Document:

Exhibit 4.1

PAW-

NEITHER THIS WARRANT NOR THE SECURITIES ISSUABLE UPON EXERCISE HEREOF
HAVE BEEN REGISTERED WITH THE UNITED STATES SECURITIES AND EXCHANGE
COMMISSION (THE "COMMISSION") OR THE SECURITIES COMMISSION OF ANY
STATE PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER RULE 506 OF
REGULATION D PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT").  THIS WARRANT SHALL NOT CONSTITUTE AN OFFER TO
SELL NOR A SOLICITATION OF AN OFFER TO BUY THE WARRANT OR THE
SECURITIES ISSUABLE UPON EXERCISE HEREOF IN ANY JURISDICTION IN WHICH
SUCH OFFER OR SOLICITATION WOULD BE UNLAWFUL.

NEITHER THIS WARRANT NOR THE SECURITIES ISSUABLE UPON EXERCISE HEREOF
MAY BE SOLD, PLEDGED, TRANSFERRED OR ASSIGNED EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND UNDER
APPLICABLE STATE SECURITIES LAWS, OR IN A TRANSACTION WHICH IS EXEMPT
FROM REGISTRATION UNDER THE PROVISIONS OF THE SECURITIES ACT AND UNDER
PROVISIONS OF APPLICABLE STATE SECURITIES LAWS AND IN THE CASE OF AN
EXEMPTION, ONLY IF THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL THAT
SUCH TRANSACTION DOES NOT REQUIRE REGISTRATION OF THE WARRANT OR SUCH
SECURITIES, WHICH OPINION AND WHICH COUNSEL SHALL BE SATISFACTORY TO
THE COMPANY IN ITS SOLE DISCRETION.

			       WARRANT

	   To Purchase _________ Shares of Common Stock
				and
  Warrants to Purchase An Additional ______ Shares of Common Stock
				of
		    MICROS-TO-MAINFRAMES, INC.

THIS CERTIFIES that, for value received, __________________ (the
"Holder"), is entitled, upon the terms and subject to the conditions
hereinafter set forth, at any time on or prior to 5:00 p.m., New York
City time on September 25, 2005 (the "Termination Date") but not
thereafter, to subscribe for and purchase from MICROS-TO-MAINFRAMES,
INC., a corporation incorporated in New York (the "Company"),
_______________ (______) shares (the "Warrant Shares") of common
stock, par value $0.001 per share, of the Company (the "Common Stock")
and warrants to purchase an additional ____ shares of Common Stock
(the "Additional Warrant Shares", and together with the Warrant
Shares, the "Shares"), in the form annexed hereto as Exhibit A (the
"Investor Warrants").  The Holder, upon exercise of this Warrant,
shall be entitled to receive an Investor Warrant to purchase one share
of Common Stock for each four shares of Common  Stock for which this
Warrant is exercised.   The purchase price of one share of Common
Stock (the "Exercise Price") under this Warrant shall be $ 5.00 per
share.  The Exercise Price and the number of shares for which the
Warrant is exercisable shall be subject to adjustment as provided
herein.

	1.      Title of Warrant.  Prior to the expiration hereof and
subject to compliance with applicable laws, this Warrant and all
rights hereunder are transferable, in whole or in part, at the office
or agency of the Company by the holder hereof in person or by duly
authorized attorney, upon surrender of this Warrant together with the
Assignment Form annexed hereto properly endorsed.

	2.      Authorization of Shares.  The Company covenants that
all shares of Common Stock which may be issued upon the exercise of
rights represented by this Warrant and the Investor Warrants will,
upon exercise of the rights represented by this Warrant and the
Investor Warrants, be duly authorized, validly issued, fully paid and
nonassessable and free from all taxes, liens and charges in respect of
the issue thereof (other than taxes in respect of any transfer
occurring contemporaneously with such issue).

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	3.      Exercise of Warrant.  Except as provided in Section 4
herein, exercise of the purchase rights represented by this Warrant
may be made at any time or times, before the close of business on the
Termination Date, or such earlier date on which this Warrant may
terminate as provided in this Warrant, by the surrender of this
Warrant and the Notice of Exercise Form annexed hereto duly executed,
at the office of the Company (or such other office or agency of the
Company as it may designate by notice in writing to the registered
holder hereof at the address of such holder appearing on the books of
the Company) and upon payment of the Exercise Price of the shares and
Investor Warrants thereby purchased by cash, check, bank draft or by
wire transfer of funds to an account designated by the Company
whereupon the holder of this Warrant shall be entitled (subject to
collection of funds if payment is by check) to receive a certificate
for the number of shares of Common Stock and Investor Warrants so
purchased.  This Warrant also may be exercised, in whole or in part,
by means of a "cashless exercise" by tendering this Warrant to the
Company for a number of shares of Common Stock having a Market Value
(as defined in Section 11(a)(vi) hereof) equal to the difference
between the Market Value of the shares of Common Stock issuable upon
such exercise of this Warrant and the total cash exercise price of
that part of the Warrant being exercised.  This Warrant shall be
deemed to have been exercised and such certificate or certificates
shall be deemed to have been issued, and Holder or any other person so
designated to be named therein shall be deemed to have become a holder
of record of such shares for all purposes, as of the date the Warrant
has been exercised by payment to the Company of the Warrant purchase
price and all taxes required to be paid by Holder, if any, pursuant to
Section 5 prior to the issuance of such shares and Investor Warrants
have been paid.  If this Warrant shall have been exercised in part,
the Company shall, at the time of delivery of the certificate or
certificates representing Warrant Shares and Investor Warrants,
deliver to Holder a new Warrant evidencing the rights of Holder to
purchase the unpurchased shares of Common Stock and Investor Warrants
called for by this Warrant, which new Warrant shall in all other
respects be identical with this Warrant.

	4.      No Fractional Shares or Scrip.  No fractional shares or
scrip representing fractional shares or fractional Investor Warrants
shall be issued upon the exercise of this Warrant.  As to any fraction
of a share which Holder would otherwise be entitled to purchase upon
such exercise, the Company shall pay a cash adjustment in respect of
such final fraction in an amount equal to the same fraction of the
closing market price per share of Common Stock on the date of exercise
of this Warrant.  No adjustment shall be made in respect of fractional
Investor Warrants which the Holder would otherwise be entitled to
purchase upon exercise of this Warrant.

	5.     Charges, Taxes and Expenses.  Issuance of certificates
for shares of Common Stock and Investor Warrants upon the exercise of
this Warrant shall be made without charge to the holder hereof for any
issue or transfer tax or other incidental expense in respect of the
issuance of such certificate, all of which taxes and expenses shall be
paid by the Company, and such certificates shall be issued in the name
of the holder of this Warrant or in such name or names as may be
directed by the holder of this Warrant; provided, however, that in the
event certificates for shares of Common Stock or Investor Warrants are
to be issued in a name other than the name of the holder of this
Warrant, this Warrant when surrendered for exercise shall be
accompanied by the Assignment Form attached hereto duly executed by
the holder hereof; and provided further, that upon any transfer
involved in the issuance or delivery of any certificates for shares of
Common Stock or Investor Warrants, the Company may require, as a
condition thereto, the payment of a sum sufficient to reimburse it for
any transfer tax incidental thereto.

	6.      Closing of Books.  The Company will not close its
shareholder books or records in any manner which prevents the timely
exercise of this Warrant.

	7.      Transfer, Division and Combination.  (a) Subject to
compliance with any applicable securities laws, transfer of this
Warrant and all rights hereunder, in whole or in part, shall be
registered on the books of the Company to be maintained for such
purpose, upon surrender of this Warrant at the principal office of the
Company, together with a written assignment of this Warrant
substantially in the form attached hereto duly executed by Holder or
its agent or attorney and funds sufficient to pay any transfer taxes
payable upon the making of such transfer.  Upon such surrender and, if
required, such payment, the Company shall execute and deliver a new
Warrant or Warrants in the name of the assignee or assignees and in
the denomination specified in such instrument of assignment, and shall
issue to the assignor a new Warrant evidencing the portion of this
Warrant not so assigned, and this Warrant shall promptly be cancelled.
A Warrant, if properly assigned, may be exercised by a new Holder for
the purchase of shares of Common Stock and Investor Warrants without
having a new Warrant issued.

		(b) This Warrant may be divided or combined with other
Warrants upon presentation hereof at the aforesaid office of the
Company, together with a written notice specifying the names and

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<PAGE>
denominations in which new Warrants are to be issued, signed by Holder
or its agent or attorney.  Subject to compliance with Section 7(a), as
to any transfer which may be involved in such division or combination,
the Company shall execute and deliver a new Warrant or Warrants in
exchange for the Warrant or Warrants to be divided or combined in
accordance with such notice.

		(c)  The Company shall prepare, issue and deliver at
its own expense (other than transfer taxes) the new Warrant or
Warrants under this Section 7.

		(d)  The Company agrees to maintain, at its aforesaid
office, books for the registration and the registration of transfer of
the Warrants.

	 8.      No Rights as Shareholder until Exercise.  This Warrant
does not entitle the holder hereof to any voting rights or other
rights as a shareholder of the Company prior to the exercise thereof.
Upon the surrender of this Warrant and the payment of the aggregate
Exercise Price, the Warrant Shares and Investor Warrants so purchased
shall be deemed to be issued to such holder as the record owner of
such shares as of the close of business on the later of the date of
such surrender or payment.

	9.      Loss, Theft, Destruction or Mutilation of Warrant.  The
Company represents and warrants that upon receipt by the Company of
evidence reasonably satisfactory to it of the loss, theft, destruction
or mutilation of this Warrant certificate or any certificate relating
to the Warrant Shares or the Investor Warrants, and in case of loss,
theft or destruction, of indemnity or security reasonably satisfactory
to it, and upon surrender and cancellation of such Warrant or
certificate, if mutilated, the Company will make and deliver a new
Warrant or certificate of like tenor and dated as of such
cancellation, in lieu of such Warrant or certificate.

       10.     Saturdays, Sundays, Holidays, etc.  If the last or
appointed day for the taking of any action or the expiration of any
right required or granted herein shall be a Saturday, Sunday or a
legal holiday, then such action may be taken or such right may be
exercised on the next succeeding day not a Saturday, Sunday or legal
holiday.

       11.  Adjustment of Exercise Price and Number of Warrant
Shares.  The number and kind of securities purchasable upon the
exercise of this Warrant and the Exercise Price shall be subject to
adjustment from time to time upon the happening of any of the
following.

	(a)     Issuance or Sale of Common Stock.  Except as hereinafter
provided, in case the Company shall, at any time after the date
hereof, issue or sell any shares of Common Stock (other than the
issuances or sales referred to in Section 11(f) hereof), including
shares held in the Company's treasury and shares of Common Stock
issued upon the exercise of any options, rights or warrants to
subscribe for shares of Common Stock (other than the issuances or
sales of Common Stock pursuant to rights to subscribe for such Common
Stock distributed pursuant to Paragraph 11(i) hereof) and shares of
Common Stock issued upon the direct or indirect conversion or exchange
of securities for shares of Common Stock, for a consideration per
share less than both the "Market Price" (as defined in Paragraph 11
(a)(vi) hereof) per share of Common Stock determined as of the trading
day immediately preceding such issuance or sale and the Exercise Price
in effect immediately prior to such issuance or sale, or without
consideration, then forthwith upon such issuance or sale, the Exercise
Price shall (until another such issuance or sale) be reduced to the
price (calculated to the nearest full cent) determined by multiplying
the Exercise Price in effect immediately prior to such issuance or
sale by a fraction, the numerator of which shall be the sum of (1) the
number of shares of Common Stock outstanding immediately prior to such
issuance or sale multiplied by the Exercise Price immediately prior to
such issuance or sale plus (2) the consideration received by the
Company upon such issuance or sale, and the denominator of which shall
be the product of (x) the total number of shares of Common Stock
outstanding immediately after such issuance or sale, multiplied by (y)
the Exercise Price immediately prior to such issuance or sale;
provided, however, that in no event shall the Exercise Price be
adjusted pursuant to this computation to an amount in excess of the
Exercise Price in effect immediately prior to such computation, except
in the case of a combination of outstanding shares of Common Stock, as
provided by Section 11(c) hereof.  For the purposes of this Section
11, the term "Exercise Price" shall mean the exercise price of this
Warrant, as adjusted from time to time pursuant to the provisions of
his Section 11.

For the purposes of any computation to be made in accordance with this
Section 11(a), the following provisions shall be applicable:

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       (i)     In case of the issuance or sale of shares of Common
Stock for a consideration part or all of which shall be cash, the
amount of the cash consideration therefor shall be deemed to be the
amount of cash received by the Company for such shares (or, if shares
of Common Stock are offered by the Company for subscription, the
subscription price, or, if such securities shall be sold to
underwriters or dealers for a public offering without a subscription
offering, the public offering price) before deducting therefrom any
compensation paid or discount allowed in the sale, underwriting or
purchase thereof by underwriters or dealers or others performing
similar services, or any expenses incurred in connection therewith.

(ii)    In case of the issuance or sale (otherwise than as a dividend or
other distribution on any stock of the Company) of shares of Common
Stock for a consideration part or all of which shall be other than
cash, the amount of the consideration therefor other than cash shall
be deemed to be the value of such consideration as determined in good
faith by the Board of Directors of the Company.

(iii)   Shares of Common Stock issuable by way of dividend or other
distribution on any stock of the Company shall be deemed to have been
issued immediately after the opening of business on the day following
the record date for the determination of stockholders entitled to
receive such dividend or other distribution and shall be deemed to
have been issued without consideration.

(iv)    The reclassification of securities of the Company other than
shares of Common Stock into securities including shares of Common
Stock shall be deemed to involve the issuance of such shares of Common
Stock for a consideration other than cash immediately prior to the
close of business on the date fixed for the determination of
securityholders entitled to receive such shares, and the value of the
consideration allocable to such shares of Common Stock shall be
determined as provided in subparagraph (ii) of this Section 11(a).

(v)     The number of shares of Common Stock at any one time outstanding
shall include the aggregate number of shares issued or issuable upon
the exercise of options, rights or warrants and upon the conversion or
exchange of convertible or exchangeable securities.

(vi)    As used herein, the phrase "Market Price" at any date shall be
deemed to be the average of the last reported sale price, or, in case
no such reported sale takes place on such day, the average of the last
reported sale prices for the last five trading days, in either case as
officially reported by the principal securities exchange on which the
Common Stock is listed or admitted to trading or as reported on the
Nasdaq Stock Market, or, if the Common Stock is not listed or admitted
to trading on any national securities exchange or quoted on the Nasdaq
Stock Market, the closing bid quotation on the OTC Bulletin Board or
otherwise in the over-the-counter market as furnished by the National
Association of Securities Dealers, Inc. through Nasdaq or a similar
organization if Nasdaq is no longer reporting such information, or if
the Common Stock is not quoted on Nasdaq or the OTC Bulletin Board, as
determined in good faith by resolution of the Board of Directors of
the Company, based on the best information available to it for the day
immediately preceding such issuance or sale.  If the Common Stock is
listed or admitted to trading on a national securities exchange and
also quoted on the Nasdaq Stock Market, the Market Price shall be
determined as hereinabove provided by reference to the prices reported
in the Nasdaq Stock Market; provided that if the Common Stock is
listed or admitted to trading on the New York Stock Exchange, the
Market Price shall be determined as hereinabove provided by reference
to the prices reported by such exchange.

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<PAGE>
      (b)     Options, Rights, Warrants and Convertible and
Exchangeable Securities.  Except in the case of the Company issuing
rights to subscribe for shares of Common Stock distributed pursuant to
Section 11(i) hereof, if the Company shall at any time after the date
hereof issue options, rights or warrants to subscribe for shares of
Common Stock, or issue any securities convertible into or exchangeable
for shares of Common Stock, in each case other than the issuances or
sales referred to in Section 11(f) hereof, (i) for a consideration per
share less than the lesser of (a) the Exercise Price in effect
immediately prior to the issuance of such options, rights or warrants,
or such convertible or exchangeable securities, or (b) the Market
Price determined as of  the trading day immediately preceding such
issuance, or (ii) without consideration, the Exercise Price in effect
immediately prior to the issuance of such options, rights or warrants,
or such convertible or exchangeable securities, as the case may be,
shall be reduced to a price determined by making a computation in
accordance with the provisions of Section 11(a) hereof, provided that:

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      (i)     The aggregate maximum number of shares of Common
Stock, as the case may be, issuable under all the outstanding options,
rights or warrants shall be deemed to be issued and outstanding at the
time all the outstanding options, rights or warrants were issued, and
for a consideration equal to the minimum purchase price per share
provided for in the options, rights or warrants at the time of
issuance, plus the consideration (determined in the same manner as
consideration received on the issue or sale of shares in accordance
with the terms of Section 11(a) hereof), if any, received by the
Company for the options, rights or warrants, and if no minimum
purchase price is provided in the options, rights or warrants, then
the minimum purchase price shall be equal to zero; provided, however,
that upon the expiration or other termination of the options, rights
or warrants, if any thereof shall not have been exercised, the number
of shares of Common Stock deemed to be issued and outstanding pursuant
to this Section 11(b) (and for the purposes of subparagraph (v) of
Section 11(a) hereof) shall be reduced by such number of shares as to
which options, warrants and/or rights shall have expired or terminated
unexercised, and such number of shares shall no longer be deemed to be
issued and outstanding, and the Exercise Price then in effect shall
forthwith be readjusted and thereafter be the price which it would
have been had adjustment been made on the basis of the issuance only
of shares actually issued or issuable upon the exercise of those
options, rights or warrants as to which the exercise rights shall not
have expired or terminated unexercised.

(ii)    The aggregate maximum number of shares of Common Stock issuable
upon conversion or exchange of any convertible or exchangeable
securities shall be deemed to be issued and outstanding at the time of
issuance of such securities, and for a consideration equal to the
consideration (determined in the same manner as consideration received
on the issue or sale of shares of Common Stock in accordance with the
terms of Section 11 (a) hereof) received by the Company for such
securities, plus the minimum consideration, if any, receivable by the
Company upon the conversion or exchange thereof; provided, however,
that upon the expiration or other termination of the right to convert
or exchange such convertible or exchangeable securities (whether by
reason of redemption or otherwise), the number of shares deemed to be
issued and outstanding pursuant to this subparagraph (ii) (and for the
purpose of subparagraph (v) of Section 11(a) hereof) shall be reduced
by such number of shares as to which the conversion or exchange rights
shall have expired or terminated unexercised, and such number of
shares shall no longer be deemed to be issued and outstanding, and the
Exercise Price then in effect shall forthwith be readjusted and
thereafter be the price which it would have been had adjustment been
made on the basis of the issuance only of the shares actually issued
or issuable upon the conversion or exchange of those convertible or
exchangeable securities as to which the conversion or exchange rights
shall not have expired or terminated unexercised.  No adjustment will
be made pursuant to this subparagraph (ii) upon the issuance by the
Company of any convertible or exchangeable securities pursuant to the
exercise of any option, right or warrant exercisable therefor, to the
extent that adjustments in respect of such options, rights or warrants
were previously made pursuant to the provisions of subparagraph (i) of
this Section 11(b).

(iii)   If any change shall occur in the price per share provided for in
any of the options, rights or warrants referred to in subparagraph (i)
of this Section 11(b), or in the price per share at which the
securities referred to in subparagraph (ii) of this Section 11(b) are
convertible or exchangeable, or if any such options, rights or
warrants are exercised at a price greater than the minimum purchase
price provided for in such options, rights or warrants, or any such
securities are converted or exercised for more than the minimum
consideration receivable by the Company upon such conversion or
exchange, the options, rights or warrants or conversion or exchange
rights, as the case may be, shall be deemed to have expired or
terminated on the date when such price change became effective in
respect of shares not theretofore issued pursuant to the exercise or
conversion or exchange thereof, and the Company shall be deemed to
have issued upon such date new options, rights or warrants or
convertible or exchangeable securities at the new price with respect
of the number of shares issuable upon the exercise of such options,
rights or warrants or the conversion or exchange of such convertible
or exchangeable securities; provided, however, that no adjustment
shall be made pursuant to this subparagraph (iii) with respect to any
change in the price per share provided for in any of the options,
rights or warrants referred to in subparagraph (i) of this Section
11(b), or in the price per share at which the securities referred to
in subparagraph (ii) of this Section 11(b) are convertible or
exchangeable, which change results from the application of the anti-
dilution provisions thereof in connection with an event for which,
subject to subparagraph (iv) of Section 11(f), an adjustment to the
Exercise Price and the number of securities issuable upon exercise of
this Warrant will be required to be made pursuant to this Section 11.
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(c)     Subdivision and Combination.  In case the Company
shall at any time after the date hereof subdivide or combine the
outstanding shares of Common Stock, the Exercise Price shall forthwith
be proportionately decreased in the case of subdivision or increased
in the case of combination.

(d)     Adjustment in Number of Warrant Shares.  Upon each adjustment of
the Exercise Price pursuant to the provisions of this Section 11, the
number of shares of Common Stock issuable upon the exercise of this
Warrant shall be adjusted to the nearest full whole number by
multiplying a number equal to the Exercise Price in effect immediately
prior to such adjustment by the number of shares of Common Stock
issuable upon exercise of this Warrant immediately prior to such
adjustment and dividing the product so obtained by the adjusted
Exercise Price.

(e)     Reclassification, Consolidation, Merger, etc.  In case of any
reclassification or change of the outstanding shares of Common Stock
(other than a change in par value to no par value, or from no par
value to par value, or as a result of a subdivision or combination),
or in the case of any consolidation of the Company with, or merger of
the Company into, another corporation (other than a consolidation or
merger which does not result in any reclassification or change of the
outstanding shares of Common Stock, except a change as a result of a
subdivision or combination of such shares or a change in par value, as
aforesaid), or in the case of a sale or conveyance to another
corporation of the property of the Company as an entirety, the Holder
shall thereafter have the right to purchase the kind and number of
shares of stock and other securities and property receivable upon such
reclassification, change, consolidation, merger, sale or conveyance as
if the Holder were the owner of the shares of Common Stock underlying
this Warrant immediately prior to any such events at a price equal to
the product of (x) the number of shares of Common Stock issuable upon
exercise of this Warrant and (y) the Exercise Price in effect
immediately prior to the record date for such reclassification,
change, consolidation, merger, sale or conveyance as if such Holder
had exercised this Warrant.

(f)     No Adjustment of Exercise Price in Certain Cases.
Notwithstanding anything herein to the contrary, no adjustment of the
Exercise Price shall be made:
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(i)     Upon the issuance of the shares of Common Stock that
may be acquired upon the exercise of warrants to purchase an aggregate
of 6,000 shares of Common Stock, identical to the Investor Warrants,
which warrants may be acquired upon exercise of this Warrant and like
warrants issued to designees of Sunrise Securities Corp. issued on the
date hereof; or

(ii)    Upon (i) the issuance of options pursuant to the Company's stock
option plans in effect on the date hereof or as hereafter amended in
accordance with the terms thereof or any other employee or executive
stock option or award plan approved by stockholders of the Company or
the sale by the Company of any shares of Common Stock pursuant to the
exercise of any such options, or (ii) the sale by the Company of any
shares of Common Stock pursuant to the exercise of any options or
warrants issued and outstanding on the date hereof.

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       (g)     Adjustment of Investor Warrants Underlying.  With
respect to the Investor Warrants that may be acquired upon exercise of
this Warrant, the exercise price of the Investor Warrants and the
number of shares of Common Stock and other securities purchasable
pursuant to the Investor Warrants shall be adjusted in accordance with
the terms and provisions of the Investor Warrants, upon the
occurrence, at any time after the date hereof, of any of the events
described in the Investor Warrant requiring such adjustment, with the
same force and effect as if the Investor Warrants had been issued as
of this date, whether or not the Investor Warrants shall have been
exercised at the time of the occurrence of such event and whether or
not the Investor Warrants shall be issued and outstanding at the time
of the occurrence of such event.  Thereafter, the Investor Warrants
shall be exercisable at such  adjusted exercise price for such
adjusted number of shares of Common Stock or other securities,
properties or rights as provided for in the Investor Warrants.

     (h)     Dividends and Other Distributions with Respect to
Outstanding Securities.   In the event that the Company shall at any
time after the date hereof and prior to the exercise and expiration of
this Warrant declare a dividend (other than a dividend consisting
solely of shares of Common Stock or a cash dividend or distribution
payable out of current or retained earnings) or otherwise distribute
to the holders of Common Stock any monies, assets, property, rights,
evidences of indebtedness, securities (other than such a cash dividend
or distribution or dividend consisting solely of shares of Common
Stock), whether issued by the Company or by another person or entity,
or any other thing of value, the Holder of this Warrant shall
thereafter be entitled, in addition to the shares of Common Stock or
other securities receivable upon the exercise thereof, to receive,
upon the exercise of this Warrant, the same monies, property, assets,
rights, evidences of indebtedness, securities or any other thing of
value that the Holder would have been entitled to receive at the time
of such dividend or distribution as if the Holder was the owner of the
shares of Common Stock underlying this Warrant.  At the time of any
such dividend or distribution, the Company shall make appropriate
reserves to ensure the timely performance of the provisions of this
Section 11(h).

(i)     Subscription Rights for Shares of Common Stock or Other
Securities.  In case the Company shall at any time after the date
hereof and prior to the exercise of this Warrant in full issue any
rights to subscribe for shares of Common Stock or any other securities
of the Company  to all the holders of Common Stock, the Holder of this
Warrant shall be entitled, in addition to the shares of Common Stock
or other securities receivable upon the exercise of this Warrant, to
receive such rights at the time such rights are distributed to the
other stockholders of the Company but only to the extent of the number
of shares of Common Stock, if any, for which this Warrant remains
exercisable.

(j)     Notice in Event of Dissolution.  In case of the
dissolution, liquidation or winding-up of the Company, all rights
under this Warrant shall terminate on a date fixed by the Company,
such date to be no earlier than ten (10) days prior to the
effectiveness of such dissolution, liquidation or winding-up and not
later than five (5) days prior to such effectiveness.  Notice of such
termination of purchase rights shall be given to the registered Holder
of this Warrant, as the same shall appear on the books and records of
the Company, by registered mail at least thirty (30) days prior to
such termination date.

	12.     Voluntary Adjustment by the Company.  The Company may
at any time during the term of this Warrant, reduce the then current
Exercise Price to any amount and for any period of time deemed
appropriate by the Board of Directors of the Company.

        13.     Notice of Adjustment.  Whenever the number of Warrant
Shares or number or kind of securities or other property purchasable
upon the exercise of this Warrant or the Exercise Price is adjusted,
as herein provided, the Company shall promptly mail by registered or
certified mail, return receipt requested, to the holder of this
Warrant notice of such adjustment or adjustments setting forth the
number of Warrant Shares (and other securities or property)
purchasable upon the exercise of this Warrant and the Exercise Price
of such Warrant Shares (and other securities or property) after such
adjustment, setting forth a brief statement of the facts requiring
such adjustment and setting forth the computation by which such
adjustment was made.  Such notice, in absence of manifest error, shall
be conclusive evidence of the correctness of such adjustment.

      14.     Notice of Corporate Action.  If at any time

		(a)  the Company shall take a record of the holders of
its Common Stock for the purpose of entitling them to receive a
dividend or other distribution, or any right to subscribe for or
purchase any evidences of its indebtedness, any shares of stock of any

				9
<PAGE>
class or any other securities or property, or to receive any other
right, or

		(b) there shall be any capital reorganization of the
Company, any reclassification or recapitalization of the capital stock
of the Company or any consolidation or merger of the Company with, or
any sale, transfer or other disposition of all or substantially all
the property, assets or business of the Company to, another
corporation or,

		(c)  there shall be a voluntary or involuntary
dissolution, liquidation or winding up of the Company; then, in any
one or more of such cases, the Company shall give to Holder (i) at
least 30 days' prior written notice of the date on which a record date
shall be selected for such dividend, distribution or right or for
determining rights to vote in respect of any such reorganization,
reclassification, merger, consolidation, sale, transfer, disposition,
liquidation or winding up, and (ii) in the case of any such
reorganization, reclassification, merger, consolidation, sale,
transfer, disposition, dissolution, liquidation or winding up, at
least 30 days' prior written notice of the date when the same shall
take place.  Such notice in accordance with the foregoing clause also
shall specify (i) the date on which any such record is to be taken for
the purpose of such dividend, distribution or right, the date on which
the holders of Common Stock shall be entitled to any such dividend,
distribution or right, and the amount and character thereof, and (ii)
the date on which any such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, dissolution, liquidation
or winding up is to take place and the time, if any such time is to be
fixed, as of which the holders of Common Stock shall be entitled to
exchange their shares of Common Stock for securities or other property
deliverable upon such disposition, dissolution, liquidation or winding
up.  Each such written notice shall be sufficiently given if addressed
to Holder at the last address of Holder appearing on the books of the
Company and delivered in accordance with Section 16(d).

	15.     Authorized Shares.  The Company covenants that during
the period the Warrant is outstanding, it will reserve from its
authorized and unissued Common Stock a sufficient number of shares to
provide for the issuance of Shares upon the exercise of any purchase
rights under this Warrant.  The Company further covenants that its
issuance of this Warrant shall constitute full authority to its
officers who are charged with the duty of executing stock certificates
to execute and issue the necessary certificates for the Shares upon
the exercise of the purchase rights under this Warrant.  The Company
will take all such reasonable action as may be necessary to assure
that such Shares may be issued as provided herein without violation of
any applicable law or regulation, or of any requirements of  NASDAQ or
any domestic securities exchange upon which the Common Stock may be
listed.

	The Company shall not by any action, including, without
limitation, amending its certificate of incorporation or through any
reorganization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other voluntary
action, avoid or seek to avoid the observance or performance of any of
the terms of this Warrant, but will at all times in good faith assist
in the carrying out of all such terms and in the taking of all such
actions as may be necessary or appropriate to protect the rights of
Holder against impairment.  Without limiting the generality of the
foregoing, the Company will (a) not increase the par value of any
shares of Common Stock receivable upon the exercise of this Warrant or
the Investor Warrants above the amount payable therefor upon such
exercise immediately prior to such increase in par value, (b) take all
such action as may be necessary or appropriate in order that the
Company may validly and legally issue fully paid and nonassessable
shares of Common Stock upon the exercise of this Warrant and the
Investor Warrants, and (c) use its best efforts to obtain all such
authorizations, exemptions or consents from any public regulatory body
having jurisdiction thereof as may be necessary to enable the Company
to perform its obligations under this Warrant and the Investor
Warrants.

	Upon the request of Holder, the Company will at any time
during the period this Warrant is outstanding acknowledge in writing,
in form reasonably satisfactory to Holder, the continuing validity of
this Warrant and the obligations of the Company hereunder.

	Before taking any action which would cause an adjustment
reducing the current Exercise Price below the then par value, if any,
of the shares of Common Stock issuable upon exercise of the Warrants,
the Company shall take any corporate action which may be necessary in
order that the Company may validly and legally issue fully paid and
non-assessable shares of such Common Stock at such adjusted Exercise
Price.
				10
<PAGE>
	Before taking any action which would result in an
adjustment in the number of shares of Common Stock for which this
Warrant is exercisable or in the Exercise Price, the Company shall
obtain all such authorizations or exemptions thereof, or consents
thereto, as may be necessary from any public regulatory body or bodies
having jurisdiction thereof.

       16.     Miscellaneous.

       (a)     Issue Date; Jurisdiction.  The provisions of this
Warrant shall be construed and shall be given effect in all respects
as if it had been issued and delivered by the Company on the date
hereof.  This Warrant shall be binding upon any successors or assigns
of the Company.  This Warrant shall constitute a contract under the
laws of New York  without regard to its conflict of law, principles or
rules, and be subject to arbitration pursuant to the terms set forth
in the Agreement.

       (b)     Restrictions.  The holder hereof acknowledges
that the Warrant Shares acquired upon the exercise of this Warrant, if
not registered, will have restrictions upon resale imposed by state
and federal securities laws.

       (c)     Nonwaiver and Expenses.  No course of dealing or
any delay or failure to exercise any right hereunder on the part of
Holder shall operate as a waiver of such right or otherwise prejudice
Holder's rights, powers or remedies, notwithstanding all rights
hereunder terminate on the Termination Date.  If the Company fails to
make, when due, any payments provided for hereunder, or fails to
comply with any other provision of this Warrant, the Company shall pay
to Holder such amounts as shall be sufficient to cover any costs and
expenses including, but not limited to, reasonable attorneys' fees,
including those of appellate proceedings, incurred by Holder in
collecting any amounts due pursuant hereto or in otherwise enforcing
any of its rights, powers or remedies hereunder.

      (d)     Notices.  Any notice, request or other document
required or permitted to be given or delivered to the holder hereof by
the Company shall be delivered in accordance with the notice
provisions of the subscription agreement between the Holder and the
Company.

      (e)     Limitation of Liability.  No provision hereof, in
the absence of affirmative action by Holder to purchase shares of
Common Stock, and no enumeration herein of the rights or privileges of
Holder hereof, shall give rise to any liability of Holder for the
purchase price of any Common Stock or as a stockholder of the Company,
whether such liability is asserted by the Company or by creditors of
the Company.

      (f)     Remedies.  Holder, in addition to being entitled
to exercise all rights granted by law, including recovery of damages,
will be entitled to specific performance of its rights under this
Warrant.  The Company agrees that monetary damages would not be
adequate compensation for any loss incurred by reason of a breach by
it of the provisions of this Warrant and hereby agrees to waive the
defense in any action for specific performance that a remedy at law
would be adequate.

      (g)     Successors and Assigns.  Subject to applicable
securities laws, this Warrant and the rights evidenced hereby shall
inure to the benefit of and be binding upon the successors of the
Company and the successors and assigns of Holder.  The provisions of
this Warrant are intended to be for the benefit of all Holders from
time to time of this Warrant and shall be enforceable by any such
Holder or holder of Warrant Stock.

				11
<PAGE>
      (h)     Cooperation.  The Company shall cooperate with
Holder in supplying such information as may be reasonably necessary
for Holder to complete and file any information reporting forms
presently or hereafter required by the Commission as a condition to
the availability of an exemption from the Securities Act for the sale
of any Warrant or Common Stock.

     (i)     Indemnification.  The Company agrees to indemnify
and hold harmless Holder from and against any liabilities,
obligations, losses, damages, penalties, actions, judgments, suits,
claims, costs, attorneys' fees, expenses and disbursements of any kind
which may be imposed upon, incurred by or asserted against Holder in
any manner relating to or arising out of any failure by the Company to
perform or observe in any material respect any of its covenants,
agreements, undertakings or obligations set forth in this Warrant;
provided, however, that the Company will not be liable hereunder to
the extent that any liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, claims, costs, attorneys' fees,
expenses or disbursements are found in a final non-appealable judgment
by a court to have resulted from Holder's negligence, bad faith or
willful misconduct in its capacity as a stockholder or warrantholder
of the Company.

     (j)     Amendment.  This Warrant and all other Warrants
may be modified or amended or the provisions hereof waived with the
written consent of the Company and the Holder.

     (k)     Severability.  Wherever possible, each provision
of this Warrant shall be interpreted in such manner as to be effective
and valid under applicable law, but if any provision of this Warrant
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 provisions or the remaining
provisions of this Warrant.

     (l) Headings.  The headings used in this Warrant are
for the convenience of reference only and shall not, for any purpose,
be deemed a part of this Warrant.

				12
<PAGE>

		IN WITNESS WHEREOF, the Company has caused this Warrant to
be executed by its officer thereunto duly authorized.

Dated: September 26,  2000

			  MICROS-TO-MAINFRAMES, INC.

		     By:
			 ____________________
			 Steven H. Rothman
			 Chief Executive Officer and President

<PAGE>

			     NOTICE OF EXERCISE

To:     MICROS-TO-MAINFRAMES, INC.

     (1)  The undersigned hereby elects to purchase ________
shares of Common Stock, par value $0.001 per share (the "Common
Stock"), of MICROS-TO-MAINFRAMES, INC. and warrants to purchase an
additional ____ shares of Common Stock pursuant to the terms of the
attached Warrant, and

	-  tenders herewith payment of the exercise price in full
	   together with all applicable transfer taxes, if any; or

	-  tenders the Warrant for cashless exercise

      (2)     Calculation of cashless exercise value, if applicable:

      (3)     Please issue a certificate or certificates
representing said shares of Common Stock and Warrants in the name of
the undersigned or in such other name as is specified below:

			_______________________________
			(Name)

			_______________________________
			(Address)
			_______________________________

Dated:

					      ______________________________
							Signature

<PAGE>

			    ASSIGNMENT FORM

	   (To assign the foregoing warrant, execute
	    this form and supply required information.
	    Do not use this form to exercise the warrant.)

      FOR VALUE RECEIVED, the foregoing Warrant and all rights
evidenced thereby are hereby assigned to_______________________

_______________________________________________ whose address is

_______________________________________________________________.

_______________________________________________________________

			Dated:  ________________________,

			Holder's Signature:     _____________________________

			Holder's Address:       _____________________________

						_____________________________

Signature Guaranteed:  ___________________________________________

NOTE:  The signature to this Assignment Form must correspond with the
name as it appears on the face of the Warrant, without alteration or
enlargement or any change whatsoever, and must be guaranteed by a bank
or trust company.  Officers of corporations and those acting in an
fiduciary or other representative capacity should file proper evidence
of authority to assign the foregoing Warrant.

<PAGE>

							    EXHIBIT A

W-

NEITHER THIS WARRANT NOR THE SHARES ISSUABLE UPON EXERCISE HEREOF HAVE
BEEN REGISTERED WITH THE UNITED STATES SECURITIES AND EXCHANGE
COMMISSION (THE "COMMISSION") OR THE SECURITIES COMMISSION OF ANY
STATE PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER RULE 506 OF
REGULATION D PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT").  THIS WARRANT SHALL NOT CONSTITUTE AN OFFER TO
SELL NOR A SOLICITATION OF AN OFFER TO BUY THE WARRANT OR THE SHARES
ISSUABLE UPON EXERCISE HEREOF IN ANY JURISDICTION IN WHICH SUCH OFFER
OR SOLICITATION WOULD BE UNLAWFUL.

NEITHER THIS WARRANT NOR THE SHARES ISSUABLE UPON EXERCISE HEREOF MAY
BE SOLD, PLEDGED, TRANSFERRED OR ASSIGNED EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND UNDER
APPLICABLE STATE SECURITIES LAWS, OR IN A TRANSACTION WHICH IS EXEMPT
FROM REGISTRATION UNDER THE PROVISIONS OF THE SECURITIES ACT AND UNDER
PROVISIONS OF APPLICABLE STATE SECURITIES LAWS AND IN THE CASE OF AN
EXEMPTION, ONLY IF THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL THAT
SUCH TRANSACTION DOES NOT REQUIRE REGISTRATION OF THE WARRANT OR SUCH
SHARES, WHICH OPINION AND WHICH COUNSEL SHALL BE SATISFACTORY TO THE
COMPANY IN ITS SOLE DISCRETION.

			 STOCK PURCHASE WARRANT

	   To Purchase _________ Shares of Common Stock of

			MICROS-TO-MAINFRAMES, INC.

THIS CERTIFIES that, for value received, ________________ (the
"Holder"), is entitled, upon the terms and subject to the conditions
hereinafter set forth, at any time on or prior to 5:00 p.m., New York
City time on September 25, 2005 (the "Termination Date") but not
thereafter, to subscribe for and purchase from MICROS-TO-MAINFRAMES,
INC., a corporation incorporated in New York (the
"Company"),___________________ shares (the "Warrant Shares") of common
stock, par value $0.001 per share of the Company (the "Common Stock").
The purchase price of one share of Common Stock (the "Exercise Price")
under this Warrant shall be $ 5.00 per share.  The Exercise Price and
the number of shares for which the Warrant is exercisable shall be
subject to adjustment as provided herein.

	1.      Title of Warrant.  Prior to the expiration hereof and
subject to compliance with applicable laws, this Warrant and all
rights hereunder are transferable, in whole or in part, at the office
or agency of the Company by the holder hereof in person or by duly
authorized attorney, upon surrender of this Warrant together with the
Assignment Form annexed hereto properly endorsed.

	2.      Authorization of Shares.  The Company covenants that
all shares of Common Stock which may be issued upon the exercise of
rights represented by this Warrant will, upon exercise of the rights
represented by this Warrant, be duly authorized, validly issued, fully
paid and nonassessable and free from all taxes, liens and charges in
respect of the issue thereof (other than taxes in respect of any
transfer occurring contemporaneously with such issue).

	3.      Exercise of Warrant.  Except as provided in Section 4
herein, exercise of the purchase rights represented by this Warrant
may be made at any time or times, before the close of business on the
Termination Date, or such earlier date on which this Warrant may
terminate as provided in this Warrant, by the surrender of this
Warrant and the Notice of Exercise Form annexed hereto duly executed,
at the office of the Company (or such other office or agency of the
Company as it may designate by notice in writing to the registered
holder hereof at the address of such holder appearing on the books of
the Company) and upon payment of the Exercise Price of the shares

				  1
<PAGE>
thereby purchased by cash, check, bank draft or by wire transfer of
funds to an account designated by the Company whereupon the holder of
this Warrant shall be entitled (subject to collection of funds if
payment is by check) to receive a certificate for the number of shares
of Common Stock so purchased.  This Warrant shall be deemed to have
been exercised and such certificate or certificates shall be deemed to
have been issued, and Holder or any other person so designated to be
named therein shall be deemed to have become a holder of record of
such shares for all purposes, as of the date the Warrant has been
exercised by payment to the Company of the Warrant purchase price and
all taxes required to be paid by Holder, if any, pursuant to Section 5
prior to the issuance of such shares have been paid.  If this Warrant
shall have been exercised in part, the Company shall, at the time of
delivery of the certificate or certificates representing Warrant
Shares, deliver to Holder a new Warrant evidencing the rights of
Holder to purchase the unpurchased shares of Common Stock called for
by this Warrant, which new Warrant shall in all other respects be
identical with this Warrant.

    4.      No Fractional Shares or Scrip.  No fractional shares or
scrip representing fractional shares shall be issued upon the exercise
of this Warrant.  As to any fraction of a share which Holder would
otherwise be entitled to purchase upon such exercise, the Company
shall pay a cash adjustment in respect of such final fraction in an
amount equal to the same fraction of the closing market price per
share of Common Stock on the date of exercise of this Warrant.

    5.   Charges, Taxes and Expenses.  Issuance of certificates
for shares of Common Stock upon the exercise of this Warrant shall be
made without charge to the holder hereof for any issue or transfer tax
or other incidental expense in respect of the issuance of such
certificate, all of which taxes and expenses shall be paid by the
Company, and such certificates shall be issued in the name of the
holder of this Warrant or in such name or names as may be directed by
the holder of this Warrant; provided, however, that in the event
certificates for shares of Common Stock are to be issued in a name
other than the name of the holder of this Warrant, this Warrant when
surrendered for exercise shall be accompanied by the Assignment Form
attached hereto duly executed by the holder hereof; and provided
further, that upon any transfer involved in the issuance or delivery
of any certificates for shares of Common Stock, the Company may
require, as a condition thereto, the payment of a sum sufficient to
reimburse it for any transfer tax incidental thereto.

    6.      Closing of Books.  The Company will not close its
shareholder books or records in any manner which prevents the timely
exercise of this Warrant.

    7.      Transfer, Division and Combination.  (a) Subject to
compliance with any applicable securities laws, transfer of this
Warrant and all rights hereunder, in whole or in part, shall be
registered on the books of the Company to be maintained for such
purpose, upon surrender of this Warrant at the principal office of the
Company, together with a written assignment of this Warrant
substantially in the form attached hereto duly executed by Holder or
its agent or attorney and funds sufficient to pay any transfer taxes
payable upon the making of such transfer.  Upon such surrender and, if
required, such payment, the Company shall execute and deliver a new
Warrant or Warrants in the name of the assignee or assignees and in
the denomination specified in such instrument of assignment, and shall
issue to the assignor a new Warrant evidencing the portion of this
Warrant not so assigned, and this Warrant shall promptly be cancelled.
A Warrant, if properly assigned, may be exercised by a new Holder for
the purchase of shares of Common Stock without having a new Warrant
issued.
		(b) This Warrant may be divided or combined with other
Warrants upon presentation hereof at the aforesaid office of the
Company, together with a written notice specifying the names and
denominations in which new Warrants are to be issued, signed by Holder
or its agent or attorney.  Subject to compliance with Section 7(a), as
to any transfer which may be involved in such division or combination,
the Company shall execute and deliver a new Warrant or Warrants in
exchange for the Warrant or Warrants to be divided or combined in
accordance with such notice.

		(c) The Company shall prepare, issue and deliver at
its own expense (other than transfer taxes) the new Warrant or
Warrants under this Section 7.
		(d) The Company agrees to maintain, at its aforesaid
office, books for the registration and the registration of transfer of
the Warrants.
				2

<PAGE>
       8.      No Rights as Shareholder until Exercise.  This Warrant
does not entitle the holder hereof to any voting rights or other
rights as a shareholder of the Company prior to the exercise thereof.
Upon the surrender of this Warrant and the payment of the aggregate
Exercise Price, the Warrant Shares so purchased shall be and be deemed
to be issued to such holder as the record owner of such shares as of
the close of business on the later of the date of such surrender or
payment.

       9.      Loss, Theft, Destruction or Mutilation of Warrant.  The
Company represents and warrants that upon receipt by the Company of
evidence reasonably satisfactory to it of the loss, theft, destruction
or mutilation of this Warrant certificate or any stock certificate
relating to the Warrant Shares, and in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to it,
and upon surrender and cancellation of such Warrant or stock
certificate, if mutilated, the Company will make and deliver a new
Warrant or stock certificate of like tenor and dated as of such
cancellation, in lieu of such Warrant or stock certificate.

      10.     Saturdays, Sundays, Holidays, etc.  If the last or
appointed day for the taking of any action or the expiration of any
right required or granted herein shall be a Saturday, Sunday or a
legal holiday, then such action may be taken or such right may be
exercised on the next succeeding day not a Saturday, Sunday or legal
holiday.

				3
<PAGE>
11.     Adjustment of Exercise Price and Number of Warrant Shares.  The
number and kind of securities purchasable upon the exercise of this
Warrant and the Exercise Price shall be subject to adjustment from
time to time upon the happening of any of the following.

(a)     Issuance or Sale of Common Stock.  Except as hereinafter
provided, in case the Company shall, at any time after the date
hereof, issue or sell any shares of Common Stock (other than the
issuances or sales referred to in Section 11(f) hereof), including
shares held in the Company's treasury and shares of Common Stock
issued upon the exercise of any options, rights or warrants to
subscribe for shares of Common Stock (other than the issuances or
sales of Common Stock pursuant to rights to subscribe for such Common
Stock distributed pursuant to Paragraph 11(i) hereof) and shares of
Common Stock issued upon the direct or indirect conversion or exchange
of securities for shares of Common Stock, for a consideration per
share less than both the "Market Price" (as defined in Paragraph 11
(a)(vi) hereof) per share of Common Stock determined as of the trading
day immediately preceding such issuance or sale and the Exercise Price
in effect immediately prior to such issuance or sale, or without
consideration, then forthwith upon such issuance or sale, the Exercise
Price shall (until another such issuance or sale) be reduced to the
price (calculated to the nearest full cent) determined by multiplying
the Exercise Price in effect immediately prior to such issuance or
sale by a fraction, the numerator of which shall be the sum of (1) the
number of shares of Common Stock outstanding immediately prior to such
issuance or sale multiplied by the Exercise Price immediately prior to
such issuance or sale plus (2) the consideration received by the
Company upon such issuance or sale, and the denominator of which shall
be the product of (x) the total number of shares of Common Stock
outstanding immediately after such issuance or sale, multiplied by (y)
the Exercise Price immediately prior to such issuance or sale;
provided, however, that in no event shall the Exercise Price be
adjusted pursuant to this computation to an amount in excess of the
Exercise Price in effect immediately prior to such computation, except
in the case of a combination of outstanding shares of Common Stock, as
provided by Section 11(c) hereof.

For the purposes of this Section 11, the term "Exercise Price" shall
mean the exercise price of this Warrant, as adjusted from time to time
pursuant to the provisions of this Section 11.

		For the purposes of any computation to be made in
accordance with this Section 11(a), the following provisions shall be
applicable:

	(i)     In case of the issuance or sale of shares of Common Stock
for a consideration part or all of which shall be cash, the amount of
the cash consideration therefor shall be deemed to be the amount of
cash received by the Company for such shares (or, if shares of Common
Stock are offered by the Company for subscription, the subscription
price, or, if such securities shall be sold to underwriters or dealers
for a public offering without a subscription offering, the public
offering price) before deducting therefrom any compensation paid or
discount allowed in the sale, underwriting or purchase thereof by
underwriters or dealers or others performing similar services, or any
expenses incurred in connection therewith.

	(ii)    In case of the issuance or sale (otherwise than as a
dividend or other distribution on any stock of the Company) of shares
of Common Stock for a consideration part or all of which shall be
other than cash, the amount of the consideration therefor other than
cash shall be deemed to be the value of such consideration as
determined in good faith by the Board of Directors of the Company.

	(iii)   Shares of Common Stock issuable by way of dividend or other
distribution on any stock of the Company shall be deemed to have been
issued immediately after the opening of business on the day following
the record date for the determination of stockholders entitled to
receive such dividend or other distribution and shall be deemed to
have been issued without consideration.

	(iv)    The reclassification of securities of the Company other
than shares of Common Stock into securities including shares of Common
Stock shall be deemed to involve the issuance of such shares of Common
Stock for a consideration other than cash immediately prior to the
close of business on the date fixed for the determination of
securityholders entitled to receive such shares, and the value of the
consideration allocable to such shares of Common Stock shall be
determined as provided in subparagraph (ii) of this Section 11(a).

				5

<PAGE>
	(v)     The number of shares of Common Stock at any one time
outstanding shall include the aggregate number of shares issued or
issuable upon the exercise of options, rights or warrants and upon the
conversion or exchange of convertible or exchangeable securities.

	(vi)    As used herein, the phrase "Market Price" at any date shall
be deemed to be the average of the last reported sale price, or, in
case no such reported sale takes place on such day, the average of the
last reported sale prices for the last five trading days, in either
case as officially reported by the principal securities exchange on
which the Common Stock is listed or admitted to trading or as reported
on the Nasdaq Stock Market, or, if the Common Stock is not listed or
admitted to trading on any national securities exchange or quoted on
the Nasdaq Stock Market, the closing bid quotation on the OTC Bulletin
Board or otherwise in the over-the-counter market as furnished by the
National Association of Securities Dealers, Inc. through Nasdaq or a
similar organization if Nasdaq is no longer reporting such
information, or if the Common Stock is not quoted on Nasdaq or the OTC
Bulletin Board, as determined in good faith by resolution of the Board
of Directors of the Company, based on the best information available
to it for the day immediately preceding such issuance or sale.  If the
Common Stock is listed or admitted to trading on a national securities
exchange and also quoted on the Nasdaq Stock Market, the Market Price
shall be determined as hereinabove provided by reference to the prices
reported in the Nasdaq Stock Market; provided that if the Common Stock
is listed or admitted to trading on the New York Stock Exchange, the
Market Price shall be determined as hereinabove provided by reference
to the prices reported by such exchange.

		(b)     Options, Rights, Warrants and Convertible and
Exchangeable Securities.  Except in the case of the Company issuing
rights to subscribe for shares of Common Stock distributed pursuant to
Section 11(i) hereof, if the Company shall at any time after the date
hereof issue options, rights or warrants to subscribe for shares of
Common Stock, or issue any securities convertible into or exchangeable
for shares of Common Stock, in each case other than the issuances or
sales referred to in Section 11(f) hereof, (i) for a consideration per
share less than the lesser of (a) the Exercise Price in effect
immediately prior to the issuance of such options, rights or warrants,
or such convertible or exchangeable securities, or (b) the Market
Price determined as of  the trading day immediately preceding such
issuance, or (ii) without consideration, the Exercise Price in effect
immediately prior to the issuance of such options, rights or warrants,
or such convertible or exchangeable securities, as the case may be,
shall be reduced to a price determined by making a computation in
accordance with the provisions of Section 11(a) hereof, provided that:

				6
<PAGE>

	(i)     The aggregate maximum number of shares of Common
Stock, as the case may be, issuable under all the outstanding options,
rights or warrants shall be deemed to be issued and outstanding at the
time all the outstanding options, rights or warrants were issued, and
for a consideration equal to the minimum purchase price per share
provided for in the options, rights or warrants at the time of
issuance, plus the consideration (determined in the same manner as
consideration received on the issue or sale of shares in accordance
with the terms of Section 11(a) hereof), if any, received by the
Company for the options, rights or warrants, and if no minimum
purchase price is provided in the options, rights or warrants, then
the minimum purchase price shall be equal to zero; provided, however,
that upon the expiration or other termination of the options, rights
or warrants, if any thereof shall not have been exercised, the number
of shares of Common Stock deemed to be issued and outstanding pursuant
to this Section 11(b) (and for the purposes of subparagraph (v) of
Section 11(a) hereof) shall be reduced by such number of shares as to
which options, warrants and/or rights shall have expired or terminated
unexercised, and such number of shares shall no longer be deemed to be
issued and outstanding, and the Exercise Price then in effect shall
forthwith be readjusted and thereafter be the price which it would
have been had adjustment been made on the basis of the issuance only
of shares actually issued or issuable upon the exercise of those
options, rights or warrants as to which the exercise rights shall not
have expired or terminated unexercised.

	(ii)    The aggregate maximum number of shares of Common
Stock issuable upon conversion or exchange of any convertible or
exchangeable securities shall be deemed to be issued and outstanding
at the time of issuance of such securities, and for a consideration
equal to the consideration (determined in the same manner as
consideration received on the issue or sale of shares of Common Stock
in accordance with the terms of Section 11 (a) hereof) received by the
Company for such securities, plus the minimum consideration, if any,
receivable by the Company upon the conversion or exchange thereof;
provided, however, that upon the expiration or other termination of
the right to convert or exchange such convertible or exchangeable
securities (whether by reason of redemption or otherwise), the number
of shares deemed to be issued and outstanding pursuant to this
subparagraph (ii) (and for the purpose of subparagraph (v) of Section
11(a) hereof) shall be reduced by such number of shares as to which
the conversion or exchange rights shall have expired or terminated
unexercised, and such number of shares shall no longer be deemed to be
issued and outstanding, and the Exercise Price then in effect shall
forthwith be readjusted and thereafter be the price which it would
have been had adjustment been made on the basis of the issuance only
of the shares actually issued or issuable upon the conversion or
exchange of those convertible or exchangeable securities as to which
the conversion or exchange rights shall not have expired or terminated
unexercised.  No adjustment will be made pursuant to this subparagraph
(ii) upon the issuance by the Company of any convertible or
exchangeable securities pursuant to the exercise of any option, right
or warrant exercisable therefor, to the extent that adjustments in
respect of such options, rights or warrants were previously made
pursuant to the provisions of subparagraph (i) of this Section 11(b).

	(iii)   If any change shall occur in the price per share
provided for in any of the options, rights or warrants referred to in
subparagraph (i) of this Section 11(b), or in the price per share at
which the securities referred to in subparagraph (ii) of this Section
11(b) are convertible or exchangeable, or if any such options, rights
or warrants are exercised at a price greater than the minimum purchase
price provided for in such options, rights or warrants, or any such
securities are converted or exercised for more than the minimum
consideration receivable by the Company upon such conversion or
exchange, the options, rights or warrants or conversion or exchange
rights, as the case may be, shall be deemed to have expired or
terminated on the date when such price change became effective in
respect of shares not theretofore issued pursuant to the exercise or
conversion or exchange thereof, and the Company shall be deemed to
have issued upon such date new options, rights or warrants or
convertible or exchangeable securities at the new price with respect
of the number of shares issuable upon the exercise of such options,
rights or warrants or the conversion or exchange of such convertible
or exchangeable securities; provided, however, that no adjustment
shall be made pursuant to this subparagraph (iii) with respect to any
change in the price per share provided for in any of the options,
rights or warrants referred to in subparagraph (i) of this Section
11(b), or in the price per share at which the securities referred to
in subparagraph (ii) of this Section 11(b) are convertible or
exchangeable, which change results from the application of the anti-
dilution provisions thereof in connection with an event for which,
subject to subparagraph (iv) of Section 11(f), an adjustment to the
Exercise Price and the number of securities issuable upon exercise of
this Warrant will be required to be made pursuant to this Section 11.

		(c)     Subdivision and Combination.  In case the Company
shall at any time after the date hereof subdivide or combine the
outstanding shares of Common Stock, the Exercise Price shall forthwith
be proportionately decreased in the case of subdivision or increased
in the case of combination.

				7
<PAGE>
		(d)     Adjustment in Number of Warrant Shares.  Upon
each adjustment of the Exercise Price pursuant to the provisions of
this Section 11, the number of shares of Common Stock issuable upon
the exercise of this Warrant shall be adjusted to the nearest full
whole number by multiplying a number equal to the Exercise Price in
effect immediately prior to such adjustment by the number of shares of
Common Stock issuable upon exercise of this Warrant immediately prior
to such adjustment and dividing the product so obtained by the
adjusted Exercise Price.

		(e)     Reclassification, Consolidation, Merger, etc.  In
case of any reclassification or change of the outstanding shares of
Common Stock (other than a change in par value to no par value, or
from no par value to par value, or as a result of a subdivision or
combination), or in the case of any consolidation of the Company with,
or merger of the Company into, another corporation (other than a
consolidation or merger which does not result in any reclassification
or change of the outstanding shares of Common Stock, except a change
as a result of a subdivision or combination of such shares or a change
in par value, as aforesaid), or in the case of a sale or conveyance to
another corporation of the property of the Company as an entirety, the
Holder shall thereafter have the right to purchase the kind and number
of shares of stock and other securities and property receivable upon
such reclassification, change, consolidation, merger, sale or
conveyance as if the Holder were the owner of the shares of Common
Stock underlying this Warrant immediately prior to any such events at
a price equal to the product of (x) the number of shares of Common
Stock issuable upon exercise of this Warrant and (y) the Exercise
Price in effect immediately prior to the record date for such
reclassification, change, consolidation, merger, sale or conveyance as
if such Holder had exercised this Warrant.

		(f)     No Adjustment of Exercise Price in Certain Cases.
Notwithstanding anything herein to the contrary, no adjustment of the
Exercise Price shall be made:

		(i)     Upon the issuance of shares of Common Stock that
may be acquired upon the exercise of warrants to purchase an aggregate
of 6,000 shares of Common Stock identical to this Warrant issued upon
exercise of warrants granted to the designees of Sunrise Securities
Corp. in connection with a private offering of the Company's
securities; or

		(ii)    Upon (i) the issuance of options pursuant to the
Company's stock option plans in effect on the date hereof or as
hereafter amended in accordance with the terms thereof or any other
employee or executive stock option or award plan approved by
stockholders of the Company or the sale by the Company of any shares
of Common Stock pursuant to the exercise of any such options, or (ii)
the sale by the Company of any shares of Common Stock pursuant to the
exercise of any options or warrants issued and outstanding on the date
hereof.

		(g)     Dividends and Other Distributions with Respect to
Outstanding Securities.   In the event that the Company shall at any
time after the date hereof and prior to the exercise and expiration of
this Warrant declare a dividend (other than a dividend consisting
solely of shares of Common Stock or a cash dividend or distribution
payable out of current or retained earnings) or otherwise distribute
to the holders of Common Stock any monies, assets, property, rights,
evidences of indebtedness, securities (other than such a cash dividend
or distribution or dividend consisting solely of shares of Common
Stock), whether issued by the Company or by another person or entity,
or any other thing of value, the Holder of this Warrant shall
thereafter be entitled, in addition to the shares of Common Stock or
other securities receivable upon the exercise thereof, to receive,
upon the exercise of this Warrant, the same monies, property, assets,
rights, evidences of indebtedness, securities or any other thing of
value that the Holder would have been entitled to receive at the time
of such dividend or distribution as if the Holder was the owner of the
shares of Common Stock underlying this Warrant.  At the time of any
such dividend or distribution, the Company shall make appropriate
reserves to ensure the timely performance of the provisions of this
Section 11(h).

		(h)     Subscription Rights for Shares of Common Stock or
Other Securities.  In case the Company shall at any time after the
date hereof and prior to the exercise of this Warrant in full issue
any rights to subscribe for shares of Common Stock or any other
securities of the Company  to all the holders of Common Stock, the
Holder of this Warrant shall be entitled, in addition to the shares of
Common Stock or other securities receivable upon the exercise of this
Warrant, to receive such rights at the time such rights are
distributed to the other stockholders of the Company but only to the
extent of the number of shares of Common Stock, if any, for which this
Warrant remains exercisable.

                (i)     Notice in Event of Dissolution.  In case of
the dissolution, liquidation or winding-up of the Company, all rights
under this Warrant shall terminate on a date fixed by the Company,
such date to be no earlier than ten (10) days prior to the
effectiveness of such dissolution, liquidation or winding-up and not
later than five (5) days prior to such effectiveness.  Notice of such
termination of purchase rights shall be given to the registered Holder
of this Warrant, as the same shall appear on the books and records of

				 8
<PAGE>
the Company, by registered mail at least thirty (30) days prior to
such termination date."

		12.     Voluntary Adjustment by the Company.  The Company
may at any time during the term of this Warrant, reduce the then
current Exercise Price to any amount and for any period of time deemed
appropriate by the Board of Directors of the Company.

		13.     Notice of Adjustment.  Whenever the number of Warrant
Shares or number or kind of securities or other property purchasable
upon the exercise of this Warrant or the Exercise Price is adjusted,
as herein provided, the Company shall promptly mail by registered or
certified mail, return receipt requested, to the holder of this
Warrant notice of such adjustment or adjustments setting forth the
number of Warrant Shares (and other securities or property)
purchasable upon the exercise of this Warrant and the Exercise Price
of such Warrant Shares (and other securities or property) after such
adjustment, setting forth a brief statement of the facts requiring
such adjustment and setting forth the computation by which such
adjustment was made.  Such notice, in absence of manifest error, shall
be conclusive evidence of the correctness of such adjustment.

		14.     Notice of Corporate Action.  If at any time

		(a)  the Company shall take a record of the holders of its
Common Stock for the purpose of entitling them to receive a dividend
or other distribution, or any right to subscribe for or purchase any
evidences of its indebtedness, any shares of stock of any class or any
other securities or property, or to receive any other right, or

		(b)  there shall be any capital reorganization of the
Company, any reclassification or recapitalization of the capital stock
of the Company or any consolidation or merger of the Company with, or
any sale, transfer or other disposition of all or substantially all
the property, assets or business of the Company to, another
corporation or,

		(c)  there shall be a voluntary or involuntary dissolution,
liquidation or winding up of the Company; then, in any one or more of
such cases, the Company shall give to Holder (i) at least 30 days'
prior written notice of the date on which a record date shall be
selected for such dividend, distribution or right or for determining
rights to vote in respect of any such reorganization,
reclassification, merger, consolidation, sale, transfer, disposition,
liquidation or winding up, and (ii) in the case of any such
reorganization, reclassification, merger, consolidation, sale,
transfer, disposition, dissolution, liquidation or winding up, at
least 30 days' prior written notice of the date when the same shall
take place.  Such notice in accordance with the foregoing clause also
shall specify (i) the date on which any such record is to be taken for
the purpose of such dividend, distribution or right, the date on which
the holders of Common Stock shall be entitled to any such dividend,
distribution or right, and the amount and character thereof, and (ii)
the date on which any such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, dissolution, liquidation
or winding up is to take place and the time, if any such time is to be
fixed, as of which the holders of Common Stock shall be entitled to
exchange their shares of Common Stock for securities or other property
deliverable upon such disposition, dissolution, liquidation or winding
up.  Each such written notice shall be sufficiently given if addressed
to Holder at the last address of Holder appearing on the books of the
Company and delivered in accordance with Section 16(d).

      15.     Authorized Shares.  The Company covenants that during
the period the Warrant is outstanding, it will reserve from its
authorized and unissued Common Stock a sufficient number of shares to
provide for the issuance of the Warrant Shares upon the exercise of
any purchase rights under this Warrant.  The Company further covenants
that its issuance of this Warrant shall constitute full authority to
its officers who are charged with the duty of executing stock
certificates to execute and issue the necessary certificates for the
Warrant Shares upon the exercise of the purchase rights under this
Warrant.  The Company will take all such reasonable action as may be
necessary to assure that such Warrant Shares may be issued as provided
herein without violation of any applicable law or regulation, or of
any requirements of  NASDAQ or any domestic securities exchange upon
which the Common Stock may be listed.

	The Company shall not by any action, including, without
limitation, amending its certificate of incorporation or through any
reorganization, transfer of assets, consolidation, merger,
				9
<PAGE>
dissolution, issue or sale of securities or any other voluntary
action, avoid or seek to avoid the observance or performance of any of
the terms of this Warrant, but will at all times in good faith assist
in the carrying out of all such terms and in the taking of all such
actions as may be necessary or appropriate to protect the rights of
Holder against impairment.  Without limiting the generality of the
foregoing, the Company will (a) not increase the par value of any
shares of Common Stock receivable upon the exercise of this Warrant
above the amount payable therefor upon such exercise immediately prior
to such increase in par value, (b) take all such action as may be
necessary or appropriate in order that the Company may validly and
legally issue fully paid and nonassessable shares of Common Stock upon
the exercise of this Warrant, and (c) use its best efforts to obtain
all such authorizations, exemptions or consents from any public
regulatory body having jurisdiction thereof as may be necessary to
enable the Company to perform its obligations under this Warrant.

	Upon the request of Holder, the Company will at any time
during the period this Warrant is outstanding acknowledge in writing,
in form reasonably satisfactory to Holder, the continuing validity of
this Warrant and the obligations of the Company hereunder.

	Before taking any action which would cause an adjustment
reducing the current Exercise Price below the then par value, if any,
of the shares of Common Stock issuable upon exercise of the Warrants,
the Company shall take any corporate action which may be necessary in
order that the Company may validly and legally issue fully paid and
non-assessable shares of such Common Stock at such adjusted Exercise
Price.

	Before taking any action which would result in an
adjustment in the number of shares of Common Stock for which this
Warrant is exercisable or in the Exercise Price, the Company shall
obtain all such authorizations or exemptions thereof, or consents
thereto, as may be necessary from any public regulatory body or bodies
having jurisdiction thereof.

      16.     Miscellaneous.

	 (a)     Issue Date; Jurisdiction.  The provisions of this
Warrant shall be construed and shall be given effect in all respects
as if it had been issued and delivered by the Company on the date
hereof.  This Warrant shall be binding upon any successors or assigns
of the Company.  This Warrant shall constitute a contract under the
laws of New York  without regard to its conflict of law, principles or
rules, and be subject to arbitration pursuant to the terms set forth
in the Agreement.

	(b)     Restrictions.  The holder hereof acknowledges
that the Warrant Shares acquired upon the exercise of this Warrant, if
not registered, will have restrictions upon resale imposed by state
and federal securities laws.

	(c)     Nonwaiver and Expenses.  No course of dealing or
any delay or failure to exercise any right hereunder on the part of
Holder shall operate as a waiver of such right or otherwise prejudice
Holder's rights, powers or remedies, notwithstanding all rights
hereunder terminate on the Termination Date.  If the Company fails to
make, when due, any payments provided for hereunder, or fails to
comply with any other provision of this Warrant, the Company shall pay
to Holder such amounts as shall be sufficient to cover any costs and
expenses including, but not limited to, reasonable attorneys' fees,
including those of appellate proceedings, incurred by Holder in
collecting any amounts due pursuant hereto or in otherwise enforcing
any of is rights, powers or remedies hereunder.

       (d)     Notices.  Any notice, request or other document
required or permitted to be given or delivered to the holder hereof by
the Company shall be delivered in accordance with the notice
provisions of the subscription agreement between the Holder and the
Company.

       (e)     Limitation of Liability.  No provision hereof, in
the absence of affirmative action by Holder to purchase shares of
Common Stock, and no enumeration herein of the rights or privileges of
Holder hereof, shall give rise to any liability of Holder for the
purchase price of any Common Stock or as a stockholder of the Company,
whether such liability is asserted by the Company or by creditors of
the Company.
				10

<PAGE>

      (f)     Remedies.  Holder, in addition to being entitled
to exercise all rights granted by law, including recovery of damages,
will be entitled to specific performance of its rights under this
Warrant.  The Company agrees that monetary damages would not be
adequate compensation for any loss incurred by reason of a breach by
it of the provisions of this Warrant and hereby agrees to waive the
defense in any action for specific performance that a remedy at law
would be adequate.

     (g)     Successors and Assigns.  Subject to applicable
securities laws, this Warrant and the rights evidenced hereby shall
inure to the benefit of and be binding upon the successors of the
Company and the successors and assigns of Holder.  The provisions of
this Warrant are intended to be for the benefit of all Holders from
time to time of this Warrant and shall be enforceable by any such
Holder or holder of Warrant Stock.

    (h)     Cooperation.  The Company shall cooperate with
Holder in supplying such information as may be reasonably necessary
for Holder to complete and file any information reporting forms
presently or hereafter required by the Commission as a condition to
the availability of an exemption from the Securities Act for the sale
of any Warrant or Restricted Common Stock.

   (i)     Indemnification.  The Company agrees to indemnify
and hold harmless Holder from and against any liabilities,
obligations, losses, damages, penalties, actions, judgments, suits,
claims, costs, attorneys' fees, expenses and disbursements of any kind
which may be imposed upon, incurred by or asserted against Holder in
any manner relating to or arising out of any failure by the Company to
perform or observe in any material respect any of its covenants,
agreements, undertakings or obligations set forth in this Warrant;
provided, however, that the Company will not be liable hereunder to
the extent that any liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, claims, costs, attorneys' fees,
expenses or disbursements are found in a final non-appealable judgment
by a court to have resulted from Holder's negligence, bad faith or
willful misconduct in its capacity as a stockholder or warrantholder
of the Company.

   (j)     Amendment.  This Warrant and all other Warrants
may be modified or amended or the provisions hereof waived with the
written consent of the Company and the Holder.

   (k)     Severability.  Wherever possible, each provision
of this Warrant shall be interpreted in such manner as to be effective
and valid under applicable law, but if any provision of this Warrant
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 provisions or the remaining
provisions of this Warrant.

    (l) Headings.  The headings used in this Warrant are
for the convenience of reference only and shall not, for any purpose,
be deemed a part of this Warrant.

                                 11
<PAGE>

		IN WITNESS WHEREOF, the Company has caused this Warrant to
be executed by its officer thereunto duly authorized.

Dated: September 26,  2000

				     MICROS-TO-MAINFRAMES, INC.

			       By:______________________

				    Steven H. Rothman
				    Chief Executive Officer and President

<PAGE>

                          NOTICE OF EXERCISE

To:     MICROS-TO-MAINFRAMES, INC.

    (1)     The undersigned hereby elects to purchase ________
shares of Common Stock, par value $0.001 per share (the "Common
Stock"), of MICROS-TO-MAINFRAMES, INC. pursuant to the terms of the
attached Warrant, and tenders herewith payment of the exercise price
in full, together with all applicable transfer taxes, if any.

    (2)     Please issue a certificate or certificates representing
said shares of Common Stock in the name of the undersigned or in such
other name as is specified below:

			_______________________________
			(Name)

			_______________________________
			(Address)
			_______________________________

Dated:

					      ______________________________
							Signature

<PAGE>

			  ASSIGNMENT FORM

	    (To assign the foregoing warrant, execute
	    this form and supply required information.
	    Do not use this form to exercise the warrant.)

	FOR VALUE RECEIVED, the foregoing Warrant and all rights
evidenced thereby are hereby assigned to

_______________________________________________ whose address is

_______________________________________________________________.

_______________________________________________________________

			Dated:  ________________________,

			Holder's Signature:     _____________________________

			Holder's Address:       _____________________________

						_____________________________

Signature Guaranteed:  ___________________________________________

NOTE:  The signature to this Assignment Form must correspond with the
name as it appears on the face of the Warrant, without alteration or
enlargement or any change whatsoever, and must be guaranteed by a bank
or trust company.  Officers of corporations and those acting in an
fiduciary or other representative capacity should file proper evidence
of authority to assign the foregoing Warrant.
                             14CREDIT AGREEMENT

                                     Between

                            TRENDWEST RESORTS, INC.,

                                       and

                       TRENDWEST SOUTH PACIFIC PTY. LTD.,

                                as the Borrowers,

                            THE LENDERS NAMED HEREIN,

                                 as the Lenders,

                          KEYBANK NATIONAL ASSOCIATION,

            as Lead Arranger and Administrative Agent for the Lenders
                     and as Letter of Credit Issuing Lender,

                                       and

                                  BANK ONE NA,

          as Syndication Agent for the Lenders and as Australian Lender

                           Dated as of August 14, 2000

<PAGE>

                                                 TABLE OF CONTENTS
<TABLE>
<CAPTION>
                                                                                                        Page
<S>               <C>                                                                                  <C>
SECTION 1.        DEFINITIONS............................................................................1

         1.1.     Definitions............................................................................1
         1.2.     General Rules of Interpretation.......................................................18
         1.3.     Accounting Terms......................................................................19

SECTION 2.        THE LOANS.............................................................................19

         2.1.     The Revolving Loans...................................................................19
         2.2.     Fees..................................................................................27
         2.3.     Increased Costs.......................................................................28
         2.4.     Australian Currency Unavailable or BBSY Rate Unascertainable..........................28
         2.5.     Changes in Law Rendering Australian Advances Unlawful.................................28
         2.6.     LIBOR Not Ascertainable...............................................................28
         2.7.     Changes in Law Rendering LIBOR Loans Unlawful.........................................29
         2.8.     Indemnity.............................................................................29
         2.9.     Capital Adequacy......................................................................29
         2.10.    Australian GST........................................................................30
         2.11.    Survival..............................................................................30

SECTION 3.        PAYMENTS..............................................................................30

         3.1.     Interest..............................................................................30
         3.2.     Principal.............................................................................31
         3.3.     Other Payment Matters.................................................................31
         3.4.     Prepayments...........................................................................32

SECTION 4.        REPRESENTATIONS AND WARRANTIES OF
                  THE BORROWERS.........................................................................34

         4.1.     Incorporation, Good Standing, and Qualification.......................................34
         4.2.     Power and Authority...................................................................34
         4.3.     Authorization.........................................................................34
         4.4.     Enforceability........................................................................34
         4.5.     Financial Statements..................................................................34
         4.6.     Projections...........................................................................34
         4.7.     Capitalization of Borrowers...........................................................34
         4.8.     Title to Properties; Patents, Trademarks, Etc.........................................35
         4.9.     Litigation; Proceedings...............................................................35
         4.10.    Taxes.................................................................................35
         4.11.    Absence of Conflicts..................................................................36
         4.12.    Indebtedness..........................................................................36
         4.13.    Compliance............................................................................36
         4.14.    Statements Not Misleading.............................................................36
         4.15.    Consents or Approvals.................................................................36
         4.16.    Material Contracts and Commitments....................................................36

                                       i

<PAGE>

         4.17.    Employee Benefit Plans................................................................37
         4.18.    Licenses and Agreements...............................................................37
         4.19.    Material Restrictions.................................................................37
         4.20.    Subsidiaries..........................................................................37
         4.21.    Investment Company Act................................................................38
         4.22.    Absence of Material Adverse Changes...................................................38
         4.23.    Defaults..............................................................................38
         4.24.    Securities Laws.......................................................................38
         4.25.    Insurance.............................................................................38
         4.26.    Labor Matters.........................................................................38
         4.27.    Notes Receivable......................................................................38
         4.28.    Inventory.............................................................................38
         4.29.    Environmental Compliance..............................................................39

SECTION 5.        CONDITIONS PRECEDENT TO OBLIGATIONS OF
                  THE LENDERS...........................................................................40

         5.1.     Compliance............................................................................40
         5.2.     Satisfaction of Other Conditions......................................................40
         5.3.     The Revolving Notes...................................................................40
         5.4.     Standstill Agreement..................................................................40
         5.5.     Opinions of Borrowers' Counsel........................................................40
         5.6.     Statement of Application of Proceeds and Borrowing Notice.............................40
         5.7.     Insurance Certificates................................................................41
         5.8.     Corporate Documents...................................................................41
         5.9.     Fees and Expenses.....................................................................41
         5.10.    Legal Approval........................................................................41
         5.11.    Delivery of Closing Documents.........................................................41
         5.12.    Other Documents.......................................................................41

SECTION 6.        AFFIRMATIVE COVENANTS OF THE BORROWERS................................................41

         6.1.     Use of Proceeds.......................................................................41
         6.2.     Continued Existence; Maintenance of Rights and Licenses;
                  Compliance with Law...................................................................42
         6.3.     Insurance.............................................................................42
         6.4.     Obligations and Taxes.................................................................42
         6.5.     Financial Statements and Reports......................................................43
         6.6.     Notices...............................................................................44
         6.7.     Maintenance of Property...............................................................45
         6.8.     Information and Inspection............................................................45
         6.9.     Title To Property.....................................................................45
         6.10.    Environmental Compliance and Indemnity................................................45
         6.11.    Financial Covenants...................................................................46

SECTION 7.        NEGATIVE COVENANTS OF THE BORROWERS...................................................46

         7.1.     Indebtedness..........................................................................46
         7.2.     Liens.................................................................................46
         7.3.     Guaranties............................................................................47

                                       ii
<PAGE>

         7.4.     Conditional Sale Obligations..........................................................47
         7.5.     Capital Leases........................................................................47
         7.6.     Claims................................................................................47
         7.7.     Notes Receivable......................................................................47
         7.8.     Capital Distributions.................................................................47
         7.9.     Disposal of Property; Mergers; Acquisitions; Reorganizations..........................47
         7.10.    Investments...........................................................................48
         7.11.    Amendment of Governing Documents......................................................49
         7.12.    Other Amendments or Waivers...........................................................49
         7.13.    Management Agreements and Fees........................................................49
         7.14.    ERISA.................................................................................49
         7.15.    Affiliates............................................................................49
         7.16.    Change of Name or Office..............................................................49
         7.17.    Change in Business....................................................................49
         7.18.    Regulation U..........................................................................49

SECTION 8.        EVENTS OF DEFAULT.....................................................................50

         8.1.     Non-Payment...........................................................................50
         8.2.     Failure of Performance with Respect to Other Obligations..............................50
         8.3.     Breach of Warranty....................................................................50
         8.4.     Cross-Defaults........................................................................50
         8.5.     Assignment for Benefit of Creditors...................................................50
         8.6.     Bankruptcy............................................................................51
         8.7.     Appointment of Receiver; Liquidation..................................................51
         8.8.     Judgments.............................................................................51
         8.9.     Impairment of Obligations.............................................................51
         8.10.    Termination of Material Agreement.....................................................51
         8.11.    Change of Control.....................................................................51
         8.12.    Condemnation..........................................................................51
         8.13.    Cessation of Operations...............................................................51

SECTION 9.        REMEDIES..............................................................................52

         9.1.     Optional Defaults.....................................................................52
         9.2.     Automatic Defaults....................................................................52
         9.3.     Performance by the Lenders............................................................52
         9.4.     Other Remedies........................................................................52
         9.5.     Enforcement and Waiver by the Lenders.................................................53

SECTION 10.       THE ADMINISTRATIVE AGENT..............................................................53

         10.1.    Appointment and Authorization.........................................................53
         10.2.    Powers................................................................................53
         10.3.    General Immunity......................................................................53
         10.4.    Action on Instructions of the Lenders.................................................54
         10.5.    Employment of Agents and Counsel......................................................54
         10.6.    Reliance on Documents; Counsel........................................................54
         10.7.    Administrative Agent's Reimbursement and Indemnification..............................54
         10.8.    Rights as a Lender....................................................................54

                                      iii
<PAGE>

         10.9.    Lender Credit Decision................................................................55
         10.10.   Successor Administrative Agent........................................................55
         10.11.   Ratable Sharing.......................................................................55
         10.12.   Actions by the Administrative Agent and the Lenders...................................56
         10.13.   Other Agents..........................................................................56

SECTION 11.       MISCELLANEOUS.........................................................................56

         11.1.    Construction..........................................................................56
         11.2.    Further Assurance.....................................................................56
         11.3.    Expenses of the Administrative Agent and the
                  Lenders; Indemnification..............................................................56
         11.4.    Notices...............................................................................57
         11.5.    Waiver and Release by the Borrowers...................................................58
         11.6.    Right of Set-Off......................................................................58
         11.7.    Successors and Assigns; Assignments and Participations................................59
         11.8.    Foreign Lenders.......................................................................61
         11.9.    Applicable Law........................................................................61
         11.10.   Binding Effect and Entire Agreement...................................................61
         11.11.   Counterparts..........................................................................62
         11.12.   Survival of Agreements................................................................62
         11.13.   Modification..........................................................................62
         11.14.   Separability..........................................................................62
         11.15.   Section Headings......................................................................62
         11.16.   Enforcement...........................................................................62
         11.17.   Termination...........................................................................63
         11.18.   Jury Trial Waiver.....................................................................63
         11.19.   Confidentiality.......................................................................63
         11.20.   Joint and Several Liability...........................................................63
         11.21.   Equal Opportunity to Draft............................................................63

</TABLE>

                                       iv

<PAGE>

                                LIST OF EXHIBITS

Exhibit A         Request for Domestic Advance

Exhibit B         Request for Australian Advance

Exhibit C         Borrowing Base Certificate

Exhibit D         Domestic Conversion/Continuation Notice

Exhibit E         Australian Continuation Notice

Exhibit F         Form of Revolving Note

Exhibit G         Projections for June 30, 2000 through December 31, 2003

Exhibit H         Capitalization

Exhibit I         Litigation

Exhibit J         Indebtedness

Exhibit K         Consents

Exhibit L         Material Contracts and Licenses

Exhibit M         Subsidiaries

Exhibit N         Environmental Matters

Exhibit O         Form of Compliance Certificate

Exhibit P         Assignment and Acceptance

Exhibit Q         Liens

                                       v

<PAGE>

                                CREDIT AGREEMENT

     This Credit  Agreement (the  "Agreement")  is entered into as of August 14,
2000, between TRENDWEST RESORTS, INC., an Oregon corporation ("Trendwest"),  and
TRENDWEST  SOUTH PACIFIC PTY.  LTD., a corporation  organized and existing under
the laws of the Commonwealth of Australia ("South Pacific"), as borrowers,  each
of the financial institutions from time to time listed on Schedule I attached to
this Agreement (each of the foregoing being referred to as a "Lender" and all of
the foregoing being collectively referred to as the "Lenders"), KEYBANK NATIONAL
ASSOCIATION,  as  Administrative  Agent and Issuing Lender,  and BANK ONE NA, as
Syndication Agent and Australian Lender.

                                    PREAMBLE

     The  Borrowers  have  requested  the credit  facilities  described  in this
Agreement, and the Lenders have agreed to provide such facilities,  on the terms
and conditions set forth in this Agreement.

                                    AGREEMENT

     Accordingly,  the Borrowers, the Lenders, the Administrative Agent, and the
Syndication Agent agree as follows:

SECTION 1.  DEFINITIONS.

     1.1.  Definitions.  Capitalized  terms  used in  this  Agreement  have  the
following meanings:

     "Adjusted  Cash Flow" means,  with respect to the four (4) fiscal  quarters
ending on the last day of any fiscal  quarter of any Fiscal  Year,  EBITDA minus
Capital Expenditures.

     "Administrative Agent" means KeyBank National Association,  in its capacity
as lead  arranger  and  administrative  agent for the  Lenders  pursuant to this
Agreement  and not in its  individual  capacity  as a Lender,  or any  successor
administrative agent.

     "Administrative  Agent-Related  Persons"  means  the  Administrative  Agent
(including any successor agent),  together with its Affiliates and the officers,
directors,   employees,   agents  and  attorneys-in-fact  of  such  Persons  and
Affiliates.

     "Affiliate" means, with respect to any Person, (a) any other Person that is
directly or indirectly  controlled  by, under common control with or controlling
the first specified Person,  (b) a Person owning  beneficially or controlling 5%
or more of the equity interests in such other Person, (c) any officer,  director
or partner  of such  other  Person,  or (d) any  spouse or  relative  (by blood,
adoption or marriage) of any such  individual  Person.  The term "control" means
possession,  directly  or  indirectly,  of the  power to  direct  or  cause  the
direction  of the  management  and  policies  of a Person,  whether  through the
ownership of voting securities, partnership interests, by contract or otherwise.

     "Agreement"  has the  meaning  assigned  to such  term in the  introductory
paragraph of this agreement.

                                       1

<PAGE>

     "Aggregate  Commitment"  means  $60,000,000,  as such amount may be reduced
pursuant to this Agreement.

     "Applicable  Margin" with respect to any period of time means the per annum
percentage determined from the following table:

      USAGE                 REVOLVING LOANS                  LETTERS OF CREDIT
      -----                 ---------------                  -----------------

                        LIBOR LOANS
                            AND             BASE
                         AUSTRALIAN         RATE
                          ADVANCES         LOANS
                       ------------        -----
less than or equal
     to 33%                1.35%           0.00%                   1.35%

 greater than 33%
 and less than or
   equal to 66%            1.50%           0.125%                  1.50%

 greater than 66%          1.75%           0.25%                   1.75%

     "Applicable  LIBOR Rate"  means,  for each LIBOR  Loan,  the per annum rate
(rounded  upward,  if  necessary,  to the nearest 1/16 of 1%)  determined by the
Administrative  Agent to be equal to the  quotient  of (1) LIBOR for such  LIBOR
Loan  for  the  appropriate  Interest  Period,  divided  by (2)  one  minus  the
Eurocurrency Reserve Requirement for such Interest Period.

     "Asset Sale" means the sale by Trendwest or any Subsidiary to any Person of
(a) any of the stock or other  equity  interests of any  Subsidiary,  or (b) any
other assets  other than (i) the sale of assets with an  aggregate  market value
that does not exceed in any Fiscal Year an amount  equal to  $250,000,  and (ii)
the sale in the  ordinary  course of  business  of assets held for resale in the
ordinary  course of  business  or the trade in or  replacement  of assets in the
ordinary  course of business or the  disposition  of any asset that, in the good
faith  exercise of its  business  judgment,  Trendwest  determines  is no longer
useful in the conduct of its business.

     "Assignment   and   Acceptance"   means  an   Assignment   and   Acceptance
substantially in the form of Exhibit P.

     "Australian Advance Limit" means a Dollar Equivalent equal to the lesser of
(a) the Revolving Loan Limit, and (b) $15,000,000.

     "Australian  Advances"  has the  meaning  assigned  to such term in Section
2.1(a).

     "Australian  Continuation  Notice" has the meaning assigned to such term in
Section 2.1(g).

     "Australian Currency" means lawful money of the Commonwealth of Australia.

                                       2
<PAGE>

     "Australian  Currency  Equivalent"  means,  in relation  to any  Australian
Advance,  the amount of Australian Currency convertible from the relevant amount
of Dollars at the  Australian  Lender's spot selling rate (based on market rates
then prevailing) for the exchange of Dollars and Australian Currency at or about
Noon, Chicago time, three Banking Days preceding the date of determination.

     "Australian Lender" means Bank One NA, and its successor and assigns.

     "BBSY  Rate"  with  respect to the first day of any  Interest  Period of an
Australian  Advance means (a) the BBSY Index Rate for such Interest  Period,  if
such rate is  determinable,  and (b) if the BBSY Index Rate cannot be determined
for such day or  Interest  Period,  then  such  rate as is  agreed  between  the
Australian  Lender and Trendwest  having due regard for comparable  indices then
available and in the absence of any such agreement  shall be the rate stipulated
by the Australian Lender having due regard for such comparable indices.

     "BBSY Index Rate" with respect to the first day of any  Interest  Period of
an Australian  Advance  means the rate per annum  calculated by taking the rates
quoted on the page  numbered  "BBSY" of the Reuters  Monitor  System at or about
10:00 a.m.  (Eastern Time) on such day for each Reference Bank appearing on that
page (or a successor  page) and so quoting  (being not less than 5) as being the
rate for a Bill with a tenor equal to the Interest  Period,  as specified in the
Borrowing  Notice  with  respect to such  Australian  Advance,  eliminating  the
highest and the lowest rates and taking the average of the  remaining  rates and
then (if necessary)  rounding the resultant  figure upwards to 4 decimal places;
provided,  however,  that if the BBSY  Rate for such day  cannot  be  determined
because  fewer than 5  Reference  Banks have quoted  rates on the page  numbered
"BBSY" (or a successor page) of the Reuters Monitor System,  the BBSY Rate shall
be  calculated  as  above by  taking  the  rates  otherwise  quoted  by 5 of the
Reference  Banks on application by the Australian  Lender for a Bill of the same
tenor.

     "Banking  Day" means any day  except a  Saturday,  Sunday,  or other day on
which  commercial  banks in Seattle,  Washington,  are authorized or required to
close under applicable law; provided,  however,  that in the case of notices and
determinations  with  respect to, and  payments of principal of and interest on,
Australian Advances,  "Banking Day" means any day except a Saturday,  Sunday, or
other day on which (a) commercial banks in Seattle,  Washington,  are authorized
or required to close under  applicable law, or (b) Australian  trading banks are
open for a full range of banking business in the metropolitan  area of Adelaide,
South Australia, Melbourne, Victoria and Sydney, New South Wales.

     "Base Rate" means the higher of (1) the  Reference  Rate, or (2) the sum of
the Federal Funds Rate plus 0.5% per annum.

     "Base  Rate  Loan"  means any  Revolving  Loan  that  bears  interest  with
reference to the Base Rate.

     "Benefit Arrangement" means any pension,  profit-sharing,  thrift, or other
retirement plan, medical,  hospitalization,  vision, dental, life, disability or
other insurance or benefit plan, deferred compensation,  stock ownership,  stock
purchase,  stock option,  performance share, bonus,  fringe benefit,  savings or
other  incentive  plan,  severance  plan  or  other  similar  plan,   agreement,
arrangement or understanding,  to which either of the Borrowers or any member of
the  Controlled  Group  is,  or in the  preceding  six years  was,  required  to
contribute on behalf of its  employees or  directors,  whether or not such plan,
agreement, arrangement or understanding is subject to ERISA.

                                       3
<PAGE>

     "Bill" has the same meaning as in the Australian Bills of Exchange Act 1909
(but does not include a cheque as defined therein).

     "Borrowers" means Trendwest and South Pacific, collectively, and "Borrower"
means Trendwest or South Pacific, as the context requires.

     "Borrowing   Base   Certificate"   means  a  borrowing   base   certificate
substantially in the form of Exhibit C.

     "Borrowing  Date" means the proposed date of a Revolving Loan, as specified
in the Borrowing Notice with respect to such Revolving Loan.

     "Borrowing  Notice"  has  the  meaning  assigned  to such  term in  Section
2.1(e)(ii).

     "Capital  Distribution"  means any payment or distribution made,  liability
incurred, or other consideration given for the purchase, acquisition, redemption
or retirement of any stock or other equity  interest of Trendwest as a dividend,
return of capital or other payment or  distribution of any kind to a shareholder
of Trendwest with respect to Trendwest's capital stock.

     "Capital  Expenditures"  means, for any period, the aggregate dollar amount
(whether paid in cash or accrued as a liability)  that would, in accordance with
GAAP, be included on the  consolidated  statement of cash flows of Trendwest and
its Subsidiaries  for such period as additions to property,  plant or equipment,
without regard to the manner in which such amounts or the instrument pursuant to
which  they  are  made are  characterized  by  Trendwest  or any  other  Person;
provided,  however,  that  "Capital  Expenditures"  shall not  include  any such
amounts (a) for  replacements  of or  substitutions  for  capital  assets to the
extent paid with the proceeds of  insurance,  or (b) that are paid in connection
with a Permitted Acquisition.

     "Capitalized Lease Obligations" means, as to any Person, the obligations of
such Person to pay rent or other  amounts  under leases of, or other  agreements
conveying  the right to use real or personal  property,  which  obligations  are
required to be classified and accounted for as capital leases on a balance sheet
of such Person, prepared in accordance with GAAP.

     "CERCLA" means the Comprehensive Environmental Response,  Compensation, and
Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et seq.

     "CERCLIS"  means the  Comprehensive  Environmental  Response and  Liability
Information System, as provided for by 12 C.F.R.ss.300.5.

     "Change of Control" means,  with respect to any Person,  an event or series
of events by which:

     (a) any  "person" or "group" (as such terms are used in Sections  13(d) and
14(d) of the Securities Exchange Act of 1934, but excluding any employee benefit
plan of such Person or its subsidiaries, or any Person acting in its capacity as
trustee,  Administrative  Agent or other fiduciary or  administrator of any such
plan) becomes the "beneficial  owner" (as defined in Rules 13d-3 and 13d-5 under
the  Securities  Exchange  Act of 1934,  except that a person shall be deemed to
have "beneficial  ownership" of all securities that such person has the right to
acquire, whether such right is exercisable immediately or only after the passage
of time),  directly or indirectly,  of 50% or more of the ownership interests of
such Person; or

     (b) during any period of 12 consecutive  months,  a majority of the members
of the board of  directors  or other  equivalent  governing  body of such Person
cease to be  composed  of  individuals  (i) who were  members  of that  board or
equivalent  governing body on the first day of such period,  (ii) whose election
or  nomination  to that  board or  equivalent  governing  body was  approved  by
individuals  referred  to in clause (i) above  constituting  at the time of such
election or nomination at least a majority of that board or equivalent governing
body or (iii) whose  election or  nomination  to that board or other  equivalent
governing body was approved by  individuals  referred to in clauses (i) and (ii)
above  constituting  at the  time of such  election  or  nomination  at  least a
majority of that board or equivalent governing body.

                                       4
<PAGE>

     "Closing"  means the  satisfaction of the conditions set forth in Section 5
and the making of the initial Revolving Loans under this Agreement.

     "Closing Date" means the date on which the initial Revolving Loans are made
by the Lenders.

     "Closing Threshold" has the meaning assigned to such term in Section
6.11(c).

     "Code"  means  the  Internal  Revenue  Code of  1986,  as  amended,  or any
successor statute.

     "Commitment" has the meaning assigned to such term in Section 2.1(a).

     "Commitment  Fee" with respect to any calendar quarter (or partial calendar
quarter  in the case of the period  beginning  on July 1, 2003 and ending on the
Revolving  Termination  Date) means a fee equal to the Dollar amount obtained by
multiplying the average daily Revolving  Commitment during such calendar quarter
(or such partial period) by the applicable per annum  percentage set forth under
the "Commitment Fee" heading in the following table:

                                       COMMITMENT
               USAGE                      FEE
               -----                    ---------
        less than or equal
              to 33%                      0.25%

        greater than 33%
       and less than or equal
              to 66%                      0.30%

          greater than 66%                0.35%

     "Compliance  Certificate"  has the meaning assigned to such term in Section
6.5(c).

     "Consolidated  Net  Worth"  means,  as of any  date of  determination,  the
shareholders' equity of Trendwest (on a GAAP basis) on such date.

     "Construction-in-Process"  means all construction costs required by GAAP to
be capitalized on Trendwest's balance sheet, excluding all construction relating
to MountainStar.

     "Controlled Group" means a controlled group of entities that, together with
Trendwest or any  Subsidiary,  are treated as a single  employer  under Sections
414(b), 414(c) or 414(m) of the Code.

     "Debtor  Relief  Laws" means the  Bankruptcy  Code of the United  States of
America, and all other liquidation, conservatorship,  bankruptcy, assignment for
the benefit of creditors, moratorium, rearrangement,  receivership,  insolvency,
reorganization, or similar debtor relief Laws of the United States of America or
other applicable  jurisdictions from time to time in effect affecting the rights
of creditors generally.

     "Default  Interest  Rate" with  respect to any  Revolving  Loan means a per
annum rate of interest  equal to the sum of the otherwise  applicable  per annum
interest rate plus 2% per annum.

                                       5
<PAGE>

     "Defaulted  Amount"  has  the  meaning  assigned  to such  term in  Section
2.1(e)(ii)(F).

     "Delinquent  Notes" means Notes  Receivable with respect to which a payment
is delinquent  for a period in excess of 90 days  following the due date of such
payment.

     "Designating  Lender"  has the  meaning  assigned  to such term in  Section
11.7(f)(i).

     "Discount  Rate" means,  with respect to a prepayment  or  conversion of an
Australian  Advance on a date other than the last day of its Interest  Period, a
rate equal to the interest rate (as of the date of  prepayment) on United States
Treasury  obligations  in a like  amount as such  Australian  Advance and with a
maturity  approximately equal to the period between the prepayment or conversion
date and the last day of the  Interest  Period of such  Australian  Advance,  as
determined by the Australian Lender.

     "Dollar  Equivalent"  means,  in relation to any  Australian  Advance,  the
amount of Dollars convertible from the relevant amount of Australian Currency at
the  Australian   Lender's  spot  selling  rate  (based  on  market  rates  then
prevailing)  for the  exchange of  Australian  Currency  and Dollars at or about
Noon, Chicago time, three Banking Days preceding the date of determination.

     "Dollars"  and the sign "$" mean  lawful  money  of the  United  States  of
America.

     "Domestic  Advances"  has the  meaning  assigned  to such  term in  Section
2.1(a).

     "Domestic  Conversion/Continuation Notice" has the meaning assigned to such
term in Section 2.1(f).

     "EBITDA" means,  with respect to the four (4) fiscal quarters ending on the
last day of any fiscal  quarter of any Fiscal Year, (a)  Trendwest's  net income
after  provision  for income taxes,  as  determined in accordance  with GAAP and
reported on Trendwest's  financial  statements,  plus (b) the sum of Trendwest's
(i)  Interest  Expense,   (ii)  income  tax  expense,   (iii)  depreciation  and
amortization  (including  amortization  of any  goodwill  or other  intangibles,
whether  pursuant  to FASB 109 or  otherwise),  (iv)  amortization  of  residual
interest in Notes Receivable  sold, (v) unrealized loss on residual  interest in
Notes Receivable sold, (vi) contract  servicing  liability arising from the sale
of Notes Receivable,  and (vii) losses considered to be extraordinary  losses in
accordance with GAAP, so long as such losses arise from non-cash expenses, minus
(c) all of the following:  (i) gain arising from Trendwest's sale of any capital
asset,  (ii) gain  arising  from any  write-up in the book value of any asset of
Trendwest, (iii) earnings of any corporation, substantially all of the assets of
which have been acquired by Trendwest in any manner,  to the extent  realized by
such other  corporation  prior to the date of acquisition,  (iv) earnings of any
business  entity in which  Trendwest has an ownership  interest  (other than its
Subsidiaries)  unless (and only to the extent) such earnings shall actually have
been  received by Trendwest in the form of cash  distributions,  (v) earnings of
any Person to which assets of Trendwest have been sold,  transferred or disposed
of, or into which Trendwest has merged, or which has been a party with Trendwest
to any consolidation or other form of reorganization,  prior to the date of such
transaction,  (vi) gain arising from the  acquisition of  Indebtedness or equity
securities of Trendwest or from  cancellation  or forgiveness  of  Indebtedness,
(vii)  amortization of contract servicing  liability,  (viii) unrealized gain on
residual  interest in Notes Receivable sold, and (ix) residual interest in Notes
Receivable sold.

     "Eligible Assignee" means (a) a financial  institution  organized under the
laws of the United States,  or any state thereof,  and having a combined capital
and surplus of at least $100,000,000;  (b) a commercial bank organized under the
laws of any other  country  that is a member of the  Organization  for  Economic
Cooperation and Development, or a political subdivision of any such country, and

                                       6
<PAGE>

having a combined  capital and surplus of at least  $100,000,000,  provided that
such bank is acting through a branch or agency located in the United States; (c)
a Person that is  primarily  engaged in the business of  commercial  banking and
that is (i) a Subsidiary  of a Lender,  (ii) a Subsidiary of a Person of which a
Lender is a Subsidiary, or (iii) a Person of which a Lender is a Subsidiary; (d)
another Lender; (e) any other entity that extends credit or buys loans as one of
its businesses and has a net worth of at least  $100,000,000,  including but not
limited to, insurance companies,  mutual funds and lease financing companies; or
(f) other lenders or institutional  investors consented to in writing in advance
by the  Administrative  Agent and  Trendwest.  No Affiliate of Trendwest  and no
Affiliate of an Affiliate of Trendwest shall be an Eligible Assignee.

     "Eligible  Inventory"  means all of  Trendwest's  Inventory,  valued at the
lower of cost or net realizable value, except:

     (a) Inventory that is not owned by Trendwest free and clear of all security
interests, liens, encumbrances, and claims of third parties; and

     (b) Construction-in-Process with respect to MountainStar.

     "Eligible Inventory Amount" as of any date during any Fiscal Year means the
lesser of (a) 50% of the  aggregate  amount of Eligible  Inventory or (b) Thirty
Million Dollars ($30,000,000).

     "Eligible  Investments"  means (a) marketable direct  obligations issued or
unconditionally  guaranteed  by the United  States  government  or issued by any
agency thereof and backed by the full faith and credit of the United States,  in
each case maturing  within one year from the date of  acquisition  thereof;  (b)
commercial paper maturing no more than one year from the date issued and, at the
time of  acquisition,  having a rate of at  least  A-1  from  Standard  & Poor's
Ratings  Group or at least P-1 from Moody's  Investors  Service,  Inc.;  and (c)
certificates  of deposit or bankers'  acceptances  maturing within one year from
the  date of  issuance  thereof  issued  by,  or  overnight  reverse  repurchase
agreements  from any,  commercial  bank  organized  under the laws of the United
States of  America or any state  thereof  or the  District  of  Columbia  having
combined  capital and surplus of not less than  $100,000,000;  (d) time deposits
maturing no more than  thirty  (30) days from the date of  creation  thereof and
demand deposits with commercial  banks having  membership in the Federal Deposit
Insurance  Corporation  in amounts not  exceeding  the lesser of $100,000 or the
maximum  amount of insurance  applicable to the aggregate  amount of Trendwest's
deposits  at such  institution;  and (e)  deposits or  investments  in mutual or
similar  funds  offered or  sponsored by  brokerage  or other  companies  having
membership in the Securities  Investor Protector  Corporation  investing only in
obligations described in clauses (a) through (d) above.

     "Eligible  Receivables"  means all of  Trendwest's  Notes  Receivable  that
contain terms and  conditions  acceptable to the  Administrative  Agent.  Unless
otherwise agreed to by the Administrative Agent in writing, Eligible Receivables
do not include:

     (a) Notes  Receivable with respect to which (i) the Note Maker files or has
filed against it any petition  seeking relief under Debtor Relief Laws, (ii) all
or any portion of the amount due thereunder is 180 or more days  delinquent,  or
(iii)  all or any  portion  of the  amount  due  thereunder  is  written  off by
Trendwest or Trendwest  should,  in accordance  either with GAAP or its internal
collection  policies,  either  write off or add an amount to its  allowance  for
doubtful accounts based on the amount past due thereunder;

     (b) Notes  Receivable  with  respect to which the Note Maker is an officer,
director,  employee  or agent of  either  of the  Borrowers  unless  such  Notes
Receivable  have  arisen in  connection  with the sale of  Vacation  Credits  or
Fractional Ownership Interests to any such officer, director, employee or agent;

                                       7
<PAGE>

     (c) Notes  Receivable  with respect to which the Note Maker is a Subsidiary
of or affiliated with or related to Trendwest or its shareholders,  officer,  or
directors;

     (d) Notes Receivable with respect to which payment by the Note Maker may be
conditional;

     (e) Notes Receivable with respect to which the Note Maker is not a resident
of the  United  States,  except  (i)  Notes  Receivable  that are  supported  by
insurance,  bonds or other assurances  satisfactory to the Administrative Agent,
(ii) Notes  Receivable  with  respect  to which the Note Maker is a resident  of
Canada,  provided  that  the  aggregate  principal  amount  of  all  such  Notes
Receivable does not exceed $15,000,000,  and (iii) Notes Receivable  denominated
in  Australian  Currency  with  respect to which the Note Maker is a resident of
Australia,  provided  that the  aggregate  principal  amount  of all such  Notes
Receivable does not exceed the Australian Advance Limit.

     (f) Notes Receivable that are subject to dispute, counterclaim, or setoff;

     (g) Notes Receivable with respect to which the Administrative Agent, in its
sole and absolute discretion,  deems the creditworthiness or financial condition
of the Note Maker to be unsatisfactory;

     (h) Notes Receivable that have been repurchased by Trendwest from a Special
Purpose Funding Corporation.

     (i) Notes  Receivable with respect to which the Note Maker has filed or has
had filed against it a petition in bankruptcy or an application for relief under
any   provision   of  any   state  or   federal   bankruptcy,   insolvency,   or
debtor-in-relief  acts,  or who has  had  appointed  a  trustee,  custodian,  or
receiver for the assets of such Note Maker,  or who has made an  assignment  for
the benefit of creditors or has become  insolvent or fails  generally to pay its
debts (including its payrolls) as such debts become due; and

     (j) Notes Receivable with respect to which the Note Maker is a governmental
entity.

     "Environmental  Claim"  means,  with respect to any Person,  any written or
oral notice, claim, demand, request for information, citation, summons, order or
other  communication  (each,  a  "claim")  by any other  Person or  governmental
authority alleging or asserting the liability of the recipient of such claim for
costs   associated   with   investigations,   enforcement,   cleanup,   removal,
governmental response or remedial actions, damages to natural resources or other
Property, or health, personal injuries, fines or penalties arising out of, based
on or resulting from (a) the presence,  or Release, of any Hazardous Material at
or from any location,  whether or not owned by such Person, or (b) circumstances
forming the basis of any violation,  or alleged violation,  of any Environmental
Law,  including  any claim by any third  party  seeking  damages,  contribution,
indemnification, cost recovery, compensation or injunctive relief resulting from
the presence or Release of Hazardous Materials or arising from alleged injury or
threat of injury to health, safety or the environment.

     "Environmental  Laws" means all  provisions of law,  statutes,  ordinances,
rules, regulations,  permits, licenses, judgments, writs, injunctions,  decrees,
orders,  awards and standards promulgated by the government of the United States
of America or by any other domestic or foreign  jurisdiction  in which Trendwest
or  any  of  its  Subsidiaries  conducts  business,  or by  any  court,  agency,
instrumentality,  regulatory  authority or commission  of any of the  foregoing,
concerning  health,  safety and  protection  of, or  regulation of the emission,
release or discharge of substances into, the environment.

                                       8
<PAGE>

     "ERISA"  means the Employee  Retirement  Income  Security  Act of 1974,  as
amended, and all regulations promulgated under such statute.

     "Eurocurrency Reserve Requirement" means, with respect to any LIBOR Loan or
Australian  Advance for any  Interest  Period,  the daily  average of the stated
maximum rate (expressed as a decimal) at which reserves (including any marginal,
supplemental,  or emergency  reserves) are required to be maintained during such
Interest Period under Regulation D by member banks of the Federal Reserve System
in Chicago with deposits  exceeding one billion  Dollars  against  "Eurocurrency
Liabilities"  (as such term is used in  Regulation  D) but  without  benefit  or
credit of proration,  exemptions,  or offsets that might  otherwise be available
from  time to time  under  Regulation  D.  Without  limiting  the  effect of the
foregoing, the Eurocurrency Reserve Requirement shall reflect any other reserves
required to be maintained  against (a) any category of liabilities that includes
deposits by  reference  to which (i) the BBSY Rate is to be  determined,  in the
case of Australian Advances,  or (ii) LIBOR is to be determined,  in the case of
Domestic  Advances,  or (b) any  category of extension of credit or other assets
that include Australian Advances or Domestic Advances, as the case may be.

     "Event of Default" means any of the events specified in Section 8.

     "Extension of Credit" means (a) a Revolving Loan and (b) a Letter of Credit
Action in which a new  Letter  of  Credit  is  issued or that has the  effect of
increasing  the  amount  of,  extending  the  maturity  of, or making a material
modification to an outstanding Letter of Credit or the reimbursement of drawings
with respect to such Letter of Credit.

     "Federal  Funds  Rate"  means,  for any day,  the rate per  annum  (rounded
upwards to the nearest  1/100 of 1%) equal to the weighted  average of the rates
on overnight  Federal  funds  transactions  with members of the Federal  Reserve
System  arranged  by Federal  funds  brokers on such day,  as  published  by the
Federal Reserve Bank on the Banking Day next succeeding such day;  provided that
(a) if such day is not a Banking Day, the Federal  Funds Rate for such day shall
be such  rate on such  transactions  on the  next  preceding  Banking  Day as so
published  on the next  succeeding  Banking  Day,  and (b) if no such rate is so
published on such next  succeeding  Banking Day, the Federal Funds Rate for such
day  shall  be the  average  rate  charged  to  KeyBank  on  such  day  on  such
transactions as determined by the Administrative Agent.

     "Fees" means, collectively, the fees described in Section 2.2.

     "Financial  Statements"  has the  meaning  assigned to such term in Section
4.5.

     "Fiscal Year" means the fiscal year of Trendwest.

     "Fixed  Charge  Coverage  Ratio"  means the ratio of Adjusted  Cash Flow to
Fixed Charges.

     "Fixed Charges" means,  with respect to the four (4) fiscal quarters ending
on the  last  day of any  fiscal  quarter  of any  Fiscal  Year,  the sum of (a)
mandatory  principal  payments  required to be made on Indebtedness of Trendwest
(exclusive  of  mandatory  prepayments  made  pursuant to Section  3.4(b)),  (b)
Interest Expense, and (c) cash taxes paid by Trendwest.

     "Fractional  Ownership Interests" means deeded fixed intervals in timeshare
condominiums  that are developed by Trendwest and not  transferred to WorldMark,
The Club.

     "Funding  Notification"  has the  meaning  assigned to such term in Section
2.1(e)(ii)(D).

                                       9
<PAGE>

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

     "GST" means a goods and services or similar tax imposed in the Commonwealth
of Australia,  together  with any related  interest,  penalties,  fines or other
charges.

     "Guaranty  Obligations"  means, with respect to any Person, all obligations
of such  Person as a result of a pledge of its credit or property in any manner,
or any agreement by such Person to become  responsible  for the payment or other
performance of the indebtedness, contract or other obligation of another Person,
including  obligations  incurred as (a) guarantor (of payment or of collection),
(b) surety,  (c) co-maker,  (d) endorser,  (e) one who agrees  conditionally  or
otherwise to make any  purchase,  loan or  investment in order thereby to enable
another to prevent  or correct a default of any kind,  (f) one who has  endorsed
(otherwise than for collection or deposit in the ordinary course of business) or
discounted with recourse,  or agreed  (contingently or otherwise) to purchase or
repurchase or otherwise acquire or become liable for, any  Indebtedness,  or (g)
one who has entered into any agreement for the purchase or other  acquisition of
any product,  materials or supplies, or for the making of shipments,  or for the
payment for  services,  if in any such case payment is to be made  regardless of
the nondelivery of the product,  materials or supplies or the  non-furnishing of
the services.

     "Hazardous Materials" means,  collectively,  (a) any petroleum or petroleum
products, flammable materials, explosives, radioactive materials, asbestos, urea
formaldehyde  foam insulation,  and transformers or other equipment that contain
polychlorinated  biphenyls,  (b) any chemicals or other  materials or substances
that are now or hereafter  become  defined as or included in the  definition  of
"hazardous  substances,"  "hazardous wastes," "hazardous  materials," "extremely
hazardous wastes,"  "restricted  hazardous wastes," "toxic  substances,"  "toxic
pollutants,"  "contaminants,"  "pollutants" or words of similar import under any
Environmental  Law, and (c) any other  chemical or other  material or substance,
exposure to which is now or hereafter prohibited, limited or regulated under any
Environmental Law.

     "Indebtedness"  of  any  Person  means,   without   duplication,   (a)  all
obligations  of such Person for  borrowed  money or with  respect to deposits or
advances of any kind,  (b) all  obligations  of such Person  evidenced by bonds,
debentures,  notes or similar  instruments,  (c) all  obligations of such Person
upon which interest  charges are  customarily  paid, (d) all obligations of such
Person under  conditional sale or other title retention  agreements  relating to
assets  purchased by such Person,  (e) all  obligations of such Person issued or
assumed as the deferred purchase price of property or services  (excluding trade
accounts  payable  and  accrued  expenses  arising  in the  ordinary  course  of
business), (f) all indebtedness of others secured by (or for which the holder of
such indebtedness has an existing right,  contingent or otherwise, to be secured
by) any Lien on property  owned or acquired by such  Person,  whether or not the
obligations  secured by such property have been assumed by such Person,  (g) all
Guaranty Obligations of such Person,  including any recourse indebtedness of any
partnership in which such Person is a general partner, (h) all Capitalized Lease
Obligations of such Person, (i) all rate hedging  obligations of such Person and
all  obligations of such Person under foreign  currency  exchange  agreements or
other exchange rate hedging arrangements, and (j) all obligations of such Person
as an account  party to  reimburse  any bank or any other Person with respect to
letters  of  credit  or  bankers'  acceptances;   provided,  however,  that  (i)
Indebtedness shall not include sales of Notes Receivable sold to Special Purpose
Funding  Corporations  pursuant to Note Purchase Facilities and indemnification,
recourse or repurchase obligations thereunder,  and (ii) the Indebtedness of any
Person  shall  include all recourse  Indebtedness  of any  partnership  or joint
venture in which such Person is a general partner or a joint venturer.

     "Indemnified  Persons"  has the  meaning  assigned  to such term in Section
11.3(b).

                                       10
<PAGE>

     "Interest  Expense"  means,  with  respect to the four (4) fiscal  quarters
ending  on the last day of any  fiscal  quarter  of any  Fiscal  Year,  the cash
interest expense of Trendwest (including all fees payable under Section 2.2) and
any other fees, charges, commissions and discounts.

     "Interest Payment Date" means (a) in the case of Base Rate Loans, the first
Banking Day of each calendar quarter,  commencing on October 1, 2000, and (b) in
the case of LIBOR Loans and Australian Advances,  the last day of the applicable
Interest Period,  except in the case of 6-month Interest Periods,  in which case
the Interest  Payment Dates shall be the ninetieth (90th) day, and the last day,
of such 6-month Interest Period.

     "Interest  Period"  means,  with  respect to any LIBOR  Loan or  Australian
Advance,  the period commencing on the day on which such Revolving Loan is made,
continued or converted  and ending on the date one,  two,  three,  or six months
thereafter, as the applicable Borrower may elect pursuant to Section 2.1(e)(ii);
provided,  however,  that (a) any  Interest  Period that  commences  on the last
Banking Day of a calendar month (or on any day for which there is no numerically
corresponding day in the appropriate subsequent calendar month) shall end on the
last Banking Day of the appropriate subsequent calendar month, (b) each Interest
Period that would  otherwise end on a day that is not a Banking Day shall end on
the next succeeding  Banking Day or, if such succeeding Banking Day falls in the
next succeeding  calendar  month, on the next preceding  Banking Day, and (c) no
Interest  Period that would end after the  Revolving  Termination  Date shall be
permitted.

     "Inventory" means Vacation Credits,  Fractional  Ownership  Interests,  and
Construction-in-Process.

     "Investments" has the meaning assigned to such term in Section 7.10.

     "Issuing  Lender"  means  KeyBank  National  Association,  or any successor
Lender issuing Letters of Credit pursuant to this Agreement.

     "JELD-WEN Debt" means  Indebtedness of Trendwest and/or its Subsidiaries to
JELD-WEN, inc. or any Affiliates of JELD-WEN, inc.

     "KeyBank" means KeyBank National  Association,  in its capacity as a Lender
and not as Administrative Agent, and its successors and assigns.

     "Lenders"  has  the  meaning  assigned  to such  term  in the  introductory
paragraph  of  this  Agreement  and,  as  the  context  requires,  includes  the
Australian Lender and Issuing Lender.

     "Letter of Credit" means any letter of credit issued or  outstanding  under
this  Agreement,  which letter of credit shall be  consistent  with the terms of
this Agreement.

     "Letter  of Credit  Action"  means  the  issuance,  supplement,  amendment,
renewal, extension, modification or other action relating to a Letter of Credit.

     "Letter of Credit  Application" means an application for a Letter of Credit
Action from time to time in use by the Issuing Lender.

     "Letter of Credit Cash Collateral  Account" means a blocked deposit account
at the Issuing Lender in which  Trendwest  hereby grants a security  interest to
the Issuing  Lender as security  for Letter of Credit  Usage and with respect to
which  Trendwest   agrees  to  execute  and  deliver  from  time  to  time  such
documentation  as  Administrative  Agent or the  Issuing  Lender may  reasonably
request to further assure and confirm such security interest.

                                       11
<PAGE>

     "Letter of Credit Payment Date" means the last Banking Day of each calendar
quarter and the Revolving Termination Date.

     "Letter  of  Credit  Sublimit"  means  an  amount  equal to  lesser  of the
Revolving Loan Limit and  $5,000,000.  The Letter of Credit Sublimit is part of,
and not in addition to, the Aggregate Commitment.

     "Letter  of  Credit  Usage"  means,  as at any date of  determination,  the
aggregate  undrawn  face  amount  of  outstanding  Letters  of  Credit  plus the
Unreimbursed Amounts.

     "Letter of Credit Notice" has the meaning  assigned to such term in Section
2.1(k)(ii).

     "Leverage  Ratio" as of any date  means the ratio of Total  Funded  Debt to
Total Capitalization.

     "LIBOR" means, for any Interest Period of a Domestic Advance, (a) the LIBOR
Index Rate for such Interest Period,  if such rate is available,  and (b) if the
LIBOR Index Rate cannot be determined,  the  arithmetic  average of the rates of
interest per annum (rounded upward, if necessary,  to the nearest 1/100th of 1%)
at which deposits in Dollars in immediately  available  funds are offered to the
Administrative Agent at 11:00 a.m. (London,  England time) two (2) Business Days
before the beginning of such Interest Period by three (3) or more major banks in
the  interbank  eurodollar  market  selected by the  Administrative  Agent for a
period equal to such Interest Period and in an amount equal or comparable to the
principal  amount of such Domestic  Advance to be outstanding  for such Interest
Period.

     "LIBOR Index Rate " means,  for any Interest Period of a Domestic  Advance,
the rate per annum  (rounded  upwards,  if  necessary,  to the next  higher  one
hundred-thousandth  of a percentage  point) for deposits in Dollars for a period
equal to such  Interest  Period,  that appears on Telerate Page 3750 as of 11:00
a.m.  (London,  England  time)  on the day  two (2)  Business  Days  before  the
commencement of such Interest Period.

     "LIBOR Loan" means any Revolving Loan that bears interest with reference to
LIBOR.

     "Lien" as applied to the  property  of any Person  means (a) any  mortgage,
lien,  pledge,  assignment,  charge,  lease  constituting  a  Capitalized  Lease
Obligation,  conditional  sale or  other  title  retention  agreement,  or other
security  interest or  encumbrance  of any kind with  respect to any property of
such  Person,  or upon  the  income  or  profits  from  such  property,  (b) any
arrangement,  express or  implied,  under  which any  property of such Person is
transferred,  sequestered or otherwise  identified for the purpose of subjecting
the  property to the payment of  Indebtedness  in priority to the payment of the
general, unsecured creditors of such person, (c) the filing of, or any agreement
to  give,  any  financing  statement  under  the  UCC or its  equivalent  of any
jurisdiction with respect to Indebtedness,  and (d) in the case of securities or
other equity  interests,  any purchase option,  call or similar right of a third
party with respect to such securities or other equity interests.

     "Majority  Lenders" means, at any time, the Lenders holding at least 51% of
the then aggregate  unpaid  principal  amount of the Revolving  Notes, or, if no
principal amount of the Revolving Notes is then outstanding,  the Lenders having
at least 51% of the Aggregate Commitment.

     "MountainStar"  means the project  known as  MountainStar  and Urban Growth
Area in or around Cle Elum, Washington.

     "Multiemployer Plan" has the meaning assigned to such term in Section 3(37)
of ERISA.

                                       12
<PAGE>

     "Non-Monetary Provisions" means all provisions of this Agreement other than
those provisions pursuant to which the principal of or interest on any Revolving
Note,  or any other  amounts,  are required to be paid by the  Borrowers or some
other party.

     "Note  Maker" means the Person or entity  obligated  with respect to a Note
Receivable.

     "Note Purchase  Facilities"  means any agreement of Trendwest or any of its
Subsidiaries  providing for sales,  transfers or conveyances of Notes Receivable
purporting  to be sales (and  considered  sales under GAAP) that do not provide,
directly or indirectly, for recourse against the seller of such Notes Receivable
(or against any of such seller's  Affiliates)  by way of a guaranty or any other
support  arrangement with respect to the amount of such Notes Receivable  (based
on the financial  condition or circumstances of the obligor  thereunder),  other
than  such  limited  recourse  as  is  reasonable  given  market  standards  for
transactions  of a similar type,  taking into account such factors as historical
bad debt loss experience and obligor concentration levels.

     "Note  Receivable"  means a  promissory  note or  other  right  to  payment
received by Trendwest for Vacation Credits sold by Trendwest.

     "Obligations"  means  any  obligation  of the  Borrowers  (a) to pay to the
Lenders the principal of and interest on the Revolving  Notes in accordance with
the terms of the  Revolving  Notes,  (b) with respect to Letter of Credit Usage,
(c) with respect to any Rate  Hedging  Obligations  owing to any Lender,  (d) to
pay, satisfy or perform any other liability or obligation to the  Administrative
Agent or any Lender,  arising  under this  Agreement,  whether  now  existing or
subsequently  incurred  by reason of future  advances or  otherwise,  matured or
unmatured,  direct  or  contingent,  joint or  several,  including  any  related
extensions, modifications or renewals and substitutions, and including all fees,
indemnification amounts, costs and expenses,  including interest on such amounts
and reasonable  attorneys' fees to the extent permitted by law,  incurred by the
Administrative  Agent or any  Lender  for the  protection  and  preservation  or
enforcement  of its rights and remedies  arising  under this  Agreement,  (e) to
repay to the Lenders all amounts  advanced at any time by the Lenders under this
Agreement,  including  advances  for  principal  or  interest  payments to prior
secured parties,  mortgagees,  lienors or other Persons,  or for taxes,  levies,
insurance, rent or repairs to, or maintenance or storage of, any of the property
of  Trendwest  or any of  its  Subsidiaries,  (f) to  perform  any  covenant  or
agreement made with the Lenders  pursuant to this Agreement,  or (g) to take any
other action with respect to any other  liability of any nature of the Borrowers
to the Lenders under this Agreement.

     "Original  Dollar  Amount" means,  with respect to any  Australian  Advance
being continued as an Australian  Advance pursuant to Section 2.1(g), the Dollar
Equivalent of such Australian  Advance on the first day of the expiring Interest
Period of such Australian Advance.

     "Outstanding  Obligations"  means,  as of any date,  and  giving  effect to
making  any  Extensions  of  Credit  requested  on such  date and all  payments,
repayments and prepayments  made on such date, (a) when reference is made to all
Lenders,  the sum of (i)  the  aggregate  outstanding  principal  amount  of all
Revolving  Loans and (ii) all Letter of Credit Usage,  and (b) when reference is
made to one Lender, the sum of (i) the aggregate outstanding principal amount of
all  Revolving  Loans  made  by  such  Lender  (excluding,  in the  case  of the
Australian  Lender,  its Australian  Advances  except to the extent  provided in
clause (iii) below), (ii) such Lender's ratable risk participation in all Letter
of Credit  Usage,  and (iii) such  Lender's  ratable risk  participation  in all
outstanding   Australian  Advances,   determined  by  reference  to  the  Dollar
Equivalent of such Australian Advances.

     "Past-Due  Notes" means Notes Receivable with respect to which a payment is
delinquent for a period in excess of 30 days,  and less than 91 days,  following
the due date of such payment.

                                       13
<PAGE>

     "PBGC" means the Pension Benefit  Guaranty  Corporation or any governmental
authority at any time substituted therefor.

     "Pension Plan" means an employee pension benefit plan as defined in Section
3(2) of ERISA that is subject to the  provisions  of Section  302 or Title IV of
ERISA or Section 412 of the Code.

     "Permitted Acquisition" means any transaction in which:

     (a) any Subsidiary merges with (i) Borrower provided that Borrower shall be
the continuing or surviving corporation,  (ii) any one or more Subsidiaries,  or
(iii) any joint  venture,  partnership  or other  Person,  so long as such joint
venture, partnership and other Person, as a result of making such merger and all
other contemporaneous related transactions,  becomes a Subsidiary; provided that
when any wholly owned Subsidiary is merging into another Subsidiary,  the wholly
owned Subsidiary shall be the continuing or surviving Person;

     (b) any  Subsidiary  sells all or  substantially  all of its  assets  (upon
voluntary  liquidation  or  otherwise)  to Trendwest  or to another  Subsidiary;
provided that when any wholly owned  Subsidiary is selling all or  substantially
all of its assets to another Subsidiary, the Subsidiary acquiring such assets is
a wholly owned Subsidiary; or

     (c) any Person sells all or substantially all of its assets to Trendwest or
to a Subsidiary,  or merges with  Trendwest or a Subsidiary in a transaction  in
which Trendwest or such  Subsidiary is the continuing or surviving  corporation,
and the consideration  paid by Trendwest in connection with either such asset or
merger transaction does not exceed 25% of Trendwest's  Consolidated Net Worth at
such  time,  provided  that  in any  such  case  Trendwest  demonstrates  to the
Administrative  Agent's  reasonable  satisfaction that such transaction will not
result in a breach of the  financial  covenants  in  Section  6.11 or  otherwise
result in a Possible Default or Event of Default.

     "Permitted Lien" means any of the following Liens:

     (a) Liens for  taxes or  assessments,  and  similar  charges,  (i) that are
either not  delinquent or are being  contested  diligently  and in good faith by
appropriate  proceedings,  (ii) as to which the affected  Borrower has set aside
adequate  reserves  on its books,  and (iii) that do not entail any  significant
risk of loss,  forfeiture,  foreclosure or sale of the property  subject to such
Liens;

     (b) Statutory  Liens,  such as mechanic's,  materialman's,  warehouseman's,
landlord's,  artisan's, workman's,  contractor's,  carrier's or other like Liens
(i)  incurred in good faith in the ordinary  course of  business,  (ii) that are
either not  delinquent or are being  contested  diligently  and in good faith by
appropriate  proceedings,  (iii) as to which  Trendwest  has set aside  adequate
reserves on its books or bonded  satisfactorily to the Administrative Agent, and
(iv) that do not entail any significant risk of loss, forfeiture, foreclosure or
sale of the property subject to such Liens;

     (c) Encumbrances  consisting of zoning restrictions,  easements,  licenses,
reservations,  provisions,  covenants,  conditions, waivers, restrictions on the
use of real  property or minor  irregularities  of title,  provided that none of
such  encumbrances  materially  impairs the use or value of any  property in the
operation of the business of Trendwest and its Subsidiaries;

     (d) Liens securing  conditional  sale, rental or purchase money obligations
permitted under Section 7.4 and Capitalized  Lease  Obligations  permitted under
Section  7.5 (and  protective  UCC-1  financing  statements  filed by lessors in
connection  with such Liens under leases not intended as security),  but only in
the property that is the subject of such obligations;

                                       14
<PAGE>

     (e) Liens arising under or pursuant to this Agreement or otherwise securing
any Obligation;

     (f) Liens  relating to judgments or awards with respect to which  Trendwest
is, in good  faith,  prosecuting  an appeal or  proceeding  for  review and with
respect to which a stay of execution  upon such appeal or proceeding  for review
has been secured,  and as to which judgments or awards Trendwest has established
adequate  reserves  on its books or has bonded in a manner  satisfactory  to the
Administrative Agent;

     (g) Pledges or deposits  made in the ordinary  course of business to secure
payment of worker's  compensation,  or to  participate in any fund in connection
with worker's compensation,  unemployment  insurance,  old-age pensions or other
social security programs;

     (h) Liens  granted to secure the  performance  of letters of credit,  bids,
tenders,  contracts,  leases, public or statutory obligations,  surety, customs,
appeal  and  performance  bonds  and other  similar  obligations  to the  extent
permitted in this Agreement and not incurred in connection with the borrowing of
money,  the obtaining of advances or the payment of the deferred  purchase price
of any property;

     (i) Any other Liens  listed on Exhibit Q or to which the  Majority  Lenders
have consented in writing;

     (j) Liens on Trendwest's corporate headquarters in Redmond,  Washington, to
the extent that such Liens secure Indebtedness of less than $15,000,000;

     (k) Liens  securing  Indebtedness  in an aggregate  principal  amount up to
$50,000 on Trendwest's property in Surfside, Washington;

     (l) Liens granted to any Special Purpose Funding  Corporation to the extent
that such Liens do not extend to property other than Notes  Receivable  conveyed
to  such  Special  Purpose  Funding   Corporation   pursuant  to  Note  Purchase
Facilities.

     (m) Any other Liens to the extent that such Liens, when considered together
with all other Liens with respect to the personal and real property of Trendwest
and its  Subsidiaries,  secure  Indebtedness  in an aggregate  Dollar amount not
exceeding 5% of Consolidated Net Worth.

     "Person" shall include  natural  persons,  corporations,  business  trusts,
associations,   companies,  limited  liability  companies,  joint  ventures  and
partnerships.

     "Plan" means any employee  benefit  plan,  as defined under Section 3(3) of
ERISA,  established  or maintained by Trendwest or any member of the  Controlled
Group or any such Plan to which Trendwest or any member of the Controlled  Group
is,  or in the last six  years  was,  required  to  contribute  on behalf of its
employees.

     "Possible  Default"  means an event,  condition,  situation  or thing  that
constitutes, or that with the lapse of any applicable grace period or the giving
of notice or both would constitute, any Event of Default.

     "Prepayment  Account"  has the  meaning  assigned  to such term in  Section
3.4(c)(i).

                                       15
<PAGE>

     "Prepayment  Premium"  with respect to the  prepayment of any LIBOR Loan or
Australian  Advance  or any other  receipt  or  recovery  of any  LIBOR  Loan or
Australian Advance prior to the end of the applicable  Interest Period,  whether
by voluntary prepayment,  acceleration,  or otherwise,  means an amount equal to
the  loss  or  expense  sustained  by  each  Lender  as a  consequence  of  such
prepayment, receipt or recovery, including any such loss or expense arising from
the liquidation or reemployment of funds obtained by such Lender to maintain its
LIBOR Loan or  Australian  Advance,  as the case may be, or from fees payable to
terminate the deposits from which such funds were obtained;  provided,  however,
that (a) for purposes of calculating such amount,  each LIBOR Loan or Australian
Advance  shall be  conclusively  deemed to have been funded at the LIBOR or BBSY
Rate used in determining  the Applicable  LIBOR Rate or BBSY Rate for such LIBOR
Loan or  Australian  Advance by a matching  deposit  or other  borrowing  in the
interbank eurodollar market for a comparable amount and for a comparable period,
whether or not such LIBOR Loan or Australian  Advance is in fact so funded,  and
(b) a statement as to the amount of such loss or expense, prepared in good faith
and in reasonable detail by the Lender and submitted by the Lender to Trendwest,
shall be  conclusive  and  binding for all  purposes  absent  manifest  error in
computation.

     "Proprietary Rights" has the meaning assigned to such term in Section 4.8.

     "Ratable Share" means with respect to any Lender,  the quotient obtained by
dividing (a) such Lender's Commitment by (b) the Aggregate Commitment.

     "Rate  Hedging  Obligations"  means all  obligations  of Trendwest  and its
Subsidiaries,  whether  absolute or  contingent  and  howsoever  and  whensoever
created,  arising,  evidenced  or  acquired  (including  all  related  renewals,
extensions and modifications,  and substitutions) under (a) agreements,  devices
or arrangements  designed to protect  Trendwest or any of its Subsidiaries  from
the  fluctuations  of interest rates,  including  interest rate exchange or swap
agreements, interest rate cap or collar protection agreements, and interest rate
options,  puts  and  warrants,  and  (b)  cancellations,  buy-backs,  reversals,
terminations or assignments of any of the foregoing.

     "Reference  Banks" means such banks as may from time to time be  determined
by the Australian Lender to be "Reference Banks".

     "Reference Rate" means the per annum rate of interest designated by KeyBank
from time to time as its prime rate at its main  office,  such rate to change as
and when such prime rate  changes  (regardless  of whether such rate is publicly
announced).  The prime rate functions as a reference rate index,  and may not be
the lowest rate of interest charged by KeyBank to its borrowers.

     "Regulation D" means  Regulation D of the Board of Governors of the Federal
Reserve System, as amended or supplemented from time to time.

     "Regulatory  Change" means the adoption of or any change in federal,  state
or local  treaties,  laws,  rules or regulations or the adoption of or change in
any interpretations, guidelines, directives or requests of or under any federal,
state or local treaties,  laws, rules or regulations  (whether or not having the
force of law) by any court,  governmental authority,  central bank or comparable
agency charged with the interpretation or administration of such treaties, laws,
rules or regulations.

     "Release" means any release, spill, emission,  leaking, pumping, injection,
deposit, disposal,  discharge,  dispersal, leaching or migration into the indoor
or outdoor  environment,  including the movement of Hazardous  Materials through
ambient air, soil,  surface  water,  groundwater,  wetlands,  land or subsurface
strata, that, in any such case, is in violation of any Environmental Law.

                                       16
<PAGE>

     "Reportable  Event"  means a  reportable  event as that term is  defined in
Title IV of  ERISA,  excluding,  however,  such  events  as to which the PBGC by
regulation  has waived the  requirement  of Section  4043(a) of ERISA that it be
notified  within thirty days of the  occurrence of such event  (provided  that a
failure to meet the minimum  funding  standard of Section 412 of the Code and of
Section 302 of ERISA shall be a Reportable  Event  regardless of the issuance of
any such waivers in accordance with Section 412(d) of the Code).

     "Revolving  Commitment"  as of any date  means  the  Aggregate  Commitment,
reduced by (a) the then-outstanding  principal balance of the Domestic Advances,
(b)  the  Dollar  Equivalent  of  the  then-outstanding   principal  balance  of
Australian Advances, and (c) the Letter of Credit Usage.

     "Revolving Loan Limit" means a Dollar amount equal to the lesser of (a) the
Revolving  Commitment,  or (b)  an  amount  equal  to  the  sum of the  Eligible
Inventory Amount plus 75% of the Dollar amount of Eligible Receivables minus the
outstanding principal balance of any JELD-WEN Debt.

     "Revolving Loans" has the meaning assigned to such term in Section 2.1(a).

     "Revolving Notes" has the meaning assigned to such term in Section 2.1(j).

     "Revolving Termination Date" means August 14, 2003.

     "SPV" has the meaning assigned to such term in Section 11.7(f)(i).

     "South  Pacific"  means  Trendwest  South Pacific Pty.  Ltd., a corporation
organized and existing under the laws of the Commonwealth of Australia.

     "Special Purpose Funding Corporation" means any special purpose corporation
the majority of the  outstanding  capital  stock or voting power of which is (or
upon the exercise of all  outstanding  warrants,  options and other rights would
be) owned,  directly or  indirectly,  at the time in  question by the  Borrower,
provided that (a) the  corporation  contributes  or  purchases,  for cash and on
arms-length  terms, Notes Receivable from the Borrower pursuant to Note Purchase
Facilities,  (b) substantially all consideration received by the corporation for
or otherwise in connection  with the sale or other transfer of Notes  Receivable
or debt or equity  interests in the  corporation  is  distributed  to or for the
account of Trendwest within one Banking Day following such sale or transfer, (c)
none of Trendwest's or any Subsidiary's  assets other than such Notes Receivable
are at any time sold,  contributed or otherwise transferred to such corporation,
and (d) neither  Trendwest nor any Subsidiary  directly or indirectly  incurs or
assumes or agrees to incur or assume any obligation to or of such corporation or
with respect to such Notes  Receivable,  other than the obligation to repurchase
or provide a substitute for any Note  Receivable with respect to which Trendwest
or any  Subsidiary  has  breached a  representation  or  warranty  made by it in
connection with the sale of such Note Receivable.

     "Standstill  Agreement"  has the  meaning  assigned to such term in Section
5.4.

     "Subsidiary"   means  each   partnership,   limited  liability  company  or
corporation,  the majority of the outstanding partnership interests,  membership
interests,  capital  stock or voting  power of which is (or upon the exercise of
all outstanding warrants,  options and other rights would be) owned, directly or
indirectly,  at the time in question by Trendwest;  provided,  however,  that no
such entity shall be considered a Subsidiary if it is a Special  Purpose Funding
Corporation or if it is the entity currently operating under the name WorldMark,
The Club.

     "Syndication Agent" means Bank One NA, in its capacity as syndication agent
for the Lenders pursuant to this Agreement and not in its individual capacity as
a Lender.

                                       17
<PAGE>

     "Telerate  Page 3750"  means the display  designated  as "Page 3750" on the
Telerate Service (or such other page as may replace Page 3750 on that service or
such other service as may be nominated by the British  Bankers'  Association  as
the  information   vendor  for  the  purpose  of  displaying   British  Bankers'
Association Interest Settlement Rates for Dollar deposits).

     "Total  Capitalization"  means a  Dollar  amount  equal to the sum of Total
Funded Debt plus Consolidated Net Worth.

     "Total  Funded  Debt"  means,  as  of  any  date  of   determination,   all
Indebtedness  of Trendwest  for borrowed  money as of such date,  including  the
Obligations  and, all  Capitalized  Lease  Obligations of Trendwest,  contingent
obligations  with respect to "off balance  sheet" or  "synthetic"  leases (i.e.,
leases  where for tax  purposes the lessee is treated as the owner of the leased
property but for GAAP  purposes  the lease is treated as an operating  lease and
the  lessor  is  treated  as  the  owner  of the  leased  property),  all  other
Indebtedness of Trendwest as of such date that is represented by notes or drafts
representing  extensions of credit for borrowed money, and all obligations as of
such  date  that are  evidenced  by bonds,  debentures,  notes or other  similar
instruments (including all such obligations to which any property or asset owned
by Trendwest is subject,  whether or not the obligation secured by such property
or asset shall have been assumed), and excluding Warehouse Debt.

     "Type" means,  with respect to any Revolving Loan, its nature as a Domestic
Advance or Australian Advance.

     "UCC"  means the  Uniform  Commercial  Code,  as amended and adopted in any
applicable jurisdiction.

     "Unreimbursed  Amounts"  has the  meaning  assigned to such term in Section
2.1(k)(iv).

     "Usage" with respect to any time period means the percentage  equivalent of
the quotient  obtained by dividing (a) the sum of the average daily  outstanding
principal  balance of the  Domestic  Advances  during  such time period plus the
Dollar  Equivalent  of  the  average  daily  outstanding  principal  balance  of
Australian  Advances during such time period, by (b) the average daily Aggregate
Commitment during such time period.

     "Vacation  Credits" means ownership  interests in WorldMark,  The Club that
(a)  entitle  the holder of such  interests  to use a fully  furnished  vacation
resort unit based on the number of such interests  purchased and (b) are created
through  the  transfer  to  WorldMark,  The Club of resort  units  developed  or
purchased by Trendwest  in exchange  for the right to sell  use-rights  in these
properties,  as  determined  using a  formula  based on the  number of user days
available and the relative credit value of each property.

     "Warehouse Debt" means Indebtedness incurred by any Special Purpose Funding
Corporation to finance the purchase of Notes Receivable from Trendwest or any of
its Subsidiaries.

     1.2.  General  Rules  of  Interpretation.  Except  as  otherwise  expressly
provided in this Agreement or unless the context clearly requires otherwise, the
terms defined in this Section  include the plural as well as the  singular;  the
words "hereof,"  "herein,"  "hereunder,"  "in this Agreement" and other words of
similar  import  refer to this  Agreement  as a whole and not to any  particular
Section or other  subdivision;  and  references  in this  Agreement to Sections,
Schedules,  and Exhibits refer to Sections of and Schedules and Exhibits to this

                                       18

<PAGE>

Agreement.  Whenever the words "include," "includes," or "including" are used in
this  Agreement,  they  shall be deemed  to be  followed  by the words  "without
limitation".  Unless otherwise  stated,  references to Subsections  refer to the
Subsections of the Section in which the reference appears.  All pronouns used in
this Agreement include the masculine, feminine and neuter gender, as the context
requires.  Whenever  any  agreement,  promissory  note or  other  instrument  or
document is defined in this Agreement,  such definition  shall be deemed to mean
and include,  from and after the date of any related  amendment,  restatement or
modification, such agreement, promissory note or other instrument or document as
so amended,  restated or modified.  Each term not otherwise expressly defined in
this  Agreement  that is defined in the UCC shall have the  meaning  assigned to
such  term in the  UCC.  In the  case of a  conflict  between  the  terms of the
Borrowing Base  Certificate or the Compliance  Certificate and the terms of this
Agreement  (excluding the Exhibits and  Schedules),  the terms of this Agreement
(excluding the Exhibits and Schedules) shall control.  A reference to any Act of
Parliament  of the  Commonwealth  of  Australia  or to any section or  provision
thereof  shall  be  read  as if the  words  "or any  statutory  modification  or
re-enactment  thereof or any statutory  provision  substituted  therefore"  were
added to such reference.

     1.3. Accounting Terms. All accounting terms used in this Agreement that are
not expressly  defined in this Agreement  have the respective  meanings given to
them in accordance  with GAAP.  All  computations  required under this Agreement
shall  be made in  accordance  with  GAAP,  and all  balance  sheets  and  other
financial  statements  required  to be  delivered  to the  Administrative  Agent
pursuant to this  Agreement  shall be prepared in accordance  with GAAP.  Unless
otherwise  expressly  stated,  all  references  to financial  data of Trendwest,
including defined terms used with respect to the financial  covenants in Section
6.11,  shall be  deemed to refer to such  financial  data of  Trendwest  and its
Subsidiaries on a consolidated basis.

SECTION 2.  THE LOANS.

     2.1. The Revolving Loans.

          (a) Generally.  Subject to the terms and conditions of this Agreement,
during the period up to but not including the Revolving  Termination  Date,  the
Lenders  severally,  but not jointly,  shall make loans to the Borrowers in such
amounts as the Borrowers may from time to time request (the  "Revolving  Loans")
but not exceeding in aggregate  principal amount at any one time outstanding the
Revolving Loan Limit.  Subject to the  limitations  set forth in Sections 2.1(b)
and  2.1(c),  the  Revolving  Loans  shall be  available  in Dollars  ("Domestic
Advances") and Australian Currency ("Australian  Advances").  No Lender shall be
obligated  under this Agreement to make a Revolving  Loan if  immediately  after
making such  Revolving  Loan, the  Outstanding  Obligations of such Lender would
exceed the amount set forth  opposite  such Lender's name on Schedule I, as such
amount may be reduced  pursuant to Section  2.1(h) or  pursuant to Section  11.7
(such Lender's "Commitment").

          (b) Domestic Advances.  The Lenders severally,  but not jointly, shall
make  Domestic  Advances to Trendwest in such amounts as Trendwest may from time
to time request, but at no time shall the aggregate principal amount of Domestic
Advances outstanding exceed the Revolving Loan Limit.

          (c) Australian  Advances.  The Australian Lender shall make Australian
Advances to South Pacific in such amounts as South Pacific may from time to time
request,  but at no time shall the Dollar Equivalent of the aggregate  principal
amount of Australian Advances outstanding to South Pacific exceed the Australian
Advance Limit. No Lender other than the Australian  Lender shall make Australian
Advances  pursuant to this  Agreement,  and no Borrower other than South Pacific
shall obtain Australian Advances.  Upon the making of each Australian Advance by
the   Australian   Lender,   each  Lender  shall  be  deemed   irrevocably   and
unconditionally to have purchased from the Australian  Lender,  without recourse
or warranty,  a risk participation in such Australian Advance in an amount equal
to such  Lender's  Ratable Share times the Dollar  Equivalent of the  Australian
Advance.

                                       19
<PAGE>

          (d) Repayment  and  Reborrowing.  Prior to the  Revolving  Termination
Date, the Borrowers may, at the Borrowers'  option,  from time to time repay all
or any portion of the Revolving Loans, subject to the provisions of Section 3.4,
and the  Borrowers  may  reborrow  from time to time  amounts  so paid up to the
amount of the Revolving Loan Limit in effect at the time of reborrowing.

          (e) Making of the Revolving  Loans.  The Revolving Loans shall be made
as follows:

               (i) Amounts and Certain Conditions.  Each Revolving Loan shall be
     made by the  Lenders  in  such  amount  as the  applicable  Borrower  shall
     request;  provided,  however,  that each such Revolving Loan shall be in an
     amount  that is a minimum  of (A) with  respect  to any  Domestic  Advance,
     $1,000,000 and integral multiples of $1,000,000 in excess of $1,000,000, in
     the case of LIBOR Loans, and $100,000 and integral  multiples of $50,000 in
     excess of $100,000, in the case of Base Rate Loans, and (B) with respect to
     any Australian  Advance,  the Australian  Currency Equivalent of $1,000,000
     and integral multiples of the Australian  Currency Equivalent of $1,000,000
     in  excess  of such  amount.  The  obligation  of the  Lenders  to make any
     Revolving Loan is conditioned  upon (x) there being no Possible  Default or
     Event of Default at such time or immediately  after the Revolving Loan, and
     (y) the  representations  and warranties  contained in this Agreement being
     true and correct in all material  respects as if made on and as of the date
     of such  borrowing,  except to the extent that any of such  representations
     and warranties expressly relate to an earlier date.

               (ii) Place, Notice, and Funding of Revolving Loans.

                    (A) Place of Domestic  Advances.  Domestic Advances shall be
          effected at the principal banking office of the  Administrative  Agent
          in  Seattle,  Washington,  and  shall  be made at  such  times  as the
          applicable Borrower may request by notice to the Administrative  Agent
          no later than (A) in the case of Base Rate Loans,  10:00 a.m., Seattle
          time, on the Borrowing  Date of a requested Base Rate Loan, and (B) in
          the case of LIBOR Loans,  10:00 a.m., Seattle time, three Banking Days
          prior to the Borrowing Date of a requested LIBOR Loan.

                    (B) Place of Australian Advances.  Australian Advances shall
          be effected at the Australian  Lender's Money Market Desk in Adelaide,
          South  Australia,  and shall be made at such  times as  Trendwest  may
          request  by notice to the  Australian  Lender no later than 2:00 p.m.,
          Eastern  Time,  one  Banking  Day  prior  to the  Borrowing  Date of a
          requested Australian Advance.

                    (C) Notice of Revolving  Loans.  The notices  required to be
          delivered pursuant to Sections  2.1(e)(ii)(A) and 2.1(e)(ii)(B)  shall
          be in substantially  the form of Exhibit A and Exhibit B, respectively
          (each a "Borrowing  Notice").  The information in the Borrowing Notice
          may be  communicated  to the  Administrative  Agent,  in the  case  of
          Domestic  Advances,  or to  the  Australian  Lender,  in the  case  of
          Australian  Advances,  by  telephonic  communication  so  long  as the
          Administrative  Agent or the  Australian  Lender,  as the case may be,
          receives  the signed  Borrowing  Notice by facsimile  transmission  or
          other delivery method on the same day as the telephone  communication.
          So long as the Administrative Agent has acted in good faith in relying
          upon a Borrowing Notice purporting to be signed by the chief financial
          officer,  treasurer or assistant treasurer of Trendwest,  on behalf of
          the applicable  Borrower,  the Borrowing  Notice shall be conclusively
          presumed to have been executed by such person,  and  authorized by the
          applicable  Borrower,  regardless  of whether  such  Borrowing  Notice
          subsequently proves to be forged, fraudulent,  invalid or insufficient

                                       20
<PAGE>

          in any  respect.  A copy  of  each  Borrowing  Notice  required  to be
          delivered by Trendwest to the Australian  Lender shall be concurrently
          delivered by Trendwest to the Australian  Lender's  principal  banking
          office in Chicago, Illinois and to the Administrative Agent.

                    (D) Funding of Domestic Advances by Lenders. Upon receipt of
          each Borrowing Notice for a Domestic Advance, the Administrative Agent
          shall  promptly  notify  each  Lender  of the  amount  and date of the
          proposed Domestic Advance (the "Funding Notification"). Not later than
          12:00 Noon, Seattle time, on the Borrowing Date of a proposed Domestic
          Advance,  each Lender shall  provide the  Administrative  Agent at the
          Administrative   Agent's  address   specified  in  Section  11.4  with
          immediately  available Dollars equal to such Lender's Ratable Share of
          such Domestic  Advance,  and the  Administrative  Agent shall pay over
          such immediately available Dollars to Trendwest.

                    (E)  Non-Receipt  of  Funds/Domestic  Advances.  Unless  the
          Administrative Agent shall have received notice from a Lender prior to
          the  Borrowing  Date for a Domestic  Advance to be made by such Lender
          that such Lender will not make available to the  Administrative  Agent
          such funds, the  Administrative  Agent may assume that such Lender has
          made such funds available to the Administrative Agent on the Borrowing
          Date  for  such   Domestic   Advance  in   accordance   with   Section
          2.1(e)(ii)(D),  and the  Administrative  Agent in its sole  discretion
          may, but shall not be obligated to, in reliance upon such  assumption,
          make  available to Trendwest on such  Borrowing  Date a  corresponding
          amount.  If and to the extent such Lender  shall not have so made such
          funds  available to the  Administrative  Agent,  such Lender agrees to
          repay  to  the   Administrative   Agent  immediately  on  demand  such
          corresponding amount together with interest thereon, for each day from
          the date such amount is made  available  to  Trendwest  until the date
          such  amount is repaid to the  Administrative  Agent,  at the  Federal
          Funds Rate.  If such Lender  shall repay to the  Administrative  Agent
          such corresponding amount, such amount so repaid shall constitute such
          Lender's Revolving Loan for purposes of this Agreement. If such Lender
          does  not  pay  such   corresponding   amount   immediately  upon  the
          Administrative Agent's demand, the Administrative Agent shall promptly
          notify   Trendwest,   and  Trendwest   shall   immediately   pay  such
          corresponding   amount  to  the  Administrative  Agent  with  interest
          thereon,  for each day from the date such amount is made  available to
          Trendwest  until the date such amount is repaid to the  Administrative
          Agent, at the rate of interest applicable at the time to such proposed
          Revolving Loan.

                    (F)  Funding  of  Australian  Advances.  Not later than 1:00
          p.m.,  Eastern Time, on the  Borrowing  Date of a proposed  Australian
          Advance  with  respect to which the  Australian  Lender has received a
          Borrowing  Notice,  the Australian  Lender shall make such  Australian
          Advance,  in  immediately  available  Australian  Currency,  to  South
          Pacific, and shall advise the Administrative Agent, in writing, of the
          Dollar Equivalent of such Australian  Advance. If South Pacific at any
          time fails to pay when due any amount  payable in  connection  with an
          Australian  Advance,  the Australian  Lender shall promptly notify the
          Administrative   Agent  of  the  amount  of  such  payment,   and  the
          Administrative  Agent shall promptly  notify each Lender of the Dollar
          Equivalent of such amount ("Defaulted Amount").  Each Lender shall pay
          to the  Administrative  Agent for the account of the Australian Lender
          such Lender's Ratable Share of the Defaulted Amount. Each such payment
          shall be deemed a Base Rate Loan made by such Lender to South Pacific.
          The Base Rate Loans  contemplated  by the preceding  sentence shall be

                                       21
<PAGE>

          made notwithstanding  Borrower's failure to satisfy the conditions set
          forth in Section 5 at the time such Base Rate  Loans are made.  If the
          Administrative  Agent notifies a Lender of the Defaulted Amount before
          1:00 p.m.,  Eastern  Time, on any Business Day, such Lender shall make
          available  to  the  Administrative   Agent  for  the  account  of  the
          Australian  Lender its Ratable Share of the  Defaulted  Amount by 4:00
          p.m.,  Eastern  Time,  on such  Business  Day in same day funds and if
          notified  after 1:00 p.m.,  Eastern Time,  then by 4:00 p.m.,  Eastern
          Time, on the next Business Day. If a Lender fails to make such payment
          by such time, it shall pay the  Administrative  Agent  interest at the
          Federal  Funds Rate on such amount for the  account of the  Australian
          Lender  for each day from such date until  such  payment is made.  The
          failure of a Lender to make any such  payment  shall not  relieve  any
          other Lender of its obligations under this Section 2.1(e)(ii)(F),  but
          no Lender shall be responsible  for the failure of any other Lender to
          make such payment.  Each Lender's  payment of its Ratable Share of any
          Defaulted Amount shall, to the extent of such payment, be deemed to be
          a  funding  of such  Lender's  risk  participation  in the  Australian
          Advance to which the Defaulted Amount relates,  and each Lender making
          such payment shall  thereupon  acquire a  participation  interest,  in
          accordance  with  such  Lender's  Ratable  Share,  in the claim of the
          Australian  Lender against the Borrowers with respect to such payment.
          Each such Lender shall share, in accordance with its Ratable Share, in
          any payment made by the Borrowers with respect to such claim.

          (f)  Conversion/Continuation  of  Domestic  Advances.  At  Trendwest's
election  pursuant to notice in  substantially  the form of Exhibit D ("Domestic
Conversion/Continuation  Notice")  given to the  Administrative  Agent not later
than 10:00 a.m.,  Seattle time,  three Banking Days prior to such  conversion or
continuation,  and subject to the condition that no Event of Default or Possible
Default shall then exist,  any Domestic Advance may be converted to or continued
as a LIBOR Loan as requested by  Trendwest;  provided,  however,  that each such
conversion  shall be in an amount that is a minimum of $1,000,000,  and integral
multiples   of    $1,000,000   in   excess   of    $1,000,000.    The   Domestic
Conversion/Continuation   Notice   shall  be  in  writing,   or  by   telephonic
communication  confirmed by telecopy or other facsimile transmission on the same
day as the  telephone  request,  and shall  specify (i) the proposed date of the
conversion or  continuation,  and (ii) the Domestic  Advance being  converted or
continued,  and (iii) the Interest  Period to be applicable  in connection  with
such conversion or  continuation.  The Domestic  Conversion/Continuation  Notice
shall be accompanied by a completed Borrowing Base Certificate, duly executed by
Trendwest  and  dated  as of the  date of the  Domestic  Conversion/Continuation
Notice.  If Trendwest  has not timely  delivered to the  Administrative  Agent a
Domestic Conversion/Continuation Notice with respect to any terminating Interest
Period  applicable to a LIBOR Loan, the affected  Domestic Advance shall convert
to a one-month LIBOR Loan at the end of such Interest Period.

          (g)  Continuation/Conversion  of Australian  Advances.  At Trendwest's
election  pursuant to notice in substantially the form of Exhibit E ("Australian
Continuation  Notice") given to the Australian Lender and  Administrative  Agent
not  later  than  2:00  p.m.,  Eastern  Time,  one  Banking  Day  prior  to such
continuation,  and subject to the condition that no Event of Default or Possible
Default  shall  then  exist,  any  Australian  Advance  may be  continued  as an
Australian  Advance as requested by South Pacific.  The Australian  Continuation
Notice shall be in writing, or by telephonic communication confirmed by telecopy
or other facsimile  transmission on the same day as the telephone  request,  and
shall specify (i) the proposed date of the continuation, and (ii) the Australian
Advance  being  continued,  and (iii) the Interest  Period to be  applicable  in
connection with such continuation.  The Australian  Continuation Notice shall be
accompanied  by  a  completed  Borrowing  Base  Certificate,  duly  executed  by
Trendwest and dated as of the date of the Australian  Continuation  Notice. With
respect to any continuation of an Australian Advance pursuant to this paragraph,
the  Dollar  Equivalent  of such  Australian  Advance  on the  proposed  date of

                                       22
<PAGE>

continuation shall not exceed or be less than the Original Dollar Amount of such
Australian  Advance.  On the first day of the Interest  Period  specified in the
Australian  Continuation Notice,  South Pacific shall make such prepayments,  or
the Australian Lender shall make such additional  Australian Advances,  as shall
be necessary to ensure compliance with the immediately  preceding  sentence.  If
Trendwest  has  not  timely   delivered  to  the   Australian   Lender  and  the
Administrative  Agent an  Australian  Continuation  Notice  with  respect to any
terminating  Interest Period, the affected Australian Advance shall convert to a
one-month LIBOR Loan at the end of such Interest Period.

          (h)  Reduction  of  Aggregate  Commitment.  At any  time  prior to the
Revolving  Termination  Date, by written notice to the  Administrative  Agent no
later  than  10:00  a.m.,  Seattle  time,  three  Banking  Days  prior  to  such
termination or reduction,  Trendwest may permanently terminate,  or from time to
time permanently reduce, the Aggregate Commitment, subject to Section 3.4(b)(i).
Such notice  shall be in writing or by  telephonic  communication  confirmed  by
telecopy  or other  facsimile  transmission  on the  same day as such  telephone
notice.  Any such partial  reduction shall be in an amount that is not less than
$5,000,000 or an integral  multiple of $1,000,000 in excess of  $5,000,000.  The
Administrative  Agent  shall  notify  the  Lenders  of  any  such  reduction  or
termination of the Aggregate Commitment.

          (i) Maturity.  All Revolving Loans, together with all interest accrued
on such  Revolving  Loans,  shall  be paid in full no later  than the  Revolving
Termination Date.

          (j)  Revolving  Notes.  All  Revolving  Loans  shall be  evidenced  by
separate  promissory notes substantially in the form of Exhibit F, duly executed
and delivered by the Borrowers at Closing, dated the date of this Agreement, and
made payable to each Lender in the aggregate  principal  amount of such Lender's
Ratable Share of the Aggregate  Commitment (the "Revolving Notes").  The Lenders
may,  and are  hereby  authorized  by the  Borrowers  to, set forth on any grids
attached to the Revolving  Notes, or in other comparable  records  maintained by
the Lenders,  the amount of each Revolving Loan, all payments and prepayments of
principal and interest received,  the current outstanding principal balance, and
other appropriate information with respect to the Revolving Loans. The aggregate
unpaid  amount of any  Revolving  Loan set forth in any records  maintained by a
Lender  with  respect to a  Revolving  Note shall be, in the absence of manifest
error,  conclusive  evidence of the  principal  amount  owing and unpaid on such
Revolving  Note.  Failure  of a Lender to  record  the  principal  amount of any
Revolving  Loan on the grid(s)  attached to a Revolving  Note shall not limit or
otherwise  affect the obligation of the Borrowers  under this Agreement or under
such Revolving Note to repay the principal amount of and all interest accrued on
such Revolving Loan.

          (k) Letters of Credit.

               (i) The  Letter of Credit  Commitment.  Subject  to the terms and
     conditions  set forth in this  Agreement,  until the Revolving  Termination
     Date,  the  Issuing  Lender  shall  take such  Letter of Credit  Actions as
     Trendwest  may  from  time to time  request;  provided,  however,  that the
     Outstanding  Obligations of each Lender (excluding the Australian  Lender's
     Australian  Advances)  shall  not  exceed  such  Lender's  Commitment,  the
     Outstanding  Obligations  of all  Lenders  shall not exceed  the  Aggregate
     Commitment  at any time,  and Letter of Credit  Usage  shall not exceed the
     Letter of Credit Sublimit at any time. Subject to subsection (vi) below and
     unless consented to by the Issuing Lender and Majority  Lenders,  no Letter
     of Credit may expire more than 12 months  after the date of its issuance or
     last  renewal;  provided,  however,  that no Letter of Credit  shall expire
     after the Revolving Termination Date. If any Letter of Credit Usage remains
     outstanding  after such date,  Trendwest  shall,  not later than such date,
     deposit  cash in an amount equal to such Letter of Credit Usage in a Letter
     of Credit Cash Collateral Account.

                                       23
<PAGE>

               (ii)  Requesting   Letter  of  Credit   Actions.   Trendwest  may
     irrevocably  request  a Letter  of  Credit  Action in an amount of at least
     $100,000  by  delivering  a Letter of Credit  Application  therefor  to the
     Issuing Lender,  with a copy to the Administrative  Agent (who shall notify
     the Lenders), by written (not telephonic) notice not later than two Banking
     Days prior to the proposed date of issuance of such Letter of Credit Action
     ("Letter of Credit  Notice").  Each Letter of Credit  Action  shall be in a
     form acceptable to the Issuing Lender,  in its sole discretion.  Unless the
     Administrative Agent notifies the Issuing Lender that such Letter of Credit
     Action  is not  permitted  under  this  Agreement,  or the  Issuing  Lender
     notifies the  Administrative  Agent that it has determined that such Letter
     of Credit  Action is  contrary  to any  applicable  laws or policies of the
     Issuing  Lender,  the  Issuing  Lender  shall,  upon  satisfaction  of  the
     applicable  conditions set forth in Section 5 with respect to any Letter of
     Credit Action  constituting  an Extension of Credit,  effect such Letter of
     Credit Action.  This  Agreement  shall control in the event of any conflict
     with any Letter of Credit  Application.  Upon the  issuance  of a Letter of
     Credit, each Lender shall be deemed irrevocably and unconditionally to have
     purchased from the Issuing  Lender,  without  recourse or warranty,  a risk
     participation  in such Letter of Credit in an amount equal to such Lender's
     Ratable  Share  times the  amount of such  Letter of  Credit.

               (iii)   Reimbursement   of  Payments  Under  Letters  of  Credit.
     Trendwest  shall  reimburse the Issuing Lender  through the  Administrative
     Agent for any  payment  that the  Issuing  Lender  makes  under a Letter of
     Credit on or before the date of such payment;  provided,  however,  that if
     the conditions precedent set forth in Section 5 can be satisfied, Trendwest
     may request a Domestic  Advance to  reimburse  the Issuing  Lender for such
     payment pursuant to Section 2.1 or, failing to make such request, Trendwest
     shall be deemed to have  requested  a Base Rate Loan on such  payment  date
     pursuant to subsection (v) below.

               (iv) Funding by Lenders When Issuing Lender Not Reimbursed.  Upon
     any drawing under a Letter of Credit,  the Issuing  Lender shall notify the
     Administrative  Agent and Trendwest.  If Trendwest fails to timely make the
     payment  required  pursuant to subsection  (iii) above,  the Issuing Lender
     shall notify the  Administrative  Agent of such fact and the amount of such
     unreimbursed  payment  ("Unreimbursed  Amounts").  The Administrative Agent
     shall  promptly  notify each Lender of its Ratable  Share of such amount by
     prompt written  notice.  Each Lender shall make funds in an amount equal to
     its Ratable Share of such amount available to the  Administrative  Agent at
     the Administrative Agent's address specified in Section 11.4 not later than
     12:00 Noon, Seattle time, on the proposed date of issuance set forth in the
     Letter of Credit Application,  and the Administrative Agent shall remit the
     funds so received to the Issuing  Lender.  The obligation of each Lender to
     so reimburse  the Issuing  Lender shall be absolute and  unconditional  and
     shall not be affected by the  occurrence of a Possible  Default or Event of
     Default or any other occurrence or event. Any such reimbursement  shall not
     relieve or otherwise  impair the  obligation  of Trendwest to reimburse the
     Issuing  Lender for the amount of any payment  made by the  Issuing  Lender
     under any Letter of Credit,  together  with  interest  as  provided in this
     Agreement.

               (v) Nature of Lenders' Funding.  If the conditions  precedent set
     forth in Section 5 can be  satisfied  (except for the giving of a Letter of
     Credit  Notice) on any date that  Trendwest is obligated  to, but fails to,
     reimburse the Issuing  Lender for a drawing  under a Letter of Credit,  the
     funding by Lenders  pursuant to the previous  subsection shall be deemed to
     be Base Rate Loans (without  regard to the required  minimum amount) deemed
     requested by Trendwest.  If the conditions precedent set forth in Section 5
     cannot be satisfied on the date that  Trendwest is obligated  to, but fails
     to,  reimburse  the Issuing  Lender for a drawing under a Letter of Credit,
     Each Lender's  payment  pursuant to the  immediately  preceding  subsection
     shall,  to the  extent of such  payment,  be deemed to be a funding by such
     Lender of its risk  participation in such Letter of Credit, and each Lender

                                       24
<PAGE>

     making such funding shall thereupon  acquire a participation  interest,  in
     accordance  with such Lender's  Ratable Share,  in the claim of the Issuing
     Lender  against  Trendwest in respect of such  payment and shall share,  in
     accordance  with that Ratable Share,  in any payment made by Trendwest with
     respect to such claim.  Any amounts  made  available  by a Lender under its
     risk  participation  shall be  payable  by  Trendwest  upon  demand  of the
     Administrative  Agent, and shall bear interest at a rate per annum equal to
     the Default Rate.

               (vi) Special Provisions  Relating to Evergreen Letters of Credit.
     Trendwest may request  Letters of Credit that have  automatic  extension or
     renewal provisions  ("evergreen"  Letters of Credit) so long as the Issuing
     Lender  consents in its sole and absolute  discretion to such  extension or
     renewal  and has the right to not permit any such  extension  or renewal at
     least  annually  within a notice  period to be agreed upon at the time each
     such  Letter of Credit is  issued.  Once an  evergreen  Letter of Credit is
     issued,  unless the  Administrative  Agent has notified the Issuing  Lender
     that the  Majority  Lenders  have  elected not to permit such  extension or
     renewal,  Trendwest,  the  Administrative  Agent and the  Lenders  shall be
     deemed to have  authorized  (but may not require) the Issuing Lender to, in
     its sole and  absolute  discretion,  permit the  renewal of such  evergreen
     Letter  of  Credit  at any time to a date  not  later  than  the  Revolving
     Termination  Date, and,  unless  directed by the Issuing Lender,  Trendwest
     shall not be required to request  such  extension  or renewal.  The Issuing
     Lender may,  in its sole and  absolute  discretion,  elect not to permit an
     evergreen Letter of Credit to be extended or renewed at any time.

               (vii) Obligations Absolute. The obligation of Trendwest to pay to
     the  Issuing  Lender the amount of any payment  made by the Issuing  Lender
     under  any  Letter  of  Credit  shall  be  absolute,   unconditional,   and
     irrevocable.  Without limiting the foregoing,  Trendwest's obligation shall
     not be affected by any of the following circumstances:

                    (A) any lack of validity or enforceability of such Letter of
          Credit, this Agreement, or any other related agreement or instrument;

                    (B) any  amendment  or waiver of or any consent to departure
          from such  Letter of  Credit,  this  Agreement,  or any other  related
          agreement or instrument;

                    (C) the existence of any claim,  setoff,  defense,  or other
          rights  that the  Borrower  may have at any time  against  the Issuing
          Lender, the Administrative Agent, the Syndication Agent or any Lender,
          any  beneficiary  of such Letter of Credit (or any persons or entities
          for whom any such  beneficiary  may be  acting)  or any other  Person,
          whether in connection with such Letter of Credit,  this Agreement,  or
          any  other  related   agreement  or   instrument,   or  any  unrelated
          transactions;

                    (D) any demand,  statement,  or any other document presented
          under such Letter of Credit proving to be forged, fraudulent, invalid,
          or insufficient  in any respect or any statement  therein being untrue
          or inaccurate  in any respect  whatsoever so long as any such document
          appeared to comply with the terms of the Letter of Credit;

                                       25
<PAGE>

                    (E) payment by the  Issuing  Lender in good faith under such
          Letter of Credit against  presentation of a draft or any  accompanying
          document  that does not strictly  comply with the terms of such Letter
          of Credit; or any payment made by the Issuing Lender under such Letter
          of Credit to any  Person  purporting  to be a trustee  in  bankruptcy,
          debtor-in-possession,   assignee   for  the   benefit  of   creditors,
          liquidator,  receiver or other  representative  of or successor to any
          beneficiary or any transferee of such Letter of Credit,  including any
          arising in  connection  with any  proceeding  under any Debtor  Relief
          Laws;

                    (F) the existence,  character, quality, quantity, condition,
          packing, value or delivery of any property purported to be represented
          by documents presented in connection with such Letter of Credit or for
          any difference  between any such property and the character,  quality,
          quantity,  condition,  or value of such  property as described in such
          documents;

                    (G) the time, place,  manner, order or contents of shipments
          or  deliveries  of property as  described  in  documents  presented in
          connection  with such  Letter of Credit or the  existence,  nature and
          extent of any insurance relative thereto;

                    (H) the  solvency or financial  responsibility  of any party
          issuing any documents in connection with such Letter of Credit;

                    (I) any failure or delay in notice of  shipments  or arrival
          of any property;

                    (J) any error in the transmission of any message relating to
          such Letter of Credit not caused by the Issuing  Lender,  or any delay
          or interruption in any such message;

                    (K) any error,  neglect or default of any  correspondent  of
          the Issuing Lender in connection with such Letter of Credit;

                    (L)  any  consequence   arising  from  acts  of  God,  wars,
          insurrections,  civil unrest, disturbances,  labor disputes, emergency
          conditions or other causes beyond the control of Issuing Lender;

                    (M) so long as the Issuing  Lender in good faith  determines
          that the  document  appears to comply  with the terms of the Letter of
          Credit,  the  form,  accuracy,  genuineness  or  legal  effect  of any
          contract or document referred to in any document  submitted to Issuing
          Lender in connection with such Letter of Credit; and

                    (N) any other  circumstances  whatsoever  where the  Issuing
          Lender has acted in good faith.

         In addition,  Trendwest will promptly  examine a copy of each Letter of
         Credit and related amendments  delivered to it and, in the event of any
         claim  of  noncompliance   with   Trendwest's   instructions  or  other
         irregularity,  Trendwest will immediately  notify the Issuing Lender in
         writing.  The Borrower shall be conclusively  deemed to have waived any
         such claim  against the Issuing  Lender and its  correspondents  unless
         such notice is given as aforesaid.

                                       26
<PAGE>

               (viii) Role of Issuing  Lender.  Each Lender and Trendwest  agree
     that,  in paying any drawing under a Letter of Credit,  the Issuing  Lender
     shall not have any  responsibility  to obtain any document  (other than any
     sight draft, certificates and documents expressly required by the Letter of
     Credit) or to  ascertain  or inquire as to the  validity or accuracy of any
     such  document or the authority of the Person  executing or delivering  any
     such  document.  No  Administrative  Agent-Related  Person  nor  any of the
     respective correspondents,  participants or assignees of the Issuing Lender
     shall be liable to any Lender for any action taken or omitted in connection
     herewith  at the  request or with the  approval  of the Lenders or Majority
     Lenders, as applicable; any action taken or omitted in the absence of gross
     negligence  or willful  misconduct;  or the due  execution,  effectiveness,
     validity or  enforceability  of any document or  instrument  related to any
     Letter  of  Credit.  Trendwest  hereby  assumes  all  risks  of the acts or
     omissions of any  beneficiary or transferee  with respect to its use of any
     Letter of Credit;  provided,  however, that this assumption is not intended
     to, and shall not, preclude  Trendwest's  pursuing such rights and remedies
     as it may have against the  beneficiary  or  transferee at law or under any
     other agreement.  No Administrative  Agent-Related  Person,  nor any of the
     respective correspondents, participants or assignees of the Issuing Lender,
     shall  be  liable  or  responsible  for  any of the  matters  described  in
     subsection  (vii)  above.  In  furtherance  and  not in  limitation  of the
     foregoing,  the Issuing  Lender may accept  documents  that appear on their
     face to be in order,  without  responsibility  for  further  investigation,
     regardless of any notice or  information  to the contrary,  and the Issuing
     Lender  shall not be  responsible  for the validity or  sufficiency  of any
     instrument  transferring or assigning or purporting to transfer or assign a
     Letter of Credit or the rights or benefits  thereunder or proceeds thereof,
     in whole or in part,  that may prove to be invalid or  ineffective  for any
     reason.

               (ix)  Applicability of ISP98 and UCP. Unless otherwise  expressly
     agreed  by the  Issuing  Lender  and  Trendwest  when a Letter of Credit is
     issued and subject to applicable laws,  performance under Letters of Credit
     by the  Issuing  Lender,  its  correspondents,  and  beneficiaries  will be
     governed by (A) with respect to standby Letters of Credit, the rules of the
     "International  Standby  Practices  1998" or such later  revision as may be
     published by the Institute of International Banking Law & Practice, subject
     to applicable  laws, and (B) with respect to commercial  Letters of Credit,
     the rules of the Uniform Customs and Practice for Documentary  Credits,  as
     published  in its most  recent  version  by the  International  Chamber  of
     Commerce (the "ICC") on the date any commercial Letter of Credit is issued,
     and  including  the ICC  decision  published by the  Commission  on Banking
     Technique  and  Practice on April 6, 1998  regarding  the  European  single
     currency (euro).

     2.2.  Fees.

          (a) Revolving Loan Fees. The Borrower shall pay to the  Administrative
Agent,  for the  benefit of the  Lenders  in  accordance  with their  respective
Ratable  Shares,  the Commitment Fee with respect to each calendar  quarter,  in
arrears, on (i) each September 30, December 31, March 31, and June 30 during the
period  commencing on the Closing Date and ending on the  Revolving  Termination
Date, and (ii) on the Revolving  Termination Date. On each annual anniversary of
the Closing Date,  Trendwest shall pay to the Administrative  Agent, for its own
account, the applicable Administrative Agent fees.

          (b) Letter of Credit Fees. With respect to each Letter of Credit, upon
the  issuance,  renewal,  and/or  amendment of such Letter of Credit,  Trendwest
shall pay to the  Administrative  Agent,  for its own account,  a  nonrefundable
fronting  fee in an amount  equal to 0.125% of the face amount of such Letter of
Credit.  In addition,  Trendwest  shall pay to the  Administrative  Agent on the
first Banking Day of each calendar  quarter in arrears,  for the account of each
Lender in accordance  with its Ratable Share, a  nonrefundable  Letter of Credit
fee equal to the product of the Applicable Margin times the average daily Letter
of Credit Usage since the later of the Closing Date and the first Banking Day of
the previous calendar quarter.

                                       27
<PAGE>

     2.3.  Increased Costs. If at any time any Regulatory  Change (including any
Regulatory Change with respect to Regulation D) shall

          (a) impose any reserve  and/or  special  deposit  requirement  against
assets  held by or  deposits  in, or for the  amount of any loans or  letters of
credit by, any Lender or the Issuing Lender, or

          (b) subject any Lender or the Issuing Lender to any tax, levy, impost,
charge,  fee, duty,  deduction or withholding of any kind whatsoever (other than
any tax  imposed  upon the net income of such  Lender and other than  changes in
franchise taxes),

and the result of any such Regulatory Change is to increase the cost (whether by
incurring a cost or adding to a cost) to such Lender of making,  maintaining  or
renewing  a  Revolving  Loan or  issuing,  maintaining  or  renewing a Letter of
Credit,  or to reduce the amount of  principal,  interest  or fees  received  or
receivable by such Lender or Issuing  Lender with respect to any Revolving  Loan
or Letter of  Credit,  then such  Lender or  Issuing  Lender  shall  notify  the
Administrative Agent and Trendwest of such occurrence.  Thereafter,  upon demand
by such Lender,  Trendwest shall pay to such Lender or Issuing Lender additional
amounts sufficient to compensate and indemnify such Lender or Issuing Lender for
such increased cost or reduced  amount.  A statement as to the increased cost or
reduced  amount as a result  of any event  mentioned  in this  Section  shall be
submitted  by such  Lender or  Issuing  Lender to the  Administrative  Agent and
Trendwest and shall, in the absence of manifest error, be conclusive and binding
as to the amount of such increased cost or reduced amount.

     2.4. Australian Currency Unavailable or BBSY Rate  Unascertainable.  If the
Australian  Lender  determines  with  respect  to any  Australian  Advance  that
Australian  Currency of the relevant amount for the relevant  Interest Period is
not  available  to it in the  foreign  exchange  market  or that,  by  reason of
circumstances  affecting such market, adequate and reasonable means do not exist
for ascertaining  the BBSY Rate applicable to such Interest Period,  or that the
BBSY Rate  does not  adequately  reflect  the cost to the  Australian  Lender of
making such Australian  Advance, as the case may be, the Australian Lender shall
promptly   give  notice  of  such   determination   to  the  Borrowers  and  the
Administrative  Agent,  and any request  for a new  Australian  Advance,  or any
Australian Conversion Notice with respect to which no conversion or continuation
has yet occurred, shall be deemed to be a request for, and Borrowing Notice with
respect  to,  a  Domestic  Advance  of  like  amount.  The  Australian  Lender's
determination under this Section 2.4 shall be conclusive.

     2.5. Changes in Law Rendering Australian Advances Unlawful.  If at any time
any Regulatory  Change shall make it unlawful for the Australian  Lender to fund
any Australian  Advance that the  Australian  Lender has committed to make under
this Agreement with Australian Currency,  the Australian Lender shall notify the
Borrowers and the  Administrative  Agent,  and the  obligation of the Australian
Lender to fund such Australian Advance shall, upon the occurrence of such event,
immediately  be  suspended  for the  duration  of such  illegality.  If any such
Regulatory  Change  makes it unlawful for the  Australian  Lender to continue in
effect  the  funding  of any  Australian  Advance  previously  made  by it,  the
Australian Lender shall, upon the happening of such event,  notify the Borrowers
and the Administrative Agent in writing, and South Pacific shall, on the earlier
of (a) the last day of the then-current  Interest Period,  or (b) if required by
such  Regulatory  Change,  on such date as shall be  specified  in such  notice,
either convert all such Australian  Advances to Domestic  Advances or prepay all
such Australian Advances in full.

     2.6. LIBOR Not Ascertainable. If the Administrative Agent determines (which
determination  shall be conclusive)  that, by reason of circumstances  affecting
the foreign  exchange  market,  adequate and  reasonable  means do not exist for

                                       28
<PAGE>

ascertaining  LIBOR for a LIBOR Loan, or that LIBOR does not adequately  reflect
the cost to the  Lenders  of making  such  LIBOR  Loan,  as the case may be, the
Administrative  Agent  shall  promptly  give  notice  of such  determination  to
Trendwest,   and  any   request  for  a  new  LIBOR   Loan,   or  any   Domestic
Conversion/Continuation   Notice  with  respect  to  which  no   conversion   or
continuation  has yet  occurred,  shall  be  deemed  to be a  request  for,  and
Borrowing Notice with respect to, a Base Rate Loan of like amount.

     2.7.  Changes in Law  Rendering  LIBOR Loans  Unlawful.  If at any time any
Regulatory  Change  shall make it unlawful for any Lender to fund any LIBOR Loan
that the Lender has  committed  to make under this  Agreement,  the Lender shall
notify Trendwest and the Administrative Agent, and the obligation of such Lender
to fund such LIBOR Loan shall, upon the occurrence of such event, immediately be
suspended for the duration of such  illegality.  If any such  Regulatory  Change
makes it unlawful  for any Lender to continue in effect the funding of any LIBOR
Loan previously made by it, such Lender shall, upon the happening of such event,
notify Trendwest and the Administrative  Agent in writing,  and Trendwest shall,
on the earlier of (a) the last day of the then-current  Interest Period,  or (b)
if required by such  Regulatory  Change,  on such date as shall be  specified in
such notice,  either  convert such LIBOR Loan to a Base Rate Loan or prepay such
LIBOR Loan in full.

     2.8.  Indemnity.   Without  prejudice  to  any  other  provisions  of  this
Agreement,  the  Borrowers  shall jointly and  severally  indemnify  each Lender
against any loss or expense that it may sustain or incur as a consequence of any
failure  by the  Borrowers  to  accept  any  LIBOR  Loan or  Australian  Advance
requested  pursuant to this Agreement or any default by the Borrowers in payment
when due of any amount due under this  Agreement  with respect to any LIBOR Loan
or  Australian  Advance or any whole or partial  prepayment or conversion by the
Borrowers of a LIBOR Loan or Australian Advance prior to the end of its Interest
Period,  whether  voluntarily  or as  required  pursuant  to the  terms  of this
Agreement,  including  any premium or penalty  actually  incurred by such Lender
with  respect to funds  borrowed by it for the purpose of making or  maintaining
such LIBOR Loan or Australian Advance, as determined by such Lender. A statement
as to any  such  loss or  expense  shall  be  submitted  by such  Lender  to the
Borrowers for payment under this  paragraph,  with a copy to the  Administrative
Agent,  which  statement  shall, in the absence of manifest error, be conclusive
and binding as to the amount of such loss or expense.

     2.9.  Capital  Adequacy.  If any Lender shall determine that any Regulatory
Change with respect to capital  adequacy,  or  compliance by such Lender (or its
lending  office)  with any  request  or  directive  regarding  capital  adequacy
(whether or not having the force of law) of any governmental authority,  central
bank or comparable agency, has the effect of reducing the rate of return on such
Lender's  capital  (or on the  capital of such  Lender's  holding  company) as a
consequence of its obligations  under this Agreement to a level below that which
such Lender (or its holding company) could have achieved but for such Regulatory
Change or compliance  (taking into  consideration  such Lender's policies or the
policies of its holding  company with respect to capital  adequacy) by an amount
that such Lender deems to be material,  then from time to time,  within ten days
after  demand  by such  Lender,  the  Borrowers  shall pay to such  Lender  such
additional  amount or amounts as will  compensate  such  Lender (or its  holding
company)  for such  reduction.  Such Lender will  designate a different  lending
office if such  designation  will  avoid the need for,  or reduce the amount of,
such  compensation  and  will  not,  in the sole  judgment  of such  Lender,  be
otherwise  disadvantageous to such Lender. A certificate of such Lender claiming
compensation  under this Section and setting forth the  additional  amount to be
paid to it in such  respect  shall be  conclusive  and binding in the absence of
manifest error. In determining  such amount,  such Lender may use any reasonable
averaging and attribution  methods.  Failure on the part of any Lender to demand
compensation  for any  reduction in return on capital with respect to any period
shall not constitute a waiver of such Lender's rights to demand compensation for
any  reduction in return on capital in such period or in any other  period.  The
protection of this Section  shall be available to each Lender  regardless of any
possible  contention of the invalidity or inapplicability of the law, regulation
or other condition that shall have been imposed.

                                       29
<PAGE>

     2.10. Australian GST.

          (a) Notwithstanding any other provision of this Agreement:

               (i) in the event  that GST has  application  to any  supply  made
     under or in connection with this Agreement by a Lender, that Lender may, in
     addition  to any amount or  consideration  payable  under  this  Agreement,
     recover from South  Pacific an  additional  amount on account of GST,  such
     amount to be calculated by multiplying the relevant amount or consideration
     payable by South  Pacific for the  relevant  supply by the  prevailing  GST
     rate; and /or

               (ii) without  limiting the  generality of the  foregoing,  in the
     event  that a Lender is not  entitled  to an input tax credit in respect of
     the  amount of any GST  charged  to or  recovered  from that  Lender by any
     person,  or payable by that  Lender,  or in respect of any amount  which is
     recovered  from  that  Lender  by way  of  reimbursement  of GST  referable
     directly or indirectly to any supply made under or in connection  with this
     Agreement,  that  Lender  shall be  entitled  to  increase  any  amount  or
     consideration  payable  by South  Pacific  on account of such input tax and
     recover from South Pacific the amount of any such increase.

          (b) Any  additional  amount on  account  of GST,  or on  account of an
     amount  for  which  a  Lender  is not  entitled  to an  input  tax  credit,
     recoverable  from  South  Pacific  pursuant  to  Section  2.10(a)  shall be
     calculated  without  any  deduction  or set-off of any other  amount and is
     payable by South Pacific upon demand by the party whether such demand is by
     means of an invoice or otherwise.

          (c) Each Lender will use its best  endeavors to  determine  reasonably
     the extent (if any) to which any  amount  payable by South  Pacific to that
     party for any supply made under this  Agreement  may be reduced as a direct
     consequence  of the  abolition  of or reduction  in any taxes,  duties,  or
     statutory charges paid or payable by that Lender (as part of the imposition
     of GST) that directly  relate to the supply by that Lender,  and the amount
     payable by South Pacific to that Lender shall be reduced only to the extent
     of the reduction (if any) so determined by the Australian Lender.

          (d) Without  limiting  sub-paragraph  2.10(a),  if  requested by South
     Pacific in writing, the relevant Lender will provide an invoice in relation
     to any supply to which sub-paragraph 2.10(a) has been applied no later than
     28 days after the request is made.

     2.11. Survival.  All of the Borrowers' obligations under Sections 2.3, 2.5,
2.7, 2.8 2.9, and 2.10 shall survive  termination of the Commitments and payment
in full of all Obligations.

SECTION 3.   PAYMENTS.

     3.1. Interest.

          (a) The  Borrowers  shall pay to the  Lenders  interest  on the unpaid
principal amount of each Revolving Loan for the period commencing on the date on
which such Revolving Loan is made until such Revolving Loan is paid in full, and
such  payments  shall be made in arrears on each  Interest  Payment  Date and at
maturity  (whether  at stated  maturity,  by  acceleration  or  otherwise),  and
thereafter on demand.  Subject to Section  3.1(b),  prior to maturity,  all Base
Rate Loans  shall bear  interest at a per annum rate equal to the Base Rate plus
the Applicable  Margin,  all LIBOR Loans shall bear interest at a per annum rate
equal  to the  Applicable  LIBOR  Rate  plus  the  Applicable  Margin,  and  all
Australian  Advances  shall bear  interest at a per annum rate equal to the BBSY
Rate plus the Applicable Margin. With respect to any particular interest payment
to  be  made  on an  Interest  Payment  Date,  the  Applicable  Margin  used  in

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<PAGE>

calculating  the amount of such payment shall be computed by reference to (i) in
the case of Base Rate Loans, the calendar quarter ending immediately before such
Interest  Payment Date, and (ii) in the case of LIBOR Loans, the Interest Period
ending on such Interest Payment Date.

          (b)  Upon  the  occurrence  of  any  Event  of  Default,   the  entire
outstanding principal amount of each Revolving Loan and (to the extent permitted
by law) unpaid  interest on such  Revolving Loan and all other amounts due under
this  Agreement  shall bear interest from the date of occurrence of the Event of
Default until paid in full at the Default Interest Rate.

          (c)  Interest  shall  be  computed  on the  basis  of a  360-day  year
calculated for the actual number of days
elapsed.

          (d) The rate of interest  payable on any  Revolving  Note from time to
time shall in no event  exceed  the  maximum  rate,  if any,  permissible  under
applicable  law. If the rate of interest  payable on any Revolving  Note is ever
reduced  as a result  of the  preceding  sentence  and any time  thereafter  the
maximum  rate  permitted  by  applicable  law shall  exceed the rate of interest
provided  for on  such  Revolving  Note,  then  the  rate  provided  for on such
Revolving  Note shall be increased to the maximum rate  permitted by  applicable
law for such period as is required so that the total amount of interest received
by the holder of such  Revolving  Note is that which would have been received by
such holder but for the operation of the preceding sentence.

     3.2.  Principal.  The  Borrowers  shall pay to the Lenders on the Revolving
Termination Date the entire outstanding principal amount of all Revolving Loans.

     3.3. Other Payment Matters.

          (a)  Payment  Statements.  Prior to each  Interest  Payment  Date with
respect to Domestic Advances,  the Administrative Agent shall render a statement
to the  Borrower of all amounts due to the Lenders for  principal,  interest and
fees under this Agreement.  Prior to each Interest  Payment Date with respect to
Australian  Advances,  the  Australian  Lender shall render a statement to South
Pacific (with a copy to Trendwest and the  Administrative  Agent) of all amounts
due to the  Australian  Lender  for  principal,  interest  and fees  under  this
Agreement.  All amounts  listed on any such statement with respect to a Domestic
Advance or Australian  Advance shall be due and payable on the Interest  Payment
Date with respect to which such statement was sent. As to all other  Obligations
that  become due and  payable  other than on a fixed  date by their  terms,  the
Administrative  Agent or the Australian Lender, as the case may be, shall advise
the  Borrowers  (and the  Administrative  Agent,  in the  case of an  Australian
Advance) by a written statement that they are due and payable, and the Borrowers
shall pay the same within ten days of receipt of such statement.  Any failure by
the  Administrative  Agent or the Australian Lender to render any such statement
or give any such advice shall in no way relieve the  Borrowers of any  liability
for or obligation to pay any amount due and payable under this Agreement.

          (b) Days Other Than  Banking  Days.  Whenever  any  payment to be made
under this  Agreement,  including  any payment to be made on a  Revolving  Note,
shall be stated to be due on a day that is not a Banking Day, such payment shall
be made on the next succeeding  Banking Day, and such extension of time shall in
each  case be  included  in the  computation  of the  interest  payable  on such
Revolving Note.

          (c) Time and Place of  Payments.  Unless  otherwise  provided  in this
Agreement, all payments or prepayments made or due under this Agreement or under
the Revolving  Notes shall be made in immediately  available  Dollars or, in the
case of Australian  Advances,  immediately  available  Australian  Currency,  by
federal funds wire transfer, and without setoff,  deduction or counterclaim,  to

                                       31
<PAGE>

the Administrative Agent, for the account of the Lenders in the case of Domestic
Advances,  or for the account of the Australian Lender in the case of Australian
Advances,  prior to 10:00  a.m.,  Seattle  time,  on the date when  due,  at its
offices at 431 East Park Center Boulevard,  Boise, Idaho 83706, or at such other
place  as may be  designated  in  writing  by the  Administrative  Agent.  Funds
received after 10:00 a.m.,  Seattle time,  shall be deemed to have been received
on the next  Banking Day. At the time of making each  payment or  prepayment  in
connection with this Agreement or the Revolving Notes,  the applicable  Borrower
shall,  subject to the other terms and conditions of this Agreement,  specify to
the  Administrative  Agent the Revolving Loan or other  obligation to which such
payment is to be applied.  In the event that the  applicable  Borrower  fails to
specify the relevant Revolving Loan or other obligation to which such payment is
to be applied or if an Event of Default shall have  occurred and be  continuing,
the Administrative Agent may apply such payment to such Revolving Loans or other
obligation  as it may  determine,  in its  sole  and  absolute  discretion.  The
Borrowers  authorize the Administrative  Agent to debit the Borrowers'  accounts
with the  Administrative  Agent in order to cause timely  payment of amounts due
under this Agreement to be made; provided,  however,  that insufficient funds in
such  accounts  shall in no way relieve the  Borrowers of any  liability  for or
obligation to pay any such amounts.

          (d)  Currency  Matters.  This  Agreement  arises in the  context of an
international  transaction,  and the  specification  of  payment  in a  specific
currency at a specific place pursuant to this Agreement is of the essence.  Such
specified  currency  shall be the  currency of account  and  payment  under this
Agreement.  The  obligations of the Borrowers  under this Agreement shall not be
discharged by an amount paid in any other currency or at another place,  whether
pursuant to a judgment or  otherwise,  to the extent that the amount so paid, on
prompt conversion into the applicable currency and transfer to the Lenders under
normal banking  procedure,  does not yield the amount of such currency due under
this Agreement. In the event that any payment, whether pursuant to a judgment or
otherwise,  upon  conversion  and  transfer,  does not  result in payment of the
amount of such currency due under this Agreement, then the Lenders shall have an
independent cause of action against the Borrowers for the currency deficit.

          (e)  Non-Receipt  of Funds from  Borrower.  Unless the  Administrative
Agent shall have received notice from the applicable  Borrower prior to the date
on which  any  payment  is due to the  Lenders  under  this  Agreement  that the
Borrower will not make such payment in full, the Administrative Agent may assume
that the Borrower has made such payment in full to the  Administrative  Agent on
such date, and the Administrative Agent, in its sole discretion,  may, but shall
not be obligated to, in reliance upon such  assumption,  cause to be distributed
to each  Lender on such due date an  amount  equal to the  amount  then due such
Lender. If and to the extent that the applicable Borrower shall not have so made
such payment in full to the Administrative Agent, each Lender shall repay to the
Administrative  Agent forthwith on demand such amount distributed to such Lender
together  with  interest  thereon,  for each day from the date  such  amount  is
distributed  to such Lender until the date such Lender repays such amount to the
Administrative Agent, at the Federal Funds Rate.

     3.4. Prepayments.

          (a)  Voluntary  Prepayments.  By  notice to the  Administrative  Agent
(which shall be in writing or by telephonic  communication confirmed by telecopy
or other  facsimile  transmission  on the same day as such telephone  notice) no
later than 10:00 a.m.,  Seattle time, on the Banking Day of such prepayment,  in
the case of any Base  Rate  Loan,  or on the  fifth  Banking  Day  prior to such
prepayment,  in the case of any LIBOR Loan or Australian Advance, the applicable
Borrower  may,  at such  Borrower's  option,  prepay  any  Domestic  Advance  or
Australian  Advance  in whole at any time or in part from  time to time  without
penalty  or  premium  (except  that any such  prepayment  of any  LIBOR  Loan or
Australian  Advance  shall  be made  together  with  payment  of the  applicable
Prepayment Premium);  provided,  however, that each partial prepayment of a Base
Rate Loan shall be in the aggregate  principal  amount of not less than $250,000

                                       32
<PAGE>

or an integral  multiple of $100,000  in excess of  $250,000,  and each  partial
prepayment  of a LIBOR  Loan or  Australian  Advance  shall be in the  aggregate
principal  amount  of not  less  than  $1,000,000  or an  integral  multiple  of
$1,000,000 in excess of $1,000,000.  All accrued  interest on the amount prepaid
shall be paid with the prepayment.

          (b) Mandatory Prepayments.

               (i)  Compliance  with  Revolving  Loan Limit.  If at any time the
     Outstanding  Obligations  exceed the  Revolving  Loan Limit,  the Borrowers
     shall  immediately  prepay the Revolving Loans,  without penalty or premium
     (except that any such  prepayment of any LIBOR Loan or  Australian  Advance
     shall be made together with payment of the applicable  Prepayment Premium),
     in an amount  necessary to cause the  outstanding  principal  amount of the
     Outstanding Obligations not to exceed the Revolving Loan Limit. All accrued
     interest on amounts  prepaid  pursuant to this paragraph shall be paid with
     the prepayment.

               (ii) Compliance with Australian Advance Limit. If at any time the
     Dollar  Equivalent  of  the  outstanding  principal  amount  of  Australian
     Advances  exceeds  the  Australian   Advance  Limit,  South  Pacific  shall
     immediately  prepay the Australian  Advances,  together with the applicable
     Prepayment  Premium (if any),  in an amount  necessary  to cause the Dollar
     Equivalent of the outstanding  principal amount of Australian  Advances not
     to exceed the  Australian  Advance Limit.  All accrued  interest on amounts
     prepaid pursuant to this paragraph shall be paid with the prepayment.

               (iii)  Insurance  Proceeds.  Immediately  following  the  date of
     receipt of any cash payments under any insurance  policy  maintained by the
     Borrowers that have not been reinvested,  or irrevocably deposited with the
     Administrative  Agent  for  reinvestment,  in assets of a kind then used or
     usable in the business of the Borrowers or used to maintain the business of
     the  Borrowers  as  a  going  concern  as a  consequence  of  any  business
     interruption,  the  Borrowers  shall  make a  mandatory  prepayment  of the
     Revolving  Loans in the  amount of such  unreinvested  or unused  proceeds;
     provided,  however,  that  notwithstanding  any  of  the  foregoing  to the
     contrary,  upon and  during  the  continuance  of any Event of  Default  or
     Possible Default,  all such insurance proceeds,  regardless of reinvestment
     or other use, received by the Borrowers shall be applied as a prepayment of
     the Revolving Loans.

          (c) Application of Prepayments.  All prepayments made pursuant to this
Section 3.4 shall be applied first to any  Prepayment  Premium then due, then to
accrued  interest and Fees, and then to the principal  outstanding in connection
with the Revolving Loans. All mandatory  prepayments of principal required to be
made pursuant to Sections  3.4(b)(i) or 3.4(b)(ii) shall be applied first to the
Base Rate Loans, and then,  after the principal  balances of the Base Rate Loans
have been reduced to zero, to the LIBOR Loans and  Australian  Advances with the
shortest remaining Interest Periods;  provided,  however,  that if the amount of
Base Rate  Loans  then  outstanding  is not  sufficient  to  satisfy  the entire
prepayment  requirement,  the applicable Borrower may, at its option,  place any
amounts  that it would  otherwise  be required to use to prepay  LIBOR Loans and
Australian  Advances  on a day other  than the last day of the  Interest  Period
therefor in an account (the "Prepayment  Account") pledged to the Administrative
Agent for the benefit of the Lenders until the end of such Interest  Period,  at
which time such  pledged  amounts will be applied to prepay such LIBOR Loans and
Australian Advances.  Unless a Possible Default or Event of Default shall occur,
the  Administrative  Agent  shall,  acting  upon  written  instructions  of  the
applicable Borrower, invest amounts placed in the Prepayment Account in Eligible
Investments;  provided,  however,  that the  Administrative  Agent  shall not be
liable for any  action  taken or  omitted  to be taken in  connection  with such
investment   activities   (except  for  its  own  gross  negligence  or  willful
misconduct).  Subject  to the  foregoing  described  pledge,  all  interest  and
earnings on amounts placed in the Prepayment Account shall be for the account of
the applicable Borrower.

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<PAGE>

          (d) Prepayment  Premium.  Upon any  prepayment or conversion  (whether
voluntary or  involuntary)  of any LIBOR Loan or Australian  Advance not made on
the last day of the applicable  Interest Period,  the applicable  Borrower shall
pay the applicable  Prepayment Premium to (i) the Administrative  Agent, for the
account of the  Lenders,  in the case of LIBOR  Loans,  and (ii) the  Australian
Lender, for its own account and not for the benefit of the other Lenders, in the
case of Australian Advances.

SECTION 4.  REPRESENTATIONS AND WARRANTIES OF THE BORROWERS.

     To induce the Lenders and the Issuing Lender to enter into this  Agreement,
make the Revolving Loans, and issue Letters of Credit,  the Borrowers  represent
and warrant to the Lenders:

     4.1. Incorporation, Good Standing, and Qualification. Each of the Borrowers
is a corporation,  duly organized,  validly  existing and in good standing under
the laws of the  jurisdiction  of its  incorporation,  and is duly  qualified or
registered  to  conduct  business  and in good  standing  under the laws of each
jurisdiction  in which the  character  of its  business or the  ownership of its
assets makes such qualification or registration necessary,  except where failure
to so qualify or  register  would not have a material  adverse  effect upon each
such  Borrower  or upon its  ability  to  perform  its  obligations  under  this
Agreement.

     4.2.  Power and  Authority.  Each of the Borrowers has all requisite  legal
power and authority to own and operate its properties,  to carry on its business
as now conducted  and proposed to be conducted,  and to enter into and carry out
the terms of this Agreement.

     4.3. Authorization. The execution, delivery, and performance by each of the
Borrowers of this Agreement have been duly authorized by all necessary corporate
and shareholder action.

     4.4.  Enforceability.  This  Agreement  is  a  valid,  legal,  and  binding
obligation of each of the Borrowers,  enforceable  against it in accordance with
its terms, except to the extent that the enforceability of this Agreement may be
limited by  bankruptcy,  insolvency or other similar laws  affecting  creditors'
rights generally and the availability of equitable remedies.

     4.5. Financial  Statements.  Trendwest has delivered to the Lenders (a) the
audited financial statements of Trendwest as of and for the years ended December
31,  1999,  December 31, 1998,  and  December  31, 1997,  and (b) the  unaudited
financial  statements of Trendwest as of and for the 3-month  period ended March
31, 2000 (collectively,  the "Financial Statements"). To the best of Trendwest's
knowledge,  the  Financial  Statements  are true and  complete  in all  material
respects  (including a disclosure of all material  contingent  liabilities)  and
present  fairly the  financial  condition and results of operations of Trendwest
and its Subsidiaries as of the dates and for the periods indicated and have been
prepared in accordance with GAAP, subject to normal year-end adjustments and the
absence of footnotes in the case of statements for interim periods.

     4.6.  Projections.  Trendwest  has  delivered  to the  Lenders  Trendwest's
projections  for the period  June 30,  2000  through  December  31,  2003.  Such
projections  were prepared with a reasonable  basis and in good faith,  and they
assume the consummation of the transactions contemplated in this Agreement. Such
projections are set forth on Exhibit G.

     4.7.  Capitalization  of  Borrowers.  The  capitalization  of  each  of the
Borrowers  as of July 31,  2000 is set  forth on  Exhibit H and is  correct  and
accurate in all material  respects.  All of the issued and outstanding shares of
capital stock of the  Borrowers  has been duly and validly  issued and are fully

                                       34

<PAGE>

paid and nonassessable. None of the shares of capital stock of the Borrowers has
been issued in  violation  of the  Securities  Act of 1933,  as amended,  or the
securities or "Blue Sky" or any other  applicable  laws, rules or regulations of
any  applicable  jurisdiction.  Except as set forth in documents  filed with the
Securities and Exchange  Commission as exhibits to Trendwest's  Form 10-K, as of
the Closing Date,  Trendwest does not have any commitment or obligation,  either
firm or  conditional,  to issue,  deliver,  purchase  or sell,  under any offer,
option agreement,  bonus agreement,  purchase plan, incentive plan, compensation
plan,  warrant,  conversion  rights,  contingent share  agreement,  shareholders
agreement,  partnership agreement or otherwise, any shares of its capital stock,
or other equity  securities  or  securities  convertible  into shares of capital
stock.

     4.8. Title to Properties;  Patents,  Trademarks, Etc. Each of the Borrowers
has good and  marketable  title to all of its assets,  whether real or personal,
tangible or intangible,  free and clear of any Liens or adverse  claims,  except
Permitted Liens.  Each of the Borrowers owns or possesses the valid right to use
all the  letters  patent,  patents,  patent  applications,  patent and  know-how
licenses,   inventions,   technology,   permits,   trademark  registrations  and
applications,  trademarks,  service  marks,  trade  names,  copyrights,  product
designs,  applications,  formulae,  processes,  and all licenses and rights with
respect to the foregoing  that are used or necessary for the conduct of business
(collectively,  "Proprietary Rights"). The Proprietary Rights are not materially
comprised of any patents, patent applications,  federally registered trademarks,
copyrights,  or other intellectual property rights subject to any statute of the
United  States.  Neither of the Borrowers is aware of any existing or threatened
infringement  or  misappropriation  of (a) any  Proprietary  Rights of others by
either of the  Borrowers,  or (b) any  Proprietary  Rights of the  Borrowers  by
others.

     4.9. Litigation;  Proceedings.  Except as disclosed on Exhibit I, as of the
Closing Date, there is no action, suit, proceeding,  inquiry or investigation at
law or in equity, or by or before any court or governmental  instrumentality  or
agency, nor any order, decree or judgment in effect,  pending or, to the best of
the  Borrowers'  knowledge,  threatened  against  or  affecting  either  of  the
Borrowers or any of their  respective  properties  or rights that, if determined
adversely to the Borrowers,  is reasonably  likely to result in liability to the
Borrowers of at least $1,000,000.

     4.10.  Taxes.  To the best of the  Borrowers'  knowledge,  all tax returns,
reports and statements  (including those relating to income taxes,  withholding,
social  security and  unemployment  taxes,  sales and use taxes,  and  franchise
taxes)  required to be filed by the Borrowers  have been properly filed with the
appropriate  governmental  agencies in all domestic and foreign jurisdictions in
which such returns,  reports and statements  are required to be filed,  and such
returns,  reports and  statements  are complete and accurate,  and all taxes and
other  impositions  due and  payable  have been timely paid prior to the date on
which any related fine,  penalty,  interest,  late charge or loss may be imposed
for non-payment,  except for any such fine,  penalty,  interest,  late charge or
loss that is being contested in good faith, by appropriate  proceedings,  and as
to which  adequate  reserves have been set aside in accordance  with GAAP. As of
the Closing Date,  neither of the Borrowers has filed with the Internal  Revenue
Service or any other domestic or foreign governmental authority any agreement or
other  document  extending  or having  the  effect of  extending  the period for
assessment or collection of any federal,  state, local or foreign taxes or other
impositions.  To the best of each  Borrower's  knowledge,  all tax  deficiencies
asserted or assessments  made as a result of any  examinations  conducted by the
Internal Revenue Service or any other domestic or foreign governmental authority
relating  to such  Borrower  have  been  fully  paid or are being  contested  in
accordance  with the  provisions of Section 6.4. To the best of each  Borrower's
knowledge,  proper and accurate amounts have been withheld by such Borrower from
its employees for all periods to fully comply with the tax,  social security and
unemployment  withholding  provisions of applicable  federal,  state,  local and
foreign law. To the best of each Borrower's knowledge, the charges, accruals and
reserves  on the  books of such  Borrower  with  respect  to any  taxes or other
governmental charges are adequate.

                                       35
<PAGE>

     4.11. Absence of Conflicts. The execution, delivery and performance of, and
the  transactions  contemplated  by, this Agreement will not (a) violate,  be in
conflict with,  result in a breach of or constitute (with due notice or lapse of
time or both) a default under (i) any provision of the articles of incorporation
or bylaws of either of the Borrowers, (ii) any arbitration award or any order of
any court or of any other governmental  agency or authority binding on either of
the Borrowers,  (iii) any material license,  permit or authorization under which
either of the  Borrowers  operates,  (iv) any  applicable  law,  rule,  order or
regulation  (including  Regulations  T, U or X of the Board of  Governors of the
Federal Reserve System), or (v) any material  agreement,  instrument or document
by which  either of the  Borrowers  or any of its  properties  is bound,  or (b)
result in the creation or  imposition  of any Lien of any nature upon any of the
properties of either of the Borrowers.

     4.12.  Indebtedness.  As of the Closing  Date,  and after giving  effect to
consummation of the transactions contemplated by this Agreement,  neither of the
Borrowers  has any  Indebtedness  of any  nature,  whether due or to become due,
absolute,  contingent or  otherwise,  including  Indebtedness  for taxes and any
related  interest  or  penalties,  except  (a) the  liability  to pay  legal and
accounting  fees  and  reasonable  closing  expenses  in  connection  with  this
Agreement,  (b) the  Obligations,  (c)  Indebtedness  that does not individually
exceed  $500,000,  (d) as  disclosed  in the  Financial  Statements,  and (e) as
disclosed on Exhibit J.

     4.13. Compliance.  Neither of the Borrowers is in material violation of any
statute,  ordinance,  law,  rule,  regulation  or order of the United  States of
America or any federal, state, county, municipal or other governmental agency or
authority  applicable  to it, its  properties,  or the conduct of its  business.
Neither of the  Borrowers  has violated or breached in any material  respect the
provisions  of  any  indenture,   license,  agreement,  note,  lease,  or  other
instrument or document to which it is a party or by which it is bound,  nor does
there exist any material default, or any event or condition that, upon notice or
lapse of  time,  or  both,  would  become a  material  default,  under  any such
indenture, license, agreement, note, lease, or other instrument or document.

     4.14. Statements Not Misleading.  No statement,  representation or warranty
made by either of the  Borrowers  or any other  party on behalf of either of the
Borrowers (other than the Administrative Agent or the Lenders) in or pursuant to
this Agreement or the Exhibits  contains or will contain any untrue statement of
a material  fact,  nor omits or will omit to state a material fact  necessary to
make such statement not misleading, except where such untrue statement, omission
or violation  relates to a condition,  situation,  event or thing that could not
reasonably be expected to have a material  adverse effect upon the either of the
Borrowers or their ability to perform the Obligations. There is no fact known to
either of the Borrowers  (other than matters of a general  economic nature) that
has had or could have a material  adverse  effect upon either such  Borrower and
that  has  not  been  disclosed  in  this  Agreement  or  in  other   documents,
certificates and statements  furnished to the Lenders for use in connection with
the transactions contemplated by this Agreement.

     4.15. Consents or Approvals.  No consent,  approval or authorization of, or
filing,  registration or qualification  with, any governmental  authority or any
other Person is required to be obtained by either of the Borrowers in connection
with the  execution,  delivery or performance  of this  Agreement,  that has not
already  been  obtained  or  completed,  except for (a) the  consents  listed on
Exhibit K that have not been obtained,  and (b) those consents,  approvals,  and
authorizations that have been obtained.

     4.16.  Material  Contracts  and  Commitments.  All material  contracts  and
commitments  of the  Borrowers,  whether  oral or  written,  have been  filed by
Trendwest with the Securities and Exchange Commission as exhibits to Trendwest's
Form 10-K or are set forth in Exhibit L,  including (a) any security  agreement,
pledge   agreement,   mortgage  or  guaranty,   (b)   management,   construction

                                       36

<PAGE>

supervision,  service or  employment  agreements,  conditional  sale contract or
lease of real or  personal  property,  that  involve  expenditures  in excess of
$1,000,000  in any  single  case,  (c)  collective  bargaining  agreements,  (d)
contracts or commitments for the future purchase or sale of goods or services by
the Borrowers, other than those that involve the payment or receipt of less than
$1,000,000  in any single  case,  (e)  contracts or  commitments  that involve a
Capital Expenditure in excess of $1,000,000 in any single case, (f) all material
licenses, permits and authorizations,  and (g) all other material agreements. To
the best of the Borrowers'  knowledge,  except as disclosed on Exhibit L, all of
the items  listed on  Exhibit L are in full force and  effect  without  material
default.  Trendwest  has made  available  to the  Administrative  Agent true and
complete copies of each of the foregoing contracts and commitments.

     4.17.  Employee Benefit Plans. Except as otherwise provided in this Section
4.17,  neither  Borrower nor any member of the Controlled Group has or will have
any liability, or reasonably anticipates any liability of any kind in excess, in
the aggregate,  of $100,000,  with respect to any Benefit Arrangement other than
(a) a Plan that is intended to be  qualified  under Code Section  401(a),  (b) a
fully  insured  employee  welfare  benefit plan (as defined  under ERISA Section
3(1)), or (c) any self-insured  medical plan covering active employees.  Neither
of the  Borrowers  nor any member of the  Controlled  Group has,  will have,  or
reasonably  anticipates  (i)  any  liability  of  any  kind  in  excess,  in the
aggregate,  of $100,000 for any  post-retirement  welfare benefits,  or (ii) any
liability  of any kind in  excess,  in the  aggregate,  of  $250,000  under  any
nonqualified  deferred  compensation  plan or  arrangement.  With respect to the
Plans  currently  maintained  by the  Borrowers or any member of the  Controlled
Group:  (A) each Plan that is intended to be qualified under Code Section 401(a)
is so qualified and has been so qualified during the period from its adoption to
date and each  trust  forming a part of each such Plan is exempt  from tax under
Code Section  501(a),  (B) each Plan complies in all material  respects with all
applicable  requirements  of law, has been  administered  in accordance with its
terms,  and all required  contributions  have been made,  and (C) neither of the
Borrowers  nor any member of the  Controlled  Group  knows or has reason to know
that such  Borrower  or any  member of the  Controlled  Group has  engaged  in a
transaction  that would  subject it to any  material  tax,  penalty or liability
under ERISA or the Code for any prohibited transaction. Neither of the Borrowers
nor any member of the  Controlled  Group  maintains,  contributes  to or has any
liability with respect to any Pension Plan, including any Multiemployer Plan.

     4.18.  Licenses and Agreements.  The material agreements shown on Exhibit L
or filed with the SEC as exhibits to Trendwest's Form 10-K constitute all of the
material licenses and agreements that, as of the Closing Date, are necessary for
the lawful  operation of the businesses of Trendwest and its Subsidiaries in the
manner  and to the  full  extent  that it is  currently  operated.  There  is no
authorization,  permit, consent, franchise, registration,  certificate, license,
agreement or other right filed with,  issued or granted by, or entered into by a
federal,  state or local  governmental  authority  that permits or authorizes or
relates to the operation of such businesses that Trendwest or its  Subsidiaries,
as  applicable,  have not obtained,  the failure of which to obtain would have a
material  adverse effect on Trendwest or its  Subsidiaries or the ability of the
Borrowers to perform the Obligations.

     4.19. Material  Restrictions.  Except as disclosed in this Agreement or the
Exhibits,  neither  Trendwest  nor any of its  Subsidiaries  is a  party  to any
agreement  or other  instrument,  or  subject  to any  other  restriction,  that
materially and adversely  affects or could  materially and adversely  affect the
business, property, assets, operations or condition,  financial or otherwise, of
Trendwest or such Subsidiaries.

     4.20.  Subsidiaries.  Exhibit M lists each of the Subsidiaries of Trendwest
and,  in the case of  Subsidiaries  that  are not  wholly  owned  by  Trendwest,
specifies the other holders of equity interests and the percentage owned by such
holders.

                                       37
<PAGE>

     4.21. Investment Company Act. Neither Trendwest nor any of its Subsidiaries
(a) is an investment  company as that term is defined in the Investment  Company
Act of 1940, as amended, (b) directly or indirectly controls,  or is directly or
indirectly  controlled by, a company that is an investment  company as that term
is defined in such statute,  and (c) is otherwise  subject to  regulation  under
such act.

     4.22.  Absence of Material Adverse  Changes.  There have been no materially
adverse changes in the business, properties,  operations or condition, financial
or otherwise, of Trendwest and its Subsidiaries since December 31, 1999.

     4.23. Defaults.  No Possible Default or Event of Default now exists or will
exist upon the making of any Revolving Loan or issuance of any Letter of Credit.

     4.24.  Securities  Laws.  No  proceeds  of any Loan  will be used by either
Borrower to acquire any security in any  transaction  that is subject to Section
13 or 14 of the  Securities  Exchange  Act of  1934,  as  amended.  Neither  the
registration  of any security under the  Securities Act of 1933, as amended,  or
the securities  laws of any state,  nor the  qualification  of an indenture with
respect to such security under the Trust  Indenture Act of 1939, as amended,  is
required in connection with the  consummation  of this Agreement,  the execution
and delivery of the Revolving Notes, or the issuance of Letters of Credit.

     4.25.  Insurance.  All policies of insurance of any kind or nature owned by
or issued to Trendwest or any of its Subsidiaries,  including  policies of fire,
theft,  public liability,  property damage,  other casualty,  employee fidelity,
worker's  compensation,   employee  health  and  welfare,  title,  property  and
liability  insurance,  are in full  force  and  effect  and are of a nature  and
provide  such  coverage  as is  sufficient  and  as is  customarily  carried  by
companies  of the size and  character  of  Trendwest  and its  Subsidiaries  and
engaged in similar businesses.  To the best of the Borrowers' knowledge,  in the
past three years,  neither of the Borrowers has been refused insurance for which
it or any of its Subsidiaries  applied or had any policy of insurance terminated
(except at its own request).

     4.26. Labor Matters.  There are no strikes or other material labor disputes
or grievances  pending or, to the best of the Borrowers'  knowledge,  threatened
against Trendwest or any of its Subsidiaries. There are no material unfair labor
practice  charges or  grievances  pending  or in process  or, to the best of the
Borrowers'  knowledge,  threatened  by or on behalf of any  employee or group of
employees of Trendwest or any of its Subsidiaries.  Neither Trendwest nor any of
its  Subsidiaries  has  received  any written  complaints  or  knowledge  of any
threatened complaints,  nor to the best of the Borrowers' knowledge are any such
complaints  on file  with  any  federal,  state or  local  governmental  agency,
alleging employment discrimination by Trendwest or any of its Subsidiaries.  All
payments due under any collective bargaining agreement to which Trendwest or any
of its  Subsidiaries  is a party have (to the best of the  Borrowers'  knowledge
with respect to payments due prior to the date of this  Agreement)  been paid or
accrued as a liability on the consolidated books of Trendwest.

     4.27. Notes Receivable.  Each Note Receivable  represented by the Borrowers
to be an Eligible  Receivable  for  purposes of this  Agreement  conforms to the
requirements of the definition of an Eligible Receivable. All of the information
delivered to the Lenders by the Borrowers  with respect to the Notes  Receivable
is and will be true and correct, subject to immaterial variance. The Lenders and
their assigns and agents shall have the right, at any time and at the Borrowers'
expense,  to inspect,  examine,  and audit the Borrowers' records and to confirm
with Note Makers the accuracy of such Notes Receivable.

     4.28. Inventory.  All Inventory represented by the Borrowers to be Eligible
Inventory for purposes of this  Agreement  conforms to the  requirements  of the
definition  of  Eligible  Inventory.  All of the  information  delivered  to the
Lenders by Trendwest  with respect to Inventory is and will be true and correct,

                                       38

<PAGE>

subject to  immaterial  variance,  and the value of such  Inventory has been and
will be determined on a consistent  accounting basis. Except as otherwise agreed
by the Administrative Agent in writing, no party other than Trendwest shall have
any right,  title or interest in or to Eligible  Inventory.  Except as otherwise
disclosed to the Lenders in writing,  all  Eligible  Inventory is now and at all
times  hereafter  will  be free  and  clear  of all  claims,  offsets,  security
interests and other encumbrances of any kind.

     4.29. Environmental Compliance. Except as set forth in Exhibit N:

          (a) Neither of the Borrowers has any knowledge of or reason to believe
that there has been any actual or  threatened  litigation  or claims  against it
(including  Environmental  Claims)  of  any  kind  by  any  Person  relating  to
Environmental Laws or other environmental matters.

          (b) Each of Trendwest and its  Subsidiaries  has obtained all material
permits,   licenses  and  other  authorizations  that  are  required  under  all
Environmental  Laws.  Each of  Trendwest  and its  Subsidiaries  is in  material
compliance  with all terms and  conditions  of all such  permits,  licenses  and
authorizations,  and is also in material  compliance with all Environmental Laws
in all  jurisdictions  in which  Trendwest  or any of its  Subsidiaries  owns or
operates a facility or site,  arranges or has arranged for disposal or treatment
of Hazardous Materials, solid waste or other wastes, accepts or has accepted for
transport any Hazardous  Materials,  solid waste or other wastes or holds or has
held any interest in real property or otherwise.

          (c) There are no  Environmental  Claims pending or, to the best of the
Borrowers'  knowledge,  threatened  by any Person  with  respect to any  alleged
failure by Trendwest or any of its Subsidiaries to comply with any Environmental
Law or to have any permit,  license or authorization required in connection with
the conduct of the  business of  Trendwest  or any of its  Subsidiaries  or with
respect to any generation, treatment, storage, recycling,  transportation,  use,
disposal or Release of any Hazardous  Materials generated by Trendwest or any of
its  Subsidiaries or with respect to any real property in which Trendwest any of
its Subsidiaries  holds or has held an interest or any past or present operation
of Trendwest or any of its Subsidiaries.

          (d) No material work, repairs,  construction,  Capital Expenditures or
other  remedial  work of any nature with  respect to any real  property in which
Trendwest or any of its  Subsidiaries  holds or has held an interest or any past
or present  operation of Trendwest or any of its  Subsidiaries is required under
any Environmental Law.

          (e) No  property  now,  or to the  best of the  Borrowers'  knowledge,
previously,  owned or premises leased by Trendwest or any of its Subsidiaries is
listed or  proposed  for listing on the  National  Priorities  list  promulgated
pursuant to CERCLA,  CERCLIS or on any similar state or provincial list of sites
requiring investigation or clean-up.

          (f) There are no Liens arising under or pursuant to any  Environmental
Laws on any of the property owned or premises  leased by Trendwest or any of its
Subsidiaries,  and no government  actions have been taken or are in process that
could subject any of such property to such Liens.

          (g) Neither  Trendwest  nor any of its  Subsidiaries  has  retained or
assumed  any   liabilities   (contingent  or  otherwise)  with  respect  to  any
Environmental  Claims (i) under the terms of any contract or agreement,  or (ii)
by operation of law as a result of the sale of assets or stock.

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<PAGE>

          (h) There have been no environmental investigations,  studies, audits,
tests, reviews or other analyses conducted by, or that are in the possession of,
Trendwest or any of its Subsidiaries in relation to any property or facility now
or previously owned or leased by Trendwest or any of its Subsidiaries  that have
not been made available to the Lenders.

SECTION 5.  CONDITIONS PRECEDENT TO OBLIGATIONS OF THE LENDERS.

     The obligations of the Lenders to make any Revolving Loans, the obligations
of the Issuing Lender to issue any Letters of Credit, and the performance by the
Lenders  and the Issuing  Lender of the other  actions to be taken by them on or
after the Closing  Date are subject to the  fulfillment  or waiver in writing of
each of the following conditions precedent:

     5.1. Compliance. All of the representations and warranties of the Borrowers
in Section 4 shall be true in all  material  respects  on and as of the  Closing
Date and the date of any subsequent  Revolving  Loan or Letter of Credit,  as if
made  on  and  as of  such  date  and  time,  except  to the  extent  that  such
representations  and  warranties  expressly  relate to an earlier date, in which
case such  representations and warranties shall be true in all material respects
as of such earlier date. The Borrowers shall have performed and be in compliance
in all material  respects with all the  applicable  terms and provisions of this
Agreement,  and no Possible  Default or Event of Default shall have occurred and
be  continuing,  on and as of the  Closing  Date and the date of any  subsequent
Revolving  Loan or Letter of Credit.  Each request by a Borrower for a Revolving
Loan shall, in and of itself, constitute a representation and warranty that each
of the Borrowers, as of the date of such Revolving Loan, is in compliance in all
material respects with such conditions.

     5.2.   Satisfaction   of  Other   Conditions.   All  conditions  and  other
requirements  set forth in  Section 2 with  respect  to the  obligations  of the
Lenders to make  Revolving  Loans and the  obligation  of the Issuing  Lender to
issue any  Letters of Credit  (including  payment  of the Fees)  shall have been
satisfied or met.

     5.3. The Revolving Notes.  Each of the Revolving Notes shall have been duly
executed and delivered by the Borrowers to the Administrative Agent.

     5.4. Standstill Agreement.  Trendwest shall have entered into and delivered
to the  Administrative  Agent  a  standstill  agreement  in form  and  substance
reasonably   satisfactory  to  the   Administrative   Agent  pursuant  to  which
performance by Trendwest and its  Subsidiaries of their  respective  obligations
with respect to the  JELD-WEN  Debt shall be subject to  fulfillment  of certain
conditions (the "Standstill Agreement").

     5.5.   Opinions  of  Borrowers'   Counsel.   On  the  Closing   Date,   the
Administrative  Agent shall have  received  the  favorable  written  opinions of
counsel to the Borrowers,  dated the Closing Date,  addressed to the Lenders and
in form  and  substance  satisfactory  to the  Administrative  Agent;  provided,
however,  that the  Administrative  Agent's receipt of a favorable legal opinion
from South Pacific's  Australian counsel shall only be a condition  precedent to
the obligations of the Australian Lender to make any Australian Advances.

     5.6.  Statement of  Application  of Proceeds and Borrowing  Notice.  On the
Closing  Date,  Trendwest  shall have  delivered to the  Administrative  Agent a
certificate,  in form and substance  satisfactory to the  Administrative  Agent,
setting forth the  application of the proceeds of the initial  Revolving  Loans.
The  applicable  Borrower  shall  also  deliver  to the  Administrative  Agent a
Borrowing Notice for each such Revolving Loan.

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<PAGE>

     5.7.  Insurance  Certificates.  On the Closing Date,  Trendwest  shall have
furnished to the Administrative  Agent certificates of insurance,  together with
copies, if available on the Closing Date, of all policies or other  satisfactory
evidence that the insurance required by Section 6.3 is in full force and effect.

     5.8. Corporate  Documents.  On the Closing Date, Trendwest shall deliver to
the Administrative Agent the following:

          (a)  Certificates of good standing for Trendwest from the secretary of
state  or  other  appropriate  governmental  authority  of  Oregon,  Washington,
California, Nevada, Utah and Arizona, in each case dated as of a date as near to
the Closing Date as practicable.

          (b) Certified copies of the articles of incorporation or other charter
documents for the Borrowers from the appropriate  governmental agency within the
relevant jurisdiction of incorporation,  in each case dated as of a date as near
to the Closing Date as practicable.

          (c) A certificate  signed by the  Secretary or Assistant  Secretary of
each of the Borrowers, dated as of the Closing Date, certifying that attached to
the certificate are true and complete copies of (i) the bylaws of such Borrower,
and (ii)  resolutions  adopted  by the  board  of  directors  of such  Borrower,
authorizing  the  execution,  delivery and  performance by such Borrower of this
Agreement and the Revolving Notes.

          (d) Incumbency certificates for the Borrowers.

          (e) Such  other  documents  as any Lender  may  reasonably  request in
connection  with  the  proceedings  taken  by  the  Borrowers  authorizing  this
Agreement.

     5.9. Fees and Expenses.  The Borrowers  shall have paid all fees,  expenses
and other amounts due pursuant to this Agreement, including the Fees.

     5.10. Legal Approval.  All legal matters incident to this Agreement and the
consummation  of the  transactions  contemplated  by  this  Agreement  shall  be
satisfactory to Graham & Dunn, counsel to the Administrative Agent.

     5.11. Delivery of Closing Documents.  The Borrowers shall have delivered to
the Administrative  Agent copies for each Lender of each agreement,  instrument,
and other document required to be delivered pursuant to this Section 5.

     5.12. Other Documents.  The Administrative Agent and each Lender shall have
received such other certificates,  opinions,  agreements and documents,  in form
and substance satisfactory to it, as it may reasonably request.

SECTION 6.  AFFIRMATIVE COVENANTS OF THE BORROWERS.

     Trendwest  agrees with the  Lenders  that so long as this  Agreement  shall
remain  in  effect  or any of  the  Obligations  shall  remain  unpaid  or to be
performed,  Trendwest  shall perform and comply,  and cause its  Subsidiaries to
perform and comply, with the affirmative covenants contained in this Section.

     6.1. Use of Proceeds. The Borrowers shall use the proceeds of the Revolving
Loans and  Letters of Credit to  refinance  existing  Indebtedness,  finance the
development of MountainStar and for general corporate purposes.

                                       41
<PAGE>

     6.2. Continued  Existence;  Maintenance of Rights and Licenses;  Compliance
with  Law.  Each of the  Borrowers  shall  do or  cause  to be done  all  things
necessary  to  preserve,  renew and keep in full force and effect its  corporate
existence.  Without  limiting  the  generality  of the  foregoing,  each  of the
Borrowers  shall  maintain  in full  force  and  effect,  until  termination  in
accordance with their respective terms, any and all material contracts, licenses
and other  rights  necessary  to operate the  businesses  of  Trendwest  and its
Subsidiaries, not breach or violate such contracts, licenses or rights, and take
all actions  that may be required to comply in all  material  respects  with all
applicable laws, statutes, rules, regulations,  orders and decrees now in effect
or subsequently promulgated by any governmental authority. Trendwest shall renew
and extend,  or obtain  replacements  for, and cause each of its Subsidiaries to
renew and extend, or obtain  replacements  for, all of the foregoing  contracts,
licenses, and rights that may be necessary for the continuance of the businesses
of Trendwest and its Subsidiaries.

     6.3.  Insurance.  Trendwest shall keep, and cause its Subsidiaries to keep,
its insurable  real  properties  insured at all times by  financially  sound and
reputable  insurers  reasonably  acceptable  to the  Administrative  Agent,  and
maintain such other insurance,  to such extent and against such risks, including
fire, lightning, vandalism, malicious mischief, flood (to the extent required by
the Administrative Agent, if the real property is located in an identified flood
hazard area, in which insurance has been made available pursuant to the National
Flood  Insurance Act of 1968),  and other risks insured  against by special form
coverage,  as is customary with  companies in the businesses in which  Trendwest
and its  Subsidiaries  are  engaged.  All such  insurance  shall  be in  amounts
sufficient to prevent  Trendwest or its Subsidiaries  from becoming a coinsurer,
shall  name  the  Administrative  Agent,  for  the  benefit  of the  Lenders  in
accordance with their respective  Ratable Shares, as loss payee, and may contain
loss  deductible  provisions  that shall not exceed  $100,000.  Trendwest  shall
maintain,  and cause its  Subsidiaries  to  maintain,  in full  force and effect
liability  insurance,  business  interruption  insurance,  errors and  omissions
insurance,   pollution  insurance,   general  accident  and  commercial  general
liability  insurance and all other  insurance as is usually carried by companies
engaged in the same or similar  business  similarly  situated against claims for
personal or bodily injury, death or property damage occurring upon, in, about or
in connection  with the use or operation of any  property,  motor  vehicles,  or
vessels owned, occupied, controlled or used by Trendwest, its Subsidiaries,  and
their respective  employees or agents, or arising in any other manner out of the
businesses  conducted by Trendwest and its  Subsidiaries.  All of such insurance
shall be in amounts  reasonably  satisfactory  to the  Administrative  Agent and
shall be obtained and maintained by means of policies with generally recognized,
responsible  insurance  companies  authorized  to do  business  in such  states,
provinces, territories, or jurisdictions as may be necessary, depending upon the
locations of the assets of  Trendwest  and its  Subsidiaries  and shall name the
Administrative  Agent,  for the benefit of the Lenders in accordance  with their
respective  Ratable Shares, as an additional  insured or loss payee, as the case
may be. The insurance to be provided may be provided by way of blanket policies.
Each  policy  of  insurance  shall  be  written  so  as  not  to be  subject  to
cancellation  or  substantial  modification  without  not less than  thirty days
advance written notice to the Administrative Agent.  Trendwest shall furnish the
Administrative  Agent annually with certificates or other evidence  satisfactory
to the  Administrative  Agent that the insurance  required by this Agreement has
been  obtained and is in full force and effect and,  prior to the  expiration of
any such  insurance,  Trendwest  shall  furnish  the  Administrative  Agent with
evidence  satisfactory to the Administrative  Agent that such insurance has been
renewed or replaced.  Trendwest shall, upon request of the Administrative Agent,
furnish  the  Administrative  Agent  such  additional   information  about  such
insurance as the Administrative Agent may from time to time reasonably request.

     6.4.  Obligations and Taxes.  Trendwest shall pay or perform, and cause its
Subsidiaries  to pay or perform,  all material  Indebtedness  and other material
liabilities  and  obligations  in a timely  manner  in  accordance  with  normal
business  practices and with the terms  governing such  Indebtedness.  Trendwest
shall comply, and cause its Subsidiaries to comply, with the terms and covenants

                                       42

<PAGE>

of all material  agreements and all material leases of real or personal property
and shall  keep them all in full  force and  effect  until  termination  of such
agreements and leases in accordance with their respective terms. Trendwest shall
promptly  pay and  discharge,  and cause its  Subsidiaries  to promptly  pay and
discharge,  all taxes,  assessments and  governmental  charges or levies imposed
upon  Trendwest or its  Subsidiaries  or with  respect to its or their  property
before  the  imposition  of any  penalty,  and  all  lawful  claims  for  labor,
materials,  supplies or other matters  that,  if unpaid,  might become a Lien or
charge upon such properties or any part thereof; provided, however, that neither
Trendwest nor any of its Subsidiaries shall be required to pay and discharge any
such tax, assessment,  charge, levy or claim so long as (a) the validity of such
tax,  assessment,  charge,  levy, or claim is being contested  diligently and in
good faith by  appropriate  proceedings,  and  enforcement is stayed pending the
outcome  of such  proceedings,  and (b)  Trendwest  has set  aside on its  books
adequate reserves with respect thereto.

     6.5.  Financial  Statements and Reports.  Trendwest shall maintain true and
complete books and records of account in accordance with GAAP, and shall furnish
to the Administrative  Agent, for delivery to the Lenders, each of the following
financial statements and projections at the following times:

          (a) As soon as available, but in no event later than 90 days after the
end of each of its Fiscal  Years,  beginning  with the year ending  December 31,
2000,  Trendwest  shall  furnish  audited  consolidated   financial  statements,
including an audited balance sheet and income and expense statement, showing the
financial  condition of Trendwest and its  Subsidiaries  as of the close of such
Fiscal  Year and the  results of  operations  during  such  Fiscal  Year,  and a
consolidated  statement  of change in financial  position of  Trendwest  and its
Subsidiaries  for such Fiscal Year,  together with such  additional  statements,
schedules and footnotes as are customary in a complete  accountant's report, and
such financial  statements  shall be certified by independent  certified  public
accountants   selected  by   Trendwest   and   reasonably   acceptable   to  the
Administrative  Agent and  accompanied by the "no material  weakness"  letter of
such  accountants  to Trendwest,  and the opinion of such  accountants  shall be
unqualified.

          (b) As soon as available, but in no event later than 45 days after the
end of each of the first  three  fiscal  quarters  of each of its Fiscal  Years,
beginning with the quarter ending  September 30, 2000,  Trendwest  shall furnish
unaudited  consolidated  financial  statements,  including  a balance  sheet and
income and expense statement,  showing the financial  condition of Trendwest and
its  Subsidiaries  as of the end of such  period and the  results of  operations
during such period and for the  then-elapsed  portion of the Fiscal Year,  and a
consolidated  statement  of change in financial  position of  Trendwest  and its
Subsidiaries  for the portion of the Fiscal Year ended with the last day of such
quarter,  and all such financial  statements  (other than  financial  statements
delivered  in the  Fiscal  Year  following  the  Closing)  shall set  forth,  in
comparative form,  corresponding  figures for the equivalent period of the prior
year, shall be in form and detail satisfactory to the Administrative  Agent, and
shall  be  certified  as to  accuracy  and  completeness  by  Trendwest's  chief
financial officer.

          (c) As soon as available, but in no event later than 90 days after the
end of each fiscal  quarter of each Fiscal Year, a compliance  certificate  (the
"Compliance  Certificate")  in  the  form  of  Exhibit  O of  Trendwest's  chief
financial  officer,  (i) setting forth the computations  showing compliance with
the financial  covenants set forth in Section 6.11, and (ii)  certifying that no
Possible Default or Event of Default has occurred, or if any Event of Default or
Possible  Default has  occurred,  stating  the nature of, and the  actions  that
Trendwest  intends to take in connection with, such Event of Default or Possible
Default.

          (d) As soon as available, but in no event later than 20 days after the
end of each calendar month, a Borrowing Base  Certificate,  completed and signed
by the chief financial officer, treasurer or assistant treasurer of Trendwest.

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<PAGE>

          (e) Promptly upon their  becoming  available,  the following  shall be
furnished by Trendwest:  (i) copies of any periodic or special  reports filed by
Trendwest  or  any  of  its  Subsidiaries  with  any  federal,  state  or  local
governmental agency or authority if such reports indicate any material change in
the ownership of Trendwest or any of its Subsidiaries, or any materially adverse
change in the business,  operations, affairs or condition of Trendwest or any of
its  Subsidiaries,  and (ii) copies of any material  notices and other  material
communications from any federal, state or local governmental agency or authority
that specifically relate to Trendwest or any of its Subsidiaries or the material
licenses,  permits or authorizations of Trendwest or any of its Subsidiaries and
the substance of which relates to a matter that could  reasonably be expected to
be materially adverse to Trendwest or any of its Subsidiaries.

          (f) Trendwest  shall furnish  prompt  written notice in the event that
(i) Trendwest or any member of the  Controlled  Group fails to make any payments
when due and payable  under any  Multiemployer  Plan,  or (ii)  Trendwest or any
member  of the  Controlled  Group  receives  notice  from the  Internal  Revenue
Service,  the Department of Labor or the administrator of any Multiemployer Plan
that  Trendwest or such  Controlled  Group member has failed to meet the minimum
funding  requirements  of any  Multiemployer  Plan, and shall (at the same time)
provide the Administrative  Agent with a copy of such notice, or (iii) Trendwest
or any member of the Controlled Group gives or is required to give notice to the
PBGC or  receives  notice of any  "reportable  event" (as defined in Title IV of
ERISA) with respect to any Multiemployer  Plan that might constitute grounds for
a termination of such  Multiemployer Plan under Title IV of ERISA, or knows that
the plan  administrator  of any  Multiemployer  Plan has given or is required to
give notice of any such reportable event, or (iv) Trendwest or any member of the
Controlled  Group receives a notice from a Multiemployer  Plan that the PBGC has
instituted  proceedings  to  terminate  or to appoint a trustee to  administer a
Multiemployer  Plan,  or (v)  Trendwest  or any member of the  Controlled  Group
withdraws in a complete or partial  withdrawal from any  Multiemployer  Plan, or
any plan that is a "multiple  employer  plan" within the meaning of Section 4063
of ERISA,  or incurs any withdrawal  liability  under Section 4204 of ERISA,  or
(vi)  Trendwest or any member of the  Controlled  Group receives a notice from a
Multiemployer  Plan that such plan is in reorganization or insolvent pursuant to
Section  4241 or 4245 of ERISA or that such plan  intends  to  terminate  or has
terminated under Section 4041A of ERISA, or (vii)  proceedings are instituted by
a fiduciary  of a  Multiemployer  Plan  against  Trendwest  or any member of the
Controlled Group to enforce Section 515 of ERISA.

          (g)  Upon the  Administrative  Agent's  written  request,  such  other
information  about  the  financial  condition,   properties  and  operations  of
Trendwest and its  Subsidiaries  as any Lender may from time to time  reasonably
request.

     6.6.  Notices.   Trendwest  shall  give  the   Administrative   Agent,  for
distribution to the Lenders,  (a) within five days after Trendwest's  receipt of
notice thereof, notice of any action, suit or proceeding by or against Trendwest
or any of its Subsidiaries,  that, if adversely determined,  could reasonably be
expected  to  have  a  material  adverse  effect  upon  Trendwest  or any of its
Subsidiaries,  including any material admonition, censure or adverse citation or
order by any governmental  authority or regulatory agency, (b) within three days
after  Trendwest's  receipt  of notice  thereof,  notice of any  action or event
constituting an event of default or violation of any material contract,  license
or permit to which  Trendwest or any of its  Subsidiaries is a party or by which
Trendwest  or any of its  Subsidiaries  is bound,  if such  event of  default or
violation  could  reasonably be expected to have a material  adverse effect upon
Trendwest or any of its Subsidiaries, (c) within three days after the occurrence
of any  Possible  Default or Event of Default,  notice of the actions  Trendwest
intends to take in connection  with such  Possible  Default or Event of Default,
(d)  within  five  days  after its  receipt  of  notice  thereof,  notice of any
cancellation  of or any  material  amendment  to any of the  insurance  policies
maintained in accordance with the  requirements  of this  Agreement,  except for
cancellations and amendments that occur in the ordinary course of business,  (e)
promptly after the occurrence thereof,  notice of any material adverse change in
the business or financial condition of Trendwest or any of its Subsidiaries, (f)
promptly after the occurrence thereof, notice of any strike, labor dispute, slow

                                       44

<PAGE>

down or work stoppage due to a labor  disagreement (or any material  development
regarding any of such matters)  affecting  Trendwest or any of its  Subsidiaries
that could reasonably be expected to have a material adverse effect on Trendwest
or any of its  Subsidiaries,  and (g) concurrently with the delivery of any such
notice to the Australian  Lender,  a copy of any notice required to be delivered
by either of the  Borrowers to the  Australian  Lender  pursuant to the terms of
this Agreement.

     6.7.  Maintenance  of Property.  Trendwest  shall at all times maintain and
preserve,  and cause each of its Subsidiaries to maintain and preserve, its real
property  and  related  improvements,   machinery,  equipment,  motor  vehicles,
vessels,  fixtures  and other  property in good  working  order,  condition  and
repair,  normal wear and tear  excepted,  and in  compliance  with all  material
applicable standards, rules or regulations imposed by any governmental authority
or agency or policy of insurance, except for such property that, in the judgment
of  Trendwest,  is no longer  necessary  to the  business  of  Trendwest  or its
Subsidiaries.

     6.8.  Information  and  Inspection.  Trendwest shall furnish to the Lenders
from time to time, promptly upon request,  information reasonably requested with
respect to any  covenant,  provision or condition of this  Agreement,  or to any
matter  connected  with  Trendwest's  books,  records,   operations,   financial
condition,  properties,   activities  or  business.  At  all  reasonable  times,
Trendwest shall permit any authorized representative designated by any Lender to
visit and inspect any of the  properties of Trendwest or its  Subsidiaries,  and
their respective books and records, and to take extracts from and make copies of
such  books and  records,  and to discuss  Trendwest's  affairs,  finances,  and
accounts  with the  management  of Trendwest  and its  independent  accountants.
Trendwest  agrees to keep and maintain  such records as the Lenders may require,
including  information  with  respect  to  (a)  Eligible  Receivables  and  Note
Receivable balances and agings, and (b) Eligible Inventory and records itemizing
and describing the Inventory, Borrower's Inventory costs and selling prices, and
the daily  withdrawals and additions to Inventory.  In addition,  within 30 days
following  Closing,  Trendwest  shall  deliver  to the  Administrative  Agent  a
certificate of good standing for South Pacific from the  appropriate  Australian
governmental authority, dated as of a date after the Closing Date.

     6.9. Title To Property. Trendwest shall own and hold, and cause each of its
Subsidiaries to own and hold, title to all of its assets in its own name and not
in the name of any nominee.

     6.10. Environmental  Compliance and Indemnity.  Trendwest shall comply, and
cause each of its  Subsidiaries  to comply,  in all material  respects  with all
Environmental  Laws,  including all Environmental Laws in jurisdictions in which
Trendwest  or any of its  Subsidiaries  owns or  operates  a  facility  or site,
arranges for disposal or treatment of Hazardous Materials,  solid waste or other
wastes,  accepts for transport any  Hazardous  Materials,  solid wastes or other
wastes or holds any interest in real property or otherwise. Trendwest shall not,
and shall not permit any of its  Subsidiaries  to, cause or allow the Release of
Hazardous  Materials,  solid  waste or  other  wastes  on,  under or to any real
property in which  Trendwest  or any of its  Subsidiaries  holds any interest or
performs any of its operations,  in material violation of any Environmental Law.
Trendwest shall notify the Lenders promptly after its receipt of notice thereof,
of any  Environmental  Claim that  involves  any  potential  or actual  material
liability of Trendwest or any of its Subsidiaries arising in connection with any
noncompliance  with or violation of the requirements of any Environmental Law or
a material Release or threatened Release of any Hazardous Materials, solid waste
or other waste into the environment. Trendwest shall promptly notify the Lenders
(i) upon Trendwest's receipt of notice that Trendwest or any of its Subsidiaries
is or may be liable  to any  Person as a result  of any  material  Release  of a
Hazardous Material on, under or from the real property in which Trendwest or any
of its Subsidiaries  holds or has held an interest,  or that Trendwest or any of

                                       46

<PAGE>

its  Subsidiaries  has been  identified as  potentially  responsible  for, or is
subject  to  investigation  by any  governmental  authority  relating  to,  such
Release,   and  (ii)  of  the   commencement   or  threat  of  any  judicial  or
administrative proceeding alleging a violation of any Environmental Laws.

     6.11. Financial Covenants.

          (a) Leverage  Ratio.  Trendwest shall maintain at all times a Leverage
Ratio of less than or equal to 0.35:1.

          (b) Fixed Charge  Coverage  Ratio.  Trendwest  shall  maintain a Fixed
Charge  Coverage  Ratio of at  least  1.75:1  as of the last day of each  fiscal
quarter of each Fiscal Year.

          (c)  Consolidated  Net Worth.  At September 30, 2000,  Trendwest shall
maintain  a  Consolidated   Net  Worth  of  at  least   $144,774,400   ("Closing
Threshold").  As of the end of each fiscal quarter  thereafter,  Trendwest shall
maintain a minimum  Consolidated  Net Worth equal to the Closing  Threshold plus
the sum of (i) 75% of Trendwest's  positive net income for the period commencing
on April 1, 2000 and ending on the day preceding  such fiscal  quarter plus (ii)
the Dollar  amount of net proceeds  received by  Trendwest  from the sale of new
common or preferred equity during such period.

SECTION 7.   NEGATIVE COVENANTS OF THE BORROWERS.

     Trendwest  agrees with the  Lenders  that so long as this  Agreement  shall
remain  in  effect  or any of  the  Obligations  shall  remain  unpaid  or to be
performed, Trendwest shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly,  take any of the actions, nor permit to occur any of the
conditions, set forth in this Section 7.

     7.1.  Indebtedness.  Trendwest  shall not,  and shall not permit any of its
Subsidiaries  to,  incur,  create,  assume or permit to exist any  Indebtedness,
except:

          (a) The Obligations;

          (b) Indebtedness reflected in the Financial Statements;

          (c) Indebtedness permitted under Sections 7.3, 7.4 or 7.5;

          (d) Unsecured  trade accounts  payable,  and other  unsecured  current
Indebtedness,  incurred in the ordinary  course of business  (but  excluding any
Indebtedness for borrowed money);

          (e) Indebtedness for taxes,  assessments,  governmental charges, liens
or similar claims to the extent that payment of such  Indebtedness  shall not be
required to be made by the provisions of Section 6.4;

          (f) Indebtedness securing Permitted Liens; and

          (g) Other unsecured  Indebtedness in an aggregate principal amount not
to exceed $1,000,000 at any time outstanding and incurred in the ordinary course
of business.

     7.2.  Liens.  Trendwest  shall  not,  and  shall  not  permit  any  of  its
Subsidiaries to, incur, create, assume or permit to exist any Lien of any nature
on any property or assets now owned or subsequently acquired by Trendwest or any
Subsidiary,  other than  Permitted  Liens.  Trendwest  shall not,  and shall not

                                       46

<PAGE>

permit any of its Subsidiaries to, enter into or permit to exist any arrangement
or agreement, other than pursuant to this Agreement, that directly or indirectly
prohibits Trendwest or any Subsidiary from creating or incurring any Lien on any
assets of Trendwest or any of its Subsidiaries.

     7.3.  Guaranties.  Trendwest  shall  not,  and shall not  permit any of its
Subsidiaries to, incur Guaranty Obligations, except with respect to endorsements
of negotiable instruments for collection in the ordinary course of business.

     7.4.  Conditional  Sale  Obligations.  Trendwest  shall not,  and shall not
permit any of its  Subsidiaries  to, incur,  create,  assume or permit to exist,
with respect to any personal  property,  any conditional  sale  obligation,  any
purchase money  obligation,  any purchase  money security  interest or any other
arrangement for the use of personal property of any other Person,  other than an
arrangement  classifiable  as a capital  lease that is  permitted in Section 7.5
below,  if the  aggregate  amount  payable by Trendwest  or any such  Subsidiary
pursuant to such  arrangements  would exceed the sum of $1,000,000 in any Fiscal
Year.

     7.5.  Capital Leases.  Trendwest shall not, and shall not permit any of its
Subsidiaries to, incur, create,  assume or permit to exist any lease of personal
or real property that is classified for  accounting  purposes as a capital lease
in  accordance  with GAAP if the aggregate  amount  payable by Trendwest and its
Subsidiaries  with respect to such lease would exceed the sum of  $2,000,000  in
any Fiscal Year.

     7.6.  Claims.  Trendwest  shall  not,  and  shall  not  permit  any  of its
Subsidiaries  to, fail to timely assert any material  claim,  cause of action or
contract  right that it possesses  against any third party or agree to settle or
compromise any such claim,  cause of action or contract right except in any case
in the  exercise  of good  business  judgment  and  except  for  settlements  or
compromises made in the reasonable exercise of business judgment in the ordinary
course of business.

     7.7.  Notes  Receivable.  Trendwest  shall not suffer or permit  either the
number or amount of Past-Due  Notes to exceed 7.5% of the total number or amount
of Notes  Receivable at the close of any calendar month, and shall not suffer or
permit  either  the  number or amount of  Delinquent  Notes to exceed 12% of the
total  number or amount of Notes  Receivable  at the close of any  period of two
consecutive  calendar  months.  For purposes of this Section 7.7, the  aggregate
principal  balance of Past-Due Notes and Delinquent  Notes shall be computed net
of allowance for doubtful accounts and sales returns.

     7.8. Capital  Distributions.  Trendwest shall not make, or declare or incur
any  liability  to make,  any  Capital  Distribution  except  (a)  common  stock
dividends,  and (b) Trendwest may repurchase up to 364,928 shares of Trendwest's
common stock on such terms and conditions as Trendwest's  Board of Directors has
approved prior to the date of this Agreement.

     7.9. Disposal of Property; Mergers; Acquisitions; Reorganizations.

          (a)  Except  as  provided  in  Sections  7.9(b),  7.9(c)  and  7.9(d),
Trendwest  shall  not,  and shall not  permit  any of its  Subsidiaries  to, (i)
dissolve or liquidate,  (ii) sell,  lease,  transfer or otherwise dispose of any
material portion of its properties and assets to any Person,  except for (A) the
contribution  or cash sale of Notes  Receivable,  on arms-length  terms,  to any
Special Purpose Funding Corporation  pursuant to Note Purchase  Facilities,  (B)
the sale of all or any portion of  MountainStar,  (C) dispositions the aggregate
Dollar value of which does not exceed 5% of Consolidated  Net Worth, and (D) the
sale of any asset that  Trendwest,  in the good faith  exercise of its  business
judgment,  determines  is no longer  useful in its  operations  if such asset is
replaced  with a comparable  asset of equal or greater  value or if the value of
such disposed asset,  together with the value of all other assets disposed of by
Trendwest  and  its  Subsidiaries  in the  prior  twelve-month  period  and  not
replaced,  is not  material  in amount,  (iii) be a party to any  consolidation,
merger,  recapitalization  or  other  form  of  reorganization,  (iv)  make  any

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<PAGE>

acquisition  of all or  substantially  all the  assets  of any  Person,  or of a
business  division or line of business  of any  Person,  or of any other  assets
constituting a going business, (v) create or acquire any Subsidiary,  or (vi) be
or become a party to any joint venture or partnership.

          (b) Trendwest may conduct Asset Sales not otherwise permitted pursuant
to Section 7.9(a) with the consent of the Majority Lenders.  The proceeds of any
such  Asset  Sale  shall  be paid to the  Administrative  Agent  as a  mandatory
prepayment of the Revolving Loans pursuant to Section 3.4.

          (c) Notwithstanding clause (v) of Section 7.9(a), Trendwest may create
a wholly  owned  corporate  Subsidiary  subject to  satisfaction  of each of the
following conditions:

               (i) No Event of Default or Possible  Default then exists or would
     exist after giving effect to such creation.

               (ii) Trendwest shall have given the  Administrative  Agent thirty
     days prior written  notice of the creation of such wholly owned  Subsidiary
     and shall have provided  information to the Administrative  Agent as to the
     business purpose for creating such Subsidiary.

               (iii) Such wholly owned  Subsidiary  shall execute and deliver to
     the  Administrative  Agent  a  joinder  agreement,  in form  and  substance
     satisfactory to the Administrative Agent, pursuant to which it shall become
     a party to this  Agreement  and agree to be a borrower  for all purposes of
     this Agreement.

               (iv) Trendwest shall have delivered to the  Administrative  Agent
     evidence reasonably  satisfactory to the Administrative Agent to the effect
     that all approvals,  consents or authorizations required in connection with
     the creation of such wholly owned  Subsidiary and the transfer to it of any
     assets shall have been  obtained,  and such opinions as the  Administrative
     Agent may reasonably  request as to the corporate or other  organization of
     such  Subsidiary,  and such other matters as the  Administrative  Agent may
     deem appropriate.

          (d) Trendwest may consummate Permitted Acquisitions.

     7.10.  Investments.  Trendwest  shall not,  and shall not permit any of its
Subsidiaries to, purchase or otherwise  acquire,  hold or invest in any stock or
other  securities or evidences of indebtedness of, or any interest or investment
in,  or make or  permit to exist any  loans or  advances  to,  any other  Person
("Investments"), except any of the following:

          (a) Direct obligations of the United States Government maturing within
one year.

          (b)  Certificates  of deposit of a commercial bank chartered under the
laws of the United States or any state of the United States, and having capital,
surplus and undivided profits in excess of $200,000,000;

          (c) Any  investment  in  commercial  paper  that  at the  time of such
investment is assigned the highest  quality rating in accordance with the rating
systems employed by either Moody's Investors Service,  Inc. or Standard & Poor's
Ratings Group;

          (d) Securities  received pursuant to a plan of reorganization  adopted
in an insolvency  proceeding or otherwise in immaterial  amounts in exchange for
accounts  receivable  of the  entity  that is the  subject  of  such  insolvency
proceeding generated in the ordinary course of Trendwest's business; and

                                       48
<PAGE>

          (e) Short-term  loans to employees not to exceed $300,000 and advances
of expenses to employees.

     7.11. Amendment of Governing Documents.  Trendwest shall not, and shall not
permit any of its  Subsidiaries  to, permit the amendment or modification of, or
any supplement to, its articles of incorporation  or bylaws,  unless required by
law,  in any manner that is adverse to the  interests  of the Lenders (as may be
reasonably determined by the Lenders).

     7.12.  Other  Amendments  or Waivers.  Trendwest  shall not,  and shall not
permit any of its  Subsidiaries  or Special  Purpose  Funding  Corporations  to,
amend,  alter or modify,  or consent to or suffer any  amendment,  alteration or
modification  of, any material  contract,  license,  permit or  authorization to
which  Trendwest or such  Subsidiary or Special  Funding  Corporation is a party
(including any agreement with WorldMark,  The Club),  except for any amendments,
alterations  or  modifications  that would not have the effect of (a) materially
and  adversely  affecting  Trendwest's  financial  condition  or the  ability of
Trendwest or any of its  Subsidiaries  to operate its business or to perform the
Obligations,  or (b)  materially  and  adversely  affecting  the  rights  of the
Administrative Agent or the Lenders.

     7.13.  Management  Agreements and Fees.  Trendwest shall not, and shall not
permit any of its  Subsidiaries  to, make or enter into,  or pay any  management
fees  pursuant  to,  any  so-called  management  or service  agreement  or joint
operating agreement pursuant to which management,  supervision or control of its
business,  or any significant aspect of such business,  shall be delegated to or
placed in any Person other than an employee of Trendwest or such Subsidiary.

     7.14. ERISA. Neither Trendwest nor any member of the Controlled Group shall
maintain,  contribute to or have any liability with respect to any Pension Plan,
including any Multiemployer Plan.

     7.15.  Affiliates.  Trendwest  shall  not,  and shall not permit any of its
Subsidiaries  to, enter into any  transaction or agreement with any Affiliate of
Trendwest or such  Subsidiary or any  shareholder or beneficiary of Trendwest or
such Subsidiary or pay any  compensation or salary to any such Person unless the
terms of such transaction or agreement are not  substantially  less favorable to
Trendwest  or  such   Subsidiary  than  could  be  obtained  in  an  arms-length
transaction  with an unaffiliated  third party or unless the amount paid to such
person is not substantially in excess of the fair value of the services rendered
by such person.

     7.16. Change of Name or Office.  Trendwest shall not change its name or the
location of its chief executive office without thirty days' prior written notice
to the Administrative Agent.

     7.17.  Change in  Business.  Trendwest  shall not  change the nature of its
business in any material respect.

     7.18.  Regulation U.  Trendwest  shall not, and shall not permit any of its
Subsidiaries  to, directly or indirectly,  (a) apply any part of the proceeds of
the  Revolving  Loans or Letters of Credit to the  purchasing or carrying of any
"margin  stock"  within  the  meaning of  Regulations  T, U or X of the Board of
Governors of the Federal Reserve System, or any interpretations or rulings under
such  regulations,  (b) extend credit to others for the purpose of purchasing or
carrying any such margin stock, or (c) retire  Indebtedness that was incurred to
purchase or carry any such margin stock.

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<PAGE>

SECTION 8.   EVENTS OF DEFAULT.

     The  occurrence  of  any  one or  more  of the  following  events,  whether
voluntarily or  involuntarily  or by operation of law, shall constitute an event
of default by the Borrowers under this Agreement (an "Event of Default"):

     8.1.  Non-Payment.  Either  of the  Borrowers  fails to pay (a)  when  due,
whether by acceleration  of maturity or otherwise,  any installment of principal
under any  Revolving  Note or any amount  payable  with respect to any Letter of
Credit,  or (b)  within  five  Banking  Days of the date  when due,  whether  by
acceleration of maturity or otherwise, any installment of interest or any fee or
other payment obligation with respect to the Obligations.

     8.2.  Failure of Performance with Respect to Other  Obligations.  Either of
the  Borrowers  fails to observe,  perform or be in  compliance  with any of the
Non-Monetary  Provisions required to be observed,  performed or complied with by
such  Borrower  and,  provided that such failure is of a type that can be cured,
such  failure  shall  continue  and not be cured for thirty  days after (i) such
Borrower receives written notice of such failure from the  Administrative  Agent
or a Lender,  or (ii) the  Lenders are  notified of such  failure or should have
been notified  pursuant to the provisions of Section 6.6,  whichever is earlier;
provided,  however, such failure shall not constitute an Event of Default if all
of the following conditions are satisfied:

          (a) Such failure does not relate to any of the financial  covenants in
Section 6.11;

          (b) Such failure is not, in the Lenders' sole and absolute discretion,
likely to have a material and adverse  effect on the ability of the Borrowers to
repay all of the Obligations in accordance with the terms and conditions of this
Agreement; and

          (c) Such failure  cannot be cured within such 30-day  period,  and the
Borrowers commence to cure such failure within such 30-day period and thereafter
promptly and  diligently  proceed to cure,  and  ultimately  cure,  such failure
within 60 days following the expiration of such 30-day period.

     8.3. Breach of Warranty. Any financial statement, representation, warranty,
statement  or   certificate   made  or   furnished  by  the   Borrowers  to  the
Administrative Agent or the Lenders in or in connection with this Agreement,  or
as an inducement to the  Administrative  Agent or the Lenders to enter into this
Agreement,  including  those in Section 4, shall have been false,  incorrect  or
incomplete when made or deemed made in any material respect.

     8.4.  Cross-Defaults.  Trendwest or any Subsidiary  defaults in any payment
due on any Indebtedness  (other than the Obligations) and such default continues
for more than the  period of  grace,  if any,  applicable  to such  default,  or
Trendwest or any Subsidiary  defaults in the  performance of or compliance  with
any term of any evidence of such  Indebtedness or of any mortgage,  indenture or
other agreement  relating to such  Indebtedness,  and any such default continues
for more than the period of grace, if any, specified therein; provided, however,
that any such default  shall not be deemed to  constitute an Event of Default if
the aggregate amount of all such Indebtedness does not exceed $1,000,000.

     8.5. Assignment for Benefit of Creditors. Trendwest or any Subsidiary makes
an  assignment  for the benefit of its  creditors,  or admits its  insolvency or
fails to pay its debts generally as such debts become due.

                                       50
<PAGE>

     8.6. Bankruptcy. Any petition seeking relief under Debtor Relief Laws shall
be filed by or against  Trendwest or any Subsidiary or any  proceeding  shall be
commenced by or against Trendwest or any Subsidiary with respect to relief under
the Debtor  Relief Laws for the  reorganization,  winding-up or  liquidation  of
Persons or an arrangement,  composition, extension or adjustment with creditors,
and such involuntary  petition or proceeding is not discharged within sixty days
of its filing or commencement.

     8.7.  Appointment  of  Receiver;  Liquidation.  A  receiver  or  trustee is
appointed  for  Trendwest  or any  Subsidiary  or for  any  substantial  part of
Trendwest's  or any  Subsidiary's  assets,  and such  receiver or trustee is not
discharged within sixty days of appointment;  any proceedings are instituted for
the  dissolution  or  the  full  or  partial  liquidation  of  Trendwest  or any
Subsidiary  and such  proceedings  are not dismissed or discharged  within sixty
days of their  commencement;  or Trendwest or any  Subsidiary  discontinues  its
business.

     8.8.  Judgments.  Trendwest or any Subsidiary  incurs  nonappealable  final
judgments  for the  payment  of money  aggregating  at any one time in excess of
$1,000,000  (to the extent not covered by insurance)  and fails to discharge (or
make adequate provision for the discharge of) the same within a period of thirty
days unless,  pending further proceedings,  execution on such judgments has been
effectively stayed.

     8.9.  Impairment of  Obligations.  Any  provision of this  Agreement or any
Revolving Note ceases to be a legal,  valid and binding  agreement or obligation
enforceable  against any Lender or the  Administrative  Agent in accordance with
its terms, or is terminated,  invalidated,  set aside or declared ineffective or
inoperative.

     8.10. Termination of Material Agreement. Any agreement,  license, permit or
authorization  that is necessary to the  consolidated  operations of Trendwest's
business,  including  any  agreement  with  WorldMark,  The Club,  is revoked or
terminated or  materially,  adversely  modified and not replaced by a substitute
acceptable  to the  Majority  Lenders  within  thirty  days of such  revocation,
termination or modification.

     8.11. Change of Control. There occurs any Change of Control with respect to
Trendwest.

     8.12.  Condemnation.  Any court,  government or  governmental  agency shall
condemn,  seize or  otherwise  appropriate,  or take  custody  or control of any
substantial  portion  of the  assets  of  Trendwest  (on a  consolidated  basis)
pursuant  to a  final,  non-appealable  order,  unless  such  taking  could  not
reasonably be expected to have a material  adverse  effect upon  Trendwest (on a
consolidated basis) or the ability of the Borrowers to perform the Obligations.

     8.13.  Cessation  of  Operations.  The  operations  of  the  Borrowers  are
interrupted  at any time for more  than 30  days,  whether  or not  consecutive,
during any period of 60  consecutive  days,  unless the  Borrowers are receiving
during such period of interruption  insurance  sufficient to assure that its per
diem  Adjusted Cash Flow during such period is a least equal to that which could
reasonably have been expected during such period but for the interruption.

                                       51
<PAGE>

SECTION 9.  REMEDIES.

     Notwithstanding  any contrary provision or implication in this Agreement or
elsewhere,

     9.1. Optional Defaults.

     If any Event of Default referred to in Sections 8.1 through 8.4 or Sections
8.8 through  8.14  occurs,  the  Administrative  Agent,  with the consent of the
Majority Lenders, upon written notice to the Borrowers, may

          (a) terminate the Aggregate  Commitment and the credit  established by
this  Agreement,  at  which  time the  obligations  of the  Lenders  to make any
additional  Revolving  Loans,  and the obligation of the Issuing Lender to issue
any Letters of Credit, immediately shall be terminated,

          (b)  accelerate  the  maturity  of the  Revolving  Loans and all other
Obligations,  at which  time all  Obligations  shall  become and  thereafter  be
immediately  due and  payable  in full  without  any  presentment  or demand and
without any further or other notice of any kind,  all of which are hereby waived
by the Borrowers, and/or

          (c) demand  immediate  payment by the  Borrowers of an amount equal to
the aggregate  amount of all  outstanding  Letter of Credit Usage, to be held in
the Letter of Credit Cash Collateral Account.

     9.2.  Automatic  Defaults.  If any Event of Default referred to in Sections
8.5 through 8.7 occurs,

          (a) the  Aggregate  Commitment  and  the  credit  established  by this
Agreement  shall  automatically  and  immediately  terminate,  and  the  Lenders
thereafter shall be under no obligation to grant any additional  Revolving Loans
and the  Issuing  Lender  shall be under no  obligation  to issue any Letters of
Credit,

          (b)  the  principal  of and  interest  on the  Revolving  Notes,  then
outstanding,  and all of the other Obligations shall immediately  become due and
payable in full, all without any presentment,  demand or notice of any kind, all
of which are hereby waived by the Borrowers, and

          (c) an amount equal to the aggregate amount of all outstanding  Letter
of Credit  Usage shall be  immediately  due and  payable to the  Issuing  Lender
without  notice to or demand upon the Borrowers,  which are expressly  waived by
the Borrowers, to be held in the Letter of Credit Cash Collateral Account.

     9.3.  Performance  by the Lenders.  If at any time either of the  Borrowers
fails or refuses to pay or perform any material  obligation or duty to any third
Person,  except for payments  that are the subject of bona fide  disputes in the
ordinary  course of  business,  the  Lenders  may,  in their  sole and  absolute
discretion,  but shall not be obligated to, pay or perform the same on behalf of
such  Borrower,  and such Borrower shall promptly repay all amounts so paid, and
all costs and expenses so incurred.  This repayment  obligation shall become one
of the  Obligations  and shall bear interest at the Default  Interest Rate as if
such obligation were a Base Rate Loan.

     9.4.  Other  Remedies.  Upon the  occurrence  of an Event of  Default,  the
Administrative  Agent and the Lenders may  exercise  any other  right,  power or
remedy as may be provided in this Agreement,  in the Revolving  Notes, or as may

                                       52

<PAGE>

be provided at law or in equity, including the right to recover judgment against
the Borrowers for any amount due either before,  during or after any proceedings
for the enforcement of any security or any realization upon any security.

     9.5.  Enforcement  and Waiver by the  Lenders.  The Lenders  shall have the
right at all  times to  enforce  the  provisions  of this  Agreement  in  strict
accordance  with the terms of this  Agreement,  notwithstanding  any  conduct or
custom  on the part of the  Lenders  in  refraining  from so doing at any  time,
unless the Lenders shall have waived such enforcement in writing with respect to
a particular  instance.  The failure of the Lenders at any time to enforce their
rights under such  provisions  shall not be construed as having created a custom
or course of dealing in any way  contrary  to the  specific  provisions  of this
Agreement,  or as having in any way modified or waived such rights.  All rights,
powers and  remedies  of the  Lenders  are  cumulative  and  concurrent  and the
exercise of one right,  power or remedy  shall not be deemed a waiver or release
of any other right, power or remedy.

SECTION 10.  THE ADMINISTRATIVE AGENT.

          10.1.  Appointment and Authorization.

          (a) KeyBank National  Association is hereby  appointed  Administrative
Agent under this Agreement,  and each of the Lenders irrevocably  authorizes the
Administrative  Agent to act as the  Administrative  Agent of such  Lender.  The
Administrative Agent agrees to act as such upon the express conditions contained
in this  Section  10.  The  Administrative  Agent  shall  not  have a  fiduciary
relationship with respect to any Lender by reason of this Agreement.

          (b) The Issuing Lender shall act on behalf of the Lenders with respect
to any Letters of Credit  issued by it and the  documents  associated  therewith
until such time and except for so long as the Administrative  Agent may agree at
the request of the Majority  Lenders to act for such Issuing Lender with respect
thereto;  provided,  however,  that the  Issuing  Lender  shall  have all of the
benefits and immunities (i) provided to the Administrative Agent in this Section
10 with respect to any acts taken or omissions suffered by the Issuing Lender in
connection  with  Letters of Credit  issued by it or proposed to be issued by it
and the  application  and  agreements  for letters of credit  pertaining  to the
Letters of Credit as fully as if the term "Administrative Agent" as used in this
Section 10 included the Issuing  Lender with respect to such acts or  omissions,
and (ii) as additionally  provided in this Agreement with respect to the Issuing
Lender.

     10.2.  Powers.  The  Administrative  Agent shall have and may exercise such
powers under this Agreement as are specifically  delegated to it by the terms of
this  Agreement,   together  with  such  additional  powers  as  are  reasonably
incidental thereto.  The Administrative  Agent shall not have any implied duties
or any obligation to the Lenders to take any action under this Agreement  except
any  action  specifically  provided  by  this  Agreement  to  be  taken  by  the
Administrative Agent.

     10.3.  General Immunity.  Neither the  Administrative  Agent nor any of its
directors,  officers,  affiliates,  agents or  employees  shall be liable to the
Lenders or any Lender for any action  taken or omitted to be taken by it or them
under or in  connection  with this  Agreement  except for its or their own gross
negligence or willful  misconduct.  Without limiting the foregoing,  neither the
Administrative Agent nor any of its directors,  officers,  affiliates, agents or
employees  shall  be  responsible  for,  or have  any  duty to  examine  (a) the
genuineness,  execution,  validity,  effectiveness,   enforceability,  value  or
sufficiency  of this  Agreement or any other  document or  instrument  furnished
pursuant to or in connection with this Agreement,  (b) the collectibility of any
amounts  owed  by  the  Borrowers,  (c)  any  recitals,   statements,   reports,
representations  or warranties made in connection  with this Agreement,  (d) the
performance or  satisfaction  by the Borrowers or other party of any covenant or
agreement  contained  in this  Agreement,  (e) any  failure of any party to this
Agreement to receive any communication sent, including any facsimile,  telegram,
teletype,  bank wire, cable, radiogram or telephone message sent or any writing,

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<PAGE>

application, notice, report, statement, certificate, resolution, request, order,
consent letter or other  instrument or paper or  communication  entrusted to the
mails or to a delivery  service,  or (f) the assets or  liabilities or financial
condition  or results of  operations  or  business  or  creditworthiness  of the
Borrowers.  The Administrative  Agent shall not be bound to ascertain or inquire
as to the performance or observance of any of the terms of this Agreement.

     10.4. Action on Instructions of the Lenders. The Administrative Agent shall
not be required  to exercise  any  discretion  or take any action,  but shall be
required to act or to refrain  from acting (and shall be fully  protected  in so
acting or refraining from acting) upon the  instructions of the Majority Lenders
(subject to Section 10.12 and Section  11.13),  and such  instructions  shall be
binding upon all the Lenders and all holders of the Revolving  Notes;  provided,
however,  that the Administrative Agent shall not be required to take any action
that exposes it to personal  liability or that is contrary to this  Agreement or
applicable law. The foregoing provisions of this Section 10.4 shall not limit in
any way the exercise by any Lender of any right or remedy granted to such Lender
pursuant to the terms of this Agreement.  Except as otherwise expressly provided
in this  Agreement,  any  reference  in this  Agreement to action by the Lenders
shall be deemed to be a reference to the Majority Lenders.

     10.5.  Employment  of Agents  and  Counsel.  The  Administrative  Agent may
execute any of its duties as  Administrative  Agent under this  Agreement  by or
through employees,  agents and  attorneys-in-fact and shall not be answerable to
the Lenders,  except as to money or securities  received by it or its authorized
agents,  for the default or misconduct  of any such agents or  attorneys-in-fact
selected by it with reasonable care.

     10.6.  Reliance on Documents;  Counsel.  The Administrative  Agent shall be
entitled  to  rely  upon  any  Revolving  Note,  notice,  consent,  certificate,
affidavit,  letter, telegram,  statement, paper or document believed by it to be
genuine  and  correct  and to have been  signed or sent by the proper  Person or
Persons,  and,  with  respect  to legal  matters,  upon the  opinion  of counsel
selected by the  Administrative  Agent,  which  counsel may be  employees of the
Administrative Agent, concerning all matters pertaining to the agency created by
and the duties under this Agreement.

     10.7. Administrative Agent's Reimbursement and Indemnification. Each of the
Lenders  agrees to reimburse  and  indemnify  the  Administrative  Agent,  which
indemnification  shall be shared by the Lenders  ratably in  proportion to their
respective Ratable Shares of the Aggregate  Commitment,  (a) for any amounts not
reimbursed by the Borrowers  for which the  Administrative  Agent is entitled to
reimbursement by the Borrowers under this Agreement,  (b) for any other expenses
reasonably  incurred  by the  Administrative  Agent on behalf of the  Lenders in
connection with the preparation, execution, delivery, administration,  amendment
or  enforcement of this  Agreement,  and (c) for any  liabilities,  obligations,
losses,  damages,  penalties,  actions,  judgments,  suits,  costs,  expenses or
disbursements  of any kind and nature  that may be imposed  on,  incurred  by or
asserted against the Administrative  Agent in any way relating to or arising out
of this Agreement or any other document or transaction related to this Agreement
or the  enforcement  of any of the terms of this  Agreement or of any such other
document;  provided,  however,  that no Lender  shall be  liable  for any of the
foregoing  to the  extent  they  arise  from the  gross  negligence  or  willful
misconduct of the Administrative Agent.

     10.8.  Rights  as a  Lender.  With  respect  to its  Ratable  Share  of the
Revolving  Loans,  the Revolving  Loans made by it and the  Revolving  Notes and
Letters of Credit issued to it or by it,  KeyBank shall have the same rights and
powers  under this  Agreement  as any Lender and may  exercise  such  rights and
powers as though it were not the Administrative Agent or the Issuing Lender, and
the term "Lender" or "Lenders" shall,  unless the context  otherwise  indicates,
include  KeyBank  National  Association  in  its  individual  capacity.  KeyBank

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<PAGE>

National  Association  may accept  deposits  from,  lend money to, and generally
engage in any kind of banking or trust business with Trendwest and/or any of its
Subsidiaries  as if it were not the  Administrative  Agent or the Issuing Lender
under this Agreement.

     10.9.  Lender  Credit  Decision.  Each  Lender  acknowledges  that  it has,
independently  and without reliance upon the  Administrative  Agent or any other
Lender and based on the  financial  statements  prepared by  Trendwest  and such
other  documents  and  information  as it has deemed  appropriate,  made its own
credit  analysis  and  decision to enter into this  Agreement.  Each Lender also
acknowledges  that  it  will,   independently  and  without  reliance  upon  the
Administrative  Agent  or any  other  Lender  and  based on such  documents  and
information as it shall deem  appropriate at the time,  continue to make its own
credit  decisions  in taking or not  taking  action  under this  Agreement.  The
Administrative  Agent shall not be  required to keep the Lenders  informed as to
the  performance  or observance by the Borrowers of this  Agreement or any other
document  referred  to or  provided  for in this  Agreement  or to  inspect  the
properties  or books of  Trendwest or any of its  Subsidiaries.  Except for such
notice and other notices,  reports and other documents and information expressly
required to be furnished to the Lenders by the  Administrative  Agent under this
Agreement, the Administrative Agent shall not have any duty or responsibility to
provide any Lender with any credit or other information  concerning the affairs,
financial  condition or business of Trendwest and its Subsidiaries that may come
into its possession.

     10.10. Successor  Administrative Agent. The Administrative Agent may resign
at any time by giving  written notice of such  resignation to the Lenders.  Upon
any such  resignation,  the Majority Lenders (with the consent of the Borrowers,
if at the time of such  resignation  no Event of Default  exists,  which consent
shall not be unreasonably  withheld) shall have the right to appoint a successor
Administrative  Agent. If no successor  Administrative  Agent shall have been so
appointed  by the  Majority  Lenders  (with the consent of the  Borrowers to the
extent  required) and shall have accepted  such  appointment  within thirty days
after the notice of  resignation,  then the  retiring  Administrative  Agent may
appoint a successor  Administrative  Agent. Such successor  Administrative Agent
shall be a commercial  bank chartered under the laws of the United States or any
state of the United States and having capital,  surplus and retained earnings of
at  least   $200,000,000.   Upon  the  acceptance  of  any  appointment  as  the
Administrative Agent under this Agreement by a successor  Administrative  Agent,
such  successor  Administrative  Agent shall  immediately  succeed to and become
vested  with all the  rights,  powers,  privileges  and  duties of the  retiring
Administrative Agent, and the retiring  Administrative Agent shall be discharged
from its  duties  and  obligations  under  this  Agreement.  After any  retiring
Administrative  Agent's  resignation  as the  Administrative  Agent  under  this
Agreement,  the  provisions of this Section 10 shall  continue in effect for its
benefit with respect to any actions  taken or omitted to be taken by it while it
was acting as the Administrative Agent under this Agreement.

     10.11. Ratable Sharing. All principal and interest payments received by the
Administrative Agent with respect to Domestic Advances and Defaulted Amounts and
all Fees other than the  Administrative  Agent  Fees  shall be  remitted  to the
Lenders in  accordance  with their  respective  Ratable  Shares of the Revolving
Loans.  All principal and interest  payments  received by the Australian  Lender
with respect to Australian  Advances shall be retained by the Australian  Lender
for its own account (and not for the benefit of the other Lenders) to the extent
that such payments do not represent repayment of Defaulted Amounts.  All amounts
received  by the  Issuing  Lender  with  respect to  Letters of Credit  shall be
retained by the Issuing  Lender for its own account  (and not for the benefit of
the other Lenders) to the extent that such payments do not represent  payment of
Unreimbursed  Amounts.  Any amounts received by the Administrative  Agent or any
other Lender upon the sale of any  collateral  for the  Obligations  or upon the
exercise of any remedies  under this Agreement or upon the exercise of any right
of setoff shall be remitted to the Lenders in accordance  with their  respective
Ratable  Shares of the Revolving  Loans.  If any Lender shall obtain any payment
under this Agreement in connection with a Domestic Advance, Defaulted Amount, or
Unreimbursed  Amount (whether  voluntary,  involuntary,  through exercise of any
right of set-off or otherwise) in excess of its Ratable Share,  then such Lender
shall immediately remit such excess to the other Lenders to the extent necessary

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<PAGE>

to  ensure  that  each  Lender  has  received  no more than and no less than its
Ratable Share of such payment. Notwithstanding anything in this Agreement to the
contrary,  all Liens at any time granted to the Administrative Agent are for the
benefit of the Lenders in accordance with their respective Ratable Shares.

     10.12.   Actions  by  the  Administrative   Agent  and  the  Lenders.   The
Administrative  Agent shall take formal  action only upon the  agreement  of the
Majority Lenders;  provided,  however,  that if the  Administrative  Agent gives
notice to the  Lenders of a Possible  Default  or an Event of  Default,  and the
Majority  Lenders  cannot  agree  (which  agreement  shall  not be  unreasonably
withheld) on a mutual course of action within thirty days following such notice,
the  Administrative  Agent may (but shall not be required  to) pursue such legal
rights and remedies  against the Borrowers as it deems necessary and appropriate
to protect the Lenders and any collateral under the circumstances.

     10.13.  Other  Agents.  None of Lenders  identified  on the facing  page or
signature pages of this Agreement as a "Syndication Agent" shall have any right,
power, obligation, liability,  responsibility or duty under this Agreement other
than those  applicable to all Lenders as such.  Without  limiting the foregoing,
none of Lenders so identified as a  "Syndication  Agent" shall have or be deemed
to have any fiduciary  relationship  with any Lender.  Each Lender  acknowledges
that it has not relied,  and will not rely,  on any of Lenders so  identified in
deciding to enter into this  Agreement  or in taking or not taking  action under
this Agreement.

SECTION 11.    MISCELLANEOUS.

     11.1.  Construction.  The provisions of this Agreement shall be in addition
to those of any other guaranty,  security  agreement,  note or other evidence of
the Obligations, all of which shall be construed as complementary to each other.
Nothing contained in this Agreement shall prevent the Lenders from enforcing any
or all of such  instruments  in accordance  with their  respective  terms.  Each
right,  power or  privilege  specified  or referred to in this  Agreement  is in
addition  to any  other  rights,  powers  or  privileges  that the  Lenders  may
otherwise  have or acquire by operation of law, by other  contract or otherwise.
No course of dealing  with respect to, nor any omission or delay in the exercise
of, any right,  power or privilege by the Lenders  shall  operate as a waiver of
such right, power or privilege, nor shall any single or partial exercise thereof
preclude any further or other exercise  thereof or of any other,  as each right,
power or privilege may be exercised  independently  or concurrently  with others
and  as  often  and  in  such  order  as  the   Lenders   may  deem   expedient.
Notwithstanding  any other provision of this Agreement,  the Borrowers shall not
be required to pay any amount  pursuant to this  Agreement  that is in excess of
the maximum amount permitted by law.

     11.2. Further Assurance. From time to time, the Borrowers shall execute and
deliver to the Lenders such  additional  documents  and take such actions as the
Administrative  Agent may  reasonably  require to carry out the purposes of this
Agreement,  or to preserve  and  protect  the rights of the  Lenders  under this
Agreement.

     11.3.   Expenses   of   the   Administrative   Agent   and   the   Lenders;
Indemnification.

          (a) Whether or not the transactions contemplated by this Agreement are
consummated,  the  Borrowers  shall  pay  the  reasonable  costs  and  expenses,
including the reasonable fees and  disbursements of the  Administrative  Agent's
counsel,  incurred  by the  Lenders  in  connection  with  (i) the  negotiation,
preparation,  amendment,  or modification of, and the transactions  contemplated
by,  this  Agreement,  (ii) the making of the  Revolving  Loans and  issuance of

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<PAGE>

Letters of Credit,  (iii) the  negotiation,  preparation  or  enforcement of any
other  document in  connection  with this  Agreement or the  Revolving  Loans or
Letters of Credit,  (iv) any  proceeding  brought or other  action  taken by the
Lenders to enforce any  provision of this  Agreement,  or to enforce or exercise
any right,  power or remedy under this Agreement,  or (v) any action that may be
taken or instituted  by any Person  against any Lender as a result of any of the
foregoing. The estimated fees and expenses of the Administrative Agent's counsel
through  the  Closing  shall be paid to the  Administrative  Agent  (for its own
account and not for the benefit of the  Lenders)  on the  Closing  Date.  If any
taxes, charges or fees shall be payable, or ruled to be payable, to any state or
federal authority with respect to the execution, delivery or performance of this
Agreement or the Revolving  Notes or Letters of Credit by reason of any existing
or  subsequently  enacted  federal or state statute,  the Borrowers will pay all
such taxes, charges or fees,  including related interest and penalties,  if any,
and will  indemnify  and hold  harmless  the Lenders  against any  liability  in
connection with such taxes, charges or fees (other than any tax imposed upon the
net income of the Lenders).

          (b)  The   Borrowers   hereby   indemnify   and  hold   harmless   the
Administrative Agent and each Lender and their respective  directors,  officers,
employees,  agents,  counsel,  subsidiaries  and  affiliates  (the  "Indemnified
Persons")  from  and  against  any and  all  losses,  liabilities,  obligations,
damages, penalties,  actions, judgments, suits, costs, expenses or disbursements
of any kind or nature (including  reasonable attorneys fees) that may be imposed
on, incurred by, or asserted against any Indemnified  Person in any way relating
to or arising out of this Agreement or any of the  transactions  contemplated by
this Agreement; provided, however, that the Borrowers shall not be liable to any
Indemnified  Person  if there is a  judicial  determination  that  such  losses,
liabilities,  obligations, damages, penalties, actions, judgments, suits, costs,
expenses  or  disbursements  resulted  from  the  gross  negligence  or  willful
misconduct of such Indemnified Person.

     11.4.  Notices.  Except as otherwise  expressly provided in this Agreement,
all notices,  demands and  requests  required or permitted to be given under the
provisions  of this  Agreement  shall be in writing  and shall be deemed to have
been duly  delivered and received (a) on the date of personal  delivery,  (b) on
the date of receipt (as shown on the return  receipt) if mailed by registered or
certified mail,  postage prepaid and return receipt  requested,  (c) on the next
business day after delivery to a courier service that guarantees delivery on the
next  business day if the  conditions  to the  courier's  guarantee are complied
with,  or (d) on the date of  receipt by  telecopy,  in each case  addressed  as
follows:

         TO THE ADMINISTRATIVE AGENT AND ISSUING LENDER:

         KeyBank National Association
         Large Corporate Group
         700 Fifth Avenue
         Seattle, Washington 98104
         Attn: Mary K. Young
         Facsimile: 206-684-6035

         Copy to:

         Mark A. Finkelstein
         Graham & Dunn P.C.
         1420 Fifth Avenue, 33rd Floor
         Seattle, Washington 98101
         Facsimile: 206-340-9599

          TO THE LENDERS, AT THE ADDRESSES LISTED ON THE SIGNATURE PAGES OF THIS
          AGREEMENT  OR IN  THE  ASSIGNMENT  INSTRUMENT  DELIVERED  PURSUANT  TO
          SECTION 11.7(b)

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         TO THE BORROWERS:

         Trendwest Resorts, Inc.
         9805 Willows Road
         Redmond, Washington 98052
         Attn: Tim O'Neil, CFO
         Facsimile: 425-498-3062

         and

         Trendwest South Pacific Pty. Ltd.
         The Trendwest Building
         Level 2, 120 Bundall Road
         Bundall, Queensland 4217
         Australia
         Attn: George Dutton
         Phone: 011 61 7 5574-0001
         Facsimile: 011 61 7 5574-0100

         with a copy to:

         John C. Hitt, Jr.
         Chapman and Cutler
         111 West Monroe Street
         Chicago, Illinois 60603
         Facsimile: 312-701-2361

or to such other  address  or  addresses  as the party to which  such  notice is
directed may have designated in writing to the other parties to this Agreement.

     11.5. Waiver and Release by the Borrowers.  Each of the Borrowers  releases
the Administrative Agent and each Lender from, and hereby waives, all claims for
loss or damage  caused by any act or omission on the part of the  Administrative
Agent  or any  Lender  or  their  respective  officers,  attorneys,  agents  and
employees, except gross negligence and willful misconduct.

     11.6.  Right of Set-Off.  Upon the occurrence and during the continuance of
any Event of Default, each Lender is hereby authorized at any time and from time
to time,  to the fullest  extent  permitted by law, to set-off and apply any and
all deposits (general or special,  time or demand,  provisional or final) at any
time held and other  indebtedness at any time owing by such Lender to or for the
credit or the account of the Borrowers  against any and all of the  Obligations,
irrespective of whether or not such Lender shall have made any demand under this
Agreement and although  such  Obligations  may be unmatured.  Such Lender agrees
promptly to notify the Borrowers after any such set-off and application  made by
such Lender;  provided,  however, that the failure to give such notice shall not
affect the validity of such set-off and  application.  The rights of the Lenders
under this Section are in addition to other rights and remedies (including other
rights of set-off)  that the Lenders may have under law, at equity,  by contract
or otherwise. The Borrowers and the Australian Lender acknowledge and agree that
the  Obligations  are mutual  debts  within the meaning of Section  86(1) of the
Bankruptcy Act 1966 of the  Commonwealth  of Australia (as  incorporated  in the
Corporations Law), and that upon the liquidation or bankruptcy of the Borrowers,
the  provisions  of Section 86 of such  Bankruptcy  Act shall  apply so that any
Obligations due from the Borrowers to the Australian Lender under this Agreement
shall be set off against any sum due from the Australian Lender to the Borrowers
under this Agreement.

                                       58
<PAGE>

     11.7. Successors and Assigns; Assignments and Participations.

          (a)  Whenever  any of the parties to this  Agreement is referred to in
this  Agreement,  such  reference  shall be deemed to include the successors and
assigns of such party;  provided,  however,  that neither of the  Borrowers  may
assign or transfer  any of its rights or  obligations  under this  Agreement  or
under the  Revolving  Notes  without  the prior  written  consent  of all of the
Lenders and the Administrative Agent.

          (b) From time to time  following  the  Closing  Date,  each Lender may
assign to one or more Eligible  Assignees  all or any portion of its  Commitment
and/or Revolving Loans; provided, however, that (i) such assignment, if not to a
Lender  or an  Affiliate  of the  assigning  Lender,  shall be  consented  to by
Trendwest at all times other than during the  existence of a Default or Event of
Default and by the  Administrative  Agent,  Issuing  Lender,  and the Australian
Lender  (which  approval  of  Trendwest  shall not be  unreasonably  withheld or
delayed),  (ii) a copy of a duly signed and completed  Assignment and Acceptance
shall be delivered to the  Administrative  Agent, (iii) except in the case of an
assignment  (A) to an Affiliate of the assigning  Lender or to another Lender or
(B) of the entire remaining  Commitment of the assigning Lender,  the portion of
the  Commitment  assigned  shall  not be less  than  $5,000,000,  and  (iv)  the
effective  date of any such  assignment  shall be as specified in the Assignment
and  Acceptance,  but not earlier  than the date that is five Banking Days after
the date on which the  Administrative  Agent has  received  the  Assignment  and
Acceptance.  Upon  obtaining  any  consent  required  as set  forth in the prior
sentence,  any forms  required by Section 11.8 and payment of the  requisite fee
described  below, the assignee named in the Assignment and Acceptance shall be a
Lender for all purposes of this Agreement to the extent of the Assigned Interest
(as defined in such Assignment and  Acceptance),  and the assigning Lender shall
be released from any further  obligations  under this Agreement to the extent of
such Assigned  Interest.  Upon request,  the Borrowers shall execute and deliver
new or  replacement  Revolving  Notes to the  assigning  Lender and the assignee
Lender to evidence  Revolving  Loans made by them.  The  Administrative  Agent's
consent to any assignment  shall not be deemed to constitute any  representation
or warranty by any  Indemnified  Person as to any matter.  For  purposes of this
Agreement,  each mutual fund that is an Affiliate of a Lender shall be deemed to
be a single Eligible  Assignee,  whether or not such fund is managed by the same
fund manager as other mutual funds that are Affiliates of the same Lender.

          (c) After  receipt  of a  completed  Assignment  and  Acceptance,  and
receipt of an assignment fee of $3,500 from such Eligible  Assignee  and/or such
assigning  Lender  (including  in the  case  of  assignments  to  Affiliates  of
assigning  Lenders),  the  Administrative  Agent shall,  promptly  following the
effective date thereof,  provide to the Borrowers and Lenders a revised Schedule
I giving effect thereto.

          (d) Each  Lender  may from time to time,  without  the  consent of any
other  Person,  grant  participations  to one or more  other  Person  (including
another  Lender) in all or any  portion of its  Ratable  Share of the  Revolving
Loans and/or Aggregate  Commitment;  provided,  however,  that (i) such Lender's
obligations under this Agreement shall remain unchanged,  (ii) such Lender shall
remain  solely  responsible  to the  other  parties  to this  Agreement  for the
performance  of  such  obligations,  (iii)  the  participating  banks  or  other
financial  institutions  shall  not be a Lender  under  this  Agreement  for any
purpose except, if the participation  agreement so provides, for the purposes of
Sections 2.3 through 2.10 (but only to the extent that the cost of such benefits
to the Borrowers does not exceed the cost that the Borrowers would have incurred
in respect of such  Lender  absent the  participation)  and  subject to Sections
10.11 and  11.6,  (iv) the  Borrowers,  the  Administrative  Agent and the other
Lenders  shall  continue  to deal  solely  and  directly  with  such  Lender  in
connection with such Lender's rights and obligations  under this Agreement,  (v)
the  participation  agreement  shall not  restrict an increase in the  Aggregate
Commitment or in the granting  Lender's  Commitment or Ratable Share, so long as
the amount of the participation interest is not increased,  and (vi) the consent
of  the  holder  of  such  participation  interest  shall  not be  required  for
amendments or waivers of provisions of this Agreement;  provided,  however, that
the  assigning  Lender  may,  in any  agreement  with a  participant,  give such
participant  the right to consent to any matter that (A)  extends the  Revolving
Credit  Termination Date as to such participant or any other date upon which any
payment of money is due to such  participant,  (B)  reduces the rate of interest

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<PAGE>

owing to such  participant,  any fee or any other monetary  amount owing to such
participant,  or (C) reduces the amount of any installment of principal owing to
such participant.  Any Lender that sells a participation to any Person that is a
"foreign corporation, partnership or trust" within the meaning of the Code shall
include in its  participation  agreement  with such  Person a  covenant  by such
Person that such Person will comply with the  provisions  of Section  11.8 as if
such  Person  were a Lender and provide  that the  Administrative  Agent and the
Borrowers shall be third party beneficiaries of such covenant.

          (e) KeyBank  National  Association  shall not enter into any agreement
with any other Lender  pursuant to which the former agrees not to consent to any
amendment, modification or waiver of any provision of this Agreement without the
consent of such other Lender.

          (f) (i)  Notwithstanding  anything to the  contrary  contained in this
Agreement,  any Lender (a "Designating Lender") may grant to one or more special
purpose funding  vehicles  (each, an "SPV"),  identified as such in writing from
time  to  time  by the  Designating  Lender  to  the  Administrative  Agent  and
Trendwest,  the  option  to  provide  to the  Borrowers  all or any  part of any
Revolving Loan that such Designating Lender would otherwise be obligated to make
to the Borrowers pursuant to this Agreement; provided, however, that (A) nothing
in this Agreement shall constitute a commitment by any SPV to make any Revolving
Loan,  (B) if an SPV elects not to exercise  such option or  otherwise  fails to
provide all or any part of such Revolving Loan, the Designating  Lender shall be
obligated to make such Revolving  Loan pursuant to the terms of this  Agreement,
and (C) the  Designating  Lender shall remain  liable for any indemnity or other
payment  obligation  with respect to its  Commitment.  The making of a Revolving
Loan by an SPV shall  utilize the  Commitment of the  Designating  Lender to the
same  extent,  and as if,  such  Revolving  Loan were  made by such  Designating
Lender.

               (ii) As to any  Revolving  Loans or portion  thereof  made by it,
each SPV shall have all the rights that a Lender making such Revolving  Loans or
portion thereof would have had under this  Agreement;  provided,  however,  that
each SPV shall have granted to its  Designating  Lender an irrevocable  power of
attorney,  to deliver  and  receive all  communications  and notices  under this
Agreement (and any related  documents) and to exercise on such SPV's behalf, all
of such SPV's voting rights under this Agreement.  No additional  Revolving Note
shall be required to evidence the Revolving  Loans or portion thereof made by an
SPV; and the related  Designating  Lender shall be deemed to hold its  Revolving
Note as agent  for such SPV to the  extent  of the  Revolving  Loans or  portion
thereof funded by such SPV. In addition, any payments for the account of any SPV
shall be paid to its Designating Lender as agent for such SPV.

               (iii)  Each party to this  Agreement  hereby  agrees  that no SPV
shall be liable for any  indemnity or payment  under this  Agreement for which a
Lender would  otherwise be liable.  In furtherance  of the foregoing,  each such
party hereby agrees (which  agreements  shall  survive the  termination  of this
Agreement)  that,  prior to the date  that is one  year  and one day  after  the
payment in full of all outstanding commercial paper or other senior indebtedness
of any  SPV,  it will  not  institute  against,  or join  any  other  person  in
instituting  against,  such  SPV any  bankruptcy,  reorganization,  arrangement,
insolvency or liquidation proceedings under the laws of the United States or any
State thereof.

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<PAGE>

               (iv)  In  addition,  notwithstanding  anything  to  the  contrary
contained in this Section  11.7(f) or otherwise in this  Agreement,  any SPV may
(A) at any time and  without  paying  any  processing  fee  therefor,  assign or
participate  all or a portion  of its  interest  in any  Revolving  Loans to the
Designating Lender or to any financial  institutions  providing liquidity and/or
credit  support  to or for the  account of such SPV to  support  the  funding or
maintenance  of  Revolving  Loans and (B) disclose on a  confidential  basis any
non-public  information  relating to its Revolving  Loans to any rating  agency,
commercial  paper  dealer or  provider  of any  surety,  guarantee  or credit or
liquidity  enhancements  to such SPV.  This  Section  11.7(f) may not be amended
without the written consent of any Designating Lender affected thereby.

     11.8.  Foreign  Lenders.  Each  Lender  that  is  a  "foreign  corporation,
partnership  or trust"  within  the  meaning  of the Code  shall  deliver to the
Administrative  Agent,  prior to receipt of any payment  subject to  withholding
under the Code (or after  accepting an  assignment of an interest  herein),  two
duly signed completed copies of either IRS Form W-8BEN or any successor  thereto
(relating to such Person and entitling it to an exemption from, or reduction of,
withholding  tax on all  payments  to be made to such  Person  by the  Borrowers
pursuant  to  this  Agreement)  or IRS  Form  W-8ECI  or any  successor  thereto
(relating to all payments to be made to such Person by Borrower pursuant to this
Agreement)  or  such  other  evidence  satisfactory  to the  Borrowers  and  the
Administrative  Agent that such  Person is  entitled to an  exemption  from,  or
reduction of, U.S.  withholding tax. Thereafter and from time to time, each such
Person shall (a) promptly  submit to the  Administrative  Agent such  additional
duly completed and signed copies of one of such forms (or such  successor  forms
as shall be  adopted  from time to time by the  relevant  United  States  taxing
authorities)  as may then be available under then current United States laws and
regulations to avoid,  or such evidence as is  satisfactory to the Borrowers and
the Administrative Agent of any available exemption from or reduction of, United
States withholding taxes in respect of all payments to be made to such Person by
the Borrowers pursuant to this Agreement, (b) promptly notify the Administrative
Agent of any change in  circumstances  that would  modify or render  invalid any
claimed  exemption  or  reduction,  and (c) take  such  steps  as  shall  not be
materially disadvantageous to it, in the reasonable judgment of such Lender, and
as may be reasonably  necessary to avoid any  requirement of applicable law that
the Borrowers make any deduction or withholding  for taxes from amounts  payable
to such  Person.  If such  Person  fails to  deliver  the  above  forms or other
documentation,  then the  Administrative  Agent may  withhold  from any interest
payment to such Person an amount  equivalent to the applicable  withholding  tax
imposed  by  Sections  1441  and 1442 of the  Code,  without  reduction.  If any
governmental  authority asserts that the  Administrative  Agent did not properly
withhold any tax or other amount from  payments  made in respect of such Person,
such Person shall indemnify the  Administrative  Agent  therefor,  including all
penalties and interest,  any taxes  imposed by any  jurisdiction  on the amounts
payable to the Administrative  Agent under this Section,  and costs and expenses
(including  attorney  fees  and  expenses)  of  the  Administrative  Agent.  The
obligation  of Lenders  under this  Section  shall  survive  the  payment of all
Obligations and the resignation or replacement of the Administrative Agent.

     11.9.  Applicable Law. This Agreement,  and the duties,  rights, powers and
remedies of the parties to this  Agreement,  shall be  construed  in  accordance
with,  and governed by, the laws of the State of  Washington,  without regard to
the conflicts of laws provisions of Washington.

     11.10.  Binding Effect and Entire Agreement.  This Agreement shall inure to
the  benefit  of, and shall be  binding  upon,  the  respective  successors  and
permitted  assigns of the  parties to this  Agreement.  This  Agreement  and the
Exhibits (which are hereby incorporated in this Agreement) constitute the entire
agreement  among the parties on the  subject  matter of this  Agreement  and the
Exhibits. BORROWER ACKNOWLEDGES THAT ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN
MONEY,  EXTEND CREDIT, OR TO FORBEAR FROM ENFORCING  REPAYMENT OF A DEBT ARE NOT
ENFORCEABLE UNDER WASHINGTON LAW.

                                       61
<PAGE>

     11.11.  Counterparts.  This  Agreement may be executed and delivered in any
number of counterparts or duplicate originals,  each of which shall be deemed to
be an original,  but all of which  together  shall  constitute  one and the same
instrument.

     11.12. Survival of Agreements. All covenants,  agreements,  representations
and warranties  made in this Agreement shall survive any  investigation  and the
Closing  and  shall  continue  in full  force  and  effect so long as any of the
Obligations remain to be performed or paid or the Lenders have any obligation to
advance sums under this Agreement.

     11.13.  Modification.  Any term of this Agreement or of the Revolving Notes
may be  amended  and the  observance  of any  term of this  Agreement  or of the
Revolving Notes may be waived (either generally or in a particular  instance and
either  retroactively  or  prospectively)  only with the written  consent of the
Borrowers and the Majority Lenders; provided, however, that no such amendment or
waiver or other action shall,  without the prior  written  consent of all of the
Lenders or the holders of all of the  Revolving  Notes at the time  outstanding,
(a) extend the maturity or reduce the principal amount of, or reduce the rate or
extend the time of payment  of  interest  on, or reduce the amount or extend the
time of payment of any principal of, any Revolving  Note,  (b) reduce the amount
or extend the time of payment of the Fees,  (c) change the Aggregate  Commitment
or the  Ratable  Share of any Lender  (other  than any  change in the  Aggregate
Commitment or Ratable Share  resulting  from the sale of a  participation  in or
assignment of any Lender's  interest in the Aggregate  Commitment  and Revolving
Loans in accordance with Section 11.7), (d) change the percentage referred to in
the definition of "Majority Lenders" contained in Section 1.1, or (e) amend this
Section 11.13; and provided  further,  that (a) no amendment,  waiver or consent
shall,  unless in writing  and signed by the  Issuing  Lender in addition to the
Majority Lenders or all Lenders, as the case may be, affect the rights or duties
of the Issuing  Lender,  (b) no amendment,  waiver or consent  shall,  unless in
writing  and signed by the  Administrative  Agent in  addition  to the  Majority
Lenders or all Lenders,  as the case may be,  affect the rights or duties of the
Administrative  Agent, and (c) no amendment,  waiver or consent shall, unless in
writing and signed by Australian  Lender in addition to the Majority  Lenders or
all  Lenders,  as the case may be,  affect  the  rights or duties of  Australian
Lender.  Notwithstanding  the foregoing  provisions of this Section 11.13,  this
Agreement  and the  Revolving  Notes may be  amended or  modified  in the manner
contemplated  by Section 11.7 for the purpose of permitting any Lender to assign
its interest,  rights and  obligations  under this  Agreement to another bank or
financial institution.  Any amendment or waiver effected in accordance with this
Section  11.13 shall be binding  upon each holder of any  Revolving  Note at the
time outstanding, each future holder of any Revolving Note and the Borrowers.

     11.14. Separability. If any one or more of the provisions contained in this
Agreement  should be  invalid,  illegal or  unenforceable  in any  respect,  the
validity,  legality and enforceability of all remaining  provisions shall not in
any way be  affected  or  impaired.  Any  provision  of this  Agreement  that is
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  of this  Agreement  or  affecting  the
validity or enforceability of such provision in any other jurisdiction.

     11.15.  Section Headings.  The section headings contained in this Agreement
are for  reference  purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.

     11.16. Enforcement. Each of the Borrowers (a) hereby irrevocably submits to
the  jurisdiction  of the state  courts of the  State of  Washington  and to the
jurisdiction  of the United States  District  Court for the Western  District of
Washington,  for the purpose of any suit, action or other proceeding arising out
of or based  upon this  Agreement  (or the  subject  matter  of this  Agreement)
brought by the Lenders or their  successors or assigns,  and (b) hereby  waives,

                                       62

<PAGE>

and agrees not to assert, by way of motion, as a defense,  or otherwise,  in any
such suit, action or proceeding,  any claim that it is not subject personally to
the  jurisdiction  of the  above-named  courts,  that its  property is exempt or
immune from  attachment  or  execution,  that the suit,  action or proceeding is
brought  in an  inconvenient  forum,  that the  venue  of the  suit,  action  or
proceeding  is improper or that this  Agreement  (or the subject  matter of this
Agreement)  may not be enforced in or by such court,  and (c) hereby  waives and
agrees not to seek any review by any court of any other jurisdiction that may be
called upon to grant an enforcement of the judgment of any such Washington state
or federal court. Each of the Borrowers hereby consents to service of process by
registered  mail at the  address to which  notices  are to be given  pursuant to
Section 11.4.  Each of the Borrowers  agrees that its submission to jurisdiction
and its consent to service of process by mail is made for the express benefit of
the Lenders.  Final judgment against either of the Borrowers in any such action,
suit or proceeding  may be enforced in other  jurisdictions  by suit,  action or
proceeding  on the judgment,  or in any other manner  provided by or pursuant to
the laws of such other jurisdiction;  provided, however, that the Lenders may at
their option bring suit, or institute other judicial proceedings, against either
of the  Borrowers  or any of their  assets in any state or federal  court of the
United  States or of any country or place where such  Borrower,  or such assets,
may be found.

     11.17.  Termination.   Except  as  otherwise  expressly  provided  in  this
Agreement,  the  provisions of Agreement  shall  terminate  when all amounts due
under this Agreement and the Revolving Notes shall have been  indefeasibly  paid
in full in cash and all other  Obligations  shall have been fully  performed  so
long as the  Lenders  have no  further  obligation  to make  Revolving  Loans or
otherwise  advance  sums  under this  Agreement  and the  Issuing  Lender has no
further obligation to issue Letters of Credit.

     11.18. Jury Trial Waiver.  EACH OF THE BORROWERS AND THE LENDERS WAIVES ANY
RIGHT TO HAVE A JURY  PARTICIPATE IN RESOLVING ANY DISPUTE,  WHETHER SOUNDING IN
CONTRACT,  TORT OR OTHERWISE,  BETWEEN THE LENDERS AND THE BORROWERS ARISING OUT
OF,  IN  CONNECTION  WITH,   RELATED  TO,  OR  INCIDENTAL  TO  THE  RELATIONSHIP
ESTABLISHED  BETWEEN THEM IN  CONNECTION  WITH THIS  AGREEMENT OR THE  REVOLVING
NOTES, LETTERS OF CREDIT, OR OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR
DELIVERED IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS  RELATED TO THIS
AGREEMENT.

     11.19.  Confidentiality.  Each  Lender  agrees  to  hold  any  confidential
information that it may receive from the Borrowers pursuant to this Agreement in
confidence,  except for disclosure (a) to legal counsel,  accountants  and other
professional and business  advisors and Affiliates to such Lender (provided such
Persons also agree to hold such  information  confidential),  (b) to  regulatory
officials,  (c)  as  required  by  law,  regulation  or  legal  process,  (d) in
connection with any legal proceeding to which such Lender is a party, and (e) as
permitted by Section 11.7; provided,  however,  that, to the extent practicable,
prior to  making  any  disclosure  pursuant  to  clause  (c) or (d)  above,  the
disclosing Lender shall notify Trendwest of its intent to make such disclosure.

     11.20. Joint and Several Liability.  Notwithstanding  any provision of this
Agreement,  all  obligations  of the  Borrowers  under  this  Agreement  and the
Revolving Notes shall be joint and several.

     11.21.  Equal  Opportunity  to Draft.  The Lenders and the  Borrowers  have
participated  in and had an equal  opportunity to participate in the drafting of
this  Agreement.  No ambiguity  with respect to any provision of this  Agreement
shall be  construed  against any Lender or Borrower on the basis of a claim that
such Lender or Borrower drafted the ambiguous provision.

                                       63
<PAGE>

     IN  WITNESS  OF  THE  FOREGOING,   the  Borrowers,   the  Lenders  and  the
Administrative  Agent  have  caused  this  Agreement  to be  executed  by  their
respective duly authorized representatives as of the date first above written.

BORROWERS:                                LENDERS:

TRENDWEST RESORTS, INC.                   KEYBANK NATIONAL ASSOCIATION,
                                          In its individual capacity as a Lender
                                          and Issuing Lender

By_____________________________            By __________________________________
  President                                Its__________________________________

TRENDWEST
SOUTH PACIFIC PTY. LTD.                     Address:
                                              KeyBank National Association
                                              Large Corporate Group
                                              700 Fifth Avenue, 46th Floor
By_______________________________             Seattle, Washington 98104
  President                                   Attn: Mary K. Young
                                              Facsimile: 206-684-6035

                                       64

<PAGE>

                                  BANK ONE NA,
                                  In its individual capacity as a Lender and
                                  Australian Lender

                                  By_______________________________________
                                  Its______________________________________

                                  Addresses:

                                       Bank One NA
                                       (Chicago Office - Operational Matters)
                                       1 Bank One Plaza, 10th Floor
                                       Chicago, Illinois  60670
                                       Attn:  Torin Johnson
                                       Facsimile:  312-732-4840

                                       Bank One NA
                                       (LA Office - Matters Re Credit Agreement)
                                       777 Figueroa Street, 4th Floor
                                       Los Angeles, California  90017
                                       Attn:  William H. Powell

                                       Bank One NA
                                       (Australia Office - Australian Advances)
                                       Level 4
                                       70 Hindmarsh Square
                                       Adelaide, South Australia 5000
                                       AUSTRALIA
                                       Attn: Josh Whiting or Joseph Byrt
                                       Facsimile:  61 8 8223 2948

                                  ADMINISTRATIVE AGENT:

                                  KEYBANK NATIONAL ASSOCIATION,
                                  as Administrative Agent

                                  By_____________________________________
                                  Its____________________________________

                                       65
<PAGE>

                                  SYNDICATION AGENT:

                                  BANK ONE NA,
                                  as Syndication Agent

                                  By______________________________________
                                  Its_____________________________________

                                   Address:

                                     Bank One NA (Chicago Office)
                                     1 Bank One Plaza, 10th Floor
                                     Chicago, Illinois  60670
                                     Attn:  Torin Johnson
                                     Facsimile:  312-732-4840

                                       66

<PAGE>

                                   SCHEDULE 1
                                   ----------

LENDER                                               COMMITMENT (Dollars)
------                                               ----------

KeyBank National Association                         $30,000,000

Bank One NA                                          $30,000,000

                                      S-1

<PAGE>

                                    EXHIBIT A
                                   ---------

                          REQUEST FOR DOMESTIC ADVANCE

                                     [Date]

To each Lender party to
the referenced Credit Agreement
c/o KeyBank National Association,
as Administrative Agent for the Lenders
700 Fifth Avenue, 46th Floor
Seattle, Washington  98104
Attn:  Mary Young

         Re:     Credit Agreement dated as of August 14, 2000, between Trendwest
                 Resorts, Inc.  (the "Borrower"),  Trendwest  South Pacific Pty.
                 Ltd.,  the  lenders  from  time to  time   party  thereto  (the
                 "Lenders"), and KeyBank National Association, as Administrative
                 Agent  for itself  and  the  other  such  lenders  (the "Credit
                 Agreement")

Ladies and Gentlemen:

     The Borrower hereby requests that a [(Base Rate Loan)(LIBOR  Loan)] be made
to it in  the  amount  of  ________________  [specify  amount  of  Dollars],  on
_______________,  ____,  for the account of the  Borrower  and  evidenced by the
Borrower's  Revolving Notes [if such requested Domestic Advance is a LIBOR Loan,
insert "and the initial  Interest  Period  shall be (insert  permitted  Interest
Period)"]. Please [deposit the proceeds of the (Base Rate Loan)(LIBOR Loan) into
KeyBank Account No. __________] [wire the proceeds of the (Base Rate Loan)(LIBOR
Loan) as follows:____________________________].

     In support of this request,  the Borrower hereby represents and warrants to
the Administrative Agent and the Lenders that:

     1. The representations and warranties  contained in Section 4 of the Credit
Agreement are true and correct in all material respects on and as of the date of
this letter,  and will be true and correct in all material  respects on the date
on which the  above-referenced  Domestic  Advance is made (both before and after
such Domestic Advance is made), as if such  representations  and warranties were
made on and as of such date  (except for  representations  and  warranties  that
specifically  relate to an earlier  date,  which shall be true and correct as of
such earlier date).

     2. No Event of Default or Possible  Default has occurred and is  continuing
or will  exist on the date on which  such  Domestic  Advance  is made,  and such
Domestic Advance shall not cause an Event of Default or Possible Default.

     Acceptance of the proceeds of such Domestic  Advance by the Borrower  shall
be deemed to be a further  representation and warranty that the  representations
and warranties made in this letter are true and correct in all material respects
at the time such proceeds are disbursed.

                                      A-1

<PAGE>

     Capitalized  terms used but not defined in this letter have the  respective
meanings assigned to them in the Credit Agreement.

                                   TRENDWEST RESORTS, INC.

                                   By:___________________________________
                                   Its:__________________________________

                                      A-2

<PAGE>

                                    EXHIBIT B
                                    ---------

                         REQUEST FOR AUSTRALIAN ADVANCE

                                     [Date]

Bank One NA
as Australian Lender under the
referenced Credit Agreement
Money Market Desk
Bank One NA (A.R.B.N. 065 752 918)
Level 4
70 Hindmarsh Square
ADELAIDE  SA  5000

         Re:     Credit Agreement dated as of August 14, 2000, between Trendwest
                 Resorts, Inc.  (the "Borrower"),  Trendwest  South Pacific Pty.
                 Ltd. ("South  Pacific"),  the lenders from  time  to time party
                 thereto (the "Lenders"), and KeyBank National  Association,  as
                 Administrative Agent for itself and the other such lenders (the
                 "Credit Agreement")

Ladies and Gentlemen:

     The Borrower  hereby  requests that an Australian  Advance be made to South
Pacific  in  the  amount  of  ________________  [specify  amount  of  Australian
Currency],  on  _______________,  ____,  for the  account of South  Pacific  and
evidenced  by the  Revolving  Notes,  and the initial  Interest  Period shall be
[insert  permitted  Interest  Period].  Please  [deposit  the  proceeds  of  the
Australian Advance into Account No. _____________ at ____________________] [wire
the     proceeds     of     the      Australian      Advance     as     follows:
______________________________________].

     In support of this request,  the Borrower hereby represents and warrants to
the Administrative Agent and the Lenders that:

     1. The representations and warranties  contained in Section 4 of the Credit
Agreement are true and correct in all material respects on and as of the date of
this letter,  and will be true and correct in all material  respects on the date
on which the above-referenced  Australian Advance is made (both before and after
such Australian Advance is made), as if such representations and warranties were
made on and as of such date  (except for  representations  and  warranties  that
specifically  relate to an earlier  date,  which shall be true and correct as of
such earlier date).

     2. No Event of Default or Possible  Default has occurred and is  continuing
or will exist on the date on which  such  Australian  Advance is made,  and such
Australian Advance shall not cause an Event of Default or Possible Default.

     Acceptance of the proceeds of such Australian Advance by the Borrower shall
be deemed to be a further  representation and warranty that the  representations
and warranties made in this letter are true and correct in all material respects
at the time such proceeds are disbursed.

                                      B-1

<PAGE>

     Capitalized  terms used but not defined in this letter have the  respective
meanings assigned to them in the Credit Agreement.

                                   TRENDWEST RESORTS, INC.

                                   By:___________________________________
                                   Its:__________________________________

                                       B-2

<PAGE>

                                    EXHIBIT C
                                    ---------

                           BORROWING BASE CERTIFICATE

     The  undersigned  warrants  and  certifies  to the  Lenders  that:  (i) all
information  contained in this  Certificate  is true and accurate to the best of
Trendwest's  knowledge;  (ii)  the  information  provided  in  this  Certificate
complies with the Agreement;  (iii)  Trendwest has exercised its best efforts to
ascertain the  truthfulness  and accuracy of the  information  contained in this
Certificate;  (iv) no Possible Default or Event of Default has occurred, and (v)
Trendwest is aware that the Lenders are relying on the information  contained in
this  Certificate as the basis for  determining the eligibility of the Borrowers
for  additional  Revolving  Loans  and/or  Letters of Credit.  Unless  otherwise
defined,  all  capitalized  terms  used in this  Certificate  have the  meanings
assigned  to such terms in the  Credit  Agreement  dated as of August 14,  2000,
between Trendwest Resorts,  Inc., Trendwest South Pacific Pty. Ltd., the lenders
from  time  to  time  party  thereto,  and  KeyBank  National  Association,   as
Administrative Agent for itself and the other such lenders.

<TABLE>
<CAPTION>
<S>                                                               <C>             <C>        <C>
                                                                                  Month Ended: _______________________

I.   CALCULATION OF REVOLVING COMMITMENT                                                             Balances
                                                                                                   Outstanding
                                                                                                   -----------
A.   Aggregate commitment

B.   Outstanding domestic principal balance

     Outstanding Australian principal balance (AUD$)                  $           ---
C.   Conversion Rate
                                                                  -------------------------- -------------------------
                                                                                                 $           ---

D.   Total outstanding principal balance                                                         $           ---

E.   Letter of Credit Usage

                                                                                             -------------------------
F.   Remaining Commitment Available (A-D-E)                                                      $           ---
                                                                                             =========================

II.  CALCULATION OF ELIGIBLE INVENTORY AMOUNT

A.   Total Inventory (lower of cost or net realizable value)          $           ---

B.   Less:  MountainStar Construction In Progress
                                                                  -------------------------- -------------------------
C.   Eligible Inventory (A -B)                                                                   $           ---

D.   50% of Eligible Inventory                                                                   $           ---

                                                                                             -------------------------
E.   Eligible Inventory Amount (lesser of D or $30 million)                                      $           ---
                                                                                             =========================

III. CALCULATION OF ELIGIBLE RECEIVABLES

A.   Total Notes Receivable                                                                      $           ---

B.   Less:  Allowance for doubtful accounts                           $           ---
     Less:  Recourse liability                                        $           ---
     Less:  Notes Receivable in default                               $           ---
     Less:  Other excluded Notes Receivable                           $           ---
                                                                  -------------------------- -------------------------
     Total excluded Notes Receivable                                                             $           ---

C.   Eligible Notes Receivable (A-B)                                                             $           ---
                                                                                             -------------------------

D.   75% of Eligible Notes Receivable                                                            $           ---
                                                                                             =========================

                                      C-1

<PAGE>

IV.  CALCULATION OF REVOLVING LOAN LIMIT

     Borrowing Base:
A.   Eligible Inventory Amount (Line IIE)                             $           ---

B.   75% of Eligible Receivables (Line IIID)                          $           ---
                                                                                             -------------------------
C.   Total Borrowing Base (A+B)                                                                  $           ---

D.   Less:  JELD-WEN Note                                                                        $           ---

E.   Borrowing Base (C-D)

F.   Revolving Loan Limit (Lesser or IF or IVE)                                                  $           ---

                                                                                             =========================
</TABLE>

Dated as of this _____ day of ______________, _______.

                                           TRENDWEST RESORTS, INC.

                                           By:_______________________________
                                           Its:______________________________

                                      C-2

<PAGE>

                                    EXHIBIT D
                                    ---------

                     DOMESTIC CONVERSION/CONTINUATION NOTICE

                                     [Date]

To each Lender party to
the referenced Credit Agreement
c/o KeyBank National Association,
as Administrative Agent for the Lenders
700 Fifth Avenue, 46th Floor
Seattle, Washington  98104
Attn:  Mary Young

         Re:     Credit Agreement dated as of August 14, 2000, between Trendwest
                 Resorts, Inc.  (the "Borrower"),  Trendwest  South Pacific Pty.
                 Ltd.,  the  lenders  from  time to  time  party   thereto  (the
                 "Lenders"), and KeyBank National Association, as Administrative
                 Agent for  itself  and  the  other  such  lenders  (the "Credit
                 Agreement")

Ladies and Gentlemen:

     The Borrower  hereby  requests that _______  (specify amount of Dollars) of
the principal  amount of the Revolving Loan originally  made on  ______________,
____,  which Revolving Loan is currently a [insert LIBOR Loan or Base Rate Loan,
as the case may be], be continued as or  converted  into,  as the case may be, a
LIBOR Loan on ____________,  ____. The Borrower hereby elects an Interest Period
for such LIBOR Loan of [insert permitted Interest Period].

     In support of this request,  the Borrower hereby represents and warrants to
the Administrative Agent and the Lenders that:

     1. The representations and warranties  contained in Section 4 of the Credit
Agreement are true and correct in all material respects on and as of the date of
this letter,  and will be true and correct in all material  respects on the date
on which the  above-referenced  Revolving Loan is  [continued][converted]  (both
before and after such  Revolving Loan is  [continued]  [converted]),  as if such
representations  and  warranties  were made on and as of such date  (except  for
representations  and  warranties  that  specifically  relate to an earlier date,
which shall be true and correct as of such earlier date).

     2. No Event of Default or Possible  Default has occurred and is  continuing
or will exist on the date on which such Revolving Loan is [continued][converted]
(whether before or after such Revolving Loan is [continued][converted]).

                                      D-1
<PAGE>

     Acceptance of the proceeds of such [continued][converted] Revolving Loan by
the Borrower  shall be deemed to be a further  representation  and warranty that
the  representations  and warranties made in this letter are true and correct in
all material respects at the time of such [continuation][conversion].

     Capitalized  terms used but not defined in this letter have the  respective
meanings assigned to them in the Credit Agreement.

                                    TRENDWEST RESORTS, INC.

                                    By:_______________________________
                                    Its:______________________________

                                      D-2

<PAGE>

                                    EXHIBIT E
                                    ---------

                         AUSTRALIAN CONTINUATION NOTICE

                                     [Date]

To each Lender party to
the referenced Credit Agreement
c/o KeyBank National Association,
as Administrative Agent for the Lenders
700 Fifth Avenue, 46th Floor
Seattle, Washington  98104
Attn:  Mary Young

         Re:     Credit Agreement dated as of August 14, 2000, between Trendwest
                 Resorts, Inc.  (the "Borrower"),  Trendwest  South Pacific Pty.
                 Ltd.,  the  lenders  from  time to  time  party   thereto  (the
                 "Lenders"), and KeyBank National Association, as Administrative
                 Agent for  itself  and  the  other  such  lenders  (the "Credit
                 Agreement")

Ladies and Gentlemen:

     The Borrower  hereby  requests that _______  (specify  amount of Australian
Currency) of the  principal  amount of the  Revolving  Loan  originally  made on
______________,  ____, which Revolving Loan is currently an Australian  Advance,
be continued as an Australian Advance on ____________, ____. The Borrower hereby
elects an  Interest  Period for such  Australian  Advance  of [insert  permitted
Interest Period].

     In support of this request,  the Borrower hereby represents and warrants to
the Administrative Agent and the Lenders that:

     1. The representations and warranties  contained in Section 4 of the Credit
Agreement are true and correct in all material respects on and as of the date of
this letter,  and will be true and correct in all material  respects on the date
on which the  above-referenced  Revolving Loan is  [continued][converted]  (both
before and after such  Revolving Loan is  [continued]  [converted]),  as if such
representations  and  warranties  were made on and as of such date  (except  for
representations  and  warranties  that  specifically  relate to an earlier date,
which shall be true and correct as of such earlier date).

     2. No Event of Default or Possible  Default has occurred and is  continuing
or will exist on the date on which such Revolving Loan is [continued][converted]
(whether before or after such Revolving Loan is [continued][converted]).

                                      E-1
<PAGE>

     Acceptance of the proceeds of such [continued][converted] Revolving Loan by
South Pacific or the Borrower shall be deemed to be a further representation and
warranty that the  representations  and warranties  made in this letter are true
and    correct   in   all    material    respects    at   the   time   of   such
[continuation][conversion].

     Capitalized  terms used but not defined in this letter have the  respective
meanings assigned to them in the Credit Agreement.

                                    TRENDWEST RESORTS, INC.

                                    By:_______________________________
                                    Its:______________________________

                                      E-2

<PAGE>

                                    EXHIBIT F
                                    ---------

                             FORM OF REVOLVING NOTE

                                                                 August 14, 2000
                                                             Seattle, Washington

     For value received,  Trendwest Resorts,  Inc., an Oregon  corporation,  and
Trendwest  South Pacific Pty.  Ltd., a corporation  organized and existing under
the laws of the  Commonwealth  of  Australia  (collectively,  the  "Borrowers"),
jointly, severally, unconditionally, and irrevocably promise to pay to the order
of  ____________________,  a national banking association (the "Lender"), at the
place,  in the  currency  and  manner,  and on the dates set forth in the Credit
Agreement  referred to below,  in  immediately  available  funds,  the aggregate
unpaid  principal  amount of all Revolving  Loans made by the Lender pursuant to
the Credit Agreement  referred to below, as recorded in the books and records of
the Lender;  and to pay  interest on the unpaid  principal  balance of this Note
from time to time outstanding,  in like money and funds, for the period from the
date of this Note until the Revolving Loans evidenced by this Note shall be paid
in full,  at the  rates  per  annum  and on the  dates  provided  in the  Credit
Agreement referred to below.

     The Lender is hereby  authorized by the Borrowers to record on the Lender's
books and records, the date,  currency,  amount and type of each Revolving Loan,
the duration of the related Interest Period (if applicable),  the amount of each
payment or prepayment of principal on each such  Revolving  Loan,  and the other
information provided for in such books and records, which such books and records
shall constitute prima facie evidence of the information so recorded;  provided,
however, that any failure by the Lender to record any such information shall not
relieve the Borrowers of their  obligations to repay the  outstanding  principal
amount of such Revolving  Loans,  all accrued  interest on such Revolving Loans,
and any amount payable with respect to such Revolving  Loans in accordance  with
the terms of this Note and the Credit Agreement referred to below.

     Each of the  Borrower  signs this Note as a  principal  (and not as surety,
guarantor,  or accommodation party), and each such Borrower and each endorser or
guarantor of this Note waives demand, presentment, protest, diligence, notice of
dishonor  and  any  other  formality  in  connection  with  this  Note.  If  the
indebtedness  evidenced  by this  Note  or any  part  of  such  indebtedness  is
collected  in  any  proceeding  or is  placed  in the  hands  of  attorneys  for
collection,  each of the Borrowers  agrees to pay, in addition to the principal,
interest  and other sums due and payable on this Note,  all costs of  collecting
this  Note,  including,  without  limitation,  reasonable  attorneys'  fees  and
expenses  (including,  without  limitation,  allocated  costs  and  expenses  of
attorneys who are employees of the Lender).

     Each of the Borrower's  obligations under this Note shall not be limited or
affected in any way by (a) the Lender's  failure,  neglect,  or omission to take
any action of any kind,  (b) any discharge of such  Borrower's  liability  under
this Note by a bankruptcy court or in any other insolvency  proceeding,  (c) the
expiration of any statute of limitations,  or (d) any other means other than the
receipt by the Lender of  payment  in full on this Note.  Each of the  Borrowers
intends by this paragraph to waive any  "suretyship"  defense that such Borrower
may have in the event  that the  Borrower  is deemed by any court to have been a
surety,   guarantor,  or  accommodation  party  under  this  Note,  despite  all
representations and warranties in this Note to the contrary.

                                      F-2
<PAGE>

     This Note  evidences  one or more  Revolving  Loans  made  under the Credit
Agreement  dated as of August 14, 2000,  between the  Borrowers;  the Lender and
______________________,   as  lenders  (the  "Lenders"),  and  KeyBank  National
Association,  as Administrative  Agent for the Lenders (the "Credit Agreement"),
to which  reference  is hereby made for a statement of the  circumstances  under
which  this Note is subject to  prepayment  and under  which its due date may be
accelerated.  This Note is made under, and shall be governed by and construed in
accordance  with,  the  laws of the  State  of  Washington  in the  same  manner
applicable to contracts made and to be performed  entirely within such State and
without giving effect to choice of law principles of such State.

     Capitalized  terms used but not  defined  in this Note have the  respective
meanings assigned to them in the Credit Agreement.

     EACH OF THE BORROWERS ACKNOWLEDGES THAT ORAL AGREEMENTS OR ORAL COMMITMENTS
TO LOAN MONEY,  EXTEND CREDIT, OR TO FORBEAR FROM ENFORCING  REPAYMENT OF A DEBT
ARE NOT ENFORCEABLE UNDER WASHINGTON LAW.

                                    TRENDWEST RESORTS, INC.

                                    By:_______________________________
                                    Its:______________________________

                                    TRENDWEST SOUTH PACIFIC PTY. LTD.,
                                    an Australian corporation

                                    By:_______________________________
                                    Its:______________________________

                                      F-2

<PAGE>

                                    EXHIBIT G
                                    ---------

                                   PROJECTIONS
             For the period from June 30, 2000 through June 30, 2003

                                 [See Attached.]

                                      G-1

<PAGE>

                                    EXHIBIT H
                                    ---------

                                 CAPITALIZATION

Capitalization as of July 31, 2000:

     Preferred  stock, no par value.  Authorized  10,000,000  shares;  no shares
        issued or outstanding

     Common stock, no par value.  Authorized 90,000,000 shares;

        issued and outstanding 16,926,183, at July 31, 2000

                                      H-1

<PAGE>

                                    EXHIBIT I
                                    ---------

                                   LITIGATION

                                      None.

                                      I-1

<PAGE>

                                    EXHIBIT J
                                    ---------

                                  INDEBTEDNESS

1.  Standby  Letter of Credit  issued  by First  National Bank of Chicago in the
    amount of  $464,506.60.  The  Letter of Credit  expires May 21, 2001 for the
    benefit of Case #97-2-19757-1 KNT K ing County Superior Court.

2.  Performance Bonds (required for marketing premiums in Las Vegas) as follows:

         (a)      $75,000 issued by Developers Insurance Company;

         (b)      $54,000 issued by Developers Insurance Company.

                                      J-1

<PAGE>

                                    EXHIBIT K

                                    ---------

                                    CONSENTS

                                      None.

                                      K-1

<PAGE>

                                    EXHIBIT L
                                    ---------

                         MATERIAL CONTRACTS AND LICENSES

                                      None.

                                      L-1

<PAGE>

                                    EXHIBIT M
                                    ---------

                                  SUBSIDIARIES

TW Resorts Real Estate, Inc.

TRI Funding II, Inc.

TRI Funding III, Inc.

Trendwest Investments, Inc.

TW Holdings II, Inc.

TW Holdings III, Inc.

MountainStar Resorts, Inc.

MountainStar Resort Resources, Inc.

Trendwest Properties, Inc.

Trendwest South Pacific PTY LTD

31674 Yukon, Inc.

Trendwest Funding I, Inc.

Trendwest Funding II, Inc.

TRI Funding Company I, L.L.C.

                                      M-1

<PAGE>

                                    EXHIBIT N
                                    ---------

                              ENVIRONMENTAL MATTERS

The environmental  matters disclosed in that certain Phase I Environmental  Site
Assessment regarding property located in Seaside, Oregon, prepared for Trendwest
Resorts, Inc. by JELD-WEN Risk Management Department dated March 2000.

                                      N-1

<PAGE>

                                    EXHIBIT O
                                    ---------

                        COMPLIANCE LETTER AND CERTIFICATE

                            ----------------, ------

KeyBank National Association,
As Administrative Agent
700 Fifth Avenue, 46th Floor
Seattle, Washington  98104
Attn:  Mary Young

Ladies and Gentlemen:

     As required by Section  6.5(c) of the Credit  Agreement  dated as of August
14, 2000,  between Trendwest Resorts,  Inc.,  Trendwest South Pacific Pty. Ltd.,
the lenders from time to time party thereto,  and KeyBank National  Association,
as Administrative Agent for itself and the other such lenders (the "Agreement"),
the  undersigned  has  reviewed  the  activities  of the Borrower for the fiscal
quarter [year] ending _____, ____, and, consequently, warrant and certify to the
Lenders that: (i) all information  contained in the attached Certificate is true
and accurate to the best of Borrower's knowledge;  (ii) the amounts set forth in
the attached  Certificate  accurately  present amounts required to be calculated
under the financial covenants set forth in Section 6.11 of the Agreement;  (iii)
Borrower  has  exercised  its best  efforts to ascertain  the  truthfulness  and
accuracy of the  information  contained  in the  attached  Certificate;  (iv) no
Possible  Default or Event of Default has  occurred;  and (v)  Borrower is aware
that the Lenders are relying on the information contained in this Certificate as
the basis for  determining the Borrower's  eligibility for additional  Revolving
Loans. Unless otherwise defined,  all capitalized terms used in this Certificate
have the meanings assigned to such terms in the Agreement.

                                                 TRENDWEST RESORTS, INC.

                                                  By:___________________________
                                                     Its Chief Financial Officer

                                      O-1

<PAGE>

                             COMPLIANCE CERTIFICATE

                 (for fiscal quarter [year] ending ______, ____)
<TABLE>
<CAPTION>
                                                                                                            As of
                                                                                                           3/31/2000
<S>                                                                                                        <C>
6.11(a)   Maximum Leverage Ratio

          Total Funded Debt
          Revolving Credit                                                                                           A
          JELD-WEN note                                                                                              B
          Capitalized Lease Obligations                                                                    5,000,000 C
          Other Indebtedness                                                                                         D
          Off B/S Synthetic Leases                                                                                   E
                                                                                                           ---------
                   Total Funded Debt (A+B+C+D+E+F)                                                         5,000,000 F
                                                                                                           =========

          Consolidated Net Worth                                                                           17,500,000G
                                                                                                           ---------

          Total Capitalization (F+G)                                                                       22,500,000H
                                                                                                           =========

          Leverage Ratio (F/H)                                                                                22.2%
          Maximum Permitted                                                                                   35.0%
</TABLE>

<TABLE>
<CAPTION>
                                                              Quarter     Quarter    Quarter     Quarter
                                                               Ended       Ended      Ended       Ended        LTM
6.11(b)   Minimum Fixed Charge Coverage Ratio                 6/30/99     9/30/99    12/31/99    3/31/00     3/31/00
                                                              -------------------------------------------------------
<S>                                                           <C>         <C>        <C>         <C>         <C>
          Adjusted EBITDA
          Net Income                                                                                              ---
                                                                                                                  ---
Add:      Income taxes
          Interest expense                                                                                        ---
          Depreciation and amortization                                                                           ---
          Amortization   of  residual   interest  in  Notes                                                       ---
          Receivable sold
          Unrealized  loss on  residual  interest  in Notes                                                       ---
          Receivable sold
          Contract  servicing  liability  arising  from the                                                       ---
          sale of Notes Receivable
          Non-cash extraordinary losses                                                                           ---
                                                                                                                  ---
Less:     Residual interest in Notes Receivable sold
          Amortization of contract servicing liability                                                            ---
          Unrealized  Gain on residual  interests  in Notes                                                       ---
          Receivable sold
          Non-cash or extraordinary income items                                                                  ---
                                                              -------------------------------------------------------
              Adjusted EBITDA                                       ---        ---         ---         ---        ---  I
                                                             =========================================================
                                                                                                                  ---
          Capital expenditures                                                                                    ---  J
                                                             ---------------------------------------------------------
              Available Cashflow (I-J)                              ---        ---         ---         ---        ---  K
                                                             =========================================================

          Fixed Charges
          Current Portion of Long-Term Debt                                                                       ---  L
          Interest Expense                                                                                        ---  M
          Cash Income Taxes                                                                                       ---  N
                                                             ---------------------------------------------------------
              Total Fixed Charges (L+M+N)                           ---        ---         ---         ---        ---  O
                                                             =========================================================

          Fixed Charge Coverage Ratio (H/L)                                                                   #DIV/O!
          Minimum Required                                                                                      2.25x

                                                                                                              As of
                                                                                                            12/31/00
                                                                                                            ----------
6.11(c)   Minimum Consolidated Net Worth

          Minimum  Required  as  of  the  Previous  Quarter                                                175,000,000 P
               Ended (__/__/__)
          Quarter Net Income (without Deducing for Losses)                                      10,000,000
                                                                                                ----------------------
          75% of quarterly net income                                                            7,500,000  7,500,000  Q

          100% of the Proceeds from the Sale of Equity                                                 ---        ---  R

          Minimum Consolidated Net Worth (P+Q+R)                                                            182,500,000
                                                                                                            ===========

          Actual Consolidated Net Worth                                                                     200,000,000
</TABLE>

                                      O-2

<PAGE>

                                    EXHIBIT P
                                    ---------

                            ASSIGNMENT AND ACCEPTANCE

     Reference is made to that certain Credit  Agreement  dated as of August 14,
2000,  between Trendwest Resorts,  Inc.,  Trendwest South Pacific Pty. Ltd. (the
"Borrowers"),  the lenders from time to time party thereto (the "Lenders"),  and
KeyBank National  Association,  as Administrative Agent for itself and the other
such lenders (as amended, restated, extended, supplemented or otherwise modified
in writing from time to time, the  "Agreement;"  the terms defined therein being
used herein as therein defined).

     The assignor  identified on the signature page hereto  ("Assignor") and the
assignee identified on the signature page hereto ("Assignee") agree as follows:

     1. (a)  Subject  to  paragraph  11,  effective  as of the date  written  on
Schedule 1 hereto (the "Effective Date"), Assignor irrevocably sells and assigns
to Assignee,  without  recourse to Assignor,  and  Assignee  hereby  irrevocably
purchases and assumes from Assignor,  without recourse to Assignor, the interest
described on Schedule 1 hereto (the  "Assigned  Interest")  in and to Assignor's
rights and obligations under the Agreement.

     (b) From and after the Effective  Date, (i) Assignee shall be a party under
the Agreement and will have all the rights and  obligations  of a Lender for all
purposes under the Agreement to the extent of the Assigned Interest and be bound
by the provisions thereof,  and (ii) Assignor shall relinquish its rights and be
released from its obligations  under the Agreement to the extent of the Assigned
Interest.  Assignor and/or Assignee,  as agreed by Assignor and Assignee,  shall
deliver, in immediately  available funds, any applicable assignment fee required
under Section 11.7(c) of the Agreement.

     2. On the Effective  Date,  Assignee shall pay to Assignor,  in immediately
available funds, an amount equal to the purchase price of the Assigned  Interest
as agreed upon by Assignor and Assignee.

     3. Assignor and Assignee  agree that all payments of  principal,  interest,
fees and other  amounts in respect of the Assigned  Interest  accruing  from and
after the Effective Date shall be for the account of Assignee,  and all payments
of such  amounts in  respect  of the  Assigned  Interest  accruing  prior to the
Effective  Date shall remain for the account of Assignor.  Assignor and Assignee
hereby agree that if either  receives  any payment of such amounts  which is for
the  account  of the  other,  it shall hold the same in trust for such party and
shall promptly pay the same to such party.

     4. Assignor represents and warrants to Assignee that:

     (a) Assignor is the legal and  beneficial  owner of the Assigned  Interest,
and the Assigned Interest is free and clear of any adverse claim;

     (b) The Assigned  Interest  listed on Schedule 1 accurately  and completely
sets forth the amount of all  outstanding  Obligations  relating to the Assigned
Interest as of the Effective Date;

                                      P-1
<PAGE>

     (c) It has the power and authority and the legal right to make, deliver and
perform,  and has  taken all  necessary  action,  to  authorize  the  execution,
delivery and  performance  of this  Assignment and  Acceptance,  and any and all
other  documents  delivered  by it in  connection  herewith  and to fulfill  its
obligations  under,  and to consummate the  transactions  contemplated  by, this
Assignment and Acceptance and the Agreement, and no consent or authorization of,
filing with,  or other act by or in respect of any  governmental  authority,  is
required in connection in connection herewith or therewith; and

     (d) This Assignment and Acceptance constitutes the legal, valid and binding
obligation of Assignor.

     Assignor makes no  representation or warranty and assumes no responsibility
with respect to the financial  condition of the Borrowers or the  performance by
the Borrowers of their respective  obligations under the Agreement and Revolving
Notes, and assumes no responsibility with respect to any statements,  warranties
or  representations  made  under  or in  connection  with the  Agreement  or the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of the Agreement or the Revolving Notes other than as expressly set forth above.

     5.  Assignee  represents  and warrants to Assignor  and the  Administrative
Agent that:

     (a) it is an Eligible Assignee;

     (b) it has the power and authority and the legal right to make, deliver and
perform,  and has  taken all  necessary  action,  to  authorize  the  execution,
delivery and  performance  of this  Assignment and  Acceptance,  and any and all
other  documents  delivered  by it in  connection  herewith  and to fulfill  its
obligations  under,  and to consummate the  transactions  contemplated  by, this
Assignment and Acceptance and the Agreement, and no consent or authorization of,
filing with,  or other act by or in respect of any  governmental  authority,  is
required in connection in connection herewith or therewith;

     (c) this Assignment and Acceptance constitutes the legal, valid and binding
obligation of Assignee;

     (d) under  applicable  laws,  no tax will be required to be withheld by the
Administrative  Agent or the Borrower with respect to any payments to be made to
Assignee  hereunder or under the Agreement or the Revolving  Notes, and prior to
or concurrently with the  Administrative  Agent's receipt of this Assignment and
Acceptance,  Assignee has  delivered to the  Administrative  Agent any tax forms
required by Section 11.8 of the Agreement; and

     (e) Assignee has received a copy of the Agreement,  together with copies of
the most recent financial  statements delivered pursuant thereto, and such other
documents and  information  as it has deemed  appropriate to make its own credit
analysis and decision to enter into this Assignment and Acceptance. Assignee has
independently and without reliance upon Assignor or the Administrative Agent and
based on such  information  as  Assignee  has deemed  appropriate,  made its own
credit  analysis  and  decision  to enter into this  Agreement.  Assignee  will,
independently and without reliance upon the Administrative  Agent or any Lender,
and based upon such documents and  information  as it shall deem  appropriate at
the time,  continue  to make its own  credit  decisions  in taking or not taking
action under the Agreement.

     6. Assignee appoints and authorizes the  Administrative  Agent to take such
action as  Administrative  Agent on its behalf and to  exercise  such powers and
discretion  under the Agreement or any other  instrument  or document  furnished
pursuant hereto or thereto as are delegated to the  Administrative  Agent by the
terms thereof, together with such powers as are incidental thereto.

                                      P-2
<PAGE>

     7. If either Assignee or Assignor  desires a Revolving Note to evidence its
Loans, it shall request that the  Administrative  Agent procure a Revolving Note
from the Borrowers.

     8.  Assignor  and  Assignee   agree  to  execute  and  deliver  such  other
instruments,  and take such other action, as either party may reasonably request
in  connection  with  the  transactions  contemplated  by  this  Assignment  and
Acceptance.

     9. This  Assignment and  Acceptance  shall be binding upon and inure to the
benefit of the parties and their  respective  successors and assigns;  provided,
however,  that  Assignee  shall not assign its rights or  obligations  hereunder
without the prior  written  consent of Assignor  and any  purported  assignment,
absent such consent, shall be void.

     10. This Assignment and Acceptance may be executed by facsimile  signatures
with the same force and effect as if manually  signed and may be executed in one
or more  counterparts,  each of which  shall be deemed an  original,  but all of
which together shall constitute one and the same instrument. This Assignment and
Acceptance shall be governed by and construed in accordance with the laws of the
state specified in the Agreement.

     11. The effectiveness of the assignment described herein is subject to:

     (a) if such  consent is required by the  Agreement,  Assignor  and Assignee
obtaining  the  consent  of the  Administrative  Agent and the  Borrower  to the
assignment described herein. By delivering a duly executed and delivered copy of
this  Assignment  and  Acceptance  to the  Administrative  Agent,  Assignor  and
Assignee  hereby  request  any  such  required  consent  and  request  that  the
Administrative Agent register Assignee as a Lender under the Agreement effective
as of the Effective Date.

     (b)  receipt  by  the  Administrative   Agent  of  (or  other  arrangements
acceptable  to  the  Administrative   Agent  with  respect  to)  any  applicable
assignment fee referred to in Section 11.7(c) of the Agreement and any tax forms
required by Section 11.8 of the Agreement.

     12.  Attached  hereto as Schedule 2 is all  contact,  address,  account and
other administrative information relating to Assignee.

     By signing below, the Administrative Agent agrees to register Assignee as a
Lender under the  Agreement,  effective as of the Effective Date with respect to
the Assigned  Interest and will adjust the registered  Ratable Share of Assignor
under the Agreement to reflect the assignment of the Assigned Interest.

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

                                    Assignor:

                                    [Name of Assignor]

                                    By:____________________________________

                                    Name:__________________________________

                                    Title:_________________________________

                                      P-3
<PAGE>

                                    Assignee:
___ Tax forms required by          [Name of Assignee]
    Section 11.8 of the
    Agreement included
                                    By:____________________________________

                                    Name:__________________________________

                                    Title:_________________________________

In accordance with and subject to Section 11.4
of the Agreement, the undersigned consent to the
foregoing assignment as of the Effective Date:

TRENDWEST RESORTS, INC.

By:__________________________________________

Name: _______________________________________

Title: ______________________________________

TRENDWEST SOUTH PACIFIC PTY. LTD.

By:__________________________________________

Name: _______________________________________

Title: ______________________________________

KEYBANK NATIONAL ASSOCIATION,
as the Administrative Agent

By:__________________________________________

Name: _______________________________________

Title: ______________________________________

                                      P-4

<PAGE>
                     SCHEDULE 1 TO ASSIGNMENT AND ACCEPTANCE

                              The Assigned Interest

Effective Date: ______________________

                       Type and amount of outstanding
Assigned Commitment        Obligations assigned           Assigned Ratable Share
-------------------    ------------------------------     ----------------------

$                      [type] $                                                %
 ------------------            -----------------------    ---------------------

                                      P-5

<PAGE>

                    SCHEDULE 2 TO ASSIGNMENT AND ACCEPTANCE

                             Administrative Details

(Assignee  to list  names of credit  contacts,  addresses,  phone and  facsimile
numbers, electronic mail addresses and account and payment information)

                                      P-6

<PAGE>

                                    EXHIBIT Q
                                   ----------

                                      LIENS

                                      None.

                                      Q-1

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