
contributions from and after payment of the Stock Purchase Price.

     Section 3.  Representations  and  Warranties  of SPV.  SPV  represents  and
warrants to Parent as follows:

     (a) SPV is a corporation  duly  incorporated,  validly existing and in good
standing  under  the  laws of the  State  of  Delaware,  and  has all  requisite
corporate  power  and  authority  to carry on its  business  as  proposed  to be
conducted on the date hereof.

     (b) SPV has all  requisite  legal and  corporate  power to enter  into this
Agreement,  to issue the Shares and to perform its other  obligations under this
Agreement.

     (c) Upon receipt by SPV of the Stock Purchase Price and the issuance of the
Shares to Parent, the Shares will be duly authorized, validly issued, fully paid
and nonassessable.

                                       2

<PAGE>

     (d) SPV has taken all corporate  action  necessary  for its  authorization,
execution and delivery of, and, its performance under, this Agreement.

     (e) This  Agreement  constitutes a legally valid and binding  obligation of
SPV,  enforceable  against  SPV  in  accordance  with  its  terms,  except  that
enforceability May be limited by bankruptcy, insolvency, reorganization or other
similar laws  affecting the  enforcement of creditors'  rights  generally and by
general  principles  of equity,  regardless  of whether such  enforceability  is
considered in a proceeding in equity or at law.

     (f) SPV has filed its  Certificate  of  Incorporation  in the form attached
hereto  as Annex A with the  Secretary  of State of  Delaware  and (ii)  adopted
By-laws in the form attached hereto as Annex B.

     (g) The issuance of the Shares by SPV hereunder is legally permitted by all
laws and regulations to which SPV is subject.

     Section 4. Representations and Warranties of Parent.  Parent represents and
warrants to SPV as follows:

     (a) Parent is a corporation duly incorporated, validly existing and in good
standing under the laws of the State of Oregon, and has all requisite  corporate
power and authority to carry on its business as conducted on the date hereof.

     (b) Parent has all requisite  legal and corporate  power to enter into this
Agreement,  to purchase  the Shares and to perform its other  obligations  under
this Agreement.

     (c) Parent has taken all corporate action necessary for its  authorization,
execution and delivery of, and its performance under, this Agreement.

     (d) This  Agreement  constitutes a legally valid and binding  obligation of
Parent,  enforceable  against Parent in accordance  with its terms,  except that
enforceability May be limited by bankruptcy, insolvency, reorganization or other
similar laws  affecting the  enforcement of creditors'  rights  generally and by
general  principles  of equity,  regardless  of whether such  enforceability  is
considered in a proceeding in equity or at law.

     (e) Parent is purchasing the Shares for investment for its own account, not
as a  nominee  or  agent,  and not with a view to any  distribution  of any part

                                       3

<PAGE>

thereof.  Parent has no current  intention of selling,  granting a participation
in, or otherwise distributing, the shares.

     (f) Parent  understands  that the Shares have not been registered under the
Securities Act of 1933, as amended, or under any other Federal or state law, and
that SPV does not contemplate such a registration.

     (g) Parent has such knowledge,  sophistication  and experience in financial
and business  matters that it is capable of  evaluating  the merits and risks of
the   transactions   contemplated   by  this   Agreement,   and  has  made  such
investigations in connection herewith as have been deemed necessary or desirable
to make such evaluation.

     (h) The  purchase of the Shares by Parent is legally  permitted by all laws
and regulations to which Parent is subject.

     Section 5. Restrictions on Transfer Imposed by the Act; Legend.

     (a) Legend. Each certificate representing any Shares shall be endorsed with
the following legend:

                  THE  SECURITIES   REPRESENTED  BY  THIS  CERTIFICATE  ARE  NOT
         REGISTERED  PURSUANT TO THE SECURITIES ACT OF 1933, AS AMENDED,  OR ANY
         STATE  SECURITIES  ACT.  SUCH  SECURITIES  SHALL NOT BE SOLD,  PLEDGED,
         HYPOTHECATED,  DONATED OR OTHERWISE  TRANSFERRED  OR DISPOSED OF ABSENT
         SUCH REGISTRATION, UNLESS, IN THE OPINION OF THE CORPORATION'S COUNSEL,
         SUCH REGISTRATION IS NOT REQUIRED.  IN ADDITION,  THESE SECURITIES HAVE
         BEEN ISSUED OR SOLD IN RELIANCE ON SECTION 4(2) OF THE  SECURITIES  ACT
         OF 1933,  AS AMENDED,  AND MAY NOT BE SOLD OR  TRANSFERRED  EXCEPT IN A
         TRANSACTION  WHICH IS EXEMPT UNDER SUCH ACT OR PURSUANT TO AN EFFECTIVE
         REGISTRATION UNDER SUCH ACT.

     (b)  Registration  of  Transfers.  SPV need not  register a transfer of any
Shares unless the  conditions  specified in the legend set forth in Section 5(a)
hereof are  satisfied.  SPV May also  instruct its transfer  agent (which May be
SPV) not to register the transfer of any Shares unless the conditions  specified
in the legend set forth in Section 5(a) hereof are satisfied.

                                       4

<PAGE>

     Section 6.  Agreement to Vote.  Parent  hereby agrees and covenants to vote
all of the  shares  of  Common  Stock  now or  hereafter  owned  by it,  whether
beneficially or otherwise,  as is necessary at a meeting of stockholders of SPV,
or by written  consent in lieu of any such  meeting,  to cause to be elected to,
and  maintained on, SPV's board of directors at least one (1) person meeting the
qualifications  of an Independent  Director and selected in accordance  with the
provisions of the Certificate of Incorporation of SPV.

     Section 7.  Successors  and  Assigns.  Each party  agrees  that it will not
assign, sell, transfer,  delegate,  or otherwise dispose of, whether voluntarily
or  involuntarily,  or by operation of law, any right or  obligation  under this
Agreement  except in connection with a transfer of Shares in compliance with the
terms and conditions hereof, as contemplated by Section 5(b) above, or otherwise
in accordance  with the terms  hereof.  Any  purported  assignment,  transfer or
delegation  in  violation  of this  Section 7 shall be null and void ab  initio.
Subject to the  foregoing  limits on  assignment  and  delegation  and except as
otherwise provided herein, this Agreement shall be binding upon and inure to the
benefit of the parties hereto,  their  respective  heirs,  legatees,  executors,
administrators, assignees and legal successors.

     Section 8.  Amendments and Waivers.  Any term hereof May be amended and the
observance of any term hereof May be waived (either generally or in a particular
instance  and  either  retroactively  or  prospectively)  only with the  written
consent of SPV and Parent.  Any amendment or waiver so effected shall be binding
upon SPV and Parent.

     Section 9. Further Acts.  Each party agrees to perform any further acts and
execute and deliver any document which May be reasonably  necessary to carry out
the provisions of this Agreement.

     Section 10.  Counterparts.  This Agreement May be executed in any number of
counterparts,  and  all  of  such  counterparts  together  will  be  deemed  one
instrument.

     Section 11. Notices. Any and all notices, acceptances, statements and other
communications to Parent in connection  herewith shall be in writing,  delivered
personally,  by facsimile or certified mail, return receipt requested, and shall
be addressed to the address of Parent  indicated on the stock transfer  register
of SPV or,  if no  address  is so  indicated,  to the  address  provided  to SPV
pursuant to the Sale  Agreement  unless  changed by written notice to SPV or its
successor.

                                       5

<PAGE>

     Section 12.  GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH AND BE  GOVERNED  BY THE LAWS OF THE STATE OF  ILLINOIS,  EXCEPT AND TO THE
EXTENT THE GENERAL CORPORATION LAW OF THE STATE OF DELAWARE IS APPLICABLE.

     Section  13.  Entire  Agreement.  This  Agreement,  together  with the Sale
Agreement and the documents  expressly to be delivered in connection  therewith,
constitute  the entire  understanding  and agreement  between the parties hereto
with subject matter hereof and thereof.

     Section 14.  Severability of this Agreement.  In case any provision of this
Agreement  shall  be  invalid  or  unenforceable,  the  validity,  legality  and
enforceability  of the  remaining  shall not in any way be  affected or impaired
thereby.

                                       6

<PAGE>

     IN WITNESS WHEREOF,  the parties have executed and delivered this Agreement
as of the date first above written.

                                     TW HOLDINGS III, INC.


                                     By:_________________________________
                                     Name:
                                     Title:


                                     TRENDWEST RESORTS, INC.


                                     By:_________________________________
                                     Name:
                                     Title:

                                       7

<PAGE>

                        ANNEX A to Subscription Agreement

                          Certificate of Incorporation

<PAGE>

                        Annex B to Subscription Agreement

                                     By-Laws

<PAGE>

                                   EXHIBIT VII

                            Form of Subordinated Note

                                SUBORDINATED NOTE

                                                                 January 7, 2000

     1. Note.  FOR VALUE  RECEIVED,  the  undersigned,  TW Holdings III, Inc., a
Delaware  corporation  ("SPV"),  hereby  unconditionally  promises to pay to the
order of Trendwest  Resorts,  Inc.,  an Oregon  corporation  ("Originator"),  in
lawful money of the United States of America and in immediately available funds,
on the date following the Amortization  Date which is one year and one day after
the date on which (i) the Outstanding  Balance of all Receivables sold under the
"Sale Agreement"  referred to below has been reduced to zero and (ii) Originator
has paid to the Buyer all  indemnities,  adjustments and other amounts which May
be owed thereunder in connection with the Purchases (the "Collection Date"), the
aggregate unpaid principal sum outstanding of all "Subordinated Loans" made from
time to time by Originator  to SPV pursuant to and in accordance  with the terms
of that certain  Receivables Sale Agreement dated as of January 7, 2000, between
Originator and SPV (as amended,  restated,  supplemented  or otherwise  modified
from time to time, the "Sale  Agreement").  Reference to Section 1.2 of the Sale
Agreement is hereby made for a statement of the terms and conditions under which
the  loans  evidenced  hereby  have been and will be made.  All terms  which are
capitalized  and used herein and which are not  otherwise  specifically  defined
herein shall have the meanings ascribed to such terms in the Sale Agreement.

     2. Interest. SPV further promises to pay interest on the outstanding unpaid
principal  amount  hereof from the date hereof until payment in full hereof at a
rate equal to 8.75%; provided, however, that if SPV shall default in the payment
of any principal hereof, SPV promises to pay, on demand, interest at the rate of
the 8.75% per annum on any such unpaid  amounts,  from the date such  payment is
due to the date of actual payment.  Interest shall be payable on the 20th day of
each  month,  or the  next  Business  Day if such day is not a  Business  Day in
arrears; provided,  however, that SPV May elect on the date any interest payment
is due  hereunder  to defer such  payment and upon such  election  the amount of
interest  due but  unpaid on such date  shall  constitute  principal  under this
Subordinated  Note.  The  outstanding  principal  of any loan  made  under  this
Subordinated  Note shall be due and  payable on the  Collection  Date and May be
repaid or prepaid at any time without premium or penalty.

                                       1

<PAGE>

     3.  Principal  Payments.  Originator is  authorized  and directed by SPV to
enter on the grid attached hereto,  or, at its option, in its books and records,
the  date  and  amount  of each  loan  made by it  which  is  evidenced  by this
Subordinated  Note and the amount of each payment of principal  made by SPV, and
absent manifest error, such entries shall constitute prima facie evidence of the
accuracy of the  information  so entered;  provided  that neither the failure of
Originator to make any such entry or any error  therein  shall expand,  limit or
affect the obligations of SPV hereunder.

     4. Subordination.  The indebtedness  evidenced by this Subordinated Note is
subordinated  to the prior payment in full of all of SPV's recourse  obligations
under that certain  Receivables  Purchase Agreement dated as of January 7, 2000,
by and among SPV, Originator,  as Servicer,  Sage Systems, Inc., as "Custodian",
various  "Purchasers"  from time to time party  thereto,  and Bank One, NA (Main
Office  Chicago),  as the  "Agent"  and "Paying  Agent" (as  amended,  restated,
supplemented or otherwise modified from time to time, the "Purchase Agreement").
The subordination provisions contained herein are for the direct benefit of, and
May be enforced by, the Agent and the Purchasers  and/or any of their respective
assignees  (collectively,  the "Senior Claimants") under the Purchase Agreement.
Until the date on which all "Capital"  outstanding under the Purchase  Agreement
has been  repaid in full and all other  obligations  of SPV and/or the  Servicer
thereunder and under the "Fee Letter"  referenced therein (all such obligations,
collectively,  the "Senior Claim") have been  indefeasibly paid and satisfied in
full, Originator shall not demand,  accelerate, sue for, take, receive or accept
from SPV, directly or indirectly, in cash or other property or by set-off or any
other manner (including from or by way of collateral) any payment or security of
all or any of the  indebtedness  under this  Subordinated  Note or exercise  any
remedies  or take any  action or  proceeding  to  enforce  the  same;  provided,
however,  that (i) Originator  hereby agrees that it will not institute  against
SPV any proceeding of the type described in Section 5.1(d) of the Sale Agreement
unless  and until the  Collection  Date has  occurred  and (ii)  nothing in this
paragraph  shall restrict SPV from paying,  or Originator from  requesting,  any
payments under this  Subordinated  Note so long as SPV is not required under the
Purchase  Agreement to set aside for the benefit of, or  otherwise  pay over to,
the funds used for such  payments  to any of the Senior  Claimants  and  further
provided that the making of such payment  would not otherwise  violate the terms
and provisions of the Purchase  Agreement.  Should any payment,  distribution or
security or  proceeds  thereof be received by  Originator  in  violation  of the
immediately  preceding  sentence,  Originator  agrees that such payment shall be
segregated,  received and held in trust for the benefit of, and deemed to be the
property of, and shall be  immediately  paid over and delivered to the Agent for
the benefit of the Senior Claimants.

                                       2

<PAGE>

     5.  Bankruptcy;  Insolvency.  Upon the  occurrence of any proceeding of the
type described in Section 5.1(d) of the Sale Agreement  involving SPV as debtor,
then and in any such event the Senior Claimants shall receive payment in full of
all  amounts  due or to become due on or in  respect  of Capital  and the Senior
Claim  (including "CP Costs" and "Yield"  accruing under the Purchase  Agreement
after the commencement of any such proceeding, whether or not any or all of such
CP  Costs  or  Yield  is an  allowable  claim  in any  such  proceeding)  before
Originator is entitled to receive payment on account of this Subordinated  Note,
and to that end,  any  payment or  distribution  of assets of SPV of any kind or
character,  whether in cash,  securities or other  property,  in any  applicable
insolvency  proceeding,  which would otherwise be payable to or deliverable upon
or with respect to any or all  indebtedness  under this  Subordinated  Note,  is
hereby  assigned  to and shall be paid or  delivered  by the Person  making such
payment or delivery (whether a trustee in bankruptcy,  a receiver,  custodian or
liquidating  trustee or otherwise)  directly to the Agent for application to, or
as collateral for the payment of, the Senior Claim until such Senior Claim shall
have been paid in full and satisfied.

     6.  Amendments.  This  Subordinated  Note shall not be amended or  modified
except in accordance with Section 7.1 of the Sale  Agreement.  The terms of this
Subordinated  Note May not be amended or  otherwise  modified  without the prior
written consent of the Agent for the benefit of the Purchasers.

     7.  GOVERNING  LAW. THIS  SUBORDINATED  NOTE HAS BEEN MADE AND DELIVERED AT
CHICAGO,  ILLINOIS,  AND SHALL BE INTERPRETED  AND THE RIGHTS AND LIABILITIES OF
THE PARTIES HERETO  DETERMINED IN ACCORDANCE  WITH THE LAWS AND DECISIONS OF THE
STATE OF ILLINOIS.  WHEREVER  POSSIBLE EACH PROVISION OF THIS  SUBORDINATED NOTE
SHALL  BE  INTERPRETED  IN  SUCH  MANNER  AS TO BE  EFFECTIVE  AND  VALID  UNDER
APPLICABLE  LAW,  BUT IF ANY  PROVISION  OF  THIS  SUBORDINATED  NOTE  SHALL  BE
PROHIBITED  BY  OR  INVALID  UNDER  APPLICABLE  LAW,  SUCH  PROVISION  SHALL  BE
INEFFECTIVE  TO  THE  EXTENT  OF  SUCH   PROHIBITION   OR  INVALIDITY,   WITHOUT
INVALIDATING THE REMAINDER OF SUCH PROVISION OR THE REMAINING PROVISIONS OF THIS
SUBORDINATED NOTE.

     8. Waivers. All parties hereto, whether as makers, endorsers, or otherwise,
severally waive presentment for payment, demand, protest and notice of dishonor.
Originator  additionally  expressly  waives all notice of the  acceptance by any
Senior Claimant of the  subordination  and other provisions of this Subordinated

                                       3

<PAGE>

Note and expressly waives reliance by any Senior Claimant upon the subordination
and other provisions herein provided.

     9.  Assignment.  This  Subordinated  Note May not be  assigned,  pledged or
otherwise  transferred  to any party  other than  Originator  without  the prior
written consent of the Agent, and any such attempted transfer shall be void.

                                     TW HOLDINGS III, INC.


                                     By:_____________________________
                                     Title:

                                       4

<PAGE>

                                    Schedule

                                       to

                                SUBORDINATED NOTE

                  SUBORDINATED LOANS AND PAYMENTS OF PRINCIPAL


<TABLE>
<CAPTION>
      Date                  Amount of             Amount of Principal        Unpaid Principal       Notation made
                        Subordinated Loan                 Paid                   Balance                  by
<S>                     <C>                       <C>                        <C>                    <C>
___________________     _____________________     ______________________     __________________     ______________

___________________     _____________________     ______________________     __________________     ______________

___________________     _____________________     ______________________     __________________     ______________

___________________     _____________________     ______________________     __________________     ______________

___________________     _____________________     ______________________     __________________     ______________

___________________     _____________________     ______________________     __________________     ______________

___________________     _____________________     ______________________     __________________     ______________

___________________     _____________________     ______________________     __________________     ______________

___________________     _____________________     ______________________     __________________     ______________

___________________     _____________________     ______________________     __________________     ______________

___________________     _____________________     ______________________     __________________     ______________

___________________     _____________________     ______________________     __________________     ______________

___________________     _____________________     ______________________     __________________     ______________

</TABLE>

<PAGE>

                                  EXHIBIT VIII

                        Form of Vacation Owner Agreement

<PAGE>

                                   EXHIBIT IX

                             Form of Sale Assignment

                             TRENDWEST RESORTS, INC.

                                       AND

                              TW HOLDINGS III, INC.



     SALE ASSIGNMENT,  dated as of [__], 200[_], between Trendwest Resorts, Inc.
(the "Seller") and TW Holdings III, Inc. (the "Buyer")

     1. We refer to the Receivable Sale Agreement (the "Sale  Agreement")  dated
as of January 7, 2000 between the Seller and the Buyer.  All  provisions of such
Sale Agreement are incorporated herein by reference. All capitalized terms shall
have the meanings set forth in the Sale Agreement.

     2. The Seller does hereby sell,  transfer,  assign,  set over and convey to
the Buyer all right,  title and interest of the Seller in and to the Receivables
listed on Schedule 1 hereto (each,  a  "Receivable"),  and the Buyer does hereby
purchase each such Receivable.

     3. The Outstanding Balance for the Receivables sold and purchased, pursuant
to paragraph 2 hereof is $[ ]. The Purchase Price for the  Receivables  sold and
purchased hereby is $ [__] ,representing the product of (x) the Original Balance
of such Receivables,  multiplied by (y) the Purchase Price Factor (as defined in
the Sale Agreement) then in effect.  The Purchase Price shall be payable in full
contemporaneously  with the  execution of this Sale  Assignment,  as provided in
Section 1.1 of the Sale Agreement.

                                       1

<PAGE>

     IN WITNESS  WHEREOF,  the parties  have caused this Sale  Assignment  to be
executed by their respective officers thereunto duly authorized,  as of the date
first above written.

                                    TRENDWEST RESORTS, INC.,
                                    as Seller

                                    By: _________________________
                                    Name:
                                    Title:



                                    TW HOLDINGS III, INC.,
                                    as Buyer

                                    By: ________________________
                                    Name:
                                    Title:

                                       2

<PAGE>

                                   SCHEDULE 2

                             SCHEDULE OF RECEIVABLES


<PAGE>

                                   Schedule A

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

1.        Copy of the  Resolutions  of the  Board  of  Directors  of  Originator
          certified  by  its  Secretary,   authorizing  Originator's  execution,
          delivery and  performance of the Agreement and the other  documents to
          be delivered by it thereunder.

2.        Articles or Certificate of Incorporation (or equivalent organizational
          documents)  of  Originator  certified by the Secretary of State of the
          jurisdiction of  incorporation  of Originator on or within thirty (30)
          days prior to the initial Purchase.

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

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

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

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

7.        Executed   Collection   Account   Agreements  for  each  Lock-Box  and
          Collection Account.

8.        A  favorable  opinion  of  legal  counsel  for  Originator  reasonably
          acceptable  to Buyer (or its assigns)  which  addresses  the following
          matters  and such other  matters as Buyer (or its  assigns)  Agent May
          reasonably request:

                                       1

<PAGE>

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

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

                  --       The  execution  and  delivery  by  Originator  of the
                           Agreement  and each  other  Transaction  Document  to
                           which  it  is  party  and  its   performance  of  its
                           obligations  thereunder  have been duly authorized by
                           all  necessary   corporate  action  and  proceedings,
                           corporate or otherwise, on the part of Originator and
                           will not:

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

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

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

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

                  --       Counsel is without  knowledge of any matters or facts
                           contrary  to  the   Representations   and  Warranties
                           contained in Section 2.1 of the Sales Agreement.

                                       2

<PAGE>

                  --       Originator is not an "investment  company" registered
                           or  required  to  be  registered under the Investment
                           Company Act of 1940.

10.       A "true  sale"  opinion  and  "substantive  consolidation"  opinion of
          counsel for Originator with respect to the  transactions  contemplated
          by the Agreement and the Purchase Agreement.

11.       A Compliance Certificate.

12.       A direction  letter executed by Originator  authorizing  Buyer and its
          assigns, and directing warehousemen to allow Buyer and its assigns, to
          inspect and make copies from Originator's books and records maintained
          at off-site data processing or storage facilities.

13.       A form of Monthly Report.

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

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

17.       Good Standing  Certificate for WorldMark  issued by the Secretaries of
          State of each jurisdiction where it has material operations.

18.       A favorable  opinion of  in-house  counsel to the  originator  stating
          that, to the best of the opinion givers knowledge, there is no action,
          suit  or  other  proceeding  against  Originator,   WorldMark  or  any
          Affiliate of Originator or WorldMark, which would materially adversely
          affect the business or financial  condition of Originator or WorldMark
          and  their  respective  Affiliates  taken as a whole  or  which  would
          materially  adversely  affect the ability of Originator to perform its
          obligations under the Agreement.

                                       3