ARCADIA FINANCIAL LTD, 8-K, 1997-10-01

ARCADIA FINANCIAL LTD
8-K, 1997-10-01
SHORT-TERM BUSINESS CREDIT INSTITUTIONS

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<PAGE>

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

-----------------------

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 1, 1997

ARCADIA FINANCIAL LTD.
--------------------------------------------------
(Exact name of registrant as specified in its charter)

Minnesota 0-20526 41-1664848
- ---------------------------- ------------------------ ------------------
(State or other jurisdiction (Commission file number) (IRS employer
of incorporation) identification No.)

7825 Washington Avenue South, Minneapolis, Minnesota 55439-2435
---------------------------------------------------------------
(Address of principal executive offices)

Registrant's telephone number, including area code: (612) 942-9880
--------------------------

Not Applicable
-------------------------------------------------------------
(Former name or former address, if changed since last report)

<PAGE>

Item 7. FINANCIAL STATEMENTS AND EXHIBITS

10.1 First Amendment, dated as of August 9, 1997, to Note Purchase
Agreement, dated as of December 3, 1996, among Arcadia Financial
Ltd. (formerly known as Olympic Financial Ltd.), Arcadia
Receivables Conduit Corp., Receivable Capital Corporation and
Bank of America National Trust and Savings Association.

10.2 First Amendment, dated as of August 4, 1997, to Repurchase
Agreement, dated as of December 3, 1996, by and between Arcadia
Receivables Conduit Corp. and Arcadia Receivables Finance Corp.

10.3 First Amendment, dated as of August 4, 1997, to Servicing
Agreement, dated as of December 3, 1996, among Arcadia Receivables
Conduit Corp., Arcadia Financial Ltd. (formerly known as Olympic
Financial Ltd.), in its individual capacity and as Servicer, and
Bank of America National Trust and Savings Association.

10.4 First Amendment, dated as of August 1, 1997, to the Insurance and
Indemnity Agreement, dated as of December 3, 1996, among
Financial Security Assurance Inc., Arcadia Receivables Conduit
Corp., Arcadia Receivables Finance Corp. and Arcadia Financial
Ltd. (formerly known as Olympic Financial Ltd.), as Servicer.

10.5 Amended and Restated Trust Agreement, dated as of July 31, 1997,
between Arcadia Receivables Finance Corp. II and Wilmington Trust
Company.

10.6 Amended and Restated Indenture, dated as of July 31, 1997,
between Olympic Automobile Receivables Warehouse Trust and
Norwest Bank Minnesota, National Association.

10.7 Amended and Restated Receivables Purchase Agreement and
Assignment, dated as of July 31, 1997, between Arcadia
Receivables Finance Corp. II and Arcadia Financial Ltd.

10.8 Amended and Restated Sale and Servicing Agreement, dated as of
July 31, 1997, among Olympic Automobile Receivables Warehouse
Trust, Arcadia Receivables Finance Corp. II, Arcadia Financial
Ltd. and Norwest Bank Minnesota, National Association.

10.9 Amended and Restated Custodian Agreement, dated as of July 31,
1997, among Arcadia Financial Ltd., Norwest Bank Minnesota,
National Association, and Olympic Automobile Receivables
Warehouse Trust.

10.10 Amended and Restated Note Purchase Agreement, dated as of July
31, 1997, among Olympic Automobile Receivables Warehouse Trust,
Arcadia Financial Ltd., Delaware Funding Corporation and Morgan
Guaranty Trust Company of New York.

10.11 Amended and Restated Certificate Purchase Agreement, dated as of
July 31, 1997, among Olympic Automobile Receivables Warehouse
Trust, Arcadia Financial Ltd., each Purchaser (as defined) and
Morgan Guaranty Trust Company of New York.

10.12 Asset Purchase Agreement, dated as of July 31, 1997, among Morgan
Guaranty Trust Company of New York and certain parties listed
therein.

10.13 Series 1997-C Supplement, dated as of September 18, 1997, to
spread Account Agreement dated as of March 25, 1993, as amended
and restated as of June 1, 1997, among Arcadia Financial Ltd.,
Arcadia Receivables Finance Corp., Financial Security Assurance,
Inc., The Chase Manhattan Bank and Norwest Bank Minnesota,
National Association.

10.14 Insurance and Indemnity Agreement, dated as of September 18,
1997, among Financial Security Assurance Inc., Arcadia Automobile
Receivables Trust, 1997-C, Arcadia Receivables Finance Corp. and
Arcadia Financial Ltd.

10.15 Form of Indemnification Agreement by and between the Company and
certain of its officers and directors.

23.1 Consent of Ernst & Young LLP.

23.2 Consent of Dorsey & Whitney LLP.

<PAGE>

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.

October 1, 1997 ARCADIA FINANCIAL LTD.

By: /s/ Richard A. Greenawalt
--------------------------------------------
Richard A. Greenawalt
President and Chief
Executive Officer

<PAGE>

INDEX TO EXHIBITS

Exhibit No. Description
- ----------- -----------

10.2 First Amendment, dated as of August 4, 1997, to Repurchase
Agreement, dated as of December 3, 1996, by and between Arcadia
Receivables Conduit Corp. and Arcadia Receivables Finance Corp.

10.5 Amended and Restated Trust Agreement, dated as of July 31, 1997,
between Arcadia Receivables Finance Corp. II and Wilmington Trust
Company.

10.6 Amended and Restated Indenture, dated as of July 31, 1997,
between Olympic Automobile Receivables Warehouse Trust and
Norwest Bank Minnesota, National Association.

10.7 Amended and Restated Receivables Purchase Agreement and
Assignment, dated as of July 31, 1997, between Arcadia
Receivables Finance Corp. II and Arcadia Financial Ltd.

10.12 Asset Purchase Agreement, dated as of July 31, 1997, among Morgan
Guaranty Trust Company of New York and certain parties listed
therein.

10.15 Form of Indemnification Agreement by and between the Company and
certain of its officers and directors.

23.1 Consent of Ernst & Young LLP.

23.2 Consent of Dorsey & Whitney LLP.

<PAGE>

FIRST AMENDMENT
TO THE
NOTE PURCHASE AGREEMENT

THIS FIRST AMENDMENT TO THE NOTE PURCHASE AGREEMENT, dated as of
August 4, 1997 (this "Amendment"), among ARCADIA FINANCIAL, LTD. (formerly known
as Olympic Financial, Ltd.) ("Arcadia"), ARCADIA RECEIVABLES CONDUIT CORP. (the
"Issuer"), RECEIVABLES CAPITAL CORPORATION (the "Purchaser") and BANK OF AMERICA
NATIONAL TRUST AND SAVINGS ASSOCIATION (the "Agent").

WHEREAS, the parties hereto wish to amend the Note Purchase Agreement,
dated as of December 3, 1996 (the "Note Purchase Agreement"), among Arcadia, the
Issuer, the Purchaser and the Agent, as provided herein;

NOW, THEREFORE, in consideration of the premises and the agreements
contained herein, the parties hereto agree as follows:

SECTION 1. AMENDMENT OF SECTION 1. Section 1 of the Note Purchase
Agreement shall be amended by deleting "U.S. $300,000,000," in the fourth line
of Section 1 and replacing it with "$375,000,000."

SECTION 2. REPRESENTATIONS AND WARRANTIES OF ARCADIA. Arcadia
represents and warrants that as of the effective date of this Amendment no Event
of Default has occurred under the Repurchase Agreement and no Servicer
Termination Event has occurred under the Servicing Agreement, and to the best of
Arcadia's knowledge there is no set of circumstances existing that with the
passage of time, would constitute such an Event of Default of Servicer
Termination Event.

SECTION 3. EFFECTIVENESS. The amendments provided for by this
Amendment shall become effective upon receipt by the Administrative Agent, in
form and substance satisfactory to the Administrative Agent, of (i) this
Amendment duly executed and delivered by each of the parties hereto and (ii)
an opinion of counsel to Arcadia, dated the date hereof, addressed to the
Agent and the Security Insurer, covering such matters as the Agent may
reasonably request.

SECTION 4. NOTE PURCHASE AGREEMENT IN FULL FORCE AND EFFECT AS
AMENDED. Except as specifically amended hereby, all the terms and conditions of
the Note Purchase Agreement shall remain in full force and effect and, except as
expressly provided herein, the effectiveness of this Amendment shall not operate
as, or constitute a waiver or modification of, any right, power

<PAGE>

remedy of any party to the Note Purchase Agreement. All references to the Note
Purchase Agreement in any other document or instrument shall be deemed to mean
the Note Purchase Agreement as amended by this Amendment. This Amendment shall
not constitute a novation of the Note Purchase Agreement, but shall constitute
an amendment thereof.

SECTION 5. COUNTERPARTS. This Amendment may be executed in any number
of counterparts and by separate parties hereto on separate counterparts, each of
which when executed shall be deemed an original, but all such counterparts taken
together shall constitute one and the same instrument.

SECTION 6. GOVERNING LAW. THIS AMENDMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS.

SECTION 7. DEFINED TERMS. Capitalized terms used herein and not
otherwise defined shall have the meaning assigned to such terms in the Note
Purchase Agreement.

2
<PAGE>

IN WITNESS WHEREOF, the Purchaser, the Agent, Arcadia and the Issuer
have caused this First Amendment to Note Purchase Agreement to be duly executed
by their respective officers thereunto duly authorized as of the date first
above written.

ARCADIA RECEIVABLES CONDUIT CORP.

By: /s/ John Witham
-------------------------------
Name: John Witham
Title: EVP CFO

ARCADIA FINANCIAL LTD.

By: /s/ Mike Sherman
--------------------------------
Name: Mike Sherman
Title: VP Treasurer

RECEIVABLES CAPITAL CORPORATION

By: /s/ Stewart L. Cutler
--------------------------------
Name: Stewart L. Cutler
Title: Vice President

BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
as Agent

By: /s/ Erik G. Ford
--------------------------------
Name: Erik G. Ford
Title: as Attorney-in Fact

<PAGE>

EXECUTION COPY

FIRST AMENDMENT
TO THE
REPURCHASE AGREEMENT

THIS FIRST AMENDMENT TO THE REPURCHASE AGREEMENT, dated as of August 4,
1997 (this "Amendment"), is by and between ARCADIA RECEIVABLES CONDUIT CORP., a
Delaware corporation (the "Buyer") and ARCADIA RECEIVABLES FINANCE CORP.
(formerly known as Olympic Receivables Finance Corp.) a Delaware corporation
(the "Seller").

WHEREAS, the parties hereto wish to amend the Repurchase Agreement,
dated as of December 3, 1996 (the "Repurchase Agreement"), by and between the
Buyer and the Seller, as provided herein;

NOW, THEREFORE, in consideration of the premises and the agreements
contained herein and in accordance with Section 15 of the Repurchase
Agreement, the parties hereto agree as follows:

SECTION 1. AMENDMENT OF SECTION 2. Section 2 of the Repurchase
Agreement shall be amended by deleting the current definition of "Commitment
Amount" and substituting in its place the following:

"COMMITMENT AMOUNT" means $375,000,000.

SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE SELLER. The
Seller represents and warrants that as of the effective date of this
Amendment no Event of Default has occurred under the Repurchase Agreement and
no Servicer Termination Event has occurred under the Servicing Agreement and
to the best of the Seller's knowledge there is no set of circumstances
existing that with the passage of time, would constitute such an Event of
Default or Servicer Termination Event.

SECTION 3. EFFECTIVENESS. The amendments provided for by this
Amendment shall become effective upon receipt by the Administrative Agent, in
form and substance satisfactory to the Administrative Agent, of (i) this
Amendment duly executed and delivered by each of the parties hereto and the
Agent and the Security Insurer and (ii) an opinion of counsel to the Seller,
dated the date hereof, addressed to the Administrative Agent and the Security
Insurer, covering such matter as the Administrative Agent may reasonably
request.

SECTION 4. REPURCHASE AGREEMENT IN FULL FORCE AND EFFECT AS AMENDED.
Except as specifically amended hereby, all of the terms and conditions of the
Repurchase Agreement shall remain in full force and effect and, except as
expressly provided

<PAGE>

herein, the effectiveness of this Amendment shall not operate as, or
constitute a waiver or modification of, any right, power remedy of any party
to the Repurchase Agreement or the Agent or the Security Insurer. All
references to the Repurchase Agreement in any document or instrument shall be
deemed to mean the Repurchase Agreement as amended by this Amendment. This
Amendment shall not constitute a novation of the repurchase Agreement, but
shall constitute an amendment thereof.

SECTION 5. COUNTERPARTS. This Amendment may be executed in any
number of counterparts and by separate parties hereto on separate
counterparts, each of which when executed shall be deemed an original, but
all such counterparts taken together shall constitute one and the same
instrument.

SECTION 6. GOVERNING LAW. THIS AMENDMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS.

SECTION 7. DEFINED TERMS. Capitalized terms used herein and not
otherwise defined shall have the meaning assigned to such terms in the
Repurchase Agreement.

IN WITNESS WHEREOF, the parties hereto have caused this First
Amendment to the Repurchase Agreement to be duly executed by their respective
officers as of the day and year first above written.

ARCADIA RECEIVABLES CONDUIT CORP.

By: /s/ John Witham
-------------------------------------
Name: John Witham
Title: EVP CFO

ARCADIA RECEIVABLES FINANCE CORP.

By: /s/ John Witham
-------------------------------------
Name: John Witham
Title: EVP CFO

2
<PAGE>

CONSENTED TO BY:

FINANCIAL SECURITY ASSURANCE INC.

By: /s/ Russell B. Brewer II
------------------------------
Name: Russell B. Brewer II
Title: Managing Director

BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION

By: /s/ Erik G. Ford
------------------------------
Name: ERIK G. FORD
Title: as Attorney-in-Fact

<PAGE>

Execution Copy

FIRST AMENDMENT
TO THE
SERVICING AGREEMENT

THIS FIRST AMENDMENT TO THE SERVICING AGREEMENT dated as of August 4,
1997 (this "Amendment"), among ARCADIA RECEIVABLES CONDUIT CORP. (the "Issuer"),
ARCADIA RECEIVABLES FINANCE CORP. (formerly known as Olympic Receivables Finance
Corp.), as Seller (the "Seller"), ARCADIA FINANCIAL LTD. (formerly known as
Olympic Financial Ltd.), in its individual capacity and as Servicer (in its
individual capacity, "AFL"; in its capacity as Servicer, the "Servicer"), and
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, a national banking
association, in its capacity as Agent (in such capacity as administrator for
Receivables Capital Corporation and as agent for certain liquidity purchasers,
the "Agent").

WHEREAS, the parties hereto wish to amend the Servicing Agreement,
dated as of December 3, 1996 (the "Servicing Agreement"), among the Issuer, the
Agent, the Seller, AFL, the Servicer and the Backup Servicer as provided herein;

NOW, THEREFORE, in consideration of the premises and the agreements
contained herein, the parties hereto agree as follows:

SECTION 1. AMENDMENT OF SECTION 1.1. Section 1.1 of the Servicing
Agreement shall be amended by deleting the current definition of "Basic
Servicing Fee Rate" and substituting in its place the following:

BASIC SERVICING FEE RATE: 1.30% per annum, payable monthly at
one-twelfth of the annual rate.

SECTION 2. AMENDMENT TO SECTION 2.10(b). Section 2.10(b) of the
Servicing Agreement is hereby deleted in its entirety and amended to read as
follows:

(b) The Servicer shall deliver to the Issuer, the Agent, the
Indenture Trustee, the Backup Servicer, the Security Insurer, the Collateral
Agent and each Rating Agency, promptly after having obtained knowledge thereof,
but in no event later than two Business Days thereafter, written notice in an
officer's certificate of any event which with the giving of notice or lapse of
time, or both, would become a Servicer Termination Event under Section 5.1(a).
The Seller or the Servicer shall deliver to the Issuer, the Agent, the Indenture
Trustee, the Backup Servicer, the Security Insurer, the Collateral Agent, each
Rating Agency and the Servicer or the Seller (as applicable) promptly after

<PAGE>

having obtained knowledge thereof, but in no event later than two Business Days
thereafter, written notice in an officer's certificate of any event which with
the giving of notice or lapse of time, or both, would become a Servicer
Termination Event under any other clause of Section 5.1.

SECTION 3. AMENDMENT TO SECTION 3.1. Section 3.1 of the Servicing
Agreement shall be amended by adding the following Section 3.1(h) to the end of
Section 3.1:

(h) The Seller may at any time deposit into the Collection Account
the positive difference, if any, between the Spread Account Minimum Amount (as
defined in the Insurance Agreement) and the amount on deposit in the Warehousing
Series Spread Account. The Seller shall provide the Rating Agencies prior
written notice of any loans it shall receive from AFL in order to make a deposit
in respect of any such deficiency in the Warehousing Series Spread Account. Any
such amount deposited in the Collection Account pursuant to this Section 3.1(h)
shall not be deemed to be amounts on deposit in the Collection Account for any
other purposes of this Agreement, the Indenture or the Repurchase Agreement
other than for purpose of Section 3.10(c).

SECTION 4. AMENDMENT TO SECTION 3.10. Section 3.10 of the Servicing
Agreement shall be amended by adding the following Section 3.10(c) to the end of
Section 3.10:

(c) On the date of any deposit into the Collection Account made
pursuant to Section 3.1(h), the Servicer shall instruct the Indenture Trustee to
withdraw from the Collection Account and deposit to the Spread Account the
amount deposited into the Collection Account pursuant to Section 3.1(h), and
upon such instruction the Indenture Trustee shall withdraw such amount from the
Collection Account and initiate a wire transfer in such account to the Spread
Account.

SECTION 5. REPRESENTATIONS AND WARRANTIES. Each of the Issuer, the
Seller, AFL and the Servicer represents and warrants that as of the effective
date of this Amendment no Event of Default has occurred under the Repurchase
Agreement or the Insurance Agreement and no Servicer Termination Event has
occurred under the Servicing Agreement, and to the best of each of the Issuer,
the Seller, AFL and the Servicer's knowledge there is no set of circumstances
existing that with the passage of time, would constitute such an Event of
Default or Servicer Termination Event.

SECTION 6. EFFECTIVENESS. The amendments provided for by this
Amendment shall become effective upon receipt by the Administrative Agent, in
form and substance satisfactory to the Administrative Agent, of (i) this
Amendment duly executed and delivered by each of the parties hereto and the
Backup Servicer, the Indenture Trustee, the Collateral Agent, the Security
Insurer and the Note Majority, (ii) an opinion of counsel to Arcadia, dated the
date hereof, addressed to the Agent and the Security

<PAGE>

Insurer, covering such matters as the Agent may reasonably request and (iii) the
amendments to the Repurchase Agreement and the Insurance Agreement duly executed
and delivered by each of the parties thereto.

SECTION 7. SERVICING AGREEMENT IN FULL FORCE AND EFFECT AS AMENDED.
Except as specifically amended hereby, all of the terms and conditions of the
Servicing Agreement shall remain in full force and effect and, except as
expressly provided herein, the effectiveness of this Amendment shall not operate
as, or constitute a waiver or modification of, any right, power or remedy of any
party to the Servicing Agreement. All references to the Servicing Agreement in
any other document or instrument shall be deemed to mean the Servicing Agreement
as amended by this Amendment. This Amendment shall not constitute a novation of
the Servicing Agreement, but shall constitute an amendment thereof.

SECTION 8. COUNTERPARTS. This Amendment may be executed in any
number of counterparts and by separate parties hereto on separate counterparts,
each of which when executed shall be deemed an original, but all such
counterparts taken together shall constitute one and the same instrument.

SECTION 9. GOVERNING LAW. THIS AMENDMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS.

SECTION 10. DEFINED TERMS. Capitalized terms used herein and not
otherwise defined shall have the meaning assigned to such terms in the Servicing
Agreement.

<PAGE>

IN WITNESS WHEREOF, the Issuer, the Agent, the Seller, AFL and the
Servicer have caused this First Amendment to Servicing Agreement to be duly
executed by their respective officers as of the day and year first above
written.

ISSUER:

ARCADIA RECEIVABLES CONDUIT CORP.

By /s/ John Witham
-----------------------------------------
Name: John Witham
Title: EVP CFO

SELLER:

ARCADIA RECEIVABLES FINANCE CORP.

By /s/ John Witham
-----------------------------------------
Name: John Witham
Title: EVP CFO

ARCADIA FINANCIAL LTD.,
in its individual capacity and as
Servicer

By /s/ Mike Sherman
-----------------------------------------
Name: Mike Sherman
Title: VP Treasurer

BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Agent

By /s/ Erik G. Ford
-----------------------------------------
Name: Erik G. Ford
Title: as Attorney-in-Fact

<PAGE>

Acknowledged and Accepted:

NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,
not in its individual capacity but as
Indenture Trustee, Backup Servicer and
Collateral Agent,

By /s/ John C. Weidner
-------------------------------------
Name: John C. Weidner
Title: Corporate Trust Officer

FINANCIAL SECURITY ASSURANCE INC.

By: /s/ Russell B. Brewer II
-------------------------------------
Name: Russell B. Brewer II
Title: Managing Director

RECEIVABLES CAPITAL CORPORATION
as sole Noteholder

By: /s/ Stewart L. Cutler
-------------------------------------
Name: Stewart L. Cutler
Title: Vice President

<PAGE>

FIRST AMENDMENT
TO THE
INSURANCE AND INDEMNITY AGREEMENT

THIS FIRST AMENDMENT TO THE INSURANCE AND INDEMNITY AGREEMENT dated as
of August 1, 1997 (this "Amendment"), among FINANCIAL SECURITY ASSURANCE INC.
("FSA"), ARCADIA RECEIVABLES CONDUIT CORP. (the "Issuer"), ARCADIA RECEIVABLES
FINANCE CORP. (formerly known as Olympic Receivables Finance Corp.), as Seller
(the "Seller"), ARCADIA FINANCIAL LTD. (formerly known as Olympic Financial
Ltd.), as Servicer ("Servicer").

WHEREAS, the parties hereto wish to amend the Insurance and Indemnity
Agreement, dated as of December 3, 1996 (the "Insurance and Indemnity
Agreement"), among FSA, the Issuer, the Seller, and the Servicer herein;

NOW, THEREFORE, in consideration of the premises and the agreements
contained herein, the parties hereto agree as follows:

SECTION 1.

a. Amendment to Section 5.01. The following subsection shall be
added to Section 5.01 of the Insurance and Indemnity Agreement:

(k) the amount on deposit in the Warehousing Spread Account as of the
end of the day on any Distribution Date shall be less than the Spread
Account Minimum Amount as of the immediately preceding or coinciding
Determination Date.

b. Amendment to Annex I. The following definition shall be
added to Annex I of the Insurance And Indemnity Agreement:

"SPREAD ACCOUNT MINIMUM AMOUNT" means, with respect to the Warehousing
Series and any Determination Date: (i) if no Amortization Event with
respect to the Warehousing Series has occurred as of the related
Determination Date, one percent of the Principal Balance as of such
Determination Date of the Purchased Receivables (as defined in the
Repurchase Agreement); or (ii) if an Amortization Event with respect
to the Warehousing Series has occurred as of the related Determination
Date, one percent of the Principal Balance of the Purchased
Receivables (as defined in the

<PAGE>

Repurchase Agreement) as of the date of the occurrence of such
Amortization Event.

SECTION 2. REPRESENTATIONS AND WARRANTIES. Each of FSA, the Issuer,
the Seller, and the Servicer represents and warrants that as of the effective
date of this Amendment, no Event of Default has occurred under the Repurchase
Agreement, no Servicer Termination Event has occurred under the Servicing
Agreement, no Event of Default has occurred under the Insurance and Indemnity
Agreement and to the best of each of FSA, the Issuer, the Seller, and the
Servicer's knowledge there is no set of circumstances existing that with the
passage of time or the giving of notice, would constitute any such event.

SECTION 3. EFFECTIVENESS. The amendments provided for by this
Amendment shall become effective upon (i) the due execution and delivery of this
Amendment duly executed by each of the parties hereto, (ii) the effectiveness of
the Amendments dated the date hereof to the Servicing Agreement and the
Repurchase Agreement in form and substance satisfactory to FSA and (iii) an
opinion of counsel to Arcadia, dated the date hereof, addressed to the Agent and
the Security Insurer, covering such matters as the Agent and the Security
Insurer may reasonably request.

SECTION 4. INSURANCE AND INDEMNITY AGREEMENT IN FULL FORCE AND EFFECT
AS AMENDED. Except as specifically amended hereby, all of the terms and
conditions of the Insurance and Indemnity Agreement shall remain in full force
and effect and, except as expressly provided herein, the effectiveness of this
Amendment shall not operate as, or constitute a waiver or modification of, any
right, power or remedy of any party to the Insurance and Indemnity Agreement.
All references to the Insurance and Indemnity Agreement in any other document or
instrument shall be deemed to mean the Insurance and Indemnity Agreement as
amended by this Amendment. This Amendment shall not constitute a novation of
the Insurance and Indemnity Agreement, but shall constitute an amendment
thereof.

SECTION 5. COUNTERPARTS. This Amendment may be executed in any
number of counterparts and by separate parties hereto on an original, but all
such counterparts taken together shall constitute one and the same instrument.

SECTION 6. GOVERNING LAW. THIS AMENDMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

SECTION 7. DEFINED TERMS. Capitalized terms used herein and not
otherwise defined shall have the meaning assigned to such terms in the Insurance
and Indemnity Agreement.

<PAGE>

IN WITNESS WHEREOF, FSA, the Issuer, the Seller, and the Servicer have
caused this First Amendment to the Insurance and Indemnity Agreement to be duly
executed by their respective officers as of the day and year first above
written.

FINANCIAL SECURITY ASSURANCE INC.

By /s/ Russell B. Brewer II
----------------------------------
Name: Russell B. Brewer II
Title: Managing Director

ARCADIA RECEIVABLES CONDUIT CORP.

By /s/ John Witham
----------------------------------
Name: John Witham
Title: EVP CFO

ARCADIA RECEIVABLES FINANCE CORP.

By /s/ John Witham
----------------------------------
Name: John Witham
Title: EVP CFO

ARCADIA FINANCIAL LTD.,
in its individual capacity and as
Servicer

By /s/ Mike Sherman
----------------------------------
Name: Mike Sherman
Title: VP - Treasurer

<PAGE>

EXECUTION COPY

AMENDED AND RESTATED
TRUST AGREEMENT

Dated as of July 31, 1997

between

ARCADIA RECEIVABLES FINANCE CORP. II

and

WILMINGTON TRUST COMPANY
Owner Trustee

OLYMPIC AUTOMOBILE RECEIVABLES WAREHOUSE TRUST

<PAGE>
TABLE OF CONTENTS

Page
----

ARTICLE I
DEFINITIONS

Section 1.1. Definitions................................................. 1
Section 1.2. Usage of Terms.............................................. 3
Section 1.3. Section References.......................................... 4
Section 1.4. Action by or Consent of Certificateholders.................. 4

ARTICLE II
CREATION OF TRUST

Section 2.1. Creation of Trust........................................... 5
Section 2.2. Office...................................................... 5
Section 2.3. Purposes and Powers......................................... 5
Section 2.4. Appointment of Owner Trustee................................ 6
Section 2.5. Initial Capital Contribution of Trust Estate................ 6
Section 2.6. Declaration of Trust........................................ 6
Section 2.7. Liability of the Certificateholders......................... 6
Section 2.8. Title to Trust Property..................................... 7
Section 2.9. Situs of Trust.............................................. 7
Section 2.10. Representations and Warranties of the Depositor and the
General Partner............................................. 7
Section 2.11. Federal Income Tax Treatment................................ 9
Section 2.12. Covenants of the General Partner............................10
Section 2.13. Covenants of the Holders....................................11

ARTICLE III
THE CERTIFICATES

Section 3.1. Initial Ownership...........................................11
Section 3.2. The Certificates............................................12
Section 3.3. Authentication of Certificates..............................12
Section 3.4. Registration of Transfer and Exchange of Certificates.......12
Section 3.5. Mutilated, Destroyed, Lost or Stolen Certificates...........13
Section 3.6. Persons Deemed Owners.......................................14
Section 3.7. Maintenance of Office or Agency.............................14
Section 3.8. Appointment of Paying Agent.................................14

<PAGE>

Page
----

ARTICLE IV
ACTIONS BY OWNER TRUSTEE

Section 4.1. Restriction on Power of Certificateholder...................15
Section 4.2. Prior Notice to Certificateholders with Respect to
Certain Matters.............................................15
Section 4.3. Action by Certificateholders with Respect to Bankruptcy.....15
Section 4.4. Restrictions on Certificateholders' Power...................15

ARTICLE V
APPLICATION OF TRUST FUNDS; CERTAIN DUTIES

Section 5.1. Trust Accounts..............................................16
Section 5.2. Application of Funds in Certificate Distribution Account....17
Section 5.3. Method of Payment...........................................20
Section 5.4. No Segregation of Monies; No Interest.......................20
Section 5.5. Accounting; Reports; Tax Returns............................20

ARTICLE VI
AUTHORITY AND DUTIES OF OWNER TRUSTEE

Section 6.1. General Authority...........................................21
Section 6.2. General Duties..............................................21
Section 6.3. Action upon Instruction.....................................22
Section 6.4. No Duties Except as Specified in this Agreement or in
Instructions................................................23
Section 6.5. No Action Except under Specified Documents or Instructions..23
Section 6.6. Restrictions................................................23
Section 6.7. Administration Agreement....................................23

ARTICLE VII
CONCERNING THE OWNER TRUSTEE

Section 7.1. Acceptance of Trustee and Duties............................24
Section 7.2. Furnishing of Documents.....................................25
Section 7.3. Representations and Warranties..............................26
Section 7.4. Reliance; Advice of Counsel.................................26
Section 7.5. Not Acting in Individual Capacity...........................27
Section 7.6. Owner Trustee Not Liable for Certificates, Notes or
Receivables.................................................27
Section 7.7. Owner Trustee May Own Certificates and Notes................27

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Page
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ARTICLE VIII
COMPENSATION OF OWNER TRUSTEE

Section 8.1. Owner Trustee's Fees and Expenses...........................28
Section 8.2. Indemnification.............................................28
Section 8.3. Non-recourse Obligations....................................28

ARTICLE IX
TERMINATION; RECAPITALIZATION

Section 9.1. Termination of the Trust....................................29
Section 9.2. Dissolution Events with respect to the General Partner......30
Section 9.3. Securitized Offering........................................31

ARTICLE X
SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES

Section 10.1. Eligibility Requirements for Owner Trustee..................31
Section 10.2. Resignation or Removal of Owner Trustee.....................32
Section 10.3. Successor Owner Trustee.....................................32
Section 10.4. Merger or Consolidation of Owner Trustee....................33
Section 10.5. Appointment of Co-Trustee or Separate Trustee...............33

ARTICLE XI
MISCELLANEOUS PROVISIONS

Section 11.1. Amendment...................................................35
Section 11.2. No Recourse.................................................36
Section 11.3. Governing Law...............................................36
Section 11.4. Severability of Provisions..................................36
Section 11.5. Certificates Nonassessable and Fully Paid...................37
Section 11.6. Third-Party Beneficiaries...................................37
Section 11.7. Counterparts................................................37
Section 11.8. Notices.....................................................37

EXHIBITS

Exhibit A -- Form of Certificate of Trust

Exhibit B -- Form of Certificate

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THIS AMENDED AND RESTATED TRUST AGREEMENT, dated as of July 31, 1997,
(the "Trust Agreement"), is made between Arcadia Receivables Finance Corp. II, a
Delaware corporation (the "Seller") and Wilmington Trust Company, a Delaware
corporation, as Owner Trustee (in such capacity, the "Owner Trustee").

In consideration of the mutual agreements herein contained, and of
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties agree as follows:

ARTICLE I
DEFINITIONS

Section 1.1. DEFINITIONS. All terms defined in the Sale and
Servicing Agreement (as defined below) shall have the same meaning in this
Agreement. Whenever capitalized and used in this Agreement, the following words
and phrases, unless otherwise specified, shall have the following meanings:

ADMINISTRATION AGREEMENT: The Amended and Restated Administration
Agreement, dated as of July 31, 1997, between the Administrator and the Trust,
as the same may be amended and supplemented from time to time.

ADMINISTRATOR: Wilmington Trust Company, a Delaware corporation, or
any successor Administrator under the Administration Agreement.

AFL: Arcadia Financial Ltd., a Minnesota corporation, and its
successors in interest.

AGREEMENT OR "THIS AGREEMENT": This Trust Agreement, all amendments
and supplements thereto and all exhibits and schedules to any of the foregoing.

AUTHENTICATION AGENT: Wilmington Trust Company, or its successor in
interest, and any successor authentication agent appointed as provided in this
Agreement.

BUSINESS TRUST STATUTE: Chapter 38 of Title 12 of the Delaware Code,
12 Del. Code Section 3801 et seq., as the same may be amended from time to time.

CERTIFICATE OR INVESTOR CERTIFICATE: A certificate executed by the
Owner Trustee evidencing a fractional undivided interest in the Trust,
substantially in the form of Exhibit B.

CERTIFICATE BALANCE: At any time, as to any Certificate, the
outstanding principal amount of that Certificate; as set forth in the records
maintained by the Trustee; and as to the Certificates as a whole, the sum of the
Certificate Balances for each outstanding Certificate.

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CERTIFICATE DISTRIBUTION ACCOUNT: The account designated as the
Certificate Distribution Account in, and which is established and maintained
pursuant to, Section 5.1.

CERTIFICATE MAJORITY: The meaning assigned in Section 1.4.

CERTIFICATE OF TRUST: The Certificate of Trust in the form of Exhibit
A hereto filed for the Trust pursuant to Section 3810(a) of the Business Trust
Statute.

CERTIFICATE PURCHASE AGREEMENT: The Amended and Restated Certificate
Purchase Agreement, if any, among the Trust, AFL, the investors who execute the
signature pages thereto and Morgan Guaranty Trust Company of New York, as agent
for such investors, evidencing the commitment of the Investors to purchase
Certificates,as the same may be amended and supplemented from time to time.

CERTIFICATE REGISTER AND CERTIFICATE REGISTRAR: The register
maintained and the registrar appointed pursuant to Section 3.4.

CERTIFICATEHOLDER OR HOLDER OR INVESTOR CERTIFICATEHOLDER: A Person
in whose name a Certificate is registered in the Certificate Register.

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

CORPORATE TRUST OFFICE: The principal office of the Owner Trustee at
which at any particular time its corporate trust business shall be administered,
which office at the Closing Date is located at Rodney Square North, 1100 North
Market Street, Wilmington, Delaware 19890-0001, Attention: Corporate Trust
Administration; the telecopy number for the Corporate Trust Office on the date
of the execution of this Agreement is (302) 651-8882.

DEPOSITOR: The Seller in its capacity as depositor hereunder.

DISSOLUTION EVENT: With respect to the General Partner, means the
withdrawal or expulsion of such Person as General Partner of the Trust or the
termination or dissolution of such Person, or the occurrence of an Insolvency
Event with respect to such Person.

EFFECTIVENESS DATE: The meaning assigned in Section 1.5.

EXPENSES: The meaning assigned to such term in Section 8.2.

GENERAL PARTNER: Initially, the Seller, or any subsequent General
Partner as permitted by this Agreement.

INDEMNIFIED PARTIES: The meaning assigned to such term in
Section 8.2.

MAXIMUM CERTIFICATE BALANCE: $32,272,300.

NOTE OWNER: The meaning assigned to such term in the Indenture.

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OWNER TRUSTEE: Wilmington Trust Company, or its successor in
interest, acting not individually but solely as trustee, and any successor
trustee appointed as provided in this Agreement.

PAYING AGENT: Any paying agent or co-paying agent appointed pursuant
to Section 3.8, which initially shall be Wilmington Trust Company.

RECORD DATE: With respect to any Distribution Date, the close of
business on the last Business Day immediately preceding such Distribution Date.

RELATED DOCUMENTS: The Sale and Servicing Agreement, the Indenture,
the Certificates, the Notes, the Purchase Agreement, each Transfer Agreement,
each Assignment Agreement, the Custodian Agreement, the Administration
Agreement, the Certificate Purchase Agreement and the Note Purchase Agreement.
The Related Documents executed by any party are referred to herein as "such
party's Related Documents," "its Related Documents" or by a similar expression.

SALE AND SERVICING AGREEMENT: The Amended and Restated Sale and
Servicing Agreement, dated as of July 31, 1997 among the Trust, the Seller, AFL,
in its individual capacity and as Servicer, and Norwest Bank Minnesota, National
Association, as Backup Servicer, as the same may be amended and supplemented
from time to time.

SECRETARY OF STATE: The Secretary of State of the State of Delaware.

SELLER: Arcadia Receivables Finance Corp. II, a Delaware corporation,
or its successor in interest.

TRUST: The trust created by this Agreement, the estate of which
consists of the Trust Property.

TRUST PROPERTY: The property and proceeds of every description
conveyed pursuant to Section 2.5 hereof and Section 2.1 of the Sale and
Servicing Agreement, together with the Trust Accounts (including all Eligible
Investments therein and all proceeds therefrom).

Section 1.2. USAGE OF TERMS. (a) With respect to all terms used in
this Agreement, the singular includes the plural and the plural the singular;
words importing any gender include the other genders; references to "writing"
include printing, typing, lithography, and other means of reproducing words in a
visible form; references to agreements and other contractual instruments include
all subsequent amendments thereto or changes therein entered into in accordance
with their respective terms and not prohibited by this Agreement; references to
Persons include their permitted successors and assigns; and the terms "include"
or "including" mean "include without limitation" or "including without
limitation." To the extent that definitions are contained in this Agreement, or
in any such certificate or other document, such definitions shall control.

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(b) The references to the Related Documents entered into in
connection with this Agreement shall be read to include, where appropriate, the
original (as amended and supplemented) agreement related to each such amended
and restated document.

Section 1.3. SECTION REFERENCES. All references to Articles,
Sections, paragraphs, subsections, exhibits and schedules shall be to such
portions of this Agreement unless otherwise specified.

Section 1.4. ACTION BY OR CONSENT OF CERTIFICATEHOLDERS.

(a) Except as expressly provided herein (i) any action that may be
taken by the Certificateholders under this Agreement may be taken by
Certificateholders holding Certificates that evidence a majority of the
Certificate Balance (a "Certificate Majority"), and (ii) any written notice
or consent of the Certificateholders delivered pursuant to this Agreement
shall be effective for such class if signed by Holders of Certificates
evidencing not less than a majority of the Certificate Balance.

(b) Whenever any provision of this Agreement refers to action to be
taken, or consented to, by Certificateholders, such provision shall be
deemed to refer to Certificateholders of record as of the Record Date
immediately preceding the date on which such action is to be taken, or
consent given, by Certificateholders. Solely for the purposes of any
action to be taken, or consented to, by the Certificateholders (including
for purposes of determining whether a Certificate Majority has approved any
action), any Certificate registered in the name of the General Partner, AFL
or any Affiliate thereof shall be deemed not to be outstanding, and the
Certificate Balance represented thereby shall not be taken into account in
determining whether the requisite percentage of the Certificate Balance
necessary to effect any such action or consent has been obtained; PROVIDED,
HOWEVER, that, solely for the purpose of determining whether the Owner
Trustee is entitled to rely upon any such action or consent, only
Certificates which the Owner Trustee knows to be so owned shall be so
disregarded.

SECTION 1.5 EFFECTIVENESS. (a) The "Effectiveness Date" of this
Agreement shall occur on the date on which the conditions set forth in this
Agreement shall have been satisfied or waived by both parties to this Agreement.

(b) This Agreement amends and restates the Original Trust Agreement
and on the Effectiveness Date, replaces the Trust Agreement without interruption
of the parties' performance thereunder.

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ARTICLE II
CREATION OF TRUST

Section 2.1. CREATION OF TRUST. Pursuant to the Original Trust
Agreement there was formed a trust known as "Olympic Automobile Receivables
Warehouse Trust," in which name the Trust may conduct business, make and execute
contracts and other instruments and sue and be sued.

Section 2.2. OFFICE. The office of the Trust has been and shall be
in care of the Owner Trustee at the Corporate Trust Office or at such other
address in Delaware as the Owner Trustee may designate by written notice to the
Certificateholders and the Depositor.

Section 2.3. PURPOSES AND POWERS. The purpose of the Trust has been
and is, and the Trust shall have the power and authority, to engage in the
following activities:

(i) to issue the Notes pursuant to the Indenture and the Certificates
pursuant to this Agreement and to sell the Notes and the Certificates; to
redeem Notes and Certificates in accordance with the terms and conditions
set forth herein and in the Indenture;

(ii) with the proceeds of the sale of the Notes and the Certificates,
to pay the organizational, start-up and transactional expenses of the Trust
and to pay the balance to the Seller from time to time pursuant to the Sale
and Servicing Agreement;

(iii) to assign, grant, transfer, pledge, mortgage and convey the
Trust Property to the Indenture Trustee pursuant to the Indenture for the
benefit of the Noteholders and to hold, manage and distribute to the
Certificateholders pursuant to the terms of the Sale and Servicing
Agreement any portion of the Trust Property released from the Lien of, and
remitted to the Trust pursuant to, the Indenture; and, in connection with a
purchase of the Trust Property, to assign, grant, transfer, pledge,
mortgage and convey the Trust Property to such purchaser or purchasers and
upon receipt of proceeds from such sale release the Lien of the Indenture;

(iv) to enter into and perform its obligations under the Related
Documents to which it is to be a party;

(v) to engage in those activities, including entering into agreements,
that are necessary, suitable or convenient to accomplish the foregoing or
are incidental thereto or connected therewith; and

(vi) subject to compliance with the Related Documents, to engage in
such other activities as may be required in connection with conservation of
the Trust Property and the making of distributions to the
Certificateholders and the Noteholders.

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The Trust is hereby authorized to engage in the foregoing activities. The Trust
shall not engage in any activity other than in connection with the foregoing or
other than as required or expressly authorized by the terms of this Agreement or
the Related Documents.

Section 2.4. APPOINTMENT OF OWNER TRUSTEE. The Depositor appointed
the Owner Trustee as trustee of the Trust effective as of the Initial Closing
Date, to have all the rights, powers and duties set forth herein, and the Owner
Trustee has accepted such appointment.

Section 2.5. INITIAL CAPITAL CONTRIBUTION OF TRUST ESTATE. The
Depositor sold, assigned, transferred, conveyed and set over to the Owner
Trustee, as of the Initial Closing Date, the sum of $10. The Owner Trustee
acknowledged receipt in trust from the Depositor, as of the Initial Closing
Date, of the foregoing contribution, which constituted the initial Trust
Property and was deposited in the Certificate Distribution Account. The
Depositor shall pay organizational expenses of the Trust as they may arise or
shall, upon the request of the Owner Trustee, promptly reimburse the Owner
Trustee for any such expenses paid by the Owner Trustee.

Section 2.6. DECLARATION OF TRUST. The Owner Trustee declared as of
the Initial Closing Date and hereby declares that it will hold the Trust
Property in trust upon and subject to the conditions set forth herein for the
use and benefit of the Holders, subject to the interests and rights in the Trust
Property granted to other Persons by the Related Documents. It is the intention
and agreement of the parties hereto that the Trust constitute a business trust
under the Business Trust Statute and that this Agreement constitute the
governing instrument of such business trust. It is the intention and agreement
of the parties hereto that, solely for income and franchise tax purposes, the
Trust shall be treated as a partnership. None of the parties hereto shall make
the election provided in Treasury Regulation Section 301. 7701-3(c) to have the
Trust classified as an association taxable as a corporation. The parties agree
that, unless otherwise required by appropriate tax authorities, the Trust will
file or cause to be filed annual or other necessary returns, reports and other
forms consistent with the characterization of the Trust as a partnership for
such tax purposes. On the Initial Closing Date, the Owner Trustee filed the
Certificate of Trust required by Section 3810(a) of the Business Trust Statute
in the Office of the Secretary of State. Effective as of the Initial Closing
Date, the Owner Trustee shall have all rights, powers and duties set forth
herein and in the Business Trust Statute with respect to accomplishing the
purposes of the Trust.

Section 2.7. LIABILITY OF THE CERTIFICATEHOLDERS.

(a) The General Partner shall be liable directly to indemnify each
injured party for all losses, claims, damages, liabilities and expenses of
the Trust, to the extent not paid out of the Trust Property, to the extent
that such Person would be liable if the Trust were a partnership under the
Delaware Revised Uniform Limited Partnership Act and such Person were a
general partner; PROVIDED, HOWEVER, that the General Partner shall not be
liable for any losses incurred by a Certificateholder in the capacity of an
investor in the Certificates or a Note Owner in the capacity of an investor
in the Notes; PROVIDED, FURTHER, that the General Partner shall not be
liable to

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indemnify any injured party if such party has agreed that its recourse
against the Trust for any obligation or liability of the Trust to such
party shall be limited to the assets of the Trust. In addition, any third
party creditors of the Trust (other than in connection with the obligations
described in the provisos to the preceding sentence for which the General
Partner shall not be liable) shall be deemed third party beneficiaries of
this paragraph.

(b) No Certificateholder, other than to the extent set forth in
paragraph (a), shall have any personal liability for any liability or
obligation of the Trust or by reason of any action taken by the parties to
this Agreement pursuant to any provisions of this Agreement or any Related
Document.

Section 2.8. TITLE TO TRUST PROPERTY.

(a) Legal title to all the Trust Property shall be vested at all times
in the Trust as a separate legal entity except where applicable law in any
jurisdiction requires title to any part of the Trust Property to be vested
in a trustee or trustees, in which case title shall be deemed to be vested
in the Owner Trustee, a co-trustee and/or a separate trustee, as the case
may be.

(b) The Certificateholders shall not have legal title to any part of
the Trust Property. The Certificateholders shall be entitled to receive
distributions with respect to their undivided ownership interest therein
only in accordance with Articles V and IX. No transfer, by operation of
law or otherwise, of any right, title or interest by any Certificateholder
of its ownership interest in the Trust Property shall operate to terminate
this Agreement or the trusts hereunder or entitle any transferee to an
accounting or to the transfer to it of legal title to any part of the Trust
Property.

Section 2.9. SITUS OF TRUST. The Trust will be located and
administered in the State of Delaware. All bank accounts maintained by the
Owner Trustee on behalf of the Trust shall be located in the State of Delaware.
The Trust shall not have any employees in any state other than Delaware;
PROVIDED, HOWEVER, that nothing herein shall restrict or prohibit the Owner
Trustee, the Servicer or any agent of the Trust from having employees within or
without the State of Delaware. Payments will be received by the Trust only in
Delaware, and payments will be made by the Trust only from Delaware. The only
office of the Trust will be at the Corporate Trust Office in Delaware.

Section 2.10. REPRESENTATIONS AND WARRANTIES OF THE DEPOSITOR AND THE
GENERAL PARTNER. On the Initial Closing Date each of the Depositor and the
General Partner made and by execution of this Agreement, each of the Depositor
and the General Partner makes the following representations and warranties with
respect to itself on which the Owner Trustee relied and relies in accepting the
Trust Property in trust and issuing the Certificates. These representations and
warranties shall be deemed to be repeated on each day on which Investor
Certificates are issued pursuant to Section 3.2.

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(a) ORGANIZATION AND GOOD STANDING. It has been duly organized and is
validly existing as a corporation in good standing under the laws of the
State of Delaware, with power and authority to own its properties and to
conduct its business as such properties are currently owned and as such
business is currently conducted and is proposed to be conducted pursuant to
this Agreement and the Related Documents.

(b) DUE QUALIFICATION. It is duly qualified to do business as a
foreign corporation in good standing, and has obtained all necessary
licenses and approvals, in all jurisdictions in which the ownership or
lease of its property, the conduct of its business and the performance of
its obligations under this Agreement and the Related Documents requires
such qualification.

(c) POWER AND AUTHORITY. It has the power and authority to execute
and deliver this Agreement and its Related Documents and to perform its
obligations pursuant thereto; and the execution, delivery and performance
of this Agreement and its Related Documents have been duly authorized by
all necessary corporate action.

(d) NO CONSENT REQUIRED. No consent, license, approval or
authorization or registration or declaration with, any Person or with any
governmental authority, bureau or agency is required in connection with the
execution, delivery or performance of this Agreement and the Related
Documents, except for such as have been obtained, effected or made.

(e) NO VIOLATION. The consummation of the transactions contemplated
by this Agreement and its Related Documents and the fulfillment of its
obligations under this Agreement and its Related Documents shall not
conflict with, result in any breach of any of the terms and provisions of
or constitute (with or without notice, lapse of time or both) a default
under, its certificate of incorporation or by-laws, or any indenture,
agreement, mortgage, deed of trust or other instrument to which it is a
party or by which it is bound, or result in the creation or imposition of
any Lien upon any of its properties pursuant to the terms of any such
indenture, agreement, mortgage, deed of trust or other instrument, or
violate any law, order, rule or regulation applicable to it of any court or
of any federal or state regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over it or any of its
properties.

(f) NO PROCEEDINGS. There are no proceedings or investigations
pending or, to its knowledge threatened against it before any court,
regulatory body, administrative agency or other tribunal or governmental
instrumentality having jurisdiction over it or its properties (A) asserting
the invalidity of this Agreement or any of the Related Documents, (B)
seeking to prevent the issuance of the Certificates or the Notes or the
consummation of any of the transactions contemplated by this Agreement or
any of the Related Documents, (C) seeking any determination or ruling that
might materially and adversely affect its performance of its obligations
under, or the validity or enforceability of, this Agreement or any of the
Related Documents, or

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(D) seeking to adversely affect the federal income tax or other federal,
state or local tax attributes of the Certificates.

Section 2.11. FEDERAL INCOME TAX TREATMENT. The Seller has
structured this Agreement and the Investor Certificates with the intention that
the Investor Certificates will qualify under applicable federal, state, local
and foreign tax law as indebtedness. The Seller, the Servicer, the General
Partner, and each Investor Certificateholder agree to treat and to take no
action inconsistent with the treatment of the Investor Certificates (or
beneficial interest therein) as indebtedness for purposes of federal, state,
local and foreign income or franchise taxes and any other tax imposed on or
measured by income. Each Investor Certificateholder, by acceptance of its
Certificate, and the General Partner, agree to be bound by the provisions of
this Section 2.11. Furthermore, subject to Section 5.5, the Trustee shall treat
the Trust as a security device only, and shall not file tax returns or obtain an
employer identification number on behalf of the Trust.

In the event that the Investor Certificates are deemed for federal income
tax purposes to represent an equity interest in the Trust, the Trust shall be
treated for federal income tax purposes as a partnership among the Holders of
such Investor Certificates and the Seller. In the event such a partnership is
deemed to exist, the net income of the Trust for any month as determined for
Federal income tax purposes (and each item of income, gain, loss and deduction
entering into the computation thereof) shall be allocated:

(a) among the Investor Certificateholders as of the first Record Date
following the end of such month, in proportion to their ownership of
principal amount of Investor Certificates on such date, an amount of net
income up to the Certificateholders' Interest Distributable Amount for such
month; and

(b) next, to the General Partner to the extent of any remaining net
income.

If the net income of the Trust for any month is insufficient for the allocations
described in clause (a) above, subsequent net income shall first be allocated to
make up such shortfall before being allocated as provided in clause (b). Net
losses of the Trust, if any, for any month as determined for Federal income tax
purposes (and each item of income, gain, loss and deduction entering into the
computation thereof) shall be allocated to the General Partner to the extent it
is reasonably expected to bear the economic burden of such net losses, then net
losses shall be allocated among the Certificateholders as of the first Record
Date following the end of such month in proportion to their ownership of
principal amount of Certificates on such Record Date until the total amount of
losses allocated to those Certificateholders pursuant to this Section 2.11 plus
the total principal amount distributed to them equals the aggregate initial
principal balance of the Investor Certificates and any remaining net losses
shall be allocated to the General Partner. The General Partner is authorized to
modify the allocations in this paragraph if necessary for the allocations to
fairly reflect the economic income, gain or loss to the General Partner or the
Certificateholders in order to comply with the provisions of the Code and the
accompanying Treasury Regulations.

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Section 2.12. COVENANTS OF THE GENERAL PARTNER. As of the Initial
Closing Date the General Partner agreed and covenanted and as of the Effective
Date the General Partner agrees and covenants for the benefit of each
Certificateholder and the Owner Trustee, during the term of this Agreement, and
to the fullest extent permitted by applicable law, that:

(a) it shall not except as specifically permitted by this Agreement
and with the prior written consent of Morgan and the Certificateholders,
sell, transfer, assign, give or encumber by operation of law or otherwise
its general partnership interest in the Trust;

(b) it shall not create, incur or suffer to exist any indebtedness or
engage in any business, except, in each case, as permitted by its
certificate of incorporation and the Related Documents;

(c) it shall not, for any reason, institute proceedings for the Trust
to be adjudicated a bankrupt or insolvent, or consent to the institution of
bankruptcy or insolvency proceedings against the Trust, or file a petition
seeking or consenting to reorganization or relief under any applicable
federal or state law relating to the bankruptcy of the Trust, or consent to
the appointment of a receiver, liquidator, assignee, trustee, sequestrator
(or other similar official) of the Trust or a substantial part of the
property of the Trust or cause or permit the Trust to make any assignment
for the benefit of creditors, or admit in writing the inability of the
Trust to pay its debts generally as they become due, or declare or effect a
moratorium on the debt of the Trust or take any action in furtherance of
any such action;

(d) it shall obtain from each counterparty to each Related Document to
which it or the Trust is a party and each other agreement entered into on
or after the date hereof to which it or the Trust is a party, an agreement
by each such counterparty that prior to the occurrence of the event
specified in Section 9.1(e) such counterparty shall not institute against,
or join any other Person in instituting against, it or the Trust, any
bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings or other similar proceedings under the laws of the United
States or any state of the United States; and

(e) it shall not, for any reason, withdraw or attempt to withdraw from
this Agreement, dissolve, institute proceedings for it to be adjudicated a
bankrupt or insolvent, or consent to the institution of bankruptcy or
insolvency proceedings against it, or file a petition seeking or consenting
to reorganization or relief under any applicable federal or state law
relating to bankruptcy, or consent to the appointment of a receiver,
liquidator, assignee, trustee, sequestrator (or other similar official) of
it or a substantial part of its property, or make any assignment for the
benefit of creditors, or admit in writing its inability to pay its debts
generally as they become due, or declare or effect a moratorium on its debt
or take any action in furtherance of any such action.

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Section 2.13. COVENANTS OF THE HOLDERS. Each Holder by purchasing
its Certificate agrees:

(a) to be bound by the terms and conditions of its Certificate and of
this Agreement, including any supplements or amendments hereto and to
perform the obligations of a Certificateholder as set forth therein or
herein, in all respects as if it were a signatory hereto. This undertaking
is made for the benefit of the Trust, the Owner Trustee and all other
Certificateholders present and future.

(b) to treat and to take no action inconsistent with the treatment of
the Investor Certificates as indebtedness for purposes of federal, state,
local and foreign income or franchise taxes and any other tax imposed on or
measured by income. In the event the Investor Certificates are deemed for
federal income tax purposes to represent an equity interest in the Trust,
each Certificateholder hereby agrees to appoint the General Partner as such
Certificateholder's agent and attorney-in-fact to sign any federal income
tax information return filed on behalf of the Trust and agree that, if
requested by the Trust, it will sign such federal income tax information
return in its capacity as holder of an interest in the Trust. Each
Certificateholder also hereby agrees that in its tax returns it will not
take any position inconsistent with those taken in any tax returns filed by
the Trust.

(c) if such Certificateholder is other than an individual or other
entity holding its Certificate through a broker who reports securities
sales on Form 1099-B, to notify the Owner Trustee of any transfer by it of
a Certificate in a taxable sale or exchange, within 30 days of the date of
the transfer.

(d) until the completion of the events specified in Section 9.1(e),
not to, for any reason, institute proceedings for the Trust or a General
Partner to be adjudicated bankrupt or insolvent, or consent to the
institution of bankruptcy or insolvency proceedings against the Trust, or
file a petition seeking or consenting to reorganization or relief under any
applicable federal or state law relating to bankruptcy, or consent to the
appointment of a receiver, liquidator, assignee, trustee, sequestrator (or
other similar official) of the Trust or a substantial part of its property,
or cause or permit the Trust to make any assignment for the benefit of its
creditors, or admit in writing its inability to pay its debts generally as
they become due, or declare or effect a moratorium on its debt or take any
action in furtherance of any such action.

ARTICLE III
THE CERTIFICATES

Section 3.1. INITIAL OWNERSHIP. Upon the formation of the Trust by
the contribution by the Depositor pursuant to Section 2.5 and until the issuance
of the Certificates, the Depositor was the sole beneficiary of the Trust.

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Section 3.2. THE CERTIFICATES. Certificates shall be issued as
follows:

(a) Upon Depositor's demand, Investor Certificates with Certificate
Balances totalling up to the Maximum Certificate Balance shall be issued on
the Effectiveness Date to Persons designated by the Depositor to the Owner
Trustee.

(b) Following a Trust Property Liquidation Date and payment in full of
the Notes and Investor Certificates and any other expenses of the Trust,
the General Partner may instruct the Owner Trustee to pay to the General
Partner all or any portion of the funds remaining in the Collection
Account.

The Certificates shall be executed on behalf of the Owner Trustee by
manual or facsimile signature of any authorized signatory of the Owner Trustee
having such authority under the Owner Trustee's seal imprinted or otherwise
affixed thereon and attested on behalf of the Owner Trustee by the manual or
facsimile signature of any authorized signatory of the Owner Trustee.
Certificates bearing the manual or facsimile signatures of individuals who were,
at the time when such signatures were affixed, authorized to sign on behalf of
the Owner Trustee shall be validly issued and entitled to the benefits of this
Agreement, notwithstanding that such individuals or any of them have ceased to
be so authorized prior to the authentication and delivery of such Certificates.
The Investor Certificates shall be issued in initial denominations and in such
integral multiples as are necessary to comply with the terms of this Agreement
and of the Related Documents.

Section 3.3. AUTHENTICATION OF CERTIFICATES. Simultaneously with the
initial sale, assignment and transfer to the Trust of the Receivables and the
delivery to the Owner Trustee of the Receivables Files and the other Trust
Property pursuant to the Sale and Servicing Agreement, upon Depositor's order
(with no less than five Business Days prior notice) the Owner Trustee shall
cause Investor Certificates as described in Section 3.2(b), to be executed on
behalf of the Trust, authenticated and delivered to or upon the order of the
Depositor. No Certificate shall entitle its holder to any benefit under this
Agreement, or shall be valid for any purpose, unless there shall appear on such
Certificate a certificate of authentication substantially in the form set forth
in Exhibit B executed by the Owner Trustee or the Authentication Agent, by
manual or facsimile signature; such authentication shall constitute conclusive
evidence that such Certificate shall have been duly authenticated and delivered
hereunder. Wilmington Trust Company is hereby initially appointed
Authentication Agent. All Certificates shall be dated the date of their
authentication.

Section 3.4. REGISTRATION OF TRANSFER AND EXCHANGE OF CERTIFICATES.

(a) The Certificate Registrar shall maintain, or cause to be
maintained, at the office or agency maintained pursuant to Section 3.7, a
Certificate Register in which, subject to such reasonable regulations as it
may prescribe, the Owner Trustee shall provide for the registration of
Certificates and of transfers and exchanges of Certificates as provided in
this Agreement. Wilmington Trust Company is hereby initially appointed
Certificate Registrar for the purpose of registering Certificates and
transfers and exchanges of Certificates as provided in this Agreement.

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(b) Upon surrender for registration of transfer of any Certificate at
the office or agency maintained pursuant to Section 3.7, the Owner Trustee
shall execute, authenticate and deliver (or shall cause the Authentication
Agent to authenticate and deliver), in the name of the designated
transferee or transferees, one or more new Certificates in authorized
denominations of like Certificate Balance, dated the date of authentication
by the Owner Trustee or any authenticating agent. At the option of a
Holder, Certificates may be exchanged for other Certificates in authorized
denominations of a like Certificate Balance upon surrender of the
Certificates to be exchanged at the office or agency maintained pursuant to
Section 3.7.

(c) Every Certificate presented or surrendered for registration of
transfer or exchange shall be accompanied by a written instrument of
transfer in form satisfactory to the Owner Trustee and the Certificate
Registrar duly executed by the Holder or his attorney duly authorized in
writing. Each Certificate surrendered for registration of transfer or
exchange shall be canceled and subsequently disposed of by the Owner
Trustee in accordance with its customary practice.

(d) No service charge shall be made for any registration of transfer
or exchange of Certificates, but the Owner Trustee or the Certificate
Registrar may require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any transfer or
exchange of Certificates.

(e) Notwithstanding anything in this Agreement to the contrary, the
Investor Certificates shall be issued only in transactions which are not
required to be registered under the Securities Act of 1933, as amended, and
the Seller may prevent any transfer, participation or other disposition of
any interest in any Investor Certificate if the Seller, in its sole and
absolute discretion, determines that such transfer, participation or other
disposition, if effected, would cause the Trust to be treated as a publicly
traded partnership under Section 7704 of the Code or the Treasury
Regulations issued thereunder.

Section 3.5. MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES. If
(a) any mutilated Certificate is surrendered to the Certificate Registrar, or
the Certificate Registrar receives evidence to its satisfaction of the
destruction, loss or theft of any Certificate, and (b) there is delivered to the
Certificate Registrar and the Owner Trustee such security or indemnity as may be
required by them to save each of them harmless, then, in the absence of notice
to the Certificate Registrar or the Owner Trustee that such Certificate has been
acquired by a bona fide purchaser, the Owner Trustee on behalf of the Trust
shall execute, authenticate and deliver (or the Authentication Agent shall
authenticate and deliver), in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Certificate, a new Certificate of like Certificate
Balance. In connection with the issuance of any new Certificate under this
Section 3.5, the Owner Trustee may require the payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and expenses of the Owner
Trustee and the Certificate Registrar) connected therewith. Any duplicate
Certificate issued pursuant to this Section 3.5

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shall constitute conclusive evidence of ownership in the Trust, as if originally
issued, whether or not the lost, stolen or destroyed Certificate shall be found
at any time.

Section 3.6. PERSONS DEEMED OWNERS. Prior to due presentation of a
Certificate for registration of transfer, the Owner Trustee, the Certificate
Registrar and any agent of the Owner Trustee or the Certificate Registrar may
treat the person in whose name any Certificate is registered as the owner of
such Certificate for the purpose of receiving distributions pursuant to Section
5.2 and for all other purposes whatsoever, and neither the Owner Trustee, the
Certificate Registrar, nor any agent of the Owner Trustee or the Certificate
Registrar shall be affected by any notice to the contrary.

Section 3.7. MAINTENANCE OF OFFICE OR AGENCY. The Owner Trustee
shall maintain in Wilmington, Delaware, an office or offices or agency or
agencies where Certificates may be surrendered for registration of transfer or
exchange and where notices and demands to or upon the Owner Trustee in respect
of the Certificates and the Related Documents may be served. The Owner Trustee
initially designates Wilmington Trust Company, Rodney Square North, 1100 North
Market Street, Wilmington, Delaware 19890-0001 as its principal corporate trust
office for such purposes. The Owner Trustee shall give prompt written notice to
the Depositor and to the Certificateholders of any change in the location of the
Certificate Register or any such office of agency.

Section 3.8. APPOINTMENT OF PAYING AGENT. The Paying Agent shall
make distributions to Certificateholders from the Certificate Distribution
Account pursuant to Section 5.2 and shall report the amounts of such
distributions to the Owner Trustee. Any Paying Agent shall have the revocable
power to withdraw funds from the Certificate Distribution Account for the
purpose of making the distributions referred to above. The Owner Trustee may
revoke such power and remove the Paying Agent if the Owner Trustee determines in
its sole discretion that the Paying Agent shall have failed to perform its
obligations under this Agreement in any material respect. The Paying Agent
shall initially be Wilmington Trust Company, and any co-paying agent chosen by
Wilmington Trust Company and acceptable to the Owner Trustee. Wilmington Trust
Company shall be permitted to resign as Paying Agent upon 30 days' written
notice to the Owner Trustee. In the event that Wilmington Trust Company shall
no longer be the Paying Agent, the Owner Trustee shall appoint a successor to
act as Paying Agent (which shall be a bank or trust company). The Owner Trustee
shall cause such successor Paying Agent or any additional Paying Agent appointed
by the Owner Trustee to execute and deliver to the Owner Trustee an instrument
in which such successor Paying Agent or additional Paying Agent shall agree with
the Owner Trustee that as Paying Agent, such successor Paying Agent or
additional Paying Agent will hold all sums, if any, held by it for payment to
the Certificateholders in trust for the benefit of the Certificateholders
entitled thereto until such sums shall be paid to such Certificateholders. The
Paying Agent shall return all unclaimed funds to the Owner Trustee, and upon
removal of a Paying Agent, such Paying Agent shall also return all funds in its
possession to the Owner Trustee. The provisions of Sections 7.1, 7.3, 7.4 and
8.2 shall apply to the Owner Trustee also in its role as Paying Agent for so
long as the Owner Trustee shall act as Paying Agent and, to the extent
applicable, to any other paying agent appointed

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hereunder. Any reference in this Agreement to the Paying Agent shall include
any co-paying agent unless the context requires otherwise.

ARTICLE IV
ACTIONS BY OWNER TRUSTEE

Section 4.1. RESTRICTION ON POWER OF CERTIFICATEHOLDER. No
Certificateholder shall have any right to vote or in any manner otherwise
control the operation and management of the Trust except as expressly provided
in this Agreement.

Section 4.2. PRIOR NOTICE TO CERTIFICATEHOLDERS WITH RESPECT TO
CERTAIN MATTERS. The Owner Trustee shall not take any of the following actions
unless, at least 30 days before the taking of such action, the Owner Trustee
shall have notified the Certificateholders in writing of the proposed action and
the Certificateholders shall not have notified the Owner Trustee in writing
prior to the 30th day after such notice is given that such Certificateholders
have withheld consent or provided alternative direction:

(a) the election by the Trust to file an amendment to the Certificate
of Trust unless such amendment is required to be filed under the Business
Trust Statute or unless such amendment would not materially and adversely
affect the interests of the Certificateholders;

(b) the amendment of the Indenture by a supplemental indenture in
circumstances where the consent of any Noteholder is required unless (i)
such amendment would not materially and adversely affect the interests of
the Certificateholders or (ii) such amendment is made in connection with a
Securitized Offering in accordance with the final sentence of Section
11.1(a); or

(c) the amendment, change or modification of the Administration
Agreement, unless (i) such amendment would not materially and adversely
affect the interests of the Certificateholders or (ii) such amendment is
made in connection with a Securitized Offering in accordance with the final
sentence of Section 11.1(a).

Section 4.3. ACTION BY CERTIFICATEHOLDERS WITH RESPECT TO BANKRUPTCY.
The Owner Trustee shall not have the power to commence a voluntary proceeding in
bankruptcy relating to the Trust without the unanimous prior approval of all
Certificateholders and the delivery to the Owner Trustee by each such
Certificateholder of a certificate certifying that such Certificateholder
reasonably believes that the Trust is insolvent.

Section 4.4. RESTRICTIONS ON CERTIFICATEHOLDERS' POWER. No
Certificateholder shall have any right by virtue or by availing itself of any
provisions of this Agreement to institute any suit, action, or proceeding in
equity or at law upon or under or with respect to this Agreement or any Related
Document, unless such Certificateholder previously shall have given to the Owner
Trustee a written notice of default and of the continuance thereof, as provided
in this Agreement and unless Certificateholders evidencing not less than 25% of
the

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Certificate Balance represented by the Certificates shall have made written
request upon the Owner Trustee to institute such action, suit or proceeding in
its own name as Owner Trustee under this Agreement and shall have offered to the
Owner Trustee such reasonable indemnity as it may require against the costs,
expenses and liabilities to be incurred therein or thereby, and the Owner
Trustee, for 30 days after its receipt of such notice, request, and offer of
indemnity, shall have neglected or refused to institute any such action, suit,
or proceeding, and during such 30-day period no request or waiver inconsistent
with such written request has been given to the Owner Trustee pursuant to and in
compliance with this Section or Section 6.3; it being understood and intended,
and being expressly covenanted by each Certificateholder with every other
Certificateholder and the Owner Trustee, that no one or more Holders of
Certificates shall have any right in any manner whatever by virtue or by
availing itself or themselves of any provisions of this Agreement to affect,
disturb, or prejudice the rights of the Holders of any other of the
Certificates, or to obtain or seek to obtain priority over or preference to any
other such Holder, or to enforce any right under this Agreement, except in the
manner provided in this Agreement and for the equal, ratable, and common benefit
of all Certificateholders. For the protection and enforcement of the provisions
of this Section 4.4, each and every Certificateholder and the Owner Trustee
shall be entitled to such relief as can be given either at law or in equity.

ARTICLE V
APPLICATION OF TRUST FUNDS; CERTAIN DUTIES

Section 5.1. TRUST ACCOUNTS.

(a) The Owner Trustee, for the benefit of the Certificateholders, has
established and shall maintain the Certificate Distribution Account in the
name of the Trust for the benefit of the Certificateholders. The
Certificate Distribution Account shall be an Eligible Account and initially
was and is a segregated trust account established with the Owner Trustee
and maintained with the Owner Trustee.

(b) The Owner Trustee shall possess all right, title and interest in
all funds on deposit from time to time in the Certificate Distribution
Account and in all proceeds thereof. If, at any time, the Certificate
Distribution Account ceases to be an Eligible Account, the Owner Trustee
shall within 5 Business Days (or such longer period, not to exceed 30
calendar days, as to which each Rating Agency may consent) establish a new
Certificate Distribution Account as an Eligible Account and shall transfer
any cash and/or any investments to such new Certificate Distribution
Account.

(c) All amounts held in the Certificate Distribution Account shall, to
the extent permitted by applicable laws, rules and regulations, be
invested, by the Owner Trustee, in Eligible Investments that mature not
later than one Business Day prior to the Distribution Date for the Monthly
Period to which such amounts relate. Investments in Eligible Investments
shall be made in the name of the Trust, and such investments shall not be
sold or disposed of prior to their maturity. Any investment of funds in
the Trust Accounts shall be made in Eligible Investments held by a

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financial institution in accordance with the following requirements: (a)
all Eligible Investments shall be held in an account with such financial
institution in the name of the Trustee, (b) with respect to securities held
in such account, such securities shall be (i) certificated securities (as
such term is used in N.Y.U.C.C. Section 8-313(d)(i)), securities deemed to
be certificated securities under applicable regulations of the United
States government, or uncertificated securities issued by an issuer
organized under the laws of the State of New York or the State of Delaware,
(ii) either (A) in the possession of such institution, (B) in the
possession of a clearing corporation (as such term is used in Minn. Stat
Section 336.8-313(g)) in the State of New York, registered in the name of
such clearing corporation or its nominee, not endorsed for collection or
surrender or any other purpose not involving transfer, not containing any
evidence of a right or interest inconsistent with the Trustee's security
interest therein, and held by such clearing corporation in an account of
such institution, (C), held in an account of such institution with the
Federal Reserve Bank of New York or the Federal Reserve Bank of
Minneapolis, or (D) in the case of uncertificated securities, issued in the
name of such institution, and (iii) identified, by book entry or otherwise,
as held for the account of, or pledged to, the Trustee on the records of
such institution, and such institution shall have sent the Trustee a
confirmation thereof, (c) with respect to repurchase obligations held in
such account, such repurchase obligations shall be identified by such
institution, by book entry or otherwise, as held for the account of, or
pledged to, the Trustee on the records of such institution, and the related
securities shall be held in accordance with the requirements of clause (b)
above, and (d) with respect to other Eligible Investments other than
securities and repurchase agreements, such Eligible Investments shall be
held in a manner acceptable to the Trustee. Subject to the other
provisions hereof, the Trustee shall have sole control over each such
investment and the income thereon, and any certificate or other instrument
evidencing any such investment, if any, shall be delivered directly to the
Trustee or its agent, together with each document of transfer, if any,
necessary to transfer title to such investment to the Trustee in a manner
which complies with this Section 5.1. All interest, dividends, gains upon
sale and other income from, or earnings on investment of funds in the
Certificate Distribution Account shall be distributed on the next
Distribution Date pursuant to Section 4.6 of the Sale and Servicing
Agreement. The Servicer shall deposit in the Certificate Distribution
Account an amount equal to any net loss on such investments immediately as
realized.

Section 5.2. APPLICATION OF FUNDS IN CERTIFICATE DISTRIBUTION
ACCOUNT.

(a) On each Distribution Date the Owner Trustee will, based on the
information contained in the Servicer's Certificate delivered on the
related Determination Date pursuant to Section 3.9(a) of the Sale and
Servicing Agreement, distribute to the Certificateholders, on a pro rata
basis, to the extent of the funds available, amounts deposited in the
Certificate Distribution Account pursuant to Section 4.6 of the Sale and
Servicing Agreement on such Distribution Date in the following order of
priority:

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(i) first, an amount equal to the Certificateholders' Interest
Distributable Amount;

(ii) second, (x) an amount equal to the Certificateholders'
Percentage of any Principal Funding Excess Amount; (y) prior to the
Distribution Date on which the outstanding principal balance of the
Notes is reduced to zero, an amount equal to the Certificateholders'
Principal Distributable Amount and (z) on each Distribution Date
thereafter an amount equal to the Certificate Balance;

(iii) third, any amounts due and owing to any Indemnified Party
(as such term is used in the Certificate Purchase Agreement) under
Section 11.01, Section 11.04 or Section 11.05 of the Certificate
Purchase Agreement; and

(iv) any remaining amount will be paid to the General Partner.

(b) On the date on which a Securitized Offering occurs, the Owner
Trustee will, based on the information contained in the Servicer's
Certificate delivered with respect to such Securitized Offering pursuant to
Section 3.9(a) of the Sale and Servicing Agreement, distribute to the
Investor Certificateholders, on a pro rata basis, to the extent of the
funds available, amounts deposited in the Certificate Distribution Account
pursuant to Section 4.6 of the Sale and Servicing Agreement on such
Distribution Date in the following order of priority taking into account
any concurrent distribution made pursuant to Section 5.2(a):

(i) first, an amount equal to the Certificateholders' Interest
Distributable Amount;

(ii) second, an amount equal to the Certificate Balance;

(iv) any remaining amount will be paid to the General Partner.

On such date, the Owner Trustee shall also, after making the distributions
referred to above, distribute to the General Partner such funds as shall be
called for in the agreements pursuant to which the Securitized Offering is
completed.

(c) On the Distribution Date (i) following the date on which amounts
received in respect of the Seller's or the Servicer's exercise of its
option to purchase the corpus of the Trust pursuant to Sections 9.1(a) or
(b) of the Sale and Servicing Agreement are deposited in the Certificate
Distribution Account, (ii) on which Insolvency Proceeds are deposited in
the Certificate Distribution Account pursuant to Section 9.1(c) of the Sale
and Servicing Agreement (or on the Distribution Date immediately

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following such deposit if such proceeds are not deposited in the
Certificate Distribution Account on a Distribution Date), or (iii)
following the date on which the Indenture Trustee makes payments of money
or property in respect of liquidation of the Trust Property pursuant to
Section 5.06 of the Indenture and deposits funds received in connection
with such liquidation in the Certificate Distribution Account, in each case
based upon information contained in a Servicer's Certificate delivered
pursuant to Section 3.9(b) of the Sale and Servicing Agreement, the Owner
Trustee will distribute to the Certificateholders, on a pro rata basis,
such amounts taking into account any concurrent distribution made pursuant
to Section 5.2(a):

(i) first, an amount equal to the Certificateholders' Interest
Distributable Amount;

(ii) second, an amount equal to the Certificate Balance; and

(d) On each Distribution Date, the Owner Trustee shall send to each
Certificateholder the statement required pursuant to Section 4.9 of the
Sale and Servicing Agreement.

(e) In the event that any withholding tax is imposed on the Trust's
payment (or allocations of income) to a Certificateholder, such tax shall
reduce the amount otherwise distributable to the Certificateholder in
accordance with this Section. The Owner Trustee is hereby authorized and
directed to retain from amounts otherwise distributable to the
Certificateholders sufficient funds for the payment of any tax that is
legally owed by the Trust (but such authorization shall not prevent the
Owner Trustee from contesting any such tax in appropriate proceedings, and
withholding payment of such tax, if permitted by law, pending the outcome
of such proceedings). The amount of any withholding tax imposed with
respect to a Certificateholder shall be treated as cash distributed to such
Certificateholder at the time it is withheld by the Trust and remitted to
the appropriate taxing authority. If there is a possibility that
withholding tax is payable with respect to a distribution (such as a
distribution to a non-U.S. Certificateholder), the Owner Trustee may in its
sole discretion withhold such amounts in accordance with this paragraph
(e). In the event that a Certificateholder wishes to apply for a refund of
any such withholding tax, the Owner Trustee shall reasonably cooperate with
such Certificateholder in making such claim so long as such
Certificateholder agrees to reimburse the Owner Trustee for any
out-of-pocket expenses incurred.

(f) Upon final liquidation of the Trust, by notice given to the Owner
Trustee by the Seller or the Servicer pursuant to Section 9.1 of the Sale
and Servicing Agreement, any funds remaining in the Certificate
Distribution Account after

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distribution of all amounts specified in this Section 5.2 shall be
distributed to the General Partner.

Section 5.3. METHOD OF PAYMENT. Subject to Section 9.1(c) and
9.3(b), distributions required to be made to Certificateholders on any
Distribution Date shall be made to each Certificateholder of record on the
preceding Record Date by wire transfer, in immediately available funds, to the
account of such Holder at a bank or other entity having appropriate facilities
therefor, which such Certificateholder shall have designated to the Certificate
Registrar, with appropriate written wire transfer instructions, at least five
Business Days prior to such Distribution Date.

Section 5.4. NO SEGREGATION OF MONIES; NO INTEREST. Subject to
Sections 5.1 and 5.2, monies received by the Owner Trustee hereunder need not be
segregated in any manner except to the extent required by law or by the Sale and
Servicing Agreement and may be deposited under such general conditions as may be
prescribed by law, and the Owner Trustee shall not be liable for any interest
thereon.

Section 5.5. ACCOUNTING; REPORTS; TAX RETURNS.

(a) The Administrator has agreed pursuant to the Administration
Agreement that the Administrator shall (i) maintain (or cause to be
maintained) the books of the Trust on a calendar year basis on the accrual
method of accounting, (ii) deliver to each Certificateholder, as may be
required by the Code and applicable Treasury Regulations, such information
as may be required (including Form 1099 or Schedule K-1) to enable each
Certificateholder to prepare its Federal and state income tax returns,
(iii) if the Investor Certificates are deemed for federal income tax
purposes to represent an equity interest in the Trust, to file or cause to
be filed such tax returns relating to the Trust (including a partnership
information return, Form 1065), and direct the Owner Trustee to make such
elections as may from time to time be required or appropriate under any
applicable state or Federal statute or rule or regulation thereunder so as
to maintain the Trust's characterization as a partnership for Federal
income tax purposes, (iv) collect or cause to be collected any withholding
tax as described in and in accordance with Section 5.2(c) with respect to
income or distributions to Certificateholders and (v) file or cause to be
filed all documents required to be filed by the Trust with the Securities
and Exchange Commission and otherwise take or cause to be taken all such
actions as are notified by the Servicer to the Administrator as being
required for the Trust's compliance with all applicable provisions of state
and federal securities laws.

(b) The Owner Trustee shall make all elections pursuant to this
Section 5.5 as directed in writing by the General Partner, with the consent
of Morgan. The Owner Trustee shall elect under Section 1278 of the Code to
include in income currently any market discount that accrues with respect
to the Receivables. The Owner Trustee shall not make the election provided
under Section 754 of the Code.

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(c) The Owner Trustee shall sign on behalf of the Trust the tax
returns of the Trust, unless applicable law requires a Certificateholder to
sign such documents, in which case such documents shall be signed by the
General Partner. In signing any tax return of the Trust, the Owner Trustee
shall rely entirely upon, and shall have no liability for, information or
calculations provided by the General Partner.

(d) The General Partner shall be the "tax matters partner" of the
Trust pursuant to the Code.

(e) None of the parties hereto shall make the election provided in
Treasury Regulation Section 301.7701-3(c) to have the Trust classified as
an association taxable as a corporation.

ARTICLE VI
AUTHORITY AND DUTIES OF OWNER TRUSTEE

Section 6.1. GENERAL AUTHORITY. The Owner Trustee is authorized and
directed to execute and deliver the Related Documents to which the Trust is to
be a party and each certificate or other document attached as an exhibit to or
contemplated by the Related Documents to which the Trust is to be a party and
any amendment thereto (including any amendment entered into in connection with a
Securitized Offering in accordance with the final sentence of Section 11.1(a)
and any additional agreements called for by each such amendment), and on behalf
of the Trust, to direct the Indenture Trustee to authenticate and deliver the
Notes in the aggregate maximum principal amount of $240,000,000. In addition to
the foregoing, the Owner Trustee is authorized, but shall not be obligated, to
take all actions required of the Trust pursuant to the Related Documents. The
Owner Trustee is further authorized, on behalf of the Trust, to enter into the
Administration Agreement, to appoint, with the consent of Morgan, a successor
Administrator and to take from time to time such action as Morgan recommends
with respect to the Related Documents so long as such actions are consistent
with the terms of the Related Documents.

Section 6.2. GENERAL DUTIES. It shall be the duty of the Owner
Trustee to discharge (or cause to be discharged through the Administrator or
such agents as shall be appointed with the consent of Morgan) all of its
responsibilities pursuant to the terms of this Agreement and the Related
Documents and to administer the Trust in the interest of the Certificateholders,
subject to the Related Documents and in accordance with the provisions of this
Agreement. Notwithstanding the foregoing, the Owner Trustee shall be deemed to
have discharged its duties and responsibilities hereunder and under the Related
Documents to the extent the Administrator has agreed in the Administration
Agreement to perform any act or to discharge any duty of the Owner Trustee
hereunder or under any Related Document, and the Owner Trustee shall not be
liable for the default or failure of the Administrator to carry out its
obligations under the Administration Agreement.

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Section 6.3. ACTION UPON INSTRUCTION.

(a) Subject to Article IV, the Certificate Majority shall have the
exclusive right to direct the actions of the Owner Trustee in the
management of the Trust, so long as such instructions are not inconsistent
with the express terms set forth herein or in any Related Document. The
Certificate Majority shall not instruct the Owner Trustee in a manner
inconsistent with this Agreement or the Related Documents.

(b) The Owner Trustee shall not be required to take any action
hereunder or under any Related Document if the Owner Trustee shall have
reasonably determined, or shall have been advised by counsel, that such
action is contrary to the terms hereof or of any Related Document or is
otherwise contrary to law.

(c) Whenever the Owner Trustee is unable to decide between alternative
courses of action permitted or required by the terms of this Agreement or
any Related Document, the Owner Trustee shall promptly give notice (in such
form as shall be appropriate under the circumstances) to the
Certificateholders requesting instruction as to the course of action to be
adopted, and to the extent the Owner Trustee acts in good faith in
accordance with any written instruction received from the Certificate
Majority, the Owner Trustee shall not be liable on account of such action
to any Person. If the Owner Trustee shall not have received appropriate
instruction within ten days of such notice (or within such shorter period
of time as reasonably may be specified in such notice or may be necessary
under the circumstances) it may, but shall be under no duty to, take or
refrain from taking such action, not inconsistent with this Agreement or
the Related Documents, as it shall deem to be in the best interests of the
Certificateholders, and shall have no liability to any Person for such
action or inaction.

(d) In the event that the Owner Trustee is unsure as to the
application of any provision of this Agreement or any Related Document or
any such provision is ambiguous as to its application, or is, or appears to
be, in conflict with any other applicable provision, or in the event that
this Agreement permits any determination by the Owner Trustee or is silent
or is incomplete as to the course of action that the Owner Trustee is
required to take with respect to a particular set of facts, the Owner
Trustee may give notice (in such form as shall be appropriate under the
circumstances) to the Certificateholders requesting instruction and, to the
extent that the Owner Trustee acts or refrains from acting in good faith in
accordance with any such instruction received from a Certificate Majority,
the Owner Trustee shall not be liable, on account of such action or
inaction, to any Person. If the Owner Trustee shall not have received
appropriate instruction within 10 days of such notice (or within such
shorter period of time as reasonably may be specified in such notice or may
be necessary under the circumstances) it may, but shall be under no duty
to, take or refrain from taking such action, not inconsistent with this
Agreement or the Related Documents, as it shall deem to be in the best
interests of the Certificateholders, and shall have no liability to any
Person for such action or inaction.
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Section 6.4. NO DUTIES EXCEPT AS SPECIFIED IN THIS AGREEMENT OR IN
INSTRUCTIONS. The Owner Trustee shall not have any duty or obligation to
manage, make any payment with respect to, register, record, sell, dispose of, or
otherwise deal with the Trust Property, or to otherwise take or refrain from
taking any action under, or in connection with, any document contemplated hereby
to which the Trust is a party, except as expressly provided by the terms of this
Agreement (including as provided in Section 6.2) or in any written instruction
received by the Owner Trustee pursuant to Section 6.3; and no implied duties or
obligations shall be read into this Agreement or any Related Document against
the Owner Trustee. The Owner Trustee shall have no responsibility for
preparing, monitoring or filing any financing or continuation statements in any
public office at any time or otherwise to perfect or maintain the perfection of
any security interest or lien granted to it hereunder or to record this
Agreement or any Related Document; however, the Owner Trustee will from time to
time execute and deliver such financing or continuation statements as are
prepared by the Servicer and delivered to the Owner Trustee for its execution on
behalf of the Trust for the purpose of perfecting or maintaining the perfection
of such a security interest or lien or effecting such a recording. The Owner
Trustee nevertheless agrees that it will, at its own cost and expense (and not
at the expense of the Trust), promptly take all action as may be necessary to
discharge any liens on any part of the Trust Property that are attributable to
claims against the Owner Trustee in its individual capacity that are not related
to the ownership or the administration of the Trust Property.

Section 6.5. NO ACTION EXCEPT UNDER SPECIFIED DOCUMENTS OR
INSTRUCTIONS. The Owner Trustee shall not manage, control, use, sell, dispose
of or otherwise deal with any part of, the Trust Property except (i) in
accordance with the powers granted to and the authority conferred upon the Owner
Trustee pursuant to this Agreement, (ii) in accordance with the Related
Documents and (iii) in accordance with any document or instruction delivered to
the Owner Trustee pursuant to Section 6.3.

Section 6.6. RESTRICTIONS. The Owner Trustee shall not take any
action (a) that is inconsistent with the purposes of the Trust set forth in
Section 2.3 or (b) that, to the actual knowledge of the Owner Trustee, would
result in the Trust's becoming taxable as a corporation for Federal income tax
purposes. The Certificateholders shall not direct the Owner Trustee to take
action that would violate the provisions of this Section.

Section 6.7. ADMINISTRATION AGREEMENT.

(a) The Administrator is authorized to execute on behalf of the Trust
all documents, reports, filings, instruments, certificates and opinions as
it shall be the duty of the Trust to prepare, file or deliver pursuant to
the Related Documents. Upon written request, the Owner Trustee shall
execute and deliver to the Administrator a power of attorney appointing the
Administrator its agent and attorney-in-fact to execute all such documents,
reports, filings, instruments, certificates and opinions.

(b) If the Administrator shall resign or be removed pursuant to the
terms of the Administration Agreement, the Owner Trustee may, and is hereby
authorized and empowered to, subject to obtaining the prior written consent
of Morgan, appoint or

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consent to the appointment of a successor Administrator pursuant to the
Administration Agreement.

(c) If the Administration Agreement is terminated, the Owner Trustee
may, and is hereby authorized and empowered to, subject to obtaining the
prior written consent of Morgan, appoint or consent to the appointment of a
Person to perform substantially the same duties as are assigned to the
Administrator in the Administration Agreement pursuant to an agreement
containing substantially the same provisions as are contained in the
Administration Agreement.

(d) The Owner Trustee shall promptly notify each Certificateholder of
any default by or misconduct of the Administrator under the Administration
Agreement of which the Owner Trustee has received written notice or of
which a Responsible Officer has actual knowledge.

ARTICLE VII
CONCERNING THE OWNER TRUSTEE

Section 7.1. ACCEPTANCE OF TRUSTEE AND DUTIES. The Owner Trustee
accepted the trusts created by the Original Trust Agreement on the Initial
Closing Date and hereby agrees to perform its duties hereunder with respect to
such trusts but only upon the terms of this Agreement. The Owner Trustee also
agrees to disburse all monies actually received by it constituting part of the
Trust Property upon the terms of the Related Documents and this Agreement. The
Owner Trustee shall not be answerable or accountable hereunder or under any
Related Document under any circumstances, except (i) for its own willful
misconduct or gross negligence, (ii) in the case of the inaccuracy of any
representation or warranty contained in Section 7.3, (iii) for liabilities
arising from the failure of the Owner Trustee to perform obligations expressly
undertaken by it in the last sentence of Section 6.4 hereof, (iv) for any
investments issued by the Owner Trustee or any branch or affiliate thereof in
its commercial capacity or (v) for taxes, fees or other charges on, based on or
measured by, any fees, commissions or compensation received by the Owner Trustee
in connection with any of the transactions contemplated by this Agreement or any
Related Document. In particular, but not by way of limitation (and subject to
the exceptions set forth in the preceding sentence):

(a) the Owner Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer of the Owner Trustee;

(b) the Owner Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the
instructions of the Certificate Majority;

(c) no provision of this Agreement or any Related Document shall
require the Owner Trustee to expend or risk funds or otherwise incur any
financial liability in the performance of any of its rights or powers
hereunder or under any Related Document

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if the Owner Trustee shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured or provided to it;

(d) under no circumstances shall the Owner Trustee be liable for
indebtedness evidenced by or arising under this Agreement or any of the
Related Documents, including the principal of and interest on the
Certificates or the Notes;

(e) the Owner Trustee shall not be responsible for or in respect of
the validity or sufficiency of this Agreement or for the due execution
hereof by the Depositor or the General Partner or for the form, character,
genuineness, sufficiency, value or validity of any of the Trust Property or
for or in respect of the validity or sufficiency of the Related Documents,
other than the certificate of authentication on the Certificates, and the
Owner Trustee shall in no event assume or incur any liability, duty, or
obligation to the Custodian, the Indenture Trustee, any Noteholder or to
any Certificateholder, other than as expressly provided for herein and in
the Related Documents;

(f) the Owner Trustee shall not be liable for the default or
misconduct of the Administrator, the Custodian, the Indenture Trustee or
the Servicer under any of the Related Documents or otherwise and the Owner
Trustee shall have no obligation or liability to perform the obligations of
the Trust under this Agreement or the Related Documents that are required
to be performed by the Administrator under the Administration Agreement,
the Custodian under the Custodian Agreement, the Indenture Trustee under
the Indenture or the Servicer under the Sale and Servicing Agreement; and

(g) the Owner Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Agreement, or to institute,
conduct or defend any litigation under this Agreement or otherwise or in
relation to this Agreement or any Related Document, at the request, order
or direction of the Certificate Majority, unless such Certificate Majority
has offered to the Owner Trustee security or indemnity satisfactory to it
against the costs, expenses and liabilities that may be incurred by the
Owner Trustee therein or thereby. The right of the Owner Trustee to
perform any discretionary act enumerated in this Agreement or in any
Related Document shall not be construed as a duty, and the Owner Trustee
shall not be answerable for other than its gross negligence or willful
misconduct in the performance of any such act.

Section 7.2. FURNISHING OF DOCUMENTS. The Owner Trustee shall
furnish to the Certificateholders promptly upon receipt of a written request
therefor, duplicates or copies of all reports, notices, requests, demands,
certificates, financial statements and any other instruments furnished to the
Owner Trustee under the Related Documents unless the Certificateholders have
previously received such items.

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Section 7.3. REPRESENTATIONS AND WARRANTIES. As of the Initial
Closing Date, the Owner Trustee represented and warranted and as of the
Effectiveness Date the Owner Trustee hereby represents and warrants to the
Depositor and the Certificateholders that:

(a) It is a banking corporation duly organized and validly existing in
good standing under the laws of the State of Delaware. It has all
requisite corporate power and authority and all franchises, grants,
authorizations, consents, orders and approvals from all governmental
authorities necessary to execute, deliver and perform its obligations under
this Agreement and each Related Document to which the Trust is a party.

(b) It has taken all corporate action necessary to authorize the
execution and delivery by it of this Agreement and each Related Document to
which the Trust is a party, and this Agreement and each Related Document
will be executed and delivered by one of its officers who is duly
authorized to execute and deliver this Agreement on its behalf.

(c) Neither the execution nor the delivery by it of this Agreement,
nor the consummation by it of the transactions contemplated hereby nor
compliance by it with any of the terms or provisions hereof will contravene
any Federal or Delaware law, governmental rule or regulation governing the
banking or trust powers of the Owner Trustee or any judgment or order
binding on it, or constitute any default under its charter documents or
by-laws or any indenture, mortgage, contract, agreement or instrument to
which it is a party or by which any of its properties may be bound or
result in the creation or imposition of any lien, charge or encumbrance on
the Trust Property resulting from actions by or claims against the Owner
Trustee individually which are unrelated to this Agreement or the Related
Documents.

Section 7.4. RELIANCE; ADVICE OF COUNSEL.

(a) The Owner Trustee shall incur no liability to anyone in acting
upon any signature, instrument, notice, resolution, request, consent,
order, certificate, report, opinion, bond, or other document or paper
believed by it to be genuine and believed by it to be signed by the proper
party or parties. The Owner Trustee may accept a certified copy of a
resolution of the board of directors or other governing body of any
corporate party as conclusive evidence that such resolution has been duly
adopted by such body and that the same is in full force and effect. As to
any fact or matter the method of the determination of which is not
specifically prescribed herein, the Owner Trustee may for all purposes
hereof rely on a certificate, signed by the president or any vice president
or by the treasurer or other authorized officers of the relevant party, as
to such fact or matter, and such certificate shall constitute full
protection to the Owner Trustee for any action taken or omitted to be taken
by it in good faith in reliance thereon.

(b) In the exercise or administration of the trusts hereunder and in
the performance of its duties and obligations under this Agreement or the
Related

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Documents, the Owner Trustee (i) may act directly or through its agents or
attorneys pursuant to agreements entered into with any of them, and the
Owner Trustee shall not be liable for the conduct or misconduct of such
agents or attorneys if such agents or attorneys shall have been selected by
the Owner Trustee with reasonable care, and (ii) may consult with counsel,
accountants and other skilled persons to be selected with reasonable care
and employed by it. The Owner Trustee shall not be liable for anything
done, suffered or omitted in good faith by it in accordance with the
written opinion or advice of any such counsel, accountants or other such
persons and not contrary to this Agreement or any Related Document.

Section 7.5. NOT ACTING IN INDIVIDUAL CAPACITY. Except as provided
in this Article VII, in accepting the trusts hereby created Wilmington Trust
Company acts solely as Owner Trustee hereunder and not in its individual
capacity and all Persons having any claim against the Owner Trustee by reason of
the transactions contemplated by this Agreement or any Related Document shall
look only to the Trust Property for payment or satisfaction thereof.

Section 7.6. OWNER TRUSTEE NOT LIABLE FOR CERTIFICATES, NOTES OR
RECEIVABLES. The recitals contained herein and in the Certificates (other than
the signature and counter-signature of the Owner Trustee on the Certificates)
shall be taken as the statements of the Depositor (other than the signature or
countersignature of the Owner Trustee on the Notes), and the Owner Trustee
assumes no responsibility for the correctness thereof. The Owner Trustee makes
no representations as to the validity or sufficiency of this Agreement, of any
Related Document or of the Certificates (other than the signature and
counter-signature of the Owner Trustee on the Certificates) or the Notes (other
than the signature or counter-signature of the Owner Trustee on the Notes), or
of any Receivable or related documents. The Owner Trustee shall at no time have
any responsibility or liability for or with respect to the legality, validity
and enforceability of any Receivable, or the perfection and priority of any
security interest created by any Receivable in any Financed Vehicle or the
maintenance of any such perfection and priority of any security interest created
by any Receivable in any Financed Vehicle or the maintenance of any such
perfection and priority, or for or with respect to the sufficiency of the Trust
Property or its ability to generate the payments to be distributed to
Certificateholders under this Agreement or the Noteholders under the Indenture,
including, without limitation: the existence, condition and ownership of any
Financed Vehicle; the existence and enforceability of any insurance thereon; the
existence and contents of any Receivable or any computer or other record
thereof; the validity of the assignment of any Receivable to the Trust or of any
intervening assignment; the completeness of any Receivable; the performance or
enforcement of any Receivable; the compliance by the Seller or the Servicer with
any warranty or representation made under any Related Document or in any related
document or the accuracy of any such warranty or representation or any action of
the Indenture Trustee, the Custodian or the Servicer taken in the name of the
Owner Trustee.

Section 7.7. OWNER TRUSTEE MAY OWN CERTIFICATES AND NOTES. The Owner
Trustee in its individual or any other capacity may become the owner or pledgee
of Certificates or Notes and may deal with the Depositors, the Seller, the
Indenture Trustee and

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the Servicer in banking or other transactions with the same rights as it would
have if it were not Owner Trustee.

ARTICLE VIII
COMPENSATION OF OWNER TRUSTEE

Section 8.1. OWNER TRUSTEE'S FEES AND EXPENSES. The Owner Trustee
shall receive as compensation for its services hereunder such fees as have been
separately agreed upon before the date hereof between AFL and the Owner Trustee,
and the Owner Trustee shall be entitled to be reimbursed by AFL for its other
reasonable expenses hereunder, including the reasonable compensation, expenses
and disbursements of such agents, representatives, experts and counsel as the
Owner Trustee may employ in connection with the exercise and performance of its
rights and its duties hereunder; PROVIDED, HOWEVER, that the Owner Trustee shall
only be entitled to reimbursement for expenses hereunder to the extent such
expenses (i) are fees of outside counsel engaged by the Owner Trustee in respect
of the performance of its obligations hereunder or (ii) relate to the
performance of its obligations pursuant to Section 5.5 hereof.

Section 8.2. INDEMNIFICATION. AFL shall be liable as primary obligor
for, and shall indemnify the Owner Trustee in its individual capacity and its
successors, assigns, agents and servants, and any co-trustee (including William
J. Wade) (collectively, the "Indemnified Parties") from and against, any and all
liabilities, obligations, losses, damages, taxes, claims, actions and suits, and
any and all reasonable costs, expenses and disbursements (including reasonable
legal fees and expenses) of any kind and nature whatsoever (collectively,
"Expenses") which may at any time be imposed on, incurred by, or asserted
against the Owner Trustee or any Indemnified Party in any way relating to or
arising out of this Agreement, the Related Documents, the Trust Property, the
administration of the Trust Property or the action or inaction of the Owner
Trustee hereunder, except only that AFL shall not be liable for or required to
indemnify the Owner Trustee from and against Expenses arising or resulting from
any of the matters described in the third sentence of Section 7.1. The
indemnities contained in this Section shall survive the resignation or
termination of the Owner Trustee or the termination of this Agreement.

Section 8.3. NON-RECOURSE OBLIGATIONS. Notwithstanding anything in
this Agreement or any Related Document, the Owner Trustee agrees in its
individual capacity and in its capacity as Owner Trustee for the Trust that all
obligations of the Trust to the Owner Trustee individually or as Owner Trustee
for the Trust shall be recourse to the Trust Property only and specifically
shall not be recourse to the assets of any Certificateholder.

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ARTICLE IX
TERMINATION; RECAPITALIZATION

Section 9.1. TERMINATION OF THE TRUST.

(a) The respective obligations and responsibilities of the Depositor,
the General Partner and the Owner Trustee created by this Agreement and the
Trust created by this Agreement shall terminate upon the latest of (i) the
maturity or other liquidation of the last Receivable (including the
purchase as of any Accounting Date by the Seller or the Servicer at its
option of the corpus of the Trust as described in Section 9.1(a) and, if so
specified by the Seller in writing, Section 9.1(b) of the Sale and
Servicing Agreement) and the subsequent distribution of amounts in respect
of such Receivables as provided in the Related Documents, (ii) the payment
to Certificateholders of all amounts required to be paid to them pursuant
to this Agreement (other than in connection with a Securitized Offering and
an optional purchase under Section 9.1(b) of the Sale and Servicing
Agreement where the Seller has not indicated that the Trust will
terminate), or (iii) at the time provided in Section 9.2. In any case,
there shall be delivered to the Owner Trustee, the Indenture Trustee and
the Rating Agencies an Opinion of Counsel that all applicable preference
periods under federal, state and local bankruptcy, insolvency and similar
laws have expired with respect to the payments pursuant to clause (ii);
PROVIDED, HOWEVER, that in no event shall the trust created by this
Agreement continue beyond the expiration of 21 years from the death of the
last survivor of the descendants living on the date of this Agreement of
Rose Kennedy of the Commonwealth of Massachusetts; and PROVIDED, FURTHER,
that the rights to indemnification under Section 8.2 shall survive the
termination of the Trust. The Servicer shall promptly notify the Owner
Trustee of any prospective termination pursuant to this Section 9.1.
Except as provided in Section 9.2, the bankruptcy, liquidation,
dissolution, termination, resignation, expulsion, withdrawal, death or
incapacity of any Certificateholder or the General Partner, shall not (x)
operate to terminate this Agreement or the Trust, nor (y) entitle such
Certificateholder's or the General Partner's legal representatives or heirs
to claim an accounting or to take any action or proceeding in any court for
a partition or winding up of all or any part of the Trust or Trust Property
nor (z) otherwise affect the rights, obligations and liabilities of the
parties hereto.

(b) Except as provided in Section 9.1(a), neither the Depositor nor
any Certificateholder shall be entitled to revoke or terminate the Trust.

(c) Promptly upon receipt of notice of final distribution on the
Certificates from the Seller or the Servicer given pursuant to Section 9.1
of the Sale and Servicing Agreement, the Owner Trustee shall mail written
notice to the Certificateholders specifying (i) the Distribution Date upon
which final payment of the Certificates shall be made upon presentation and
surrender of Certificates at the office of the Paying Agent therein
specified, (ii) the amount of any such final payment, and (iii) that the
Record Date otherwise applicable to such Distribution Date is not
applicable, payments being made only upon presentation and surrender of the
Certificates at the

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office of the Paying Agent therein specified. The Owner Trustee shall give
such notice to the Certificate Registrar at the time such notice is given
to Certificateholders. In the event such notice is given, the Indenture
Trustee shall make deposits into the Certificate Distribution Account in
accordance with Section 4.6 of the Sale and Servicing Agreement, or, in the
case of an optional purchase of Receivables pursuant to Section 9.1 of the
Sale and Servicing Agreement, shall deposit the amount specified in Section
9.1 of the Sale and Servicing Agreement. Upon presentation and surrender
of the Certificates, the Paying Agent shall cause to be distributed to
Certificateholders amounts distributable on such Distribution Date pursuant
to Section 5.2.

(d) In the event that all of the Certificateholders shall not
surrender their Certificates for cancellation within six months after the
date specified in the above-mentioned written notice, the Owner Trustee
shall give a second written notice to the remaining Certificateholders to
surrender their Certificates for cancellation and receive the final
distribution with respect thereto. If within one year after the second
notice all the Certificates shall not have been surrendered for
cancellation, the Owner Trustee may take appropriate steps, or may appoint
an agent to take appropriate steps, to contact the remaining
Certificateholders concerning surrender of their Certificates, and the cost
thereof shall be paid out of the funds and other assets that remain subject
to this Agreement. Any funds which are payable to Certificateholders
remaining in the Trust after exhaustion of such remedies shall be
distributed by the Owner Trustee to The United Way (but only upon
termination of this Agreement), and the Certificateholders, by acceptance
of their Certificates, hereby waive any rights with respect to such funds.

(e) Upon the winding up of the Trust and its termination, the Owner
Trustee shall cause the Certificate of Trust to be canceled by filing a
certificate of cancellation with the Secretary of State in accordance with
the provisions of Section 3810 of the Business Trust Statute.

Section 9.2. DISSOLUTION EVENTS WITH RESPECT TO THE GENERAL PARTNER.
In the event that a Dissolution Event shall occur with respect to the General
Partner, the Trust will terminate unless, within 90 days after the occurrence of
the Dissolution Event with respect to the General Partner (x) a Certificate
Majority agrees in writing to continue the business of the Trust and to the
appointment of a Person to hold the partnership interest in the Trust held by
the General Partner and to assume the liabilities incident thereto and (y) the
Owner Trustee requests and obtains an opinion of counsel to the effect that a
failure to terminate the Trust upon the occurrence of such Dissolution Event
(and the transfer, if any, of the partnership interest in the Trust held by the
General Partner) will not cause the Trust to be treated as an association (or
publicly traded partnership) taxable as a corporation for federal income tax
purposes. Promptly after the occurrence of the events referred to in the
preceding sentence, (i) the General Partner shall give the Indenture Trustee and
the Owner Trustee written notice of the occurrence of such event, (ii) the Owner
Trustee shall, upon the receipt of such written notice, give prompt written
notice to the Certificateholders and the Indenture Trustee of the occurrence of
such event and (iii) the Indenture Trustee shall, upon

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receipt of written notice of the occurrence of such event from the Owner Trustee
or the Seller, give prompt written notice to the Noteholders of the occurrence
of such event; PROVIDED, HOWEVER, that any failure to give a notice required by
this sentence shall not prevent or delay, in any manner, a termination of the
Trust pursuant to the first sentence of this Section 9.2. Upon a termination
pursuant to this Section, the Owner Trustee shall direct the Indenture Trustee
to sell the assets of the Trust (other than the Trust Accounts) at one or more
private or public sales conducted in any manner permitted by law. The proceeds
of such a sale of the assets of the Trust shall be distributed as provided in
Section 9.1(c) of the Sale and Servicing Agreement.

Section 9.3. SECURITIZED OFFERING.

(a) The Certificates shall be subject to redemption, upon not less
than ten days prior notice from the General Partner to the Owner Trustee,
in connection with a Securitized Offering, PROVIDED that funds sufficient
to repay the Certificate Balance of the Investor Certificates and all
accrued interest on the Certificates are deposited in the Certificate
Distribution Account on or prior to the date of such Securitized Offering
and distributed to the Certificateholders in accordance with Section
5.2(b).

(b) Promptly upon receipt of notice of a Securitized Offering from the
General Partner, the Owner Trustee shall notify the Certificateholders
specifying (i) the date upon which final payment of the Certificates shall
be made upon presentation and surrender of Certificates at the office of
the Paying Agent therein specified, (ii) the amount of any such final
payment, and (iii) that the Record Date otherwise applicable to any
concurrent Distribution Date is not applicable, payments being made only
(unless such condition is waived by the General Partner) upon presentation
and surrender of the Certificates at the office of the Paying Agent therein
specified. Upon presentation and surrender of the Certificates (or without
presentation and surrender, if waived by the General Partner), the Paying
Agent shall cause to be distributed to Certificateholders amounts
distributable in connection with such Securitized Offering pursuant to
Section 5.2. Following any such distribution in connection with a
Securitized Offering, each Investor Certificateholder that has not
presented and surrendered its Certificate as described above shall do so
promptly, and the Investor Certificates shall be of no further force and
effect, whether or not so presented and surrendered.

ARTICLE X
SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES

Section 10.1. ELIGIBILITY REQUIREMENTS FOR OWNER TRUSTEE. The Owner
Trustee shall at all times be a corporation (i) satisfying the provisions of
Section 3807(a) of the Business Trust Statute; (ii) authorized to exercise
corporate trust powers; (iii) having a combined capital and surplus of at least
$50,000,000 and subject to supervision or examination by Federal or State
authorities; and (iv) having (or having a parent which has) a rating of at least
Baa3 by Moody's or BBB by Standard & Poor's. If such corporation shall

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publish reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purpose of this Section, the combined capital and surplus of such corporation
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. In case at any time the Owner Trustee
shall cease to be eligible in accordance with the provisions of this Section,
the Owner Trustee shall resign immediately in the manner and with the effect
specified in Section 10.2.

Section 10.2. RESIGNATION OR REMOVAL OF OWNER TRUSTEE. The Owner
Trustee may at any time resign and be discharged from the trusts hereby created
by giving written notice thereof to the General Partner and the Servicer at
least 30 days before the date specified in such instrument. Upon receiving such
notice of resignation, the General Partner shall promptly appoint a successor
Owner Trustee meeting the qualifications set forth in Section 10.1 by written
instrument, in duplicate, one copy of which instrument shall be delivered to the
resigning Owner Trustee and one copy to the successor Owner Trustee. If no
successor Owner Trustee shall have been so appointed and have accepted
appointment within 30 days after the giving of such notice of resignation, the
resigning Owner Trustee may petition any court of competent jurisdiction for the
appointment of a successor Owner Trustee.

If at any time the Owner Trustee shall cease to be eligible in
accordance with the provisions of Section 10.1 and shall fail to resign after
written request therefor by the General Partner or if at any time the Owner
Trustee shall be legally unable to act, or shall be adjudged bankrupt or
insolvent, or a receiver of the Owner Trustee or of its property shall be
appointed, or any public officer shall take charge or control of the Owner
Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, then the General Partner, with the consent of
Morgan may remove the Owner Trustee. If the General Partner shall remove the
Owner Trustee under the authority of the immediately preceding sentence, the
General Partner shall promptly appoint a successor Owner Trustee meeting the
qualification requirements of Section 10.1 by written instrument, in duplicate,
one copy of which instrument shall be delivered to the outgoing Owner Trustee so
removed and one copy to the successor Owner Trustee and payment of all fees owed
to the outgoing Owner Trustee.

Any resignation or removal of the Owner Trustee and appointment of a
successor Owner Trustee pursuant to any of the provisions of this Section shall
not become effective until all fees and expenses, including any indemnity
payments, due to the outgoing Owner Trustee have been paid and until acceptance
of appointment by the successor Owner Trustee pursuant to Section 10.3. The
General Partner shall provide notice of such resignation or removal of the Owner
Trustee to each of the Rating Agencies.

Section 10.3. SUCCESSOR OWNER TRUSTEE. Any successor Owner Trustee
appointed pursuant to Section 10.2 shall execute, acknowledge and deliver to the
General Partner and to its predecessor Owner Trustee an instrument accepting
such appointment under this Agreement, and thereupon the resignation or removal
of the predecessor Owner Trustee shall become effective and such successor Owner
Trustee, without any further act, deed or conveyance, shall become fully vested
with all the rights, powers, duties, and

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obligations of its predecessor under this Agreement, with like effect as if
originally named as Owner Trustee. The predecessor Owner Trustee shall deliver
to the successor Owner Trustee all documents and statements and monies held by
it under this Agreement; and the General Partner and the predecessor Owner
Trustee shall execute and deliver such instruments and do such other things as
may reasonably be required for fully and certainly vesting and confirming in the
successor Owner Trustee all such rights, powers, duties, and obligations.

No successor Owner Trustee shall accept appointment as provided in
this Section unless at the time of such acceptance such successor Owner Trustee
shall be eligible pursuant to Section 10.1.

Upon acceptance of appointment by a successor Owner Trustee pursuant
to this Section, the General Partner shall mail notice of the successor of such
Owner Trustee to all Certificateholders, the Indenture Trustee, the Noteholders
and the Rating Agencies. If the General Partner shall fail to mail such notice
within 10 days after acceptance of appointment by the successor Owner Trustee,
the successor Owner Trustee shall cause such notice to be mailed at the expense
of the General Partner.

Section 10.4. MERGER OR CONSOLIDATION OF OWNER TRUSTEE. Any
corporation into which the Owner Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Owner Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Owner Trustee, shall be the successor of the Owner Trustee
hereunder, provided such corporation shall be eligible pursuant to Section 10.1,
without the execution or filing of any instrument or any further act on the part
of any of the parties hereto, anything herein to the contrary notwithstanding,
and provided further that the Owner Trustee shall mail notice of such merger or
consolidation to the Rating Agencies.

Section 10.5. APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE.
Notwithstanding any other provisions of this Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Trust Property or any Financed Vehicle may at the time be located, the
Administrator and the Owner Trustee acting jointly shall have the power and
shall execute and deliver all instruments to appoint one or more Persons
approved by the Owner Trustee to act as co-trustee, jointly with the Owner
Trustee, or separate trustee or separate trustees, of all or any part of the
Trust Property, and to vest in such Person, in such capacity, such title to the
Trust, or any part thereof, and, subject to the other provisions of this
Section, such powers, duties, obligations, rights and trusts as the
Administrator and the Owner Trustee may consider necessary or desirable. If the
Administrator shall not have joined in such appointment within 15 days after the
receipt by it of a request so to do, the Owner Trustee shall have the power to
make such appointment. No co-trustee or separate trustee under this Agreement
shall be required to meet the terms of eligibility as a successor trustee
pursuant to Section 10.1 and no notice of the appointment of any co-trustee or
separate trustee shall be required pursuant to Section 10.1.

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Each separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:

(i) all rights, powers, duties, and obligations conferred or imposed
upon the Owner Trustee shall be conferred upon and exercised or performed
by the Owner Trustee and such separate trustee or co-trustee jointly (it
being understood that such separate trustee or co-trustee is not authorized
to act separately without the Owner Trustee joining in such act), except to
the extent that under any law of any jurisdiction in which any particular
act or acts are to be performed the Owner Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights,
powers, duties, and obligations (including the holding of title to the
Trust Property or any portion thereof in any such jurisdiction) shall be
exercised and performed singly by such separate trustee or co-trustee, but
solely at the direction of the Owner Trustee;

(ii) no trustee under this Agreement shall be personally liable by
reason of any act or omission of any other trustee under this Agreement;
and

(iii) the Administrator and the Owner Trustee acting jointly may at
any time accept the resignation of or remove any separate trustee or
co-trustee.

Any notice, request or other writing given to the Owner Trustee shall
be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article. Each separate trustee and co-trustee, upon its
acceptance of the trusts conferred, shall be vested with the estates or property
specified in its instrument of appointment, either jointly with the Owner
Trustee or separately, as may be provided therein, subject to all the provisions
of this Agreement, specifically including every provision of this Agreement
relating to the conduct of, affecting the liability of, or affording protection
to, the Owner Trustee. Each such instrument shall be filed with the Owner
Trustee and a copy thereof given to the Administrator.

Any separate trustee or co-trustee may at any time appoint the Owner
Trustee, its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Owner Trustee, to the extent permitted by law, without the appointment of a new
or successor trustee.

34
<PAGE>

ARTICLE XI
MISCELLANEOUS PROVISIONS

Section 11.1. AMENDMENT.

(a) This Agreement may be amended by the Depositor, the General
Partner and the Owner Trustee, but without the consent of any of the
Investor Certificateholders or Noteholders, (i) to cure any ambiguity, or
(ii) to correct, supplement or modify any provisions in this Agreement;
PROVIDED, HOWEVER, that such action shall not, as evidenced by an Opinion
of Counsel, adversely affect in any material respect the interests of any
Certificateholder or Noteholder. In addition, this Agreement and any
Related Document may be amended by the Depositor, the General Partner and
the Owner Trustee (or, in the case of a Related Document, the parties
thereto), but without the consent of any of the Investor
Certificateholders, in connection with any Securitized Offering, so long as
it is a condition precedent to the effectiveness of such amendment that the
Certificate Balance and all interest accrued on the Certificates be paid in
full and that any commitment to purchase additional Certificates or Notes
under the Certificate Purchase Agreement or the Note Purchase Agreement,
respectively, has been terminated.

(b) This Agreement may also be amended from time to time by the
Depositor, the General Partner and the Owner Trustee with the consent of a
Certificate Majority and, if such amendment materially and adversely
affects the interests of Noteholders, the consent of a Note Majority (which
consent of any Holder of a Certificate or Note given pursuant to this
Section or pursuant to any other provision of this Agreement shall be
conclusive and binding on such Holder and on all future Holders of such
Investor Certificate or Note and of any Investor Certificate or Note issued
upon the transfer thereof or in exchange thereof or in lieu thereof whether
or not notation of such consent is made upon the Investor Certificate or
Note) for the purpose of adding any provisions to or changing in any manner
or eliminating any of the provisions of this Agreement, or of modifying in
any manner the rights of the Holders of Certificates or Notes; PROVIDED,
HOWEVER, that, no such amendment shall directly or indirectly (a) increase
or reduce in any manner the amount of, or accelerate or delay the timing
of, collections of payments on Receivables or distributions that shall be
required to be made on any Certificate or Note or the Certificate Rate or
the Note Interest Rate or (b) reduce the aforesaid percentage required to
consent to any such amendment or any waiver hereunder, without the consent
of the Holders of all Certificates and Notes then outstanding.

(c) Prior to the execution of any such amendment or consent (other
than an amendment described in the final sentence of Section 11.1(a)), the
General Partner shall furnish written notification of the substance of such
amendment or consent to each Rating Agency.

35
<PAGE>

(d) Promptly after the execution of any such amendment or consent
(other than an amendment described in the final sentence of Section
11.1(a)), the Owner Trustee shall furnish written notification of the
substance of such amendment or consent to each Certificateholder and the
Indenture Trustee unless such parties have previously received such
notification.

(e) It shall not be necessary for the consent of Certificateholders or
Noteholders pursuant to Section 11.1(b) to approve the particular form of
any proposed amendment or consent, but it shall be sufficient if such
consent shall approve the substance thereof. The manner of obtaining such
consents (and any other consents of Certificateholders and Noteholders
provided for in this Agreement) and of evidencing the authorization of the
execution thereof by Certificateholders shall be subject to such reasonable
requirements as the Owner Trustee may prescribe, including the
establishment of record dates.

(f) Prior to the execution of any amendment to this Agreement (other
than an amendment described in the final sentence of Section 11.1(a)), the
Owner Trustee shall be entitled to receive and rely upon an Opinion of
Counsel stating that the execution of such amendment is authorized or
permitted by this Agreement and that all conditions precedent to the
execution and delivery of such amendment have been satisfied. The Owner
Trustee may, but shall not be obligated to, enter into any such amendment
which affects the Owner Trustee's own rights, duties or immunities under
this Agreement or otherwise.

Section 11.2. NO RECOURSE. Each Certificateholder by accepting a
Certificate acknowledges that such Certificateholder's Certificates represent
beneficial interests in the Trust only and do not represent interests in or
obligations of the Seller, the General Partner, the Servicer, the Owner Trustee,
the Indenture Trustee or any Affiliate of any of the foregoing and no recourse
may be had against such parties or their assets, except as may be expressly set
forth or contemplated in this Agreement, the Certificates or the Related
Documents.

Section 11.3. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware without regard to
the principles of conflicts of laws thereof and the obligations, rights and
remedies of the parties under this Agreement shall be determined in accordance
with such laws.

Section 11.4. SEVERABILITY OF PROVISIONS. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Certificates
or the rights of the Holders thereof.

36
<PAGE>

Section 11.5. CERTIFICATES NONASSESSABLE AND FULLY PAID.
Certificateholders shall not be personally liable for obligations of the Trust,
the fractional undivided interests in the Trust represented by the Certificates
shall be nonassessable for any losses or expenses of the Trust or for any reason
whatsoever, and Certificates upon execution thereof by the Owner Trustee
pursuant to Section 3.3 are and shall be deemed fully paid.

Section 11.6. THIRD-PARTY BENEFICIARIES. This Agreement shall inure
to the benefit of and be binding upon the parties hereto and their respective
successors and permitted assigns. Except as otherwise provided in this
Agreement, no other Person shall have any right or obligation hereunder.

Section 11.7. COUNTERPARTS. For the purpose of facilitating its
execution and for other purposes, this Agreement may be executed simultaneously
in any number of counterparts, each of which counterparts shall be deemed to be
an original, and all of which counterparts shall constitute but one and the same
instrument.

Section 11.8. NOTICES. All demands, notices and communications under
this Agreement shall be in writing, personally delivered or mailed by certified
mail-return receipt requested, and shall be deemed to have been duly given upon
receipt (a) in the case of the General Partner or the Depositor, at the
following address: 7825 Washington Avenue South, Minneapolis, Minnesota
55439-2435, with copies to: Arcadia Financial Ltd., 7825 Washington Avenue
South, Minneapolis, Minnesota 55439-2435, Attention: President, (b) in the
case of the Owner Trustee, at the Corporate Trust Office and (c) in the case of
Morgan, at the following address: 500 Stanton Christiana Road, Newark, Delaware
19713-2107, Attention: Asset Finance Group, or at such other address as shall
be designated by any such party in a written notice to the other parties.
Notwithstanding the foregoing, any notice required or permitted to be mailed to
a Certificateholder shall be given by first class mail, postage prepaid, at the
address of such Holder as shown in the Certificate Register, and any notice so
mailed within the time prescribed in this Agreement shall be conclusively
presumed to have been duly given, whether or not the Certificateholder receives
such notice.

37
<PAGE>

IN WITNESS WHEREOF, the Depositor, the General Partner and the Owner
Trustee have caused this Amended and Restated Trust Agreement to be duly
executed by their respective officers as of the day and year first above
written.

Arcadia Receivables Finance Corp. II

By /s/ John A. Witham
-------------------------------------------------
Name: John A. Witham
Title: EVP CFO

WILMINGTON TRUST COMPANY

By /s/ D. Geran
-------------------------------------------------
Name: Denise M. Geran
Title: Financial Services Officer

Consented and Agreed:

ARCADIA FINANCIAL LTD.

By: /s/ John A. Witham
--------------------------
Name: John A. Witham
Title: EVP CFO

[Signature page to Amended and Restated Trust Agreement]

<PAGE>

EXECUTION COPY

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

OLYMPIC AUTOMOBILE RECEIVABLES WAREHOUSE TRUST

Variable Funding Notes

---------------------------------

AMENDED AND RESTATED
INDENTURE

Dated as of July 31, 1997

---------------------------------

NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION
Trustee

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

<PAGE>

TABLE OF CONTENTS

Page
----
ARTICLE I

Definitions and Incorporation by Reference

SECTION 1.01. Definitions................................................... 2
SECTION 1.02. Rules of Construction......................................... 9

ARTICLE II

The Notes

SECTION 2.01. Form.......................................................... 10
SECTION 2.02. Execution, Authentication and Delivery........................ 10
SECTION 2.03. Additional Issuances.......................................... 11
SECTION 2.04. Registration; Registration of Transfer and Exchange........... 11
SECTION 2.05. Mutilated, Destroyed, Lost or Stolen Notes.................... 13
SECTION 2.06. Person Deemed Owner........................................... 13
SECTION 2.07. Payment of Principal and Interest; Defaulted Interest......... 14
SECTION 2.08. Cancellation.................................................. 14

ARTICLE III

Covenants

SECTION 3.01. Payment of Principal, Interest and Premium.................... 15
SECTION 3.02. Maintenance of Office or Agency............................... 15
SECTION 3.03. Money for Payments To Be Held in Trust........................ 15
SECTION 3.04. Existence..................................................... 16
SECTION 3.05. Protection of Trust Estate.................................... 16
SECTION 3.06. Opinions as to Trust Estate................................... 17
SECTION 3.07. Performance of Obligations; Servicing of Receivables.......... 17
SECTION 3.08. Negative Covenants............................................ 18
SECTION 3.09. Annual Statement as to Compliance............................. 19
SECTION 3.10. Issuer May Consolidate, etc. Only on Certain Terms............ 19
SECTION 3.11. Successor or Transferee....................................... 21
SECTION 3.12. No Other Business............................................. 21
SECTION 3.13. No Borrowing.................................................. 22
SECTION 3.14. Servicer's Obligations........................................ 22
SECTION 3.15. Guarantees, Loans, Advances and Other Liabilities............. 22
SECTION 3.16. Capital Expenditures.......................................... 22

i
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Page
----

SECTION 3.17. Restricted Payments........................................... 22
SECTION 3.18. Notice of Events of Default................................... 22
SECTION 3.19. Further Instruments and Acts.................................. 22
SECTION 3.20. Compliance with Laws.......................................... 23
SECTION 3.21. Amendments of Sale and Servicing Agreement and Trust
Agreement..................................................... 23
SECTION 3.22. [Reserved].................................................... 23
SECTION 3.23. Income Tax Characterization................................... 23

ARTICLE IV

Satisfaction and Discharge

SECTION 4.01. Satisfaction and Discharge of Indenture....................... 23
SECTION 4.02. Application of Trust Money.................................... 24
SECTION 4.03. Repayment of Moneys Held by Paying Agent...................... 24
SECTION 4.04. Release of Trust Estate....................................... 24

ARTICLE V

Remedies

SECTION 5.01. Events of Default............................................. 25
SECTION 5.02. Rights upon Event of Default.................................. 26
SECTION 5.03. Collection of Indebtedness and Suits for Enforcement by
Trustee; Authority of Controlling Party....................... 26
SECTION 5.04. Remedies...................................................... 28
SECTION 5.05. Optional Preservation of the Receivables...................... 29
SECTION 5.06. Priorities.................................................... 29
SECTION 5.07. Limitation of Suits........................................... 30
SECTION 5.08. [Reserved].................................................... 31
SECTION 5.09. Restoration of Rights and Remedies............................ 31
SECTION 5.10. Rights and Remedies Cumulative................................ 31
SECTION 5.11. Delay or Omission Not a Waiver................................ 31
SECTION 5.12. Control by Noteholders........................................ 31
SECTION 5.13. Waiver of Past Defaults....................................... 32
SECTION 5.14. Undertaking for Costs......................................... 32
SECTION 5.15. Waiver of Stay or Extension Laws.............................. 32
SECTION 5.16. Action on Notes............................................... 33
SECTION 5.17. Performance and Enforcement of Certain Obligations............ 33

ii
<PAGE>

Page
----

ARTICLE VI

The Trustee

SECTION 6.01. Duties of Trustee............................................. 34
SECTION 6.02. Rights of Trustee............................................. 36
SECTION 6.03. Individual Rights of Trustee.................................. 37
SECTION 6.04. Trustee's Disclaimer.......................................... 37
SECTION 6.05. Notice of Defaults............................................ 37
SECTION 6.06. Reports by Trustee to Holders................................. 37
SECTION 6.07. Compensation and Indemnity.................................... 37
SECTION 6.08. Replacement of Trustee........................................ 38
SECTION 6.09. Successor Trustee by Merger................................... 39
SECTION 6.10. Appointment of Co-Trustee or Separate Trustee................. 40
SECTION 6.11. Eligibility; Disqualification................................. 41

ARTICLE VII

Noteholders' Lists and Reports

SECTION 7.01. Issuer to Furnish to Trustee Names and Addresses
of Noteholders................................................ 41
SECTION 7.02. Preservation of Information; Communications to Noteholders.... 41

ARTICLE VIII

Accounts, Disbursements and Releases

SECTION 8.01. Collection of Money........................................... 42
SECTION 8.02. Trust Accounts................................................ 42
SECTION 8.03. General Provisions Regarding Accounts......................... 43

ARTICLE IX

Supplemental Indentures

SECTION 9.01. Supplemental Indentures Without Consent of Noteholders........ 43
SECTION 9.02. Supplemental Indentures With Consent of Noteholders........... 44
SECTION 9.03. Execution of Supplemental Indentures.......................... 46
SECTION 9.04. Effect of Supplemental Indenture.............................. 46
SECTION 9.05. [Reserved].................................................... 46
SECTION 9.06. Reference in Notes to Supplemental Indentures................. 46

iii
<PAGE>

Page
----

ARTICLE X

Redemption of Notes

SECTION 10.01. Redemption.................................................... 47
SECTION 10.02. Form of Redemption Notice..................................... 48
SECTION 10.03. Notes Payable on Redemption Date.............................. 49

ARTICLE XI

Miscellaneous

SECTION 11.01. Compliance Certificates and Opinions, etc..................... 49
SECTION 11.02. Form of Documents Delivered to Trustee........................ 50
SECTION 11.03. Acts of Noteholders........................................... 51
SECTION 11.04. Notices, etc., to Trustee, Issuer, Morgan and the
Rating Agencies............................................... 52
SECTION 11.05. Notices to Noteholders; Waiver................................ 52
SECTION 11.06. Alternate Payment and Notice Provisions....................... 53
SECTION 11.07. [Reserved].................................................... 53
SECTION 11.08. Effect of Headings and Table of Contents...................... 53
SECTION 11.09. Successors and Assigns........................................ 53
SECTION 11.10. Severability.................................................. 53
SECTION 11.11. Benefits of Indenture......................................... 54
SECTION 11.12. Legal Holidays................................................ 54
SECTION 11.13. Governing Law................................................. 54
SECTION 11.14. Counterparts.................................................. 54
SECTION 11.15. Recording of Indenture........................................ 54
SECTION 11.16. Trust Obligation.............................................. 54
SECTION 11.17. No Petition................................................... 55
SECTION 11.18. Inspection.................................................... 55
SECTION 11.19. Limitation of Liability....................................... 55
SECTION 11.20. Consent to Amendments to Other Agreements..................... 55

iv
<PAGE>

AMENDED AND RESTATED INDENTURE, dated as of July 31, 1997, (the "Indenture")
between OLYMPIC AUTOMOBILE RECEIVABLES WAREHOUSE TRUST, a Delaware business
trust (the "Issuer"), and NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION, a
national banking association, in its capacities as trustee (the "Trustee") and
not in its individual capacity.

Each party agrees as follows for the benefit of the other party and for the
equal and ratable benefit of the Holders of the Issuer's Variable Funding Notes
(the "Notes"):

As security for the payment and performance by the Issuer of its
obligations under this Indenture and the Notes, the Issuer assigned the
Indenture Collateral (as defined below) as collateral to the Trustee for the
benefit of the Noteholders on the Initial Closing Date (as defined below).

GRANTING CLAUSE

The Issuer Granted to the Trustee at the Initial Closing Date and hereby
Grants for the benefit of the Noteholders to secure the performance of the
Secured Obligations, all of the Issuer's right, title and interest in and to (a)
the Receivables, whether now existing or hereafter originated, and all moneys
paid or payable thereon or in respect thereof after the applicable Cutoff Date
(including amounts due on or before the applicable Cutoff Date but received by
AFL, the Seller or the Issuer after such Cutoff Date); (b) an assignment of the
security interests of AFL in the Financed Vehicles; (c) the Insurance Policies
and any proceeds from any Insurance Policies relating to the Receivables, the
Obligors or the Financed Vehicles, including rebates of premiums, all Collateral
Insurance and any Force-Placed Insurance relating to the Receivables; (d) an
assignment of the rights of AFL or the Seller against Dealers with respect to
the Receivables under the Dealer Agreements and the Dealer Assignments, (e) all
items contained in the Receivable Files and any and all other documents or
election records that AFL keeps on file in accordance with its customary
procedures relating to the Receivables, the Obligors or the Financed Vehicles,
(f) an assignment of the rights of the Seller under the Purchase Agreement, (g)
property (including the right to receive future Liquidation Proceeds) that
secures a Receivable and that has been acquired by or on behalf of the Trust
pursuant to liquidation of such Receivable, (h) the Trust Accounts and all funds
on deposit therein from time to time (other than the Certificate Distribution
Account), and in all investments and proceeds thereof (including all income
thereon), (i) the Purchase Agreement and each Assignment Agreement, including
the right assigned to the Issuer to cause AFL to repurchase Receivables from the
Seller under certain circumstances, (j) the Sale and Servicing Agreement and
each Transfer Agreement (including all rights of the Seller under the Purchase
Agreement and each Assignment Agreement assigned to the Issuer pursuant to the
Sale and Servicing Agreement), and (k) all present and future claims, demands,
causes and choses in action in respect of the Receivables and any or all of the
foregoing and all payments on or under and all proceeds of every kind and nature
whatsoever in respect of the Receivables and any or all of the foregoing,
including all proceeds of the conversion, voluntary or involuntary, into cash or
other liquid property, all cash proceeds, accounts, accounts receivable, notes,
drafts, acceptances, chattel paper,

<PAGE>

checks, deposit accounts, insurance proceeds, condemnation awards, rights to
payment of any and every kind and other forms of obligations and receivables,
instruments and other property which at any time constitute all or part of or
are included in the proceeds of the Receivables and any of the foregoing
(collectively, the "Indenture Collateral").

The Trustee for the benefit of the Holders of the Notes acknowledges such
Grant. The Trustee on behalf of the Holders of the Notes accepts the trusts
under this Indenture in accordance with the provisions of this Indenture and
agrees to perform its duties required in this Indenture to the best of its
ability to the end that the interests of the Holders of the Notes may be
adequately and effectively protected.

ARTICLE I

DEFINITIONS AND INCORPORATION BY REFERENCE

SECTION 1.01. DEFINITIONS.

(a) Except as otherwise specified herein or as the context may otherwise
require, the following terms have the respective meanings set forth below for
all purposes of this Indenture.

"ACT" has the meaning specified in Section 11.03(a).

"ADMINISTRATOR" has the meaning specified therefor in the Trust Agreement.

"AFFILIATE" means, with respect to any Person, any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such Person. For the purposes of this definition, "control" when
used with respect to such specified Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.

"AUTHORIZED OFFICER" means, with respect to the Issuer, any officer of the
Owner Trustee who is authorized to act for the Owner Trustee in matters relating
to the Issuer and who is identified on the list of Authorized Officers delivered
by the Owner Trustee to the Trustee on the Effectiveness Date (as such list may
be modified or supplemented from time to time thereafter).

"BUSINESS DAY" means any day other than a Saturday, Sunday, legal holiday
or other day on which commercial banking institutions in Minneapolis, Minnesota,
New York, New York, Wilmington, Delaware or any other location of any successor
Servicer, successor Owner Trustee or successor Trustee are authorized or
obligated by law, executive order or governmental decree to remain closed.

"CERTIFICATEHOLDER" has the meaning specified therefor in the Trust
Agreement.

2
<PAGE>

"CODE" means the Internal Revenue Code of 1986, as amended from time to
time, and Treasury Regulations promulgated thereunder.

"CONTROLLING PARTY" means the Note Majority and Morgan.

"CORPORATE TRUST OFFICE" means the principal office of the Trustee at which
at any particular time its corporate trust business shall be administered which
office at date of the execution of this Agreement is located at Sixth Street and
Marquette Avenue, Minneapolis, Minnesota 55479-0070, Attention: Corporate
Trust Department; or at such other address as the Trustee may designate from
time to time by notice to the Noteholders, Morgan and the Issuer, or the
principal corporate trust office of any successor Trustee (the address of which
the successor Trustee will notify the Noteholders and the Issuer).

"DEFAULT" means any occurrence that is, or with notice or the lapse of time
or both would become, an Event of Default.

"EFFECTIVENESS DATE" has the meaning specified in Section 1.03 hereof.

"EVENT OF DEFAULT" has the meaning specified in Section 5.01.

"EXECUTIVE OFFICER" means, with respect to any corporation, the Chief
Executive Officer, Chief Operating Officer, Chief Financial Officer, President,
Executive Vice President, any Vice President, any Responsible Officer, the
Secretary or the Treasurer of such corporation; and with respect to any
partnership, any general partner thereof.

"FINAL MATURITY DATE" means the earlier of (i) the Payment Date that is 85
months from the Purchase Termination Date and (ii) the date on which the Notes
are fully redeemed in accordance with this Indenture (or, if such day is not a
Business Day, the next succeeding Business Day).

"GENERAL PARTNER" means Seller in its capacity as general partner of the
Trust, and any successors thereto as permitted by the Trust Agreement.

"GRANT" means mortgage, pledge, bargain, sell, warrant, alienate, remise,
release, convey, assign, transfer, create, and grant a lien upon and a security
interest in and right of set-off against, deposit, set over and confirm pursuant
to this Indenture. A Grant of the Indenture Collateral or of any other
agreement or instrument shall include all rights, powers and options (but none
of the obligations) of the Granting party thereunder, including the immediate
and continuing right to claim for, collect, receive and give receipt for
principal and interest payments in respect of the Indenture Collateral and all
other moneys payable thereunder, to give and receive notices and other
communications, to make waivers or other agreements, to exercise all rights and
options, to bring Proceedings in the name of the Granting party or otherwise and
generally to do and receive anything that the Granting party is or may be
entitled to do or receive thereunder or with respect thereto.

3
<PAGE>

"HOLDER" or "NOTEHOLDER" means the Person in whose name a Note is
registered on the Note Register.

"INDEBTEDNESS" means, with respect to any Person at any time, (a)
indebtedness or liability of such Person for borrowed money whether or not
evidenced by bonds, debentures, notes or other instruments, or for the deferred
purchase price of property or services (including trade obligations); (b)
obligations of such Person as lessee under leases which should have been or
should be, in accordance with generally accepted accounting principles, recorded
as capital leases; (c) current liabilities of such Person in respect of unfunded
vested benefits under plans covered by Title IV of the Employee Retirement
Income Security Act of 1974, as amended; (d) obligations issued for or
liabilities incurred on the account of such Person; (e) obligations or
liabilities of such Person arising under acceptance facilities; (f) obligations
of such Person under any guarantees, endorsements (other than for collection or
deposit in the ordinary course of business) and other contingent obligations to
purchase, to provide funds for payment, to supply funds to invest in any Person
or otherwise to assure a creditor against loss; (g) obligations of such Person
secured by any lien on property or assets of such Person, whether or not the
obligations have been assumed by such Person; or (h) obligations of such Person
under any interest rate or currency exchange agreement.

"INDENTURE" means this Amended and Restated Indenture as amended or
supplemented from time to time.

"INDENTURE COLLATERAL" has the meaning specified in the Granting Clause of
this Indenture.

"INDEPENDENT" means, when used with respect to any specified Person, that
the Person (a) is in fact independent of the Issuer, any other obligor upon the
Notes, the Seller and any Affiliate of any of the foregoing Persons, (b) does
not have any direct financial interest or any material indirect financial
interest in the Issuer, any such other obligor, the Seller or any Affiliate of
any of the foregoing Persons and (c) is not connected with the Issuer, any such
other obligor, the Seller or any Affiliate of any of the foregoing Persons as an
officer, employee, promoter, underwriter, trustee, partner, director or person
performing similar functions.

"INDEPENDENT CERTIFICATE" means a certificate or opinion to be delivered to
the Trustee under the circumstances described in, and otherwise complying with,
the applicable requirements of Section 11.01, made by an Independent appraiser
or other expert appointed by an Issuer Order and approved by the Trustee in the
exercise of reasonable care, and such opinion or certificate shall state that
the signer has read the definition of "Independent" in this Indenture and that
the signer is Independent within the meaning thereof.

"INITIAL CLOSING DATE" means December 28, 1995.

"INTEREST RATE" means the Note Interest Rate.

4
<PAGE>

"ISSUER" means the party named as such in this Indenture until a successor
replaces it and, thereafter, means the successor and each other obligor on the
Notes.

"ISSUER ORDER" and "ISSUER REQUEST" means a written order or request signed
in the name of the Issuer by any one of its Authorized Officers and delivered to
the Trustee.

"LETTER AGREEMENT" has the meaning specified in Section 6.07.

"NON-CALLABLE NOTE" means a Note issued in connection with a
Recapitalization that is not subject to any right of AFL to purchase such Note
from its Holder pursuant to the Note Purchase Agreement or otherwise.

"NOTE" means the Variable Funding Notes substantially in the form of
Exhibit B.

"NOTE OWNER" means with respect to any Notes, the Holder.

"NOTE REGISTER" and "NOTE REGISTRAR" have the respective meanings specified
in Section 2.04.

"OFFICER'S CERTIFICATE" means a certificate signed by any Authorized
Officer of the Issuer, under the circumstances described in, and otherwise
complying with, the applicable requirements of Section 11.01, and delivered to,
the Trustee. Unless otherwise specified, any reference in this Indenture to an
Officer's Certificate shall be to an Officer's Certificate of any Authorized
Officer of the Issuer.

"OPINION OF COUNSEL" means one or more written opinions of counsel who may,
except as otherwise expressly provided in this Indenture, be employees of or
counsel to the Issuer and who shall be satisfactory to the Trustee and which
shall comply with any applicable requirements of Section 11.01, and shall be in
form and substance satisfactory to the Trustee.

"ORIGINAL INDENTURE" means the Indenture dated as of December 28, 1995, as
amended and supplemented, between the Issuer and the Trustee.

"OUTSTANDING" means, as of the date of determination, all Notes theretofore
authenticated and delivered under this Indenture except:

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

(ii) Notes or portions thereof the payment for which money in the
necessary amount has been theretofore deposited with the Trustee or any
Paying Agent in trust for the Holders of such Notes (provided, however,
that if such Notes are to be redeemed, notice of such redemption has been
duly given pursuant to this Indenture or provision therefor, satisfactory
to the Trustee, has been made); and

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

PROVIDED, HOWEVER, that in determining whether the Holders of the requisite
percentage of the Outstanding Amount of the Notes have given any request,
demand, authorization, direction, notice, consent or waiver hereunder or under
any Related Document, Notes owned by the Issuer, any other obligor upon the
Notes, the Seller or any Affiliate of any of the foregoing Persons shall be
disregarded and deemed not to be Outstanding, except that, in determining
whether the Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Notes that the Trustee
knows to be so owned shall be so disregarded. Notes so owned that have been
pledged in good faith may be regarded as Outstanding if the pledgee establishes
to the satisfaction of the Trustee the pledgee's right so to act with respect to
such Notes and that the pledgee is not the Issuer, any other obligor upon the
Notes, the Seller or any Affiliate of any of the foregoing Persons.

"OUTSTANDING AMOUNT" means the aggregate principal amount of all Notes
Outstanding at the date of determination.

"OWNER TRUSTEE" means Wilmington Trust Company, not in its individual
capacity but solely as Owner Trustee under the Trust Agreement, or any successor
trustee under the Trust Agreement.

"PAYING AGENT" means the Trustee or any other Person that meets the
eligibility standards for the Trustee specified in Section 6.11 and is
authorized by the Issuer to make the distributions from the Note Distribution
Account, including payment of principal of or interest on the Notes on behalf of
the Issuer.

"PAYMENT DATE" means a Distribution Date.

"PERSON" means any legal person including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof, or any other entity.

"PROCEEDING" means any suit in equity, action at law or other judicial or
administrative proceeding.

"RECORD DATE" means, with respect to a Payment Date or Redemption Date, the
close of business on the last Business Day immediately preceding such Payment
Date or Redemption Date.

"REDEMPTION DATE" means (a) in the case of a redemption of the Notes
pursuant to Section 10.01(a) or a payment to Noteholders pursuant to Section
10.01(c), the date specified in the notice of redemption sent by the Servicer or
the Issuer pursuant to Section 10.01(a) or 10.01(c), as applicable, and Section
10.02 or (b) in the case of a redemption of Notes

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pursuant to Section 10.01(b) or 10.01(d), the date specified in the notice of
redemption sent in accordance with Section 10.02.

"REDEMPTION PRICE" means (a) in the case of a redemption of the Notes
pursuant to Section 10.01 (a), (b) or (d), an amount equal to the principal
amount of the Notes redeemed plus accrued and unpaid interest on the principal
amount of Notes at the Interest Rate to but excluding the Redemption Date and
plus, any breakage payments (including the amounts to be deposited in the
Commercial Paper Funding Account pursuant to the Note Purchase Agreement)
specified in the Note Purchase Agreement, or (b) in the case of a payment made
to Noteholders pursuant to Section 10.01(c), the amount on deposit in the Note
Distribution Account, but not in excess of the amount specified in clause (a)
above.

"RELATED DOCUMENTS" means the Trust Agreement, the Certificates, the Notes,
the Purchase Agreement, the Sale and Servicing Agreement, each Assignment
Agreement, the Lockbox Agreement, the Administration Agreement, the Note
Purchase Agreement, and the Certificate Purchase Agreement. The Related
Documents executed by any party are referred to herein as "such party's Related
Documents," "its Related Documents" or by a similar expression.

"RESPONSIBLE OFFICER" means, with respect to the Trustee, any officer of
the Trustee assigned by the Trustee to administer its corporate trust affairs
relating to the Trust Estate.

"SALE AND SERVICING AGREEMENT" means the Amended and Restated Sale and
Servicing Agreement, dated as of July 31, 1997, among the Issuer, the Seller,
the Servicer and the Backup Servicer.

"SECURED OBLIGATIONS" means all amounts and obligations which the Issuer
may at any time owe to or on behalf of the Trustee for the benefit of the
Noteholders under this Indenture or the Notes.

"STATE" means any one of the 50 states of the United States of America or
the District of Columbia.

"TERMINATION DATE" means the date on which the Trustee shall have received
payment and performance of all Secured Obligations then outstanding.

"TRUST ESTATE" means all money, instruments, rights and other property that
are subject or intended to be subject to the lien and security interest of this
Indenture for the benefit of the Noteholders (including, without limitation, the
Indenture Collateral Granted to the Trustee), including all proceeds thereof.

"TRUSTEE" means Norwest Bank Minnesota, National Association, a national
banking association, as Trustee under this Indenture, or any successor Trustee
under this Indenture.

"UCC" means, unless the context otherwise requires, the Uniform Commercial
Code, as in effect in the relevant jurisdiction, as amended from time to time.

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(b) Except as otherwise specified herein or as the context may otherwise
require, the following terms have the respective meanings set forth in the Sale
and Servicing Agreement as in effect on the Effectiveness Date for all purposes
of this Indenture, and the definitions of such terms are equally applicable both
to the singular and plural forms of such terms:

Section of Sale and
Term Servicing Agreement
- ---- -------------------

Administration Agreement . . . . . . . . . . . . . . . . Section 1.1
AFL. . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.1
Assignment Agreement . . . . . . . . . . . . . . . . . . Section 1.1
Backup Servicer. . . . . . . . . . . . . . . . . . . . . Section 1.1
Certificate Balance. . . . . . . . . . . . . . . . . . . Section 1.1
Certificate Distribution Account . . . . . . . . . . . . Section 1.1
Certificates . . . . . . . . . . . . . . . . . . . . . . Section 1.1
Collateral Insurance . . . . . . . . . . . . . . . . . . Section 1.1
Collection Account . . . . . . . . . . . . . . . . . . . Section 1.1
Custodian. . . . . . . . . . . . . . . . . . . . . . . . Section 1.1
Cutoff Date. . . . . . . . . . . . . . . . . . . . . . . Section 1.1
Dealer . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.1
Dealer Agreement . . . . . . . . . . . . . . . . . . . . Section 1.1
Dealer Assignment. . . . . . . . . . . . . . . . . . . . Section 1.1
Distribution Date. . . . . . . . . . . . . . . . . . . . Section 1.1
Eligible Account . . . . . . . . . . . . . . . . . . . . Section 1.1
Eligible Investments . . . . . . . . . . . . . . . . . . Section 1.1
Facility Balance . . . . . . . . . . . . . . . . . . . . Section 1.1
Facility Limit . . . . . . . . . . . . . . . . . . . . . Section 1.1
Financed Vehicle . . . . . . . . . . . . . . . . . . . . Section 1.1
Forced-Placed Insurance. . . . . . . . . . . . . . . . . Section 1.1
Insurance Policies . . . . . . . . . . . . . . . . . . . Section 1.1
Lien . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.1
Liquidation Proceeds . . . . . . . . . . . . . . . . . . Section 1.1
Lockbox Agreement. . . . . . . . . . . . . . . . . . . . Section 1.1
Lockbox Bank . . . . . . . . . . . . . . . . . . . . . . Section 1.1
Monthly Period . . . . . . . . . . . . . . . . . . . . . Section 1.1
Moody's. . . . . . . . . . . . . . . . . . . . . . . . . Section 1.1
Morgan . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.1
Note Distribution Account. . . . . . . . . . . . . . . . Section 1.1
Note Interest Rate . . . . . . . . . . . . . . . . . . . Section 1.1
Note Majority. . . . . . . . . . . . . . . . . . . . . . Section 1.1
Note Purchase Agreement. . . . . . . . . . . . . . . . . Section 1.1
Obligor. . . . . . . . . . . . . . . . . . . . . . . . . Section 1.1
Principal Funding Excess Amount. . . . . . . . . . . . . Section 1.1
Purchase Agreement . . . . . . . . . . . . . . . . . . . Section 1.1
Purchase Termination Date. . . . . . . . . . . . . . . . Section 1.1

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Rating Agency. . . . . . . . . . . . . . . . . . . . . . Section 1.1
Rating Agency Condition. . . . . . . . . . . . . . . . . Section 1.1
Recapitalization . . . . . . . . . . . . . . . . . . . . Section 1.1
Receivable . . . . . . . . . . . . . . . . . . . . . . . Section 1.1
Receivable File. . . . . . . . . . . . . . . . . . . . . Section 1.1
Schedule of Receivables. . . . . . . . . . . . . . . . . Section 1.1
Securitized Offering . . . . . . . . . . . . . . . . . . Section 1.1
Seller . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.1
Servicer . . . . . . . . . . . . . . . . . . . . . . . . Section 1.1
Servicer Termination Event . . . . . . . . . . . . . . . Section 1.1
Standard & Poor's. . . . . . . . . . . . . . . . . . . . Section 1.1
Transfer Agreement . . . . . . . . . . . . . . . . . . . Section 1.1
Transfer Date. . . . . . . . . . . . . . . . . . . . . . Section 1.1
Trust Accounts . . . . . . . . . . . . . . . . . . . . . Section 1.1
Trust Agreement. . . . . . . . . . . . . . . . . . . . . Section 1.1

SECTION 1.02. RULES OF CONSTRUCTION. Unless otherwise specified:

(i) a term has the meaning assigned to it;

(ii) an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting
principles as in effect from time to time;

(iii) "or" is not exclusive;

(iv) "including" means including without limitation;

(v) words in the singular include the plural and words in the
plural include the singular; and

(vi) references to Sections, Subsections, Schedules and Exhibits
shall refer to such portions of this Indenture.

(vii) The references to the Related Documents entered into in
connection with this Indenture shall be read to include, where
appropriate, the original (as amended and supplemented) agreement
related to each such amended and restated document.

SECTION 1.03 EFFECTIVENESS. (a) The "Effectiveness Date" of this
Indenture shall occur on the date on which the conditions set forth in this
Agreement shall have been satisfied or waived by both parties to this Agreement.

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(b) This Agreement amends and restates the Original Indenture and on the
Effectiveness Date, replaces the Indenture without interruption of the parties'
performance thereunder.

ARTICLE II

THE NOTES

SECTION 2.01. FORM. The Notes, together with the Trustee's certificate of
authentication, shall be in substantially the form set forth in Exhibit B, with
such appropriate insertions, omissions, substitutions and other variations as
are required or permitted by this Indenture and may have such letters, numbers
or other marks of identification and such legends or endorsements placed thereon
as may, consistently herewith, be determined by the officers executing such
Notes, as evidenced by their execution of the Notes. Any portion of the text of
any Note may be set forth on the reverse thereof, with an appropriate reference
thereto on the face of the Note.

The Notes shall be typewritten, printed, lithographed or engraved or
produced by any combination of these methods (with or without steel engraved
borders), all as determined by the officers executing such Notes, as evidenced
by their execution of such Notes.

Each Note shall be dated the date of its authentication. The terms of the
Notes set forth in Exhibit B are part of the terms of this Indenture.

SECTION 2.02. EXECUTION, AUTHENTICATION AND DELIVERY. The Notes were
executed on behalf of the Issuer by an Authorized Officer. The signature of any
such Authorized Officer on the Notes may be manual or facsimile.

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

The Trustee upon receipt of the Issuer Order dated the Initial Closing Date
authenticated and delivered Notes for original issue in an aggregate principal
amount of up to $200,000,000.

Each Note shall be dated the date of its authentication. The Notes shall
be issued in minimum initial denominations and in such integral multiples as are
necessary to comply with the terms of this Agreement and the Related Documents.

No Note shall be entitled to any benefit under this Indenture or be valid
or obligatory for any purpose, unless there appears on such Note a certificate
of authentication substantially in the form provided for herein executed by the
Trustee by the manual signature of one of its authorized signatories, and such
certificate upon any Note shall be conclusive

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<PAGE>

evidence, and the only evidence, that such Note has been duly authenticated and
delivered hereunder.

SECTION 2.03. ADDITIONAL ISSUANCES.

(a) On each Business Day that is a Transfer Date under the Sale and
Servicing Agreement and upon meeting all conditions precedent to the purchase of
additional principal amounts of Notes under the Note Purchase Agreement, the
Issuer may instruct the Trustee by rendering an Issuer Order to indicate or
cause the Note Registrar to indicate in the Note Register that the outstanding
principal amount of Notes held by each Noteholder is increased pro rata, in
accordance with the outstanding principal balance held by such Noteholder, by an
aggregate amount for all Notes equal to (x) the aggregate outstanding principal
balance of Receivables transferred to the Trust on such Transfer Date, less (y)
the amount of any increase in the outstanding Certificate Balance of
Certificates related to such Receivables transferred on the Transfer Date. The
Trustee shall, upon receipt of the Issuer Order and funds in the amount of the
increase in principal balance of Notes from the Noteholders or their agent,
instruct the Note Registrar to indicate in the Note Register such increase in
the principal amount of Notes. The Outstanding Amount of Notes may never exceed
the maximum aggregate principal amount of Notes as specified in the Note
Purchase Agreement. No increase in the principal balance of Notes shall be
effective until the Outstanding Amount of Certificates equals $32,727,300.

(b) Upon any Recapitalization, upon satisfaction of the applicable
requirements of Article X of this Indenture, (i) the Trustee shall upon receipt
of the Issuer Order authenticate and deliver to the Holders (determined as of
the related Record Date) Non-Callable Notes in an aggregate principal amount
specified in the Issuer Order (which shall not exceed the then-outstanding
principal amount of the Notes and shall be allocated pro rata among the
Noteholders in accordance with outstanding principal amount of Notes held by
each), and (ii) the Issuer shall instruct the Trustee by rendering an Issuer
Order to indicate or cause the Note Registrar to indicate in the Note Register
that the outstanding principal amount of Notes represented by the physical Notes
issued prior to the Recapitalization and held by each Noteholder is decreased by
the principal amount of the Non-Callable Notes issued to such Noteholder in that
Recapitalization, and Trustee shall make, or cause to be made such indication.
After any Recapitalization, any increase made pursuant to paragraph (a) above
shall be made to Non-Callable Notes only to the extent specified in the Issuer
Order relating to that Recapitalization and otherwise shall be applied ratably
to the other outstanding Notes.

SECTION 2.04. REGISTRATION; REGISTRATION OF TRANSFER AND EXCHANGE. The
Issuer shall cause to be kept a register (the "Note Register") in which, subject
to such reasonable regulations as it may prescribe, the Issuer shall provide for
the registration of Notes and the registration of transfers of Notes. The
Trustee shall be "Note Registrar" for the purpose of registering Notes and
transfers of Notes as herein provided. Upon any resignation of any Note
Registrar, the Issuer shall promptly appoint a successor or, if it elects not to
make such an appointment, assume the duties of Note Registrar.

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If a Person other than the Trustee is appointed by the Issuer as Note
Registrar, the Issuer will give the Trustee prompt written notice of the
appointment of such Note Registrar and of the location, and any change in the
location, of the Note Register, and the Trustee shall have the right to inspect
the Note Register at all reasonable times and to obtain copies thereof, and the
Trustee shall have the right to rely upon a certificate executed on behalf of
the Note Registrar by an Executive Officer thereof as to the names and addresses
of the Holders of the Notes and the principal amounts and number of such Notes.

Upon surrender for registration of transfer of any Note at the office or
agency of the Issuer to be maintained as provided in Section 3.02, the Issuer
shall execute, and the Trustee shall authenticate and the Noteholder shall
obtain from the Trustee, in the name of the designated transferee or
transferees, one or more new Notes in any authorized denominations, of a like
aggregate principal amount.

At the option of the Holder, Notes may be exchanged for other Notes in any
authorized denominations, of a like aggregate principal amount, upon surrender
of the Notes to be exchanged at such office or agency. Whenever any Notes are
so surrendered for exchange, the Issuer shall execute, and the Trustee shall
authenticate and the Noteholder shall obtain from the Trustee, the Notes which
the Noteholder making the exchange is entitled to receive.

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

Every Note presented or surrendered for registration of transfer or
exchange shall be duly endorsed by, or be accompanied by a written instrument of
transfer in form satisfactory to the Trustee duly executed by, the Holder
thereof or such Holder's attorney duly authorized in writing, with such
signature guaranteed by a commercial bank or trust company located, or having a
correspondent located, in The City of New York or the city in which the
Corporate Trust Office is located, or by a member firm of a national securities
exchange, and such other documents as the Trustee may require.

No service charge shall be made to a Holder for any registration of
transfer or exchange of Notes, but the Issuer or the Trustee may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any registration of transfer or exchange of Notes,
other than exchanges pursuant to Section 2.03 or 9.06 not involving any
transfer.

The preceding provisions of this section notwithstanding, the Issuer shall
not be required to make and the Note Registrar need not register transfers or
exchanges of Notes selected for redemption or of any Note for a period of 15
days preceding the due date for any payment with respect to the Note.

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SECTION 2.05. MUTILATED, DESTROYED, LOST OR STOLEN NOTES. If (i) any
mutilated Note is surrendered to the Trustee, or the Trustee receives evidence
to its satisfaction of the destruction, loss or theft of any Note, and (ii)
there is delivered to the Trustee such security or indemnity as may be required
by them to hold the Issuer and the Trustee harmless, then, in the absence of
notice to the Issuer, the Note Registrar or the Trustee that such Note has been
acquired by a bona fide purchaser, the Issuer shall execute and upon its request
the Trustee shall authenticate and deliver, in exchange for or in lieu of any
such mutilated, destroyed, lost or stolen Note, a replacement Note; PROVIDED,
HOWEVER, that if any such destroyed, lost or stolen Note, but not a mutilated
Note, shall have become or within seven days shall be due and payable, or shall
have been called for redemption, instead of issuing a replacement Note, the
Issuer may pay such destroyed, lost or stolen Note when so due or payable or
upon the Redemption Date without surrender thereof. If, after the delivery of
such replacement Note or payment of a destroyed, lost or stolen Note pursuant to
the proviso to the preceding sentence, a bona fide purchaser of the original
Note in lieu of which such replacement Note was issued presents for payment such
original Note, the Issuer and the Trustee shall be entitled to recover such
replacement Note (or such payment) from the Person to whom it was delivered or
any Person taking such replacement Note from such Person to whom such
replacement Note was delivered or any assignee of such Person, except a bona
fide purchaser, and shall be entitled to recover upon the security or indemnity
provided therefor to the extent of any loss, damage, cost or expense incurred by
the Issuer or the Trustee in connection therewith.

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

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

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

SECTION 2.06. PERSON DEEMED OWNER. Prior to due presentment for
registration of transfer of any Note, the Issuer, the Trustee and any agent of
the Issuer or the Trustee may treat the Person in whose name any Note is
registered (as of the day of determination) as the owner of such Note for the
purpose of receiving payments of principal of and interest, if any, on such Note
and for all other purposes whatsoever, whether or not such Note be overdue, and
none of the Issuer, the Trustee nor any agent of the Issuer or the Trustee shall
be affected by notice to the contrary.

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SECTION 2.07. PAYMENT OF PRINCIPAL AND INTEREST; DEFAULTED INTEREST.

(a) The Notes shall accrue interest as provided herein and in the
form of Note set forth in Exhibit B, and such interest shall be payable on
each Payment Date and Redemption Date as specified herein and therein. Any
installment of interest or principal, if any, payable on any Note which is
punctually paid or duly provided for by the Issuer on the applicable
Payment Date and Redemption Date shall be paid to the Person in whose name
such Note (or one or more predecessor Notes) is registered on the Record
Date, by wire transfer in immediately available funds to the account
designated by such Person and except for (i) the final installment of
principal payable with respect to such Note on a Payment Date and (ii) the
Redemption Price for any Note called for redemption pursuant to Section
10.01(a), which shall be payable as provided below. Any funds for which
proper wire instructions have not been received shall be held in accordance
with Section 3.03.

(b) The principal of each Note shall be payable in installments on
Payment Dates and Redemption Dates as provided herein and in the form of
the Notes. Notwithstanding the foregoing, the entire unpaid principal
amount of the Notes shall be due and payable, if not previously paid, on
the date on which an Event of Default shall have occurred and be
continuing. All principal payments on the Notes shall be made pro rata to
the Noteholders. If Non-Callable Notes are issued, principal payments
shall also be made pro rata between the Non-Callable Notes and any other
outstanding Notes, based upon their respective principal amounts on the
Record Date preceding the applicable Payment Date or Redemption Date. The
Trustee shall notify the Person in whose name a Note is registered at the
close of business on the Record Date preceding the Payment Date on which
the Issuer expects that the final installment of principal of and interest
on such Note will be paid. Such notice shall be mailed no later than five
days prior to such final Payment Date and shall specify that such final
installment will be payable only upon presentation and surrender of such
Note and shall specify the place where such Note may be presented and
surrendered for payment of such installment. Notices in connection with
redemptions of Notes shall be mailed to Noteholders as provided in Section
10.02.

SECTION 2.08. CANCELLATION. All Notes surrendered for payment,
registration of transfer, exchange or redemption shall, if surrendered to any
Person other than the Trustee, be delivered to the Trustee and shall be promptly
canceled by the Trustee. The Issuer may at any time deliver to the Trustee for
cancellation any Notes previously authenticated and delivered hereunder which
the Issuer may have acquired in any manner whatsoever, and all Notes so
delivered shall be promptly canceled by the Trustee. No Notes shall be
authenticated in lieu of or in exchange for any Notes canceled as provided in
this Section, except as expressly permitted by this Indenture. All canceled
Notes may be held or disposed of by the Trustee in accordance with its standard
retention or disposal policy as in effect at the time unless the Issuer shall
direct by an Issuer Order that they be destroyed or returned to it, provided
that such Issuer Order is timely and the Notes have not been previously disposed
of by the Trustee.

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ARTICLE III

COVENANTS

SECTION 3.01. PAYMENT OF PRINCIPAL, INTEREST AND PREMIUM. The Issuer will
duly and punctually pay the principal, interest and premium, if any, on the
Notes in accordance with the terms of the Notes and this Indenture. Without
limiting the foregoing, the Issuer will cause to be distributed all amounts on
deposit in the Note Distribution Account on a Payment Date in accordance with
Section 8.02(b). Amounts properly withheld under the Code by any Person from a
payment to any Noteholder of interest and/or principal shall be considered as
having been paid by the Issuer to such Noteholder for all purposes of this
Indenture.

SECTION 3.02. MAINTENANCE OF OFFICE OR AGENCY. The Issuer will maintain
in Minneapolis or St. Paul, Minnesota, an office or agency where Notes may be
surrendered for registration of transfer or exchange, and where notices and
demands to or upon the Issuer in respect of the Notes and this Indenture may be
served. The Issuer hereby initially appoints the Trustee to serve as its agent
for the foregoing purposes. The Issuer will give prompt written notice to the
Trustee of the location, and of any change in the location, of any such office
or agency. If at any time the Issuer shall fail to maintain any such office or
agency or shall fail to furnish the Trustee with the address thereof, such
surrenders, notices and demands may be made or served at the Corporate Trust
Office, and the Issuer appoints the Trustee as its agent to receive all such
surrenders, notices and demands.

SECTION 3.03. MONEY FOR PAYMENTS TO BE HELD IN TRUST. As provided in
Section 8.02, all payments of amounts due and payable with respect to any Notes
that are to be made from amounts withdrawn from the Note Distribution Account
pursuant to Section 8.02(b) shall be made on behalf of the Issuer by the Trustee
or by another Paying Agent, and no amounts so withdrawn from the Note
Distribution Account for payments of Notes shall be paid over to the Issuer.

On or before each Payment Date and Redemption Date, the Issuer shall
deposit or cause to be deposited in the Note Distribution Account an aggregate
sum sufficient to pay the amounts then becoming due, such sum to be held in
trust for the benefit of the Persons entitled thereto and (unless the Paying
Agent is the Trustee) shall promptly notify the Trustee of its action or failure
so to act.

The Issuer will cause each Paying Agent other than the Trustee to execute
and deliver to the Trustee an instrument in which such Paying Agent shall agree
with the Trustee (and if the Trustee acts as Paying Agent, it hereby so agrees),
subject to the provisions of this Section, that such Paying Agent will:

(i) hold all sums held by it for the payment of amounts due with
respect to the Notes in trust for the benefit of the Persons entitled
thereto until such sums shall be paid to such Persons or otherwise
disposed of as herein provided and pay such sums to such Persons as
herein provided;

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(ii) give the Trustee notice of any default (of which it has
actual knowledge) by the Issuer (or any other obligor upon the Notes)
in the making of any payment required to be made with respect to the
Notes;

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

(iv) immediately resign as a Paying Agent and forthwith pay
to the Trustee all sums held by it in trust for the payment of Notes
if at any time it ceases to meet the standards required to be met by a
Paying Agent at the time of its appointment; and

(v) comply with all requirements of the Code with respect
to the withholding from any payments made by it on any Notes of any
applicable withholding taxes imposed thereon and with respect to any
applicable reporting requirements in connection therewith.

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

SECTION 3.04. EXISTENCE. The Issuer will keep in full effect its
existence, rights and franchises as a business trust under the laws of the State
of Delaware (unless it becomes, or any successor Issuer hereunder is or becomes,
organized under the laws of any other state or of the United States of America,
in which case the Issuer will keep in full effect its existence, rights and
franchises under the laws of such other jurisdiction) and will obtain and
preserve its qualification to do business in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Indenture, the Notes, the Indenture Collateral and each
other instrument or agreement included in the Trust Estate.

SECTION 3.05. PROTECTION OF TRUST ESTATE. The Issuer intends the security
interest Granted pursuant to the Original Indenture and Granted hereby in favor
of the Trustee to be prior to all other liens in respect of the Trust Estate,
and the Issuer has taken all actions necessary to obtain and shall take all
actions necessary to maintain, in favor of the Trustee, a first lien on and a
first priority, perfected security interest in the Trust Estate. The Issuer
will from time to time execute and deliver all such supplements and amendments
hereto and all such financing statements, continuation statements, instruments
of further assurance and other instruments, all as prepared by the Servicer and
delivered to the Issuer, and will take such other action necessary or advisable
to:

(i) grant more effectively all or any portion of the Trust
Estate;

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(ii) maintain or preserve the lien and security interest
(and the priority thereof) in favor of the Trustee created by this
Indenture or carry out more effectively the purposes hereof;

(iii) perfect, publish notice of or protect the validity of
any Grant made or to be made by this Indenture;

(iv) enforce any of the Indenture Collateral;

(v) preserve and defend title to the Trust Estate and the
rights of the Trustee in such Trust Estate against the claims of all
persons and parties; or

(vi) pay all taxes or assessments levied or assessed upon
the Trust Estate when due.

The Issuer hereby designates the Trustee its agent and attorney-in-fact to
execute any financing statement, continuation statement or other instrument
required by the Trustee pursuant to this Section.

SECTION 3.06. OPINIONS AS TO TRUST ESTATE. On the Initial Closing Date,
the Issuer furnished, and on the Effectiveness Date shall furnish, to the
Trustee an Opinion of Counsel either stating that, in the opinion of such
counsel, such action has been taken with respect to the recording and filing of
this Indenture, any indentures supplemental hereto, and any other requisite
documents, and with respect to the execution and filing of any financing
statements and continuation statements, as are necessary to perfect and make
effective the first priority lien and security interest in favor of the Trustee,
created by the Original Indenture and this Indenture and reciting the details of
such action, or stating that, in the opinion of such counsel, no such action is
necessary to make such lien and security interest effective.

SECTION 3.07. PERFORMANCE OF OBLIGATIONS; SERVICING OF RECEIVABLES.

(a) The Issuer will not take any action and will use its best efforts
not to permit any action to be taken by others that would release any
Person from any of such Person's material covenants or obligations under
any instrument or agreement included in the Trust Estate or that would
result in the amendment, hypothecation, subordination, termination or
discharge of, or impair the validity or effectiveness of, any such
instrument or agreement, except as expressly provided in this Indenture,
the Sale and Servicing Agreement or such other instrument or agreement.

(b) The Issuer may contract with other Persons acceptable to the
Controlling Party to assist it in performing its duties under this
Indenture, and any performance of such duties by a Person identified to the
Trustee in an Officer's Certificate of the Issuer shall be deemed to be
action taken by the Issuer. The Issuer has contracted with the Servicer
and the Administrator to assist the Issuer in performing its duties under
this Indenture. The Owner Trustee shall not be responsible for the action
or inaction of the Servicer or the Administrator.

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(c) The Issuer will punctually perform and observe all of its
obligations and agreements contained in this Indenture, the Related
Documents and in the instruments and agreements included in the Trust
Estate, including but not limited to filing or causing to be filed all UCC
financing statements and continuation statements required to be filed by
the terms of this Indenture and the Sale and Servicing Agreement in
accordance with and within the time periods provided for herein and
therein.

(d) If the Issuer shall have knowledge of the occurrence of a
Servicer Termination Event under the Sale and Servicing Agreement, the
Issuer shall promptly notify the Trustee, Morgan and the Rating Agencies
thereof, and shall specify in such notice the action, if any, the Issuer is
taking with respect of such default. If a Servicer Termination Event shall
arise from the failure of the Servicer or the Seller to perform any of
their respective duties or obligations under the Sale and Servicing
Agreement with respect to the Receivables, the Issuer shall take all
reasonable steps available to it to remedy such failure.

(e) Upon any termination of the Servicer's rights and powers pursuant
to the Sale and Servicing Agreement, the Issuer shall promptly notify the
Trustee. As soon as a successor Servicer is appointed, the Issuer shall
notify the Trustee and Morgan of such appointment, specifying in such
notice the name and address of such successor Servicer.

(f) The Issuer agrees that it will not waive timely performance or
observance by the Servicer, the Backup Servicer, the Seller or AFL of their
respective duties under the Related Documents without the prior consent of
the Controlling Party.

SECTION 3.08. NEGATIVE COVENANTS. Until the Termination Date, the Issuer
shall not:

(i) except as expressly permitted by this Indenture, the
Purchase Agreement or the Sale and Servicing Agreement, sell,
transfer, exchange or otherwise dispose of any of the properties or
assets of the Issuer, including those included in the Trust Estate,
unless directed to do so by the Controlling Party;

(ii) claim any credit on, or make any deduction from the
principal, interest or premium payable in respect of, the Notes (other
than amounts properly withheld from such payments under the Code) or
assert any claim against any present or former Noteholder by reason of
the payment of the taxes levied or assessed upon any part of the Trust
Estate; or

(iii) (A) permit the validity or effectiveness of this
Indenture to be impaired, or permit the lien in favor of the Trustee
created by this Indenture to be amended, hypothecated, subordinated,
terminated or discharged, or permit

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any Person to be released from any covenants or obligations with
respect to the Notes under this Indenture except as may be expressly
permitted hereby, (B) permit any lien, charge, excise, claim, security
interest, mortgage or other encumbrance (other than the lien in favor
of the Trustee created by this Indenture) to be created on or extend
to or otherwise arise upon or burden the Trust Estate or any part
thereof or any interest therein or the proceeds thereof (other than
tax liens, mechanics' liens and other liens that arise by operation of
law, in each case on a Financed Vehicle and arising solely as a result
of an action or omission of the related Obligor), (C) permit the lien
in favor of the Trustee created by this Indenture not to constitute a
valid first priority (other than with respect to any such tax,
mechanics' or other lien) security interest in the Trust Estate, or
(D) amend, modify or fail to comply with the provisions of the Related
Documents without the prior written consent of the Controlling Party.

SECTION 3.09. ANNUAL STATEMENT AS TO COMPLIANCE. The Issuer will deliver
to the Trustee and Morgan, within 120 days after the end of each fiscal year of
the Issuer (commencing with the fiscal year ended December 31, 1996), an
Officer's Certificate stating, as to the Authorized Officer signing such
Officer's Certificate, that

(i) a review of the activities of the Issuer during such year
and of performance under this Indenture has been made under such
Authorized Officer's supervision; and

(ii) to the best of such Authorized Officer's knowledge, based
on such review, the Issuer has complied with all conditions and
covenants under this Indenture throughout such year, or, if there
has been a default in the compliance of any such condition or
covenant, specifying each such default known to such Authorized
Officer and the nature and status thereof.

SECTION 3.10. ISSUER MAY CONSOLIDATE, ETC. ONLY ON CERTAIN TERMS.

(a) The Issuer shall not consolidate or merge with or into any other
Person, unless

(i) the Person (if other than the Issuer) formed by or surviving
such consolidation or merger shall be a Person organized and existing
under the laws of the United States of America or any State and shall
expressly assume, by an indenture supplemental hereto, executed and
delivered to the Trustee, in form and substance satisfactory to the
Trustee and Morgan, the due and punctual payment of the principal of
and interest on all Notes and the performance or observance of every
agreement and covenant of this Indenture and each other Related
Document on the part of the Issuer to be performed or observed, all as
provided herein;

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

(iii) the Rating Agency Condition shall have been satisfied
with respect to such transaction;

(iv) the Issuer shall have received an Opinion of Counsel
which shall be delivered to and shall be satisfactory to the Trustee
to the effect that such transaction will not have any material adverse
tax consequence to the Trust, any Noteholder or any Certificateholder;

(v) any action as is necessary to maintain the lien and
security interest created in favor of the Trustee by this Indenture
shall have been taken;

(vi) the Issuer shall have delivered to the Trustee an
Officer's Certificate and an Opinion of Counsel (which shall describe
the actions taken as required by clause (a)(v) of this Section 3.10 or
that no such actions will be taken) each stating that such
consolidation or merger and such supplemental indenture comply with
this Article III and that all conditions precedent herein provided for
relating to such transaction have been compiled with; and

(vii) the Issuer or the Person (if other than the Issuer)
formed by or surviving such consolidation or merger has a net worth,
immediately after such consolidation or merger, that is (a) greater
than zero and (b) not less than the net worth of the Issuer
immediately prior to giving effect to such consolidation or merger.

(b) The Issuer shall not convey or transfer all or substantially all
of its properties or assets, including those included in the Trust Estate,
to any Person (except as expressly permitted by the Indenture, the Purchase
Agreement or the Sale and Servicing Agreement), unless

(i) the Person that acquires by conveyance or transfer the
properties and assets of the Issuer shall (A) be a United States
citizen or a Person organized and existing under the laws of the
United States of America or any State, (B) expressly assume, by an
indenture supplemental hereto, executed and delivered to the Trustee,
in form and substance satisfactory to the Trustee and the Note
Majority, the due and punctual payment of the principal of and
interest on all Notes and the performance or observance of every
agreement and covenant of this Indenture and each Related Document on
the part of the Issuer to be performed or observed, all as provided
herein, (C) expressly agree by means of such supplemental indenture
that all right, title and interest so conveyed or transferred shall be
subject and subordinate to the rights of Holders of the Notes and (D)
unless otherwise provided in such supplemental indenture, expressly
agree to indemnify, defend and hold harmless the Issuer

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against and from any loss, liability or expense arising under or
related to this Indenture and the Notes;

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

(iii) the Rating Agency Condition shall have been satisfied
with respect to such transaction;

(iv) the Issuer shall have received an Opinion of Counsel
which shall be delivered to and shall be satisfactory to the Trustee
and Morgan to the effect that such transaction will not have any
material adverse tax consequence to the Trust, any Noteholder or any
Certificateholder;

(v) any action as is necessary to maintain the lien and
security interest created in favor of the Trustee by this Indenture
shall have been taken;

(vi) the Issuer shall have delivered to the Trustee an
Officer's Certificate and an Opinion of Counsel (which shall describe
the actions taken as required by clause (b)(v) of this Section 3.10 or
that no such actions will be taken) each stating that such conveyance
or transfer and such supplemental indenture comply with this Article
III and that all conditions precedent herein provided for relating to
such transaction have been complied with; and

(vii) the Person acquiring by conveyance or transfer the
properties or assets of the Issuer has a net worth, immediately after
such conveyance or transfer, that is (a) greater than zero and (b) not
less than the net worth of the Issuer immediately prior to giving
effect to such conveyance or transfer.

SECTION 3.11. SUCCESSOR OR TRANSFEREE.

(a) Upon any consolidation or merger of the Issuer in accordance with
Section 3.10(a), the Person formed by or surviving such consolidation or
merger (if other than the Issuer) shall succeed to, and be substituted for,
and may exercise every right and power of, the Issuer under this Indenture
with the same effect as if such Person had been named as the Issuer herein.

(b) Upon a conveyance or transfer of all the assets and properties of
the Issuer pursuant to Section 3.10(b), Olympic Automobile Receivables
Warehouse Trust will be released from every covenant and agreement of this
Indenture to be observed or performed on the part of the Issuer with
respect to the Notes immediately upon the delivery of written notice to the
Trustee stating that Olympic Automobile Receivables Warehouse Trust is to
be so released.

SECTION 3.12. NO OTHER BUSINESS. The Issuer shall not engage in any
business other than financing, purchasing, owning, selling and managing the
Receivables in the

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manner contemplated by this Indenture and the Related Documents and activities
incidental thereto.

SECTION 3.13. NO BORROWING. The Issuer shall not issue, incur, assume,
guarantee or otherwise become liable, directly or indirectly, for any
Indebtedness except for (i) the Notes, (ii) any other Indebtedness permitted by
or arising under the Related Documents and (iii) a Securitized Offering. The
proceeds of the Notes and the Certificates shall be used exclusively to fund the
Issuer's purchase of the Receivables and the other assets specified in the Sale
and Servicing Agreement and to pay the Issuer's organizational, transactional
and start-up expenses.

SECTION 3.14. SERVICER'S OBLIGATIONS. The Issuer shall cause the Servicer
to comply with Sections 3.9, 3.10, 3.11 and 4.9(b) of the Sale and Servicing
Agreement.

SECTION 3.15. GUARANTEES, LOANS, ADVANCES AND OTHER LIABILITIES. Except
as contemplated by the Sale and Servicing Agreement or this Indenture, the
Issuer shall not make any loan or advance or credit to, or guarantee (directly
or indirectly or by an instrument having the effect of assuming another's
payment or performance on any obligation or capability of so doing or
otherwise), endorse or otherwise become contingently liable, directly or
indirectly, in connection with the obligations, stocks or dividends of, or own,
purchase, repurchase or acquire (or agree contingently to do so) any stock,
obligations, assets or securities of, any other interest in, or make any capital
contribution to, any other Person.

SECTION 3.16. CAPITAL EXPENDITURES. The Issuer shall not make any
expenditure (by long-term or operating lease or otherwise) for capital assets
(either realty or personalty).

SECTION 3.17. RESTRICTED PAYMENTS. Except as expressly permitted by this
Indenture or the Sale and Servicing Agreement, the Issuer shall not, directly or
indirectly, (i) make any distribution (by reduction of capital or otherwise),
whether in cash, property, securities or a combination thereof, to the Owner
Trustee or any owner of a beneficial interest in the Issuer or otherwise with
respect to any ownership or equity interest or security in or of the Issuer or
to the Servicer, (ii) redeem, purchase, retire or otherwise acquire for value
any such ownership or equity interest or security or (iii) set aside or
otherwise segregate any amounts for any such purpose. The Issuer will not,
directly or indirectly, make payments to or distributions from the Collection
Account except in accordance with this Indenture and the Related Documents.

SECTION 3.18. NOTICE OF EVENTS OF DEFAULT. The Issuer agrees to give the
Trustee, the Controlling Party and the Rating Agencies prompt written notice of
each Event of Default hereunder, each default on the part of the Servicer or the
Seller of its obligations under the Sale and Servicing Agreement and each
default on the part of AFL of its obligations under the Purchase Agreement.

SECTION 3.19. FURTHER INSTRUMENTS AND ACTS. Upon request of the Trustee,
the Issuer will execute and deliver such further instruments and do such further
acts as may be reasonably necessary or proper to carry out more effectively the
purpose of this Indenture.

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SECTION 3.20. COMPLIANCE WITH LAWS. The Issuer shall comply with the
requirements of all applicable laws, the non-compliance with which would,
individually or in the aggregate, materially and adversely affect the ability of
the Issuer to perform its obligations under the Notes, this Indenture or any
Related Document.

SECTION 3.21. AMENDMENTS OF SALE AND SERVICING AGREEMENT AND TRUST
AGREEMENT. The Issuer shall not agree to any amendment to Section 10.1 of the
Sale and Servicing Agreement or Section 11.1 of the Trust Agreement to eliminate
the requirements thereunder that the Trustee or the Holders of the Notes consent
to amendments thereto as provided therein.

SECTION 3.22. [Reserved].

SECTION 3.23. INCOME TAX CHARACTERIZATION. For purposes of federal
income, state and local income and franchise and any other income taxes, the
Issuer and the Trustee hereby agree, and the Noteholders will agree by their
acceptance of the Notes or any interest therein, to treat the Notes as
indebtedness.

ARTICLE IV

SATISFACTION AND DISCHARGE

SECTION 4.01. SATISFACTION AND DISCHARGE OF INDENTURE. This Indenture
shall cease to be of further effect with respect to the Notes except as to (i)
rights of registration of transfer and exchange, (ii) substitution of mutilated,
destroyed, lost or stolen Notes, (iii) rights of Noteholders to receive payments
of principal, interest and premium, if any, thereon and breakage payments in
connection therewith, (iv) Sections 3.01, 3.03, 3.04, 3.05, 3.07, 3.08, 3.10,
3.12, 3.13, 3.20, 3.21 and 3.23, (v) the rights, obligations and immunities of
the Trustee hereunder (including the rights of the Trustee under Section 6.07
and the obligations of the Trustee under Section 4.02) and (vi) the rights of
Noteholders as beneficiaries hereof with respect to the property so deposited
with the Trustee payable to all or any of them, and the Trustee, on demand of
and at the expense of the Issuer, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture with respect to the Notes, when

(A) either

(1) all Notes theretofore authenticated and delivered (other
than (i) Notes that have been destroyed, lost or stolen and that have
been replaced or paid as provided in Section 2.05 and (ii) Notes for
whose payment money has theretofore been deposited in trust or
segregated and held in trust by the Issuer and thereafter repaid to
the Issuer or discharged from such trust, as provided in Section 3.03)
have been delivered to the Trustee for cancellation; or

(2) all Notes not theretofore delivered to the Trustee for
cancellation have become due and payable and the Issuer has
irrevocably

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deposited or caused to be irrevocably deposited with the Trustee as
part of the Trust Estate cash or direct obligations of or obligations
guaranteed by the United States of America (which will mature prior to
the date such amounts are payable), in trust in an Eligible Account in
the name of the Trustee for such purpose, in an amount sufficient to
pay and discharge the entire indebtedness on such Notes not
theretofore delivered to the Trustee for cancellation when due to the
Final Maturity Date;

(B) the Issuer has paid or caused to be paid all Secured Obligations;
and

(C) the Issuer has delivered to the Trustee an Officer's Certificate
and an Independent Certificate from a firm of certified public accountants,
each meeting the applicable requirements of Section 11.01(a) and each
stating that all conditions precedent herein provided for relating to the
satisfaction and discharge of this Indenture have been complied with and
the Rating Agency Condition has been satisfied.

SECTION 4.02. APPLICATION OF TRUST MONEY. All moneys deposited with the
Trustee pursuant to Section 4.01 hereof shall be held in trust and applied by
it, in accordance with the provisions of the Notes and this Indenture, to the
payment, either directly or through any Paying Agent, as the Trustee may
determine, to the Holders of the particular Notes for the payment or redemption
of which such moneys have been deposited with the Trustee, of all sums due and
to become due thereon for principal and interest; but such moneys need not be
segregated from other funds except to the extent required herein or in the Sale
and Servicing Agreement or required by law.

SECTION 4.03. REPAYMENT OF MONEYS HELD BY PAYING AGENT. In connection
with the satisfaction and discharge of this Indenture with respect to the Notes,
all moneys then held by any Paying Agent other than the Trustee under the
provisions of this Indenture with respect to such Notes shall, upon demand of
the Issuer, be paid to the Trustee to be held and applied according to Section
3.03 and thereupon such Paying Agent shall be released from all further
liability with respect to such moneys.

SECTION 4.04. RELEASE OF TRUST ESTATE. The Trustee shall, on or after the
Termination Date, release any remaining portion of the Trust Estate from the
lien created by this Indenture and deposit in the Collection Account any funds
then on deposit in any other Trust Account. The Trustee shall release property
from the lien created by this Indenture pursuant to this Section 4.04 only upon
receipt of an Issuer Request accompanied by an Officer's Certificate and, if
requested by the Trustee, an Opinion of Counsel satisfying the criteria set
forth in Section 11.01(a)(ii).

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ARTICLE V

REMEDIES

SECTION 5.01. EVENTS OF DEFAULT. "Event of Default," wherever used
herein, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):

(i) default in the payment of any interest on any Note when
the same becomes due and payable; or

(ii) default in the payment of the principal of or any
installment of the principal of any Note when the same becomes due and
payable; or

(iii) default in the observance or performance of any
covenant or agreement of the Issuer made in this Indenture (other than
a covenant or agreement, a default in the observance or performance of
which is elsewhere in this Section specifically dealt with), or any
representation or warranty of the Issuer made in this Indenture or in
any certificate or other writing delivered pursuant hereto or in
connection herewith proving to have been incorrect in any material
respect as of the time when the same shall have been made, and such
default shall continue or not be cured, or the circumstance or
condition in respect of which such misrepresentation or warranty was
incorrect shall not have been eliminated or otherwise cured, for a
period of 30 days after there shall have been given, by registered or
certified mail, to the Issuer by the Trustee or to the Issuer and the
Trustee by the Controlling Party, a written notice specifying such
default or incorrect representation or warranty and requiring it to be
remedied and stating that such notice is a "Notice of Default"
hereunder; or

(v) the commencement of an involuntary case against the
Issuer under any applicable Federal or state bankruptcy, insolvency or
other similar law now or hereafter in effect, and such case is not
dismissed within 60 days; or

(vi) (A) the commencement by the Issuer of a voluntary case
under any applicable Federal or state bankruptcy, insolvency or other
similar law now or hereafter in effect, (B) the entry of an order for
relief in an involuntary case against the Issuer under any such law,
(C) the consent by the Issuer to the entry of any such order for
relief, (D) the consent by the Issuer to the appointment or taking
possession by a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official of the Issuer or for any substantial
part of the Trust Estate, (E) the making by the Issuer of any general
assignment for the benefit of creditors, (F) the failure by the Issuer
generally to pay its debts

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<PAGE>

as such debts become due, or (G) the taking of action by the Issuer in
furtherance of any of the foregoing.

The Issuer shall deliver to the Trustee, within five days after obtaining
knowledge of the occurrence thereof, written notice in the form of an Officer's
Certificate of any event which with the giving of notice and the lapse of time
would become an Event of Default under clause (iii), its status and what action
the Issuer is taking or proposes to take with respect thereto.

SECTION 5.02. RIGHTS UPON EVENT OF DEFAULT.

If an Event of Default shall have occurred and be continuing, the Notes
shall become immediately due and payable, together with accrued interest
thereon. If an Event of Default shall have occurred and be continuing, the
Controlling Party may exercise any of the remedies specified in Section 5.04(a).

SECTION 5.03. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
TRUSTEE; AUTHORITY OF CONTROLLING PARTY.

(a) The Issuer covenants that if any Notes are accelerated following
the occurrence of an Event of Default, the Issuer will, upon demand of the
Trustee, pay to it, for the benefit of the Holders of such Notes, the whole
amount then due and payable on such Notes for principal and interest, with
interest upon the overdue principal, and, to the extent payment at such
rate of interest shall be legally enforceable, upon overdue installments of
interest, at the Interest Rate and in addition thereto such further amount
as shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and advances
of the Trustee and its agents and counsel, and any breakage payments in
connection therewith.

(b) The Trustee hereby irrevocably and unconditionally appoints the
Controlling Party as the true and lawful attorney-in-fact of the Trustee,
with full power of substitution, to execute, acknowledge and deliver any
notice, document, certificate, paper, pleading or instrument and to do in
the name of the Controlling Party as well as in the name, place and stead
of the Trustee such acts, things and deeds for or on behalf of and in the
name of the Controlling Party under this Indenture (including specifically
under Section 5.04) and under the Related Documents which the Trustee could
or might do or which may be necessary, desirable or convenient in such
Controlling Party's sole discretion to effect the purposes contemplated
hereunder and under the Related Documents and, without limitation,
following the occurrence of an Event of Default, exercise full right, power
and authority to take, or defer from taking, any and all acts with respect
to the administration, maintenance or disposition of the Trust Estate.

(c) If an Event of Default occurs and is continuing, the Trustee may
in its discretion but with the consent of the Controlling Party (except as
provided in Section

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<PAGE>

5.03(d) below or as required to comply with Section 6.01(a)), proceed to
protect and enforce its rights and the rights of the Noteholders, by such
appropriate Proceedings as the Trustee shall deem most effective to protect
and enforce any such rights, whether for the specific enforcement of any
covenant or agreement in this Indenture or in aid of the exercise of any
power granted herein, or to enforce any other proper remedy or legal or
equitable right vested in the Trustee by this Indenture or by law.

(d) Notwithstanding anything to the contrary contained in this
Indenture (including without limitation Sections 5.04(a), 5.12, 5.13 and
5.17), if the Issuer fails to perform its obligations under Section
10.01(b) hereof when and as due, the Trustee may in its discretion (and
without the consent of the Controlling Party) proceed to protect and
enforce its rights and the rights of the Noteholders by such appropriate
Proceedings as the Trustee shall deem most effective to protect and enforce
any such rights, whether for specific performance of any covenant or
agreement in this Indenture or in aid of the exercise of any power granted
herein, or to enforce any other proper remedy or legal or equitable right
vested in the Trustee by this Indenture or by law; provided that the
Trustee shall only be entitled to take any such actions without the consent
of the Controlling Party to the extent such actions are taken only to
enforce to Issuer's obligations to redeem the principal amount of Notes.

(e) In case there shall be pending, relative to the Issuer or any
other obligor upon the Notes or any Person having or claiming an ownership
interest in the Trust Estate, Proceedings under Title 11 of the United
States Code or any other applicable Federal or state bankruptcy, insolvency
or other similar law, or in case a receiver, assignee or trustee in
bankruptcy or reorganization, liquidator, sequestrator or similar official
shall have been appointed for or taken possession of the Issuer or its
property or such other obligor or Person, or in case of any other
comparable judicial Proceedings relative to the Issuer or other obligor
upon the Notes, or to the creditors or property of the Issuer or such other
obligor, the Trustee, irrespective of whether the principal of any Notes
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any
demand pursuant to the provisions of this Section, shall be entitled and
empowered, by intervention in such Proceedings or otherwise:

(i) to file and prove a claim or claims for the whole amount of
principal, interest and premium, if any, owing and unpaid in respect
of the Notes and to file such other papers or documents as may be
necessary or advisable in order to have the claims of the Trustee
(including any claim for reasonable compensation to the Trustee and
each predecessor Trustee, and their respective agents, attorneys and
counsel, and for reimbursement of all expenses and liabilities
incurred, and all advances made, by the Trustee and each predecessor
Trustee, except as a result of negligence or bad faith) and of the
Noteholders allowed in such Proceedings;

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(ii) unless prohibited by applicable law and regulations, to
vote on behalf of the Holders of Notes in any election of a trustee, a
standby trustee or Person performing similar functions in any such
Proceedings;

(iii) to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute all
amounts received with respect to the claims of the Noteholders and of
the Trustee on their behalf; and

(iv) to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims
of the Trustee or the Holders of Notes allowed in any judicial
proceedings relative to the Issuer, its creditors and its property;

and any trustee, receiver, liquidator, custodian or other similar official
in any such Proceeding is hereby authorized by each of such Noteholders to
make payments to the Trustee, and, in the event that the Trustee shall
consent to the making of payments directly to such Noteholders, to pay to
the Trustee such amounts as shall be sufficient to cover reasonable
compensation to the Trustee, each predecessor Trustee and their respective
agents, attorneys and counsel, and all other expenses and liabilities
incurred, and all advances made, by the Trustee and each predecessor
Trustee except as a result of negligence or bad faith.

(f) Nothing herein contained shall be deemed to authorize the Trustee
to authorize or consent to or vote for or accept or adopt on behalf of any
Noteholder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder thereof or to
authorize the Trustee to vote in respect of the claim of any Noteholder in
any such proceeding except, as aforesaid, to vote for the election of a
trustee in bankruptcy or similar Person.

(g) All rights of action and of asserting claims under this Indenture
or under any of the Notes, may be enforced by the Trustee without the
possession of any of the Notes or the production thereof in any trial or
other Proceedings relative thereto, and any such action or Proceedings
instituted by the Trustee shall be brought in its own name as trustee of an
express trust, and any recovery of judgment, subject to the payment of the
expenses, disbursements and compensation of the Trustee, each predecessor
Trustee and their respective agents and attorneys, shall be for the ratable
benefit of the Holders of the Notes.

(h) In any Proceedings brought by the Trustee (including any
Proceedings involving the interpretation of any provision of this
Indenture), the Trustee shall be held to represent all the Holders of the
Notes, and it shall not be necessary to make any Noteholder a party to any
such Proceedings.

SECTION 5.04. REMEDIES. (a) If an Event of Default shall have occurred
and be continuing, the Controlling Party may:

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(i) institute Proceedings in its own name and as or on
behalf of a trustee of an express trust for the collection of all
amounts then payable on the Notes or under this Indenture with respect
thereto, whether by declaration or otherwise, enforce any judgment
obtained, and collect from the Issuer and any other obligor upon such
Notes moneys adjudged due;

(ii) institute Proceedings from time to time for the
complete or partial foreclosure of this Indenture with respect to the
Trust Estate;

(iii) exercise any remedies of a secured party under the UCC
and any other remedy available to the Trustee and take any other
appropriate action to protect and enforce the rights and remedies of
the Trustee for the benefit of the Noteholders under this Indenture or
the Notes; and

(iv) direct the Trustee to sell the Trust Estate or any
portion thereof or rights or interest therein, at one or more public
or private sales called and conducted in any manner permitted by law;

SECTION 5.05. OPTIONAL PRESERVATION OF THE RECEIVABLES. If the Notes have
become due and payable under Section 5.02 following an Event of Default, the
Trustee may, but need not, unless otherwise directed by the Controlling Party,
maintain possession of the Trust Estate. It is the desire of the parties hereto
and the Noteholders that there be at all times sufficient funds for the payment
of principal of and interest on the Notes, and the Trustee shall take such
desire into account when determining whether or not to maintain possession of
the Trust Estate. In determining whether to maintain possession of the Trust
Estate, the Trustee may, but need not, obtain and rely upon an opinion of an
Independent investment banking or accounting firm of national reputation as to
the feasibility of such proposed action and as to the sufficiency of the Trust
Estate for such purpose.

SECTION 5.06. PRIORITIES.

If the Trustee collects any money or property pursuant to this Article V or
the Trustee receives proceeds of liquidation of the Trust Estate pursuant to
Section 5.04(a)(iv), the Trustee shall pay as promptly as practicable out the
money or property in the following order:

FIRST: amounts due and owing and required to be distributed to the
Servicer, the Owner Trustee, the Trustee, the Lockbox Bank, the Custodian and
the Backup Servicer, respectively, pursuant to priorities (i), (ii) and (iii) of
Section 4.6 of the Sale and Servicing Agreement and not previously distributed,
in the order of such priorities and without preference or priority of any kind
within such priorities;

SECOND: to the Noteholders for amounts due and unpaid on the Notes for
interest, ratably, without preference or priority of any kind, according to the
amounts due and payable on the Notes for interest;

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THIRD: to the Noteholders for amounts due and unpaid on the Notes for
principal, ratably, without preference or priority of any kind, according to the
amounts due and payable on the Notes for principal;

FOURTH: amounts due and unpaid on the Certificates for interest and
principal, to the Owner Trustee for distribution to Certificateholders in
accordance with Section 5.2(c) of the Trust Agreement;

FIFTH: any amounts due and owing to any Indemnified Party (as such term is
used in the Note Purchase Agreement) under Section 11.01, Section 11.04 or
Section 11.05 of the Note Purchase Agreement; and

SIXTH: any amounts due and owing to any Indemnified Party (as such term is
used in the Certificate Purchase Agreement) under Section 11.01, Section 11.04
or Section 11.05 of the Certificate Purchase Agreement.

SECTION 5.07. LIMITATION OF SUITS. No Holder of any Notes shall have any
right to institute any Proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless:

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

(ii) the Holders of not less than 25% of the Outstanding
Amount of such Notes have made written request to the Trustee to
institute such Proceeding in respect of such Event of Default in its
own name as Trustee hereunder;

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

(iv) the Trustee for 60 days after its receipt of such
notice, request and offer of indemnity has failed to institute such
Proceedings; and

(v) no direction inconsistent with such written request has
been given to the Trustee during such 60-day period by the Holders of
a majority of the Outstanding Amount of such Notes;

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

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In the event the Trustee shall receive conflicting or inconsistent requests
and indemnity from two or more groups of Holders of such Notes, each
representing less than a majority of the Outstanding Amount of such Notes, the
Trustee in its sole discretion may determine what action, if any, shall be
taken, notwithstanding any other provisions of this Indenture.

SECTION 5.08. [Reserved].

SECTION 5.09. RESTORATION OF RIGHTS AND REMEDIES. If the Controlling
Party or any Noteholder has instituted any Proceeding to enforce any right or
remedy under this Indenture and such Proceeding has been discontinued or
abandoned for any reason or has been determined adversely to the Controlling
Party or to such Noteholder, then and in every such case the Issuer, the
Controlling Party and any such Noteholder shall, subject to any determination in
such Proceeding, be restored severally and respectively to their former
positions hereunder, and thereafter all rights and remedies of the Controlling
Party and any such Noteholder shall continue as though no such Proceeding had
been instituted.

SECTION 5.10. RIGHTS AND REMEDIES CUMULATIVE. No right or remedy herein
conferred upon or reserved to the Controlling Party or to the Noteholders is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.

SECTION 5.11. DELAY OR OMISSION NOT A WAIVER. No delay or omission of the
Controlling Party or any Holder of any Note to exercise any right or remedy
accruing upon any Default or Event of Default shall impair any such right or
remedy or constitute a waiver of any such Default or Event of Default or an
acquiescence therein. Every right and remedy given by this Article V or by law
to the Trustee or to the Noteholders may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the Noteholders, as the
case may be.

SECTION 5.12. CONTROL BY NOTEHOLDERS. The Controlling Party shall have
the right to direct the time, method and place of conducting any Proceeding for
any remedy available to the Trustee with respect to the Notes or exercising any
trust or power conferred on the Trustee; provided that

(i) such direction shall not be in conflict with any rule
of law or with this Indenture;

(ii) subject to the express terms of Section 5.04, any
direction to the Trustee to sell or liquidate all or any portion of
the Trust Estate shall be by the Holders of Notes representing not
less than 100% of the Outstanding Amount of the Notes;

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(iii) if the conditions set forth in Section 5.05 have been
satisfied and the Trustee elects to retain the Trust Estate pursuant
to such Section, then any direction to the Trustee by Holders of Notes
representing less than 100% of the Outstanding Amount of the Notes to
sell or liquidate all or any portion of the Trust Estate shall be of
no force and effect; and

(iv) the Trustee may take any other action deemed proper by
the Trustee that is not inconsistent with such direction; PROVIDED,
HOWEVER, that, subject to Section 6.01, the Trustee need not take any
action that it determines might involve it in liability or might
materially adversely affect the rights of any Noteholders not
consenting to such action.

SECTION 5.13. WAIVER OF PAST DEFAULTS.

The Controlling Party may waive any past Default or Event of Default and
its consequences except a Default (a) in payment of principal of or interest on
any of the Notes or (b) in respect of a covenant or provision hereof which
cannot be modified or amended without the consent of the Holder of each Note.
In the case of any such waiver, the Issuer, the Trustee and the Holders of the
Notes shall be restored to their former positions and rights hereunder,
respectively; but no such waiver shall extend to any subsequent or other Default
or impair any right consequent thereto.

Upon any such waiver, such Default shall cease to exist and be deemed to
have been cured and not to have occurred, and any Event of Default arising
therefrom shall be deemed to have been cured and not to have occurred, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other Default or Event of Default or impair any right consequent thereto.

SECTION 5.14. UNDERTAKING FOR COSTS. All parties to this Indenture agree,
and each Holder of any Note by such Holder's acceptance thereof shall be deemed
to have agreed, that any court may in its discretion require, in any suit for
the enforcement of any right or remedy under this Indenture, or in any suit
against the Trustee for any action taken, suffered or omitted by it as Trustee,
the filing by any party litigant in such suit of an undertaking to pay the costs
of such suit and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees, against any party litigant in such suit,
having due regard to the merits and good faith of the claims or defenses made by
such party litigant; but the provisions of this Section shall not apply to (a)
any suit instituted by the Trustee, (b) any suit instituted by any Noteholder,
or group of Noteholders, in each case holding in the aggregate more than 10% of
the Outstanding Amount of the Notes or (c) any suit instituted by any Noteholder
for the enforcement of the payment of principal of or interest on any Note on or
after the respective due dates expressed in such Note and in this Indenture (or,
in the case of redemption, on or after the Redemption Date).

SECTION 5.15. WAIVER OF STAY OR EXTENSION LAWS. The Issuer covenants (to
the extent that it may lawfully do so) that it will not at any time insist upon,
or plead or in any manner whatsoever, claim or take the benefit or advantage of,
any stay or extension law

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wherever enacted, now or at any time hereafter in force, that may affect the
covenants or the performance of this Indenture; and the Issuer (to the extent
that it may lawfully do so) hereby expressly waives all benefit or advantages of
any such law, and covenants that it will not hinder, delay or impede the
execution of any power herein granted to the Trustee, but will suffer and permit
the execution of every such power as though no such law had been enacted.

SECTION 5.16. ACTION ON NOTES. The Trustee's right to seek and recover
judgment on the Notes or under this Indenture shall not be affected by the
seeking, obtaining or application of any other relief under or with respect to
this Indenture. Neither the lien of this Indenture nor any rights or remedies
of the Trustee or the Noteholders shall be impaired by the recovery of any
judgment by the Trustee against the Issuer or by the levy of any execution under
such judgment upon any portion of the Trust Estate or upon any of the assets of
the Issuer.

SECTION 5.17. PERFORMANCE AND ENFORCEMENT OF CERTAIN OBLIGATIONS.

(a) Promptly following a request from the Trustee to do so and at the
Seller's expense, the Issuer agrees to take all such lawful action as the
Trustee may request to compel or secure the performance and observance by
the Seller, the Servicer and AFL, as applicable, of each of their
obligations to the Issuer under or in connection with the Sale and
Servicing Agreement or to the Seller under or in connection with the
Purchase Agreement in accordance with the terms thereof, and to exercise
any and all rights, remedies, powers and privileges lawfully available to
the Issuer under or in connection with the Sale and Servicing Agreement to
the extent and in the manner directed by the Trustee, including the
transmission of notices of default on the part of the Seller or the
Servicer thereunder and the institution of legal or administrative actions
or proceedings to compel or secure performance by the Seller or the
Servicer of each of their obligations under the Sale and Servicing
Agreement.

(b) If an Event of Default has occurred and is continuing, the
Trustee may, and at the direction (which direction shall be in writing,
including facsimile) of the Holders of 66-2/3% of the Outstanding Amount of
the Notes shall, exercise all rights, remedies, powers, privileges and
claims of the Issuer against the Seller or the Servicer under or in
connection with the Sale and Servicing Agreement, including the right or
power to take any action to compel or secure performance or observance by
the Seller or the Servicer of each of their obligations to the Issuer
thereunder and to give any consent, request, notice, direction, approval,
extension or waiver under the Sale and Servicing Agreement, and any right
of the Issuer to take such action shall be suspended.

(c) Promptly following a request from the Trustee to do so and at the
Seller's expense, the Issuer agrees to take all such lawful action as the
Trustee may request to compel or secure the performance and observance by
AFL of each of its obligations to the Seller under or in connection with
the Purchase Agreement in accordance with the terms thereof, and to
exercise any and all rights, remedies,

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powers and privileges lawfully available to the Issuer under or in
connection with the Purchase Agreement to the extent and in the manner
directed by the Trustee, including the transmission of notices of default
on the part of the Seller thereunder and the institution of legal or
administrative actions or proceedings to compel or secure performance by
AFL of each of its obligations under the Purchase Agreement.

(d) If an Event of Default has occurred and is continuing the Trustee
may, and at the direction (which direction shall be in writing, including
facsimile) of the Holders of 66-2/3% of the Outstanding Amount of the Notes
shall, exercise all rights, remedies, powers, privileges and claims of the
Seller against AFL under or in connection with the Purchase Agreement,
including the right or power to take any action to compel or secure
performance or observance by AFL of each of its obligations to the Seller
hereunder and to give any consent, request, notice, direction, approval,
extension or waiver under the Purchase Agreement, and any right of the
Seller to take such action shall be suspended.

ARTICLE VI

THE TRUSTEE

SECTION 6.01. DUTIES OF TRUSTEE.

(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise the rights and powers vested in it by this Indenture
and in the same degree of care and skill in their exercise as a prudent
person would exercise or use under the circumstances in the conduct of such
person's own affairs except to the extent that the Controlling Party has
directed the Trustee to act or assumes the duties and/or responsibilities
of the Trustee hereunder on behalf of the Noteholders.

(b) Except during the continuance of an Event of Default:

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

(ii) in the absence of bad faith on its part, the Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements
of this Indenture; however, the Trustee shall examine the certificates
and opinions to determine whether or not they conform to the
requirements of this Indenture and, if applicable, the Trustee's other
Related Documents.

(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:

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(i) this paragraph does not limit the effect of paragraph
(b) of this Section;

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

(iii) the Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 5.12.

(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b) and (c) of this Section.

(e) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Issuer.

(f) Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law or the terms of this
Indenture or the Sale and Servicing Agreement.

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

(h) In no event shall the Trustee be required to perform, or be
responsible for the manner of performance of, any of the obligations of the
Servicer, or any other party, under the Sale and Servicing Agreement,
except during such time, if any, as the Backup Servicer shall be the
successor to, and be vested with the rights, powers, duties and privileges
of the Servicer in accordance with the terms of, the Sale and Servicing
Agreement.

(i) The Trustee shall, and hereby agrees that it will, perform all of
the obligations and duties required of it under the Sale and Servicing
Agreement.

(j) Without limiting the generality of this Section 6.01, the Trustee
shall have no duty (i) to see to any recording, filing or depositing of
this Indenture or any agreement referred to herein or any financing
statement evidencing a security interest in the Financed Vehicles, or to
see to the maintenance of any such recording or filing or depositing or to
any recording, refiling or redepositing of any thereof, (ii) to see to any
insurance of the Financed Vehicles or Obligors or to effect or maintain any
such insurance, (iii) to see to the payment or discharge of any tax,
assessment or other governmental charge or any Lien or encumbrance of any
kind owing with respect to, assessed or levied against any part of the
Trust, (iv) to confirm or verify the contents

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of any reports or certificates delivered to the Trustee pursuant to this
Indenture or the Sale and Servicing Agreement believed by the Trustee to be
genuine and to have been signed or presented by the proper party or
parties, or (v) to inspect the Financed Vehicles at any time or ascertain
or inquire as to the performance of observance of any of the Issuer's, the
Seller's or the Servicer's representations, warranties or covenants or the
Servicer's duties and obligations as Servicer and as custodian of the
Receivable Files under the Agreement.

SECTION 6.02. RIGHTS OF TRUSTEE.

(a) The Trustee may rely on any document believed by it to be genuine
and to have been signed or presented by the proper person. The Trustee
need not investigate any fact or matter stated in the document.

(b) Before the Trustee acts or refrains from acting, it may require
an Officer's Certificate (with respect to factual matters) or an Opinion of
Counsel, as applicable. The Trustee shall not be liable for any action it
takes or omits to take in good faith in reliance on the Officer's
Certificate or Opinion of Counsel, as applicable, or as directed by the
requisite amount of Note Owners as provided herein.

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

(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or within its
rights or powers; PROVIDED, HOWEVER, that the Trustee's conduct does not
constitute willful misconduct, negligence or bad faith.

(e) The Trustee may consult with counsel, and the advice or opinion
of counsel with respect to legal matters relating to this Indenture and the
Notes shall be full and complete authorization and protection from
liability in respect to any action taken, omitted or suffered by it
hereunder in good faith and in accordance with the advice or opinion of
such counsel.

(f) The Trustee shall be under no obligation to institute, conduct or
defend any litigation under this Indenture or in relation to this
Indenture, at the request, order or direction of any of the Holders of
Notes, pursuant to the provisions of this Indenture, unless such Holders of
Notes shall have offered to the Trustee reasonable security or indemnity
against the costs, expenses and liabilities that may be incurred therein or
thereby; PROVIDED, HOWEVER, that the Trustee shall, upon the occurrence of
an Event of Default (that has not been cured), exercise the rights and
powers vested in it by this Indenture with reasonable care and skill.

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(g) The Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval,
bond or other paper or document, unless requested in writing to do so by
the Holders of Notes evidencing not less than 25% of the Outstanding Amount
thereof; PROVIDED, HOWEVER, that if the payment within a reasonable time to
the Trustee of the costs, expenses or liabilities likely to be incurred by
it in the making of such investigation is, in the opinion of the Trustee,
not reasonably assured to the Trustee by the security afforded to it by the
terms of this Indenture or the Sale and Servicing Agreement, the Trustee
may require reasonable indemnity against such cost, expense or liability as
a condition to so proceeding; the reasonable expense of every such
examination shall be paid by the Person making such request, or, if paid by
the Trustee, shall be reimbursed by the Person making such request upon
demand.

SECTION 6.03. INDIVIDUAL RIGHTS OF TRUSTEE. The Trustee in its individual
or any other capacity may become the owner or pledgee of Notes and may otherwise
deal with the Issuer or its Affiliates with the same rights it would have if it
were not Trustee. Any Paying Agent, Note Registrar, co-registrar or co-paying
agent may do the same with like rights. However, the Trustee is required to
comply with Sections 6.11 and 6.12.

SECTION 6.04. TRUSTEE'S DISCLAIMER. The Trustee shall not be responsible
for and makes no representation as to the validity or adequacy of this
Indenture, the Trust Estate or the Notes, it shall not be accountable for the
Issuer's use of the proceeds from the Notes, and it shall not be responsible for
any statement of the Issuer in the Indenture or in any document issued in
connection with the sale of the Notes or in the Notes other than the Trustee's
certificate of authentication.

SECTION 6.05. NOTICE OF DEFAULTS. If a Default occurs and is continuing
and if it is known to a Responsible Officer of the Trustee, the Trustee shall
mail to Morgan and each Noteholder notice of the Default within 10 days after it
occurs. Except in the case of a Default in payment of principal of or interest
on any Note (including payments pursuant to the mandatory redemption provisions
of such Note), the Trustee may withhold the notice if and so long as a committee
of its Responsible Officers in good faith determines that withholding the notice
is in the interests of Noteholders.

SECTION 6.06. REPORTS BY TRUSTEE TO HOLDERS. The Trustee shall deliver to
each Noteholder such information as may be required to enable such holder to
prepare its federal and state income tax returns.

SECTION 6.07. COMPENSATION AND INDEMNITY.

(a) AFL in a separate letter agreement (the "Letter Agreement") has
covenanted and agreed to pay to the Trustee, and the Trustee shall be
entitled to, certain annual fees, which shall not be limited by any law on
compensation of a trustee of an express trust. In the Letter Agreement,
AFL has also agreed to reimburse the Trustee for all reasonable
out-of-pocket expenses incurred or made by

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it, including costs of collection, in addition to the compensation for its
services. Such expenses shall include the reasonable compensation and
expenses, disbursements and advances of the Trustee's agents, counsel,
accountants and experts. Pursuant to the Letter Agreement, AFL has agreed
to indemnify the Trustee against any and all loss, liability or expense
(including attorneys' fees) incurred by it in connection with the
administration of this trust and the performance of its duties hereunder.

(b) If notwithstanding the provisions of the Letter Agreement, AFL
fails to pay any fees or expenses due to the Trustee pursuant to the terms
or the Letter Agreement, the Trustee shall be entitled to a distribution in
respect of such amount pursuant of Section 4.6(ii) of the Sale and
Servicing Agreement. The Issuer's payment obligations to the Trustee
pursuant to this Section shall survive the discharge of this Indenture.
When the Trustee incurs expenses after the occurrence of a Default
specified in Section 5.01(v) or (vi) with respect to the Issuer, the
expenses are intended to constitute expenses of administration under Title
11 of the United States Code or any other applicable Federal or state
bankruptcy, insolvency or similar law. Notwithstanding anything else set
forth in this Indenture or the Related Documents, the Trustee agrees that
the obligations of the Issuer (but not AFL) to the Trustee hereunder and
under the Related Documents shall be recourse to the Trust Estate only and
specifically shall not be recourse to the assets of the General Partner of
the Issuer or any Certificateholder.

SECTION 6.08. REPLACEMENT OF TRUSTEE. The Trustee may resign at any time
by so notifying the Issuer and the Controlling Party. The Issuer may, with the
consent of the Controlling Party, and, at the request of the Controlling Party
shall, remove the Trustee if:

(i) the Trustee fails to comply with Section 6.11;

(ii) a court having jurisdiction in the premises in respect
of the Trustee in an involuntary case or proceeding under federal or
state banking or bankruptcy laws, as now or hereafter constituted, or
any other applicable federal or state bankruptcy, insolvency or other
similar law, shall have entered a decree or order granting relief or
appointing a receiver, liquidator, assignee, custodian, trustee,
conservator, sequestrator (or similar official) for the Trustee or for
any substantial part of the Trustee's property, or ordering the
winding-up or liquidation of the Trustee's affairs;

(iii) an involuntary case under the federal bankruptcy laws,
as now or hereafter in effect, or another present or future federal or
state bankruptcy, insolvency or similar law is commenced with respect
to the Trustee and such case is not dismissed within 60 days;

(iv) the Trustee commences a voluntary case under any
federal or state banking or bankruptcy laws, as now or hereafter
constituted, or any other applicable federal or state bankruptcy,
insolvency or other similar law, or consents to the appointment of or
taking possession by a receiver, liquidator,

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assignee, custodian, trustee, conservator, sequestrator (or other
similar official) for the Trustee or for any substantial part of the
Trustee's property, or makes any assignment for the benefit of
creditors or fails generally to pay its debts as such debts become due
or takes any corporate action in furtherance of any of the foregoing;

(v) the Trustee otherwise becomes incapable of acting; or

(vi) the rating assigned to the long-term unsecured debt
obligations of the Trustee (or the holding company thereof) by the
Rating Agencies shall be lowered below the rating of "BBB", "Baa3" or
equivalent rating or be withdrawn by either of the Rating Agencies.

If the Trustee resigns or is removed or if a vacancy exists in the office
of Trustee for any reason (the Trustee in such event being referred to herein as
the retiring Trustee), the Issuer shall promptly appoint a successor Trustee
acceptable to the Controlling Party. If the Issuer fails to appoint such a
successor Trustee, the Controlling Party may appoint a successor Trustee.

A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Issuer. Thereupon the resignation or removal
of the retiring Trustee shall become effective, and the successor Trustee shall
have all the rights, powers and duties of the Trustee under this Indenture. The
successor Trustee shall mail a notice of its succession to the Noteholders and
Morgan. The retiring Trustee shall promptly transfer all property held by it as
Trustee to the successor Trustee.

If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Controlling
Party or the Issuer may petition any court of competent jurisdiction for the
appointment of a successor Trustee.

If the Trustee fails to comply with Section 6.11, any Noteholder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.

Any resignation or removal of the Trustee and appointment of a successor
Trustee pursuant to any of the provisions of this Section shall not become
effective until acceptance of appointment by the successor Trustee pursuant to
this Section and payment of all fees and expenses owed to the outgoing Trustee.
Notwithstanding the replacement of the Trustee pursuant to this Section, the
retiring Trustee shall be entitled to payment or reimbursement of such amounts
as such Person is entitled pursuant to Section 6.07.

SECTION 6.09. SUCCESSOR TRUSTEE BY MERGER. If the Trustee consolidates
with, merges or converts into, or transfers all or substantially all its
corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation without any
further act shall be the successor Trustee. The Trustee shall provide the
Rating Agencies prompt notice of any such transaction.

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In case at the time such successor or successors by merger, conversion or
consolidation to the Trustee shall succeed to the trusts created by this
Indenture any of the Notes shall have been authenticated but not delivered, any
such successor to the Trustee may adopt the certificate of authentication of any
predecessor trustee, and deliver such Notes so authenticated; and in case at
that time any of the Notes shall not have been authenticated, any successor to
the Trustee may authenticate such Notes either in the name of any predecessor
hereunder or in the name of the successor to the Trustee; and in all such cases
such certificates shall have the full force which it is anywhere in the Notes or
in this Indenture provided that the certificate of the Trustee shall have.

SECTION 6.10. APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE.

(a) Notwithstanding any other provisions of this Indenture, at any
time, for the purpose of meeting any legal requirement of any jurisdiction
in which any part of the Trust may at the time be located, the Trustee,
with the consent of the Controlling Party, shall have the power and may
execute and deliver all instruments to appoint one or more Persons to act
as a co-trustee or co-trustees, or separate trustee or separate trustees,
of all or any part of the Trust, and to vest in such Person or Persons, in
such capacity and for the benefit of the Noteholders, such title to the
Trust, or any part hereof, and, subject to the other provisions of this
Section, such powers, duties, obligations, rights and trusts as the Trustee
may consider necessary or desirable. No co-trustee or separate trustee
hereunder shall be required to meet the terms of eligibility as a successor
Trustee under Section 6.11, and no notice to Noteholders of the appointment
of any co-trustee or separate trustee shall be required under Section 6.08
hereof.

(b) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions
and conditions:

(i) all rights, powers, duties and obligations conferred or
imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or
co-trustee jointly (it being understood that such separate trustee or
co-trustee is not authorized to act separately without the Trustee
joining in such act), except to the extent that under any law of any
jurisdiction in which any particular act or acts are to be performed
the Trustee shall be incompetent or unqualified to perform such act or
acts, in which event such rights, powers, duties and obligations
(including the holding of title to the Trust or any portion thereof in
any such jurisdiction) shall be exercised and performed singly by such
separate trustee or co-trustee, but solely at the direction of the
Trustee;

(ii) no trustee hereunder shall be personally liable by
reason of any act or omission of any other trustee hereunder; and

(iii) the Trustee may at any time accept the resignation of
or remove any separate trustee or co-trustee.

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(c) Any notice, request or other writing given to the Trustee shall
be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement
and the conditions of this Article VI. Each separate trustee and
co-trustee, upon its acceptance of the trusts conferred, shall be vested
with the estates or property specified in its instrument of appointment,
either jointly with the Trustee or separately, as may be provided therein,
subject to all the provisions of this Indenture, specifically including
every provision of this Indenture relating to the conduct of, affecting the
liability of, or affording protection to, the Trustee. Every such
instrument shall be filed with the Trustee.

(d) Any separate trustee or co-trustee may at any time constitute the
Trustee, its agent or attorney-in-fact with full power and authority, to
the extent not prohibited by law, to do any lawful act under or in respect
of this Agreement on its behalf and in its name. If any separate trustee
or co-trustee shall die, become incapable of acting, resign or be removed,
all of its estates, properties, rights, remedies and trusts shall vest in
and be exercised by the Trustee, to the extent permitted by law, without
the appointment of a new or successor trustee.

SECTION 6.11. ELIGIBILITY; DISQUALIFICATION. The Trustee shall have a
combined capital and surplus of at least $50,000,000 as set forth in its most
recent published annual report of condition. The Trustee shall provide copies
of such reports to the Controlling Party upon request.

ARTICLE VII

NOTEHOLDERS' LISTS AND REPORTS

SECTION 7.01. ISSUER TO FURNISH TO TRUSTEE NAMES AND ADDRESSES OF
NOTEHOLDERS. The Issuer will furnish or cause to be furnished to the Trustee
(a) not more than five days after the earlier of (i) each Record Date and (ii)
three months after the last Record Date, a list, in such form as the Trustee may
reasonably require, of the names and addresses of the Holders of Notes as of
such Record Date, (b) at such other times as the Trustee may request in writing,
within 30 days after receipt by the Issuer of any such request, a list of
similar form and content as of a date not more than 10 days prior to the time
such list is furnished; PROVIDED, HOWEVER, that so long as the Trustee is the
Note Registrar, no such list shall be required to be furnished. The Trustee or,
if the Trustee is not the Note Registrar, the Issuer shall furnish to Morgan in
writing on an annual basis on each March 31 and at such other times as Morgan
may request a copy of the list.

SECTION 7.02. PRESERVATION OF INFORMATION; COMMUNICATIONS TO NOTEHOLDERS.
The Trustee shall preserve, in as current a form as is reasonably practicable,
the names and addresses of the Holders of Notes contained in the most recent
list furnished to the Trustee as provided in Section 7.01 and the names and
addresses of Holders of Notes received by the

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Trustee in its capacity as Note Registrar. The Trustee may destroy any list
furnished to it as provided in such Section 7.01 upon receipt of a new list so
furnished.

ARTICLE VIII

ACCOUNTS, DISBURSEMENTS AND RELEASES

SECTION 8.01. COLLECTION OF MONEY. Except as otherwise expressly provided
herein, the Trustee may demand payment or delivery of, and shall receive and
collect, directly and without intervention or assistance of any fiscal agent or
other intermediary, all money and other property payable to or receivable by the
Trustee pursuant to this Indenture. The Trustee shall apply all such money
received by it as provided in this Indenture. Except as otherwise expressly
provided in this Indenture, if any default occurs in the making of any payment
or performance under any agreement or instrument that is part of this Indenture
or the Notes, the Trustee may take such action as may be appropriate to enforce
such payment or performance, including the institution and prosecution of
appropriate Proceedings. Any such action shall be without prejudice to any
right to claim a Default or Event of Default under this Indenture and any right
to proceed thereafter as provided in Article V.

SECTION 8.02. TRUST ACCOUNTS.

(a) On or prior to the Initial Closing Date, the Issuer caused the
Servicer to establish and maintain, in the name of the Trustee, for the
benefit of the Noteholders and the Certificateholders, the Trust Accounts
as provided in Section 4.1 of the Sale and Servicing Agreement. The
Trustee shall apply the moneys in such Trust Accounts in accordance with
the provisions of this Indenture and the Sale and Servicing Agreement.

(b) On each Payment Date and Redemption Date, the Trustee shall
distribute all amounts on deposit in the Note Distribution Account to
Noteholders in respect of the Notes to the extent of amounts due and unpaid
on the Notes for principal, interest and premium, if any, first to pay all
accrued and unpaid interest, and then to pay principal and premium, if any,
on the Notes in the following amounts and in the following order of
priority (except as otherwise provided in Section 5.06):

(i) accrued and unpaid interest on the Notes, provided that if
funds in the Note Distribution Account are not sufficient to pay the
entire amount of accrued but unpaid interest on the Notes, the amount
in the Note Distribution Account shall be applied to the payment of
such interest pro rata on the basis of the principal amount of Notes
held by each Noteholder;

(ii) (w) to the Holders of Notes in reduction of the Outstanding
Amount of the Notes, an amount equal to the Noteholders' Percentage of
any Principal Funding Excess Amount, (x) on a Payment Date prior to
the Purchase Termination Date on which the Facility Balance exceeds
the Facility

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Limit, to the Holders of the Notes in reduction of the Outstanding
Amount of the Notes, an amount equal to the excess of (1) the Facility
Balance over (2) the Facility Limit and (y) on each Payment Date on or
after the Purchase Termination Date, to the Holders of the Notes in
reduction of the Outstanding Amount of the Notes, until the
Outstanding Amount of the Notes is reduced to zero; and

(iii) any amounts due and owing to any Indemnified Party (as such
term is used in the Note Purchase Agreement) under Section 11.01,
Section 11.04 or Section 11.05 of the Note Purchase Agreement.

SECTION 8.03. GENERAL PROVISIONS REGARDING ACCOUNTS.

(a) So long as no Default or Event of Default shall have occurred and
be continuing, all or a portion of the funds in the Trust Accounts shall be
invested and reinvested in Eligible Investments in accordance with the
provisions of Section 4.1(e) of the Sale and Servicing Agreement.

(b) Subject to Section 6.01(c), the Trustee shall not in any way be
held liable by reason of any insufficiency in any of the Trust Accounts
resulting from any loss on any Eligible Investment included therein except
for losses attributable to the Trustee's failure to make payments on such
Eligible Investments issued by the Trustee, in its commercial capacity as
principal obligor and not as Trustee, in accordance with their terms.

ARTICLE IX

SUPPLEMENTAL INDENTURES

SECTION 9.01. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF NOTEHOLDERS.

(a) Without the consent of the Holders of any Notes but with the
consent of Morgan and with prior notice to the Rating Agencies, the Issuer
and the Trustee, when authorized by an Issuer Order, at any time and from
time to time, may enter into one or more indentures supplemental hereto, in
form satisfactory to the Trustee, for any of the following purposes:

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

(ii) to evidence the succession, in compliance with the
applicable provisions hereof, of another Person to the Issuer, and the
assumption by any

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such successor of the covenants of the Issuer herein and in the Notes
contained;

(iii) to add to the covenants of the Issuer, for the benefit of
the Holders of the Notes, or to surrender any right or power herein
conferred upon the Issuer;

(iv) to convey, transfer, assign, mortgage or pledge any property
to or with the Trustee;

(v) to cure any ambiguity, to correct or supplement any
provision herein or in any supplemental indenture which may be
inconsistent with any other provision herein or in any supplemental
indenture or to make any other provisions with respect to matters or
questions arising under this Indenture or in any supplemental
indenture; PROVIDED that such action shall not adversely affect the
interests of the Holders of the Notes; or

(vi) to evidence and provide for the acceptance of the
appointment hereunder by a successor trustee with respect to the Notes
and to add to or change any of the provisions of this Indenture as
shall be necessary to facilitate the administration of the trusts
hereunder by more than one trustee, pursuant to the requirements of
Article VI.

The Trustee is hereby authorized to join in the execution of any such
supplemental indenture and to make any further appropriate agreements and
stipulations that may be therein contained.

(b) The Issuer and the Trustee, when authorized by an Issuer Order,
may, with the consent of Morgan and with prior notice to the Rating
Agencies, enter into an indenture or indentures supplemental hereto for the
purpose of adding any provisions to, or changing in any manner or
eliminating any of the provisions of, this Indenture or of modifying in any
manner the rights of the Holders of the Notes under this Indenture;
PROVIDED, HOWEVER, that such action shall not, as evidenced by an Opinion
of Counsel, adversely affect in any material respect the interests of any
Noteholder.

SECTION 9.02. SUPPLEMENTAL INDENTURES WITH CONSENT OF NOTEHOLDERS. The
Issuer and the Trustee, when authorized by an Issuer Order, also may, with prior
notice to the Rating Agencies, with the consent of the Note Majority, by Act of
such Holders delivered to the Issuer and the Trustee, enter into an indenture or
indentures supplemental hereto for the purpose of adding any provisions to, or
changing in any manner or eliminating any of the provisions of, this Indenture
or of modifying in any manner the rights of the Holders of the Notes under this
Indenture; PROVIDED, HOWEVER, that, no such supplemental indenture shall,
without the consent of the Holder of each Outstanding Note affected thereby:

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(i) change the date of payment of any installment of principal
of or interest on any Note, or reduce the principal amount thereof,
the interest rate thereon or the Redemption Price with respect
thereto, change the provision of this Indenture relating to the
application of collections on, or the proceeds of the sale of, the
Trust Estate to payment of principal of or interest on the Notes, or
change any place of payment where, or the coin or currency in which,
any Note or the interest thereon is payable, or impair the right to
institute suit for the enforcement of the provisions of this Indenture
requiring the application of funds available therefor, as provided in
Article V, to the payment of any such amount due on the Notes on or
after the respective due dates thereof (or, in the case of redemption,
on or after the Redemption Date);

(ii) reduce the percentage of the Outstanding Amount of the
Notes, the consent of the Holders of which is required for any such
supplemental indenture, or the consent of the Holders of which is
required for any waiver of compliance with certain provisions of this
Indenture or certain defaults hereunder and their consequences
provided for in this Indenture;

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

(iv) reduce the percentage of the Outstanding Amount of the Notes
required to direct the Trustee to direct the Issuer to sell or
liquidate the Trust Estate pursuant to Section 5.04;

(v) modify any provision of this Section except to increase any
percentage specified herein or to provide that certain additional
provisions of this Indenture or the Related Documents cannot be
modified or waived without the consent of the Holder of each
Outstanding Note affected thereby;

(vi) modify any of the provisions of this Indenture in such
manner as to affect the calculation of the amount of any payment of
interest or principal due on any Note on any Payment Date (including
the calculation of any of the individual components of such
calculation) or to affect the rights of the Holders of Notes to the
benefit of any provisions for the mandatory redemption of the Notes
contained herein; or

(vii) permit the creation of any lien ranking prior to or on
a parity with the lien created by this Indenture with respect to any
part of the Trust Estate or, except as otherwise permitted or
contemplated herein, terminate the lien created by this Indenture on
any property at any time subject hereto or deprive the Holder of any
Note of the security provided by the lien created by this Indenture.

The Trustee may in its discretion determine whether or not any Notes would
be affected by any supplemental indenture, and any such determination shall be
conclusive upon

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the Holders of all Notes, whether theretofore or thereafter authenticated and
delivered hereunder. The Trustee shall not be liable for any such determination
made in good faith.

It shall not be necessary for any Act of Noteholders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.

Promptly after the execution by the Issuer and the Trustee of any
supplemental indenture pursuant to this Section, the Trustee shall mail to the
Holders of the Notes to which such amendment or supplemental indenture relates a
notice setting forth in general terms the substance of such supplemental
indenture. Any failure of the Trustee to mail such notice, or any defect
therein, shall not, however, in any way impair or affect the validity of any
such supplemental indenture.

SECTION 9.03. EXECUTION OF SUPPLEMENTAL INDENTURES. In executing, or
permitting the additional trusts created by, any supplemental indenture
permitted by this Article IX or the modifications thereby of the trusts created
by this Indenture, the Trustee shall be entitled to receive, and subject to
Sections 6.01 and 6.02 shall be fully protected in relying upon, an Opinion of
Counsel stating that the execution of such supplemental indenture is authorized
or permitted by this Indenture. The Trustee may, but shall not be obligated to,
enter into any such supplemental indenture that affects the Trustee's own
rights, duties, liabilities or immunities under this Indenture or otherwise.

SECTION 9.04. EFFECT OF SUPPLEMENTAL INDENTURE. Upon the execution of any
supplemental indenture pursuant to the provisions hereof, this Indenture shall
be and be deemed to be modified and amended in accordance therewith with respect
to the Notes affected thereby, and the respective rights, limitations of rights,
obligations, duties, liabilities and immunities under this Indenture of the
Trustee, the Issuer and the Holders of the Notes shall thereafter be determined,
exercised and enforced hereunder subject in all respects to such modifications
and amendments, and all the terms and conditions of any such supplemental
indenture shall be and be deemed to be part of the terms and conditions of this
Indenture for any and all purposes.

SECTION 9.05. [Reserved].

SECTION 9.06. REFERENCE IN NOTES TO SUPPLEMENTAL INDENTURES. Notes
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article IX may, and if required by the Trustee shall, bear a
notation in form approved by the Trustee as to any matter provided for in such
supplemental indenture. If the Issuer or the Trustee shall so determine, new
notes so modified as to conform, in the opinion of the Trustee and the Issuer,
to any such supplemental indenture may be prepared and executed by the Issuer
and authenticated and delivered by the Trustee in exchange for Outstanding
Notes.

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ARTICLE X

REDEMPTION OF NOTES

SECTION 10.01. REDEMPTION.

(a) In the event that the Seller or the Servicer pursuant to Sections
9.1(a) or 9.1(b) of the Sale and Servicing Agreement purchases the corpus
of the Trust, the Notes are subject to redemption in whole, but not in
part, on any Business Day on which such repurchase occurs, for a purchase
price equal to the Redemption Price; PROVIDED, HOWEVER, that the Issuer has
available funds sufficient to pay the Redemption Price. The Seller, the
Servicer or the Issuer shall furnish the Rating Agencies notice of such
redemption. If the Notes are to be redeemed pursuant to this Section
10.01(a), the Servicer or the Issuer shall furnish notice of such election
to the Trustee not later than 3 days prior to the Redemption Date, and the
Issuer shall deposit with the Trustee in the Note Distribution Account the
Redemption Price of the Notes to be redeemed, whereupon all such Notes
shall be due and payable on the Redemption Date upon the furnishing of a
notice complying with Section 10.02 to each Holder of the Notes. Notes
redeemed pursuant to Section 9.1(b) may be reissued in accordance with the
provisions of Article II hereof provided that neither the Seller nor the
Servicer shall have given notice of final termination of the Trust.

(b) The Issuer may, at any time upon giving proper notice as required
by Section 10.02 hereof, redeem in whole, but not in part, the Notes on any
Business Day in connection with a Securitized Offering for a price equal to
the Redemption Price; PROVIDED, HOWEVER, that the Issuer has available
funds sufficient to pay the Redemption Price; and PROVIDED FURTHER,
HOWEVER, that, in the case of a Redemption of all outstanding Notes in
connection with a Securitized Offering, the Seller has repurchased or is
simultaneously with the redemption repurchasing any Receivables that are
not eligible to be included in such Securitized Offering pursuant to
Section 6.5 of the Sale and Servicing Agreement. If the Notes are to be
redeemed pursuant to this Section 10.01(b), the Servicer or the Issuer
shall furnish notice of such election to the Trustee not later than ten
days prior to the Redemption Date, and the Issuer shall deposit with the
Trustee in the Note Distribution Account the Redemption Price of the Notes
to be redeemed, whereupon all such Notes shall be due and payable on the
Redemption Date upon furnishing of a notice complying with Section 10.02 to
each Holder of the Notes.

(c) In the event that the assets of the Trust are sold pursuant to
Section 9.2 of the Trust Agreement, the proceeds of such sale shall be
distributed as provided in Section 5.06. If amounts are to be paid to
Noteholders pursuant to this Section 10.01(c), the Servicer or the Issuer
shall, to the extent practicable, furnish notice of such event to the
Trustee not later than ten days prior to the Redemption Date whereupon all
such amounts shall be payable on the Redemption Date.

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(d) The Issuer may, at any time upon giving proper notice as required
by Section 10.02 hereof, redeem in whole or in part, the Notes on any
Business Day in connection with a Recapitalization for a price equal to the
Redemption Price for the Notes that are redeemed. A portion of the
Redemption Price equal to the outstanding principal amount of the Notes
being redeemed shall be paid by issuance of new Non-Callable Notes in like
principal amount to each Noteholder; PROVIDED, HOWEVER, that the Issuer has
available funds sufficient to pay the remainder of the Redemption Price. If
all or any part of the Notes are to be redeemed pursuant to this Section
10.01(d), the Servicer or the Issuer shall furnish notice of such election
to the Trustee not later than 3 days prior to the Redemption Date, and the
Issuer shall deliver to the Trustee for authentication and delivery the
Non-Callable Notes being issued in the Recapitalization and deposit with
the Trustee in the Note Distribution Account the balance of the Redemption
Price of the Notes to be redeemed, whereupon such Notes to be redeemed
shall be due and payable on the Redemption Date upon furnishing of a notice
complying with Section 10.02 to each Holder of the Notes. Redemption of
any Notes in a Recapitalization shall be evidenced by the decreases marked
in the Note Register pursuant to Section 2.03(b).

Notwithstanding anything in this Section 10.01, no redemption pursuant
to Section 10.01 (a), (b) or (c) shall occur unless the Issuer shall have
deposited the amount, if any, required to be deposited in the Commercial
Paper Funding Account pursuant to Section 2.10 of the Note Purchase
Agreement.

SECTION 10.02. FORM OF REDEMPTION NOTICE.

(a) Notice of redemption under Section 10.01(a) or 10.01(b) shall be
given by the Trustee in writing (which may be by facsimile) not less than
three days prior to the applicable Redemption Date to each Holder of Notes,
as of the close of business on the Record Date with respect to the Payment
Date immediately preceding the applicable Redemption Date, at such Holder's
address appearing in the Note Register.

All notices of redemption shall state:

(i) the Redemption Date;

(ii) the Redemption Price; and

(iii) except in connection with a Recapitalization, the place
where such Notes are to be surrendered for payment of the Redemption
Price (which shall be the office or agency of the Issuer to be
maintained as provided in Section 3.02).

Notice of redemption of the Notes shall be given by the Trustee in the name
and at the expense of the Issuer. Failure to give notice of redemption, or any
defect therein, to any

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Holder of any Note shall not impair or affect the validity of the redemption of
any other Note.

(b) Prior notice of redemption under Section 10.01(c) is not required
to be given to Noteholders.

SECTION 10.03. NOTES PAYABLE ON REDEMPTION DATE. The Notes or portions
thereof to be redeemed shall, following notice of redemption (if any) as
required by Section 10.02, on the Redemption Date become due and payable at the
Redemption Price and (unless the Issuer shall default in the payment of the
Redemption Price) no interest shall accrue on the Redemption Price (other than
any portion thereof represented by Non-Callable Notes in accordance with Section
10.01(d), which shall accrue interest in accordance with the terms of such
Non-Callable Notes) for any period after the date to which accrued interest is
calculated for purposes of calculating the Redemption Price.

ARTICLE XI

MISCELLANEOUS

SECTION 11.01. COMPLIANCE CERTIFICATES AND OPINIONS, ETC.

(a) Upon any application or request by the Issuer to the Trustee to
take any action under any provision of this Indenture, the Issuer shall
furnish to the Trustee and to the Controlling Party (i) an Officer's
Certificate stating that all conditions precedent, if any, provided for in
this Indenture relating to the proposed action have been complied with and
(ii) an Opinion of Counsel stating that in the opinion of such counsel all
such conditions precedent, if any, have been complied with.

(b) (i) Prior to the deposit of any Indenture Collateral or other
property or securities with the Trustee that is to be made the basis for
the release of any property subject to the lien created by this Indenture,
the Issuer shall, in addition to any obligation imposed in Section 11.01(a)
or elsewhere in this Indenture, furnish to the Trustee and the Controlling
Party an Officer's Certificate certifying or stating the opinion of each
person signing such certificate as to the fair value (within 90 days of
such deposit) to the Issuer of the Indenture Collateral or other property
or securities to be so deposited.

(ii) Whenever the Issuer is required to furnish to the
Trustee and the Controlling Party an Officer's Certificate certifying
or stating the opinion of any signer thereof as to the matters
described in clause (i) above, the Issuer shall also deliver to the
Trustee and the Controlling Party an Independent Certificate as to the
same matters, if the fair value to the Issuer of the property to be so
deposited and of all other such property made the basis of any such
withdrawal or release since the commencement of the then-current
fiscal year of the Issuer, as set forth in the certificates delivered
pursuant to clause (i)

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above and this clause (ii), is 10% or more of the Outstanding Amount
of the Notes, but such a certificate need not be furnished with
respect to any property so deposited, if the fair value thereof to the
Issuer as set forth in the related Officer's Certificate is less than
$25,000 or less than one percent of the Outstanding Amount of the
Notes.

(iii) Other than with respect to any release described in
clause (A) or (B) of Section 11.01(b)(v), whenever any property or
securities are to be released from the lien created by this Indenture,
the Issuer shall also furnish to the Trustee and the Controlling Party
an Officer's Certificate certifying or stating the opinion of each
person signing such certificate as to the fair value (within 90 days
of such release) of the property or securities proposed to be released
and stating that in the opinion of such person the proposed release
will not impair the security created by this Indenture in
contravention of the provisions hereof.

(iv) Whenever the Issuer is required to furnish to the
Trustee and the Controlling Party an Officer's Certificate certifying
or stating the opinion of any signer thereof as to the matters
described in clause (iii) above, the Issuer shall also furnish to the
Trustee and the Controlling Party an Independent Certificate as to the
same matters if the fair value of the property or securities and of
all other property or securities (other than property described in
clauses (A) or (B) of Section 11.01(b)(v)) released from the lien
created by this Indenture since the commencement of the then current
fiscal year, as set forth in the certificates required by clause (iii)
above and this clause (iv), equals 10% or more of the Outstanding
Amount of the Notes, but such certificate need not be furnished in the
case of any release of property or securities if the fair value
thereof as set forth in the related Officer's Certificate is less than
$25,000 or less than one percent of the then Outstanding Amount of the
Notes.

(v) Notwithstanding any other provision of this Section,
the Issuer may, without compliance with the other provisions of this
Section, (A) collect, liquidate, sell or otherwise dispose of
Receivables as and to the extent permitted or required by the Related
Documents (including as provided in Section 3.1 of the Sale and
Servicing Agreement) and (B) make cash payments out of the Trust
Accounts as and to the extent permitted or required by the Related
Documents.

SECTION 11.02. FORM OF DOCUMENTS DELIVERED TO TRUSTEE. In any case where
several matters are required to be certified by, or covered by an opinion of,
any specified Person, it is not necessary that all such matters be certified by,
or covered by the opinion of, only one such Person, or that they be so certified
or covered by only one document, but one such Person may certify or give an
opinion with respect to some matters and one or more other such Persons as to
other matters, and any such Person may certify or give an opinion as to such
matters in one or several documents.

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Any certificate or opinion of an Authorized Officer of the Issuer may be
based, insofar as it relates to legal matters, upon a certificate or opinion of,
or representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate of an Authorized Officer or Opinion of Counsel
may be based, insofar as it relates to factual matters, upon a certificate or
opinion of, or representations by, an officer or officers of the Servicer, the
Seller or the Issuer, stating that the information with respect to such factual
matters is in the possession of the Servicer, the Seller or the Issuer, unless
such counsel knows, or in the exercise of reasonable care should know, that the
certificate or opinion or representations with respect to such matters are
erroneous.

Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.

Whenever in this Indenture, in connection with any application or
certificate or report to the Trustee, it is provided that the Issuer shall
deliver any document as a condition of the granting of such application, or as
evidence of the Issuer's compliance with any term hereof, it is intended that
the truth and accuracy, at the time of the granting of such application or at
the effective date of such certificate or report (as the case may be), of the
facts and opinions stated in such document shall in such case be conditions
precedent to the right of the Issuer to have such application granted or to the
sufficiency of such certificate or report. The foregoing shall not, however, be
construed to affect the Trustee's right to rely upon the truth and accuracy of
any statement or opinion contained in any such document as provided in Article
VI.

SECTION 11.03. ACTS OF NOTEHOLDERS.

(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Noteholders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Noteholders in person or by
agents duly appointed in writing; and except as herein otherwise expressly
provided, such action shall become effective when such instrument or
instruments are delivered to the Trustee, and, where it is hereby expressly
required, to the Issuer. Such instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as
the "Act" of the Noteholders signing such instrument or instruments. Proof
of execution of any such instrument or of a writing appointing any such
agent shall be sufficient for any purpose of this Indenture and (subject to
Section 6.01) conclusive in favor of the Trustee and the Issuer, if made in
the manner provided in this Section.

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

51
<PAGE>

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

SECTION 11.04. NOTICES, ETC., TO TRUSTEE, ISSUER, MORGAN AND THE RATING
AGENCIES. Any request, demand, authorization, direction, notice, consent, waiver
or Act of Noteholders or other documents provided or permitted by this Indenture
to be made upon, given or furnished to or filed with:

(a) the Trustee by any Noteholder or by the Issuer shall be
sufficient for every purpose hereunder if made, given, furnished or filed
in writing to or with the Trustee at its Corporate Trust Office,

(b) the Issuer by the Trustee or by any Noteholder shall be
sufficient for every purpose hereunder if in writing and mailed,
first-class, postage prepaid, to the Issuer addressed to: Olympic
Automobile Receivables Warehouse Trust, in care of Wilmington Trust
Company, as Owner Trustee, Rodney Square North, 1100 North Market Street,
Wilmington, Delaware 19890-0001, Attention: Corporate Trust Administration
or at any other address previously furnished in writing to the Trustee by
Issuer. The Issuer shall promptly transmit any notice received by it from
the Noteholders to the Trustee, or

(c) Morgan by the Trustee, by the Issuer or by any Noteholder shall
be sufficient for every purpose hereunder if in writing and mailed,
first-class, postage prepaid, to Morgan addressed to: Morgan Guaranty
Trust Company of New York, 500 Stanton Christiana Road, Newark, Delaware
19713-2107, Attention: Asset Finance Group, or at any other address
previously furnished in writing to the Trustee and the Issuer by Morgan.
Morgan shall promptly transmit any notice received by it from the
Noteholders to the Trustee and the Issuer.

Notices required to be given to the Rating Agencies by the Issuer, the
Trustee or the Owner Trustee shall be in writing, personally delivered or mailed
by certified mail, return receipt requested to (i) in the case of Moody's, at
the following address: Moody's Investors Service, Inc., ABS Monitoring
Department, 99 Church Street, New York, New York 10007 and (ii) in the case of
Standard & Poor's, at the following address: Standard & Poor's Ratings Group, 26
Broadway (20th Floor), New York, New York 10004, Attention of Asset Backed
Surveillance Department; or as to each of the foregoing, at such other address
as shall be designated by written notice to the other parties.

SECTION 11.05. NOTICES TO NOTEHOLDERS; WAIVER. Where this Indenture
provides for notice to Noteholders of any event, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed, first-class, postage prepaid to each Noteholder affected by such
event, at his address as it appears on the Note Register, not later than the
latest date, and not earlier than the earliest date, prescribed for the giving
of

52
<PAGE>

such notice. In any case where notice to Noteholders is given by mail, neither
the failure to mail such notice nor any defect in any notice so mailed to any
particular Noteholder shall affect the sufficiency of such notice with respect
to other Noteholders, and any notice that is mailed in the manner herein
provided shall conclusively be presumed to have been duly given.

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

In case, by reason of the suspension of regular mail service as a result of
a strike, work stoppage or similar activity, it shall be impractical to mail
notice of any event of Noteholders when such notice is required to be given
pursuant to any provision of this Indenture, then any manner of giving such
notice as shall be satisfactory to the Trustee shall be deemed to be a
sufficient giving of such notice.

Where this Indenture provides for notice to the Rating Agencies, failure to
give such notice shall not affect any other rights or obligations created
hereunder, and shall not under any circumstance constitute a Default or Event of
Default.

SECTION 11.06. ALTERNATE PAYMENT AND NOTICE PROVISIONS. Notwithstanding
any provision of this Indenture or any of the Notes to the contrary, the Issuer
may enter into any agreement with any Holder of a Note providing for a method of
payment, or notice by the Trustee or any Paying Agent to such Holder, that is
different from the methods provided for in this Indenture for such payments or
notices. The Issuer will furnish to the Trustee a copy of each such agreement
and the Trustee will cause payments to be made and notices to be given in
accordance with such agreements.

SECTION 11.07. [Reserved].

SECTION 11.08. EFFECT OF HEADINGS AND TABLE OF CONTENTS. The Article and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.

SECTION 11.09. SUCCESSORS AND ASSIGNS. All covenants and agreements in
this Indenture and the Notes by the Issuer shall bind its successors and
assigns, whether so expressed or not.

All agreements of the Trustee in this Indenture shall bind its successors.

SECTION 11.10. SEVERABILITY. In case any provision in this Indenture or
in the Notes shall be invalid, illegal or unenforceable, the validity, legality,
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.

53
<PAGE>

SECTION 11.11. BENEFITS OF INDENTURE. Nothing in this Indenture or in the
Notes, express or implied, shall give to any Person, other than the parties
hereto and their successors hereunder, and the Noteholders, and any other party
secured hereunder, and any other Person with an ownership interest in any part
of the Trust Estate, including, without limitation, the Certificateholders, any
benefit or any legal or equitable right, remedy or claim under this Indenture.

SECTION 11.12. LEGAL HOLIDAYS. In any case where the date on which any
payment is due shall not be a Business Day, then (notwithstanding any other
provision of the Notes or this Indenture) payment need not be made on such date,
but may be made on the next succeeding Business Day with the same force and
effect as if made on the date on which nominally due, and no interest shall
accrue for the period from and after any such nominal date.

SECTION 11.13. GOVERNING LAW. THIS INDENTURE SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

SECTION 11.14. COUNTERPARTS. This Indenture may be executed in any number
of counterparts, each of which so executed shall be deemed to be an original,
but all such counterparts shall together constitute but one and the same
instrument.

SECTION 11.15. RECORDING OF INDENTURE. If this Indenture is subject to
recording in any appropriate public recording offices, such recording is to be
effected by the Issuer and at its expense accompanied by an Opinion of Counsel
(which may be counsel to the Trustee or any other counsel reasonably acceptable
to the Trustee, and Morgan) to the effect that such recording is necessary
either for the protection of the Noteholders or any other Person secured
hereunder or for the enforcement of any right or remedy granted to the Trustee
under this Indenture.

SECTION 11.16. TRUST OBLIGATION. No recourse may be taken, directly or
indirectly, with respect to the obligations of the Issuer, the Owner Trustee or
the Trustee on the Notes or under this Indenture or any certificate or other
writing delivered in connection herewith or therewith, against (i) the Trustee
or the Owner Trustee in its individual capacity, (ii) any Certificateholder or
any owner of a beneficial interest in the Issuer or (iii) any partner, owner,
beneficiary, agent, officer, director, employee or agent of the Trustee or the
Owner Trustee in its individual capacity, any holder of a beneficial interest in
the Issuer, the Owner Trustee or the Trustee or of any successor or assign of
the Trustee or the Owner Trustee in its individual capacity, except as any such
Person may have expressly agreed (it being understood that the Trustee and the
Owner Trustee have no such obligations in their individual capacity) and except
that any such partner, owner or beneficiary shall be fully liable, to the extent
provided by applicable law, for any unpaid consideration for stock, unpaid
capital contribution or failure to pay any installment or call owing to such
entity. For all purposes of this Indenture, in the performance of any duties or
obligations of the Issuer

54
<PAGE>

hereunder, the Owner Trustee shall be subject to, and entitled to the benefits
of, the terms and provisions of Articles VI, VII and VIII of the Trust
Agreement.

SECTION 11.17. NO PETITION. The Trustee, by entering into this Indenture,
and each Noteholder, by accepting a Note, hereby covenant and agree that they
will not at any time institute against the Seller, the Issuer or the General
Partner, or join in any institution against the Seller, the Issuer or the
General Partner of, any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings, or other proceedings under any United States Federal or
state bankruptcy or similar law in connection with any obligations relating to
the Notes, this Indenture or any of the Related Documents.

SECTION 11.18. INSPECTION. The Issuer agrees that, on reasonable prior
notice, it will permit any representative of the Trustee or of Morgan, during
the Issuer's normal business hours, to examine all the books of account,
records, reports, and other papers of the Issuer, to make copies and extracts
therefrom, to cause such books to be audited by independent certified public
accountants, and to discuss the Issuer's affairs, finances and accounts with the
Issuer's officers, employees, and independent certified public accountants, all
at such reasonable times and as often as may be reasonably requested. The
Trustee shall and shall cause its representatives to hold in confidence all such
information except to the extent disclosure may be required by law (and all
reasonable applications for confidential treatment are unavailing) and except to
the extent that the Trustee may reasonably determine that such disclosure is
consistent with its obligations hereunder.

SECTION 11.19. LIMITATION OF LIABILITY. It is expressly understood and
agreed by the parties hereto that (a) this Agreement is executed and delivered
by Wilmington Trust Company, not individually or personally but solely as Owner
Trustee of the Issuer under the Trust Agreement, in the exercise of the powers
and authority conferred and vested in it, (b) each of the representations,
undertakings and agreements herein made on the part of the Issuer is made and
intended not as personal representations, undertakings and agreements by
Wilmington Trust Company but is made and intended for the purpose for binding
only the Issuer, (c) nothing herein contained shall be construed as creating any
liability on Wilmington Trust Company, individually or personally, to perform
any covenant either expressed or implied contained herein, all such liability,
if any, being expressly waived by the parties to this Agreement and by any
person claiming by, through or under them and (d) under no circumstances shall
Wilmington Trust Company be personally liable for the payment of any
indebtedness or expenses of the Issuer or be liable for the breach or failure of
any obligation, representation, warranty or covenant made or undertaken by the
Issuer under this Agreement or any related documents.

SECTION 11.20. CONSENT TO AMENDMENTS TO OTHER AGREEMENTS. The Controlling
Party hereby consents, pursuant to Section 3.08 of the Indenture to the
amendments to the Trust Agreement, the Purchase Agreement, the Sale and
Servicing Agreement, the Administration Agreement, the Note Purchase Agreement,
and the Certificate Purchase Agreement of even date herewith.

55
<PAGE>

IN WITNESS WHEREOF, the Issuer and the Trustee have caused this Amended and
Restated Indenture to be duly executed by their respective officers, thereunto
duly authorized, all as of the day and year first above written.

OLYMPIC AUTOMOBILE RECEIVABLES
WAREHOUSE TRUST

By WILMINGTON TRUST COMPANY, not in its
individual capacity but solely as Owner
Trustee under the Trust Agreement,

By /s/ D Geran
--------------------------------------------
Name: DENISE M. GERAN
Title: FINANCIAL SERVICES OFFICER

NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION, not
in its individual capacity but solely as Trustee,

By /s/ Thomas D. Wraalstad
--------------------------------------------
Name: Thomas D Wraalstad
Title: Corporate Trust Officer

[Signature page to Amended and Restated Indenture]

<PAGE>

EXECUTION COPY

AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT
AND ASSIGNMENT

between

ARCADIA RECEIVABLES FINANCE CORP. II
Purchaser

and

ARCADIA FINANCIAL LTD.
Seller

dated as of

July 31, 1997

<PAGE>

TABLE OF CONTENTS

Page
----

ARTICLE I

DEFINITIONS

SECTION 1.1 General.........................................................1
SECTION 1.2 Specific Terms..................................................2
SECTION 1.3 Usage of Terms..................................................4
SECTION 1.4 Certain References..............................................4
SECTION 1.5 No Recourse.....................................................4
SECTION 1.6 Action by or Consent of Noteholders or Certificateholders.......4

ARTICLE II

CONVEYANCE OF THE RECEIVABLES
AND THE OTHER CONVEYED PROPERTY

SECTION 2.1 Purchase Price..................................................5
SECTION 2.2. Conveyance of Receivables.......................................5
SECTION 2.3. Delivery of Receivables File....................................7

ARTICLE III

REPRESENTATIONS AND WARRANTIES

SECTION 3.1 Representations and Warranties of AFL...........................8
SECTION 3.2 Representations and Warranties of ARFC II.......................9

ARTICLE IV

COVENANTS OF AFL

SECTION 4.1 Protection of Title of ARFC II and the Trust.................. 11
SECTION 4.2 Other Liens or Interests...................................... 13
SECTION 4.3 Costs and Expenses............................................ 13
SECTION 4.4 Indemnification............................................... 13
SECTION 4.5 Advances...................................................... 15

<PAGE>

Page
----

ARTICLE V

REPURCHASES

SECTION 5.1 Repurchase of Receivables Upon Breach of Warranty or
Covenant...................................................... 15
SECTION 5.2 Reassignment of Purchased Receivables......................... 16
SECTION 5.3 Repurchase of Ineligible Receivables Upon Securitized
Offering...................................................... 16
SECTION 5.4 Waivers....................................................... 17

ARTICLE VI

MISCELLANEOUS

SECTION 6.1 Liability of AFL.............................................. 17
SECTION 6.2 [RESERVED..................................................... 17
SECTION 6.3 Merger or Consolidation of AFL or ARFC II..................... 17
SECTION 6.4 Limitation on Liability of AFL and Others..................... 18
SECTION 6.5 AFL May Own Notes or Certificates............................. 18
SECTION 6.6 Amendment..................................................... 18
SECTION 6.7 Notices....................................................... 19
SECTION 6.8 Merger and Integration........................................ 19
SECTION 6.9 Severability of Provisions.................................... 19
SECTION 6.10 Intention of the Parties...................................... 20
SECTION 6.11 Governing Law................................................. 20
SECTION 6.12 Counterparts.................................................. 20
SECTION 6.13 Conveyance of the Receivables and the Other Conveyed
Property to the Trust......................................... 20
SECTION 6.14 Nonpetition Covenant.......................................... 21

<PAGE>

AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT
AND ASSIGNMENT

THIS AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT AND
ASSIGNMENT, dated as of July 31, 1997, executed between Arcadia Receivables
Finance Corp. II, a Delaware corporation, as purchaser ("ARFC II"), and Arcadia
Financial Ltd., a Minnesota corporation, as seller ("AFL").

W I T N E S S E T H:

WHEREAS, ARFC II has agreed from time to time to purchase from AFL and
AFL, pursuant to this Agreement, has agreed from time to time to sell and assign
to ARFC II the Receivables and Other Conveyed Property.

WHEREAS, ARFC II and AFL are parties to a Receivables Purchase
Agreement and Assignment dated as of December 28, 1995, as previously amended
(the "Original Receivables Purchase Agreement and Assignment");

WHEREAS, ARFC II and AFL desire to further amend the Original
Receivables Purchase Agreement and Assignment in connection with amendments
being made to documents contemplated by the Original Receivables Purchase
Agreement and Assignment.

WHEREAS, ARFC II and AFL are entering into this Receivables Purchase
Agreement and Assignment, which on the Effectiveness Date (defined below) will
supersede the Original Receivables Purchase Agreement and Assignment, to make
certain amendments to the Original Receivables Purchase Agreement and Assignment
and to govern the obligations of the parties hereunder from and after the date
hereof;

NOW, THEREFORE, in consideration of the premises and the mutual
agreements hereinafter contained, and for other good and valuable consideration,
the receipt of which is acknowledged, ARFC II and AFL, intending to be legally
bound, hereby agree as follows:

ARTICLE I

DEFINITIONS

SECTION 1.1 GENERAL. The specific terms defined in this Article
include the plural as well as the singular. The words "herein," "hereof" and
"hereunder" and other words of similar import refer to this Agreement as a whole
and not to any particular Article, Section or other subdivision, and Article,
Section, Schedule and Exhibit references, unless otherwise specified, refer to
Articles and Sections of and Schedules and Exhibits to this Agreement.
Capitalized terms used herein without definition shall have the respective
meanings assigned to such terms in the Amended and Restated Sale and Servicing

<PAGE>

Agreement, dated as of July 31, 1997, by and among Arcadia Receivables Finance
Corp. II (as Seller), Arcadia Financial Ltd. (in its individual capacity and as
Servicer), Olympic Automobile Receivables Warehouse Trust (as Issuer) (the
"Trust") and Norwest Bank Minnesota, National Association, a national banking
association (as Backup Servicer).

SECTION 1.2 SPECIFIC TERMS. Whenever used in this Agreement, the
following words and phrases, unless the context otherwise requires, shall have
the following meanings:

"Agreement" means this Amended and Restated Receivables Purchase
Agreement and Assignment and all amendments hereof and supplements hereto.

"ARFC II" means Arcadia Receivables Finance Corp. II, a Delaware
corporation.

"Assignment Agreement" means, with respect to any Receivables and
related Other Conveyed Property, the assignment agreement between AFL and ARFC
II pursuant to which AFL sells and assigns Receivables and related Other
Conveyed Property to ARFC II, the form of which is attached hereto as Exhibit A.

"Effectiveness Date" has the meaning specified in Section 1.7 hereof.

"Initial Closing Date" means December 28, 1995.

"Indenture Trustee" means Norwest Bank Minnesota, National
Association, a national banking association, as trustee and indenture collateral
agent under the Amended and Restated Indenture, dated as of July 31, 1997,
between the Trust and the Indenture Trustee.

"Other Conveyed Property" means all monies at any time paid or payable
on the Receivables or in respect thereof after the applicable Cutoff Date
(including amounts due on or before the applicable Cutoff Date but receivable by
AFL after such Cutoff Date), the security interests of AFL in the Financed
Vehicles, the Insurance Policies and any proceeds from any Insurance Policies
relating to the Receivables, the Obligors or the Financed Vehicles, including
rebates of premiums, all Collateral Insurance and any Force-Placed Insurance
relating to the Receivables, rights of AFL against Dealers with respect to the
Receivables under the Dealer Agreements and the Dealer Assignments, all items
contained in the Receivables File, any and all other documents or electronic
records that AFL keeps on file in accordance with its customary procedures
relating to the Receivables, the Obligors or the Financed Vehicles, property
(including the right to receive future Liquidation Proceeds) that secures a
Receivable and that has been acquired by or on behalf of AFL pursuant to
liquidation of such Receivable, all present and future claims, demands, causes
and chooses in action in respect of the Receivables and any or all of the
foregoing and all payments on or under and all proceeds of every kind and nature
whatsoever in respect of the Receivables and any and all of the foregoing,
including all proceeds of the conversion, voluntary or involuntary, into cash or
other liquid property, all cash proceeds, accounts, accounts receivables, notes,
drafts, acceptances, chattel paper, checks, deposit

<PAGE>

accounts, insurance proceeds, condemnation awards, rights to payment of any and
every kind and other forms of obligations and receivables, instruments and other
property which at any time constitute all or part of or are included in the
proceeds of the Receivables and any of the foregoing.

"Owner Trustee" means Wilmington Trust Company, a Delaware
corporation, not in its individual capacity but solely as trustee of the Trust
and any successor trustee appointed and acting pursuant to the Trust Agreement.

"Purchase Price" means, with respect to any Receivables and related
Other Conveyed Property conveyed to ARFC II by AFL on any Transfer Date, an
amount equal to the sum of the Principal Balances of all such Receivables as of
the applicable Cutoff Date.

"Receivable" means a retail installment sale contract or promissory
note (and related security agreement) for a new or used automobile or light
truck (and all accessories thereto) that is included in the Schedule of
Receivables, and all rights and obligations under such a contract.

"Related Documents" means the Notes, the Custodian Agreement, the Sale
and Servicing Agreement, the Lockbox Agreement and the Indenture. The Related
Documents to be executed by any party are referred to herein as "such party's
Related Documents," "its Related Documents" or by a similar expression.

"Repurchase Event" means the occurrence of a breach of any of AFL's
representations and warranties contained in Section 3.1(a) hereof or any other
event which requires the repurchase of a Receivable by AFL under the Sale and
Servicing Agreement or by ARFC II pursuant to Section 2.6 of the Sale and
Servicing Agreement.

"Sale and Servicing Agreement" means the Amended and Restated Sale and
Servicing Agreement, dated as of July 31, 1997, executed and delivered by
Arcadia Receivables Finance Corp. II, as Seller, Arcadia Financial Ltd., in its
individual capacity and as Servicer, Olympic Automobile Receivables Warehouse
Trust, as Issuer, and Norwest Bank Minnesota, National Association, as Backup
Servicer, together with any Transfer Agreements executed pursuant thereto and in
accordance with the terms thereof.

"Schedule of Receivables" means the schedule of all automobile retail
installment loan contracts and promissory notes sold and transferred pursuant to
each Assignment Agreement which is attached hereto as Schedule A, as such
Schedule shall be supplemented from time to time (i) by each Schedule of
Receivables with respect to each Assignment Agreement, which Schedules of
Receivables shall be deemed incorporated and made a part of Schedule A hereto
and (ii) to reflect the repurchase from ARFC II of (a) Warranty Receivables and
(b) other Receivables purchased from ARFC II by AFL, such comprehensive schedule
to be maintained by the Indenture Trustee. With respect to an Assignment
Agreement, "Schedule of Receivables" shall mean the Schedule attached to such
Assignment Agreement as Exhibit A thereto.

<PAGE>

"Schedule of Representations" means the Schedule of Representations
and Warranties attached hereto as Schedule B.

"Transfer Date" means any date on which Receivables and related Other
Conveyed Property are sold and assigned to ARFC II pursuant to Section 2.2.

"Trust" means the trust created by the Trust Agreement, the estate of
which consists of the Trust Property.

"Trust Agreement" means the Amended and Restated Trust Agreement,
dated as of July 31, 1997 between ARFC II and the Owner Trustee.

"Trust Property" means the property and proceeds of every description
conveyed pursuant to Section 2.5 of the Trust Agreement, Sections 2.1 and 2.4 of
the Sale and Servicing Agreement and Section 2.2 hereof and pursuant to any
Assignment Agreement, together with the Trust Accounts (including all Eligible
Investments therein and all proceeds therefrom).

SECTION 1.3 USAGE OF TERMS. (a) With respect to all terms used in
this Agreement, the singular includes the plural and the plural the singular;
words importing any gender include the other gender; references to "writing"
include printing, typing, lithography, and other means of reproducing words in a
visible form; references to agreements and other contractual instruments include
all subsequent amendments thereto or changes therein entered into in accordance
with their respective terms and not prohibited by this Agreement or the Sale and
Servicing Agreement; references to Persons include their permitted successors
and assigns; and the terms "include" or "including" mean "include without
limitation" or "including without limitation."

SECTION 1.4 CERTAIN REFERENCES. All references to the Principal
Balance of a Receivable as of an Accounting Date shall refer to the close of
business on such day, or as of the first day of a Monthly Period shall refer to
the opening of business on such day. All references to the last day of a
Monthly Period shall refer to the close of business on such day.

SECTION 1.5 NO RECOURSE. Without limiting the obligations of AFL
hereunder, no recourse may be taken, directly or indirectly, under this
Agreement or any certificate or other writing delivered in connection herewith
or therewith, against any stockholder, officer or director, as such, of AFL, or
of any predecessor or successor of AFL.

SECTION 1.6 ACTION BY OR CONSENT OF NOTEHOLDERS OR
CERTIFICATEHOLDERS. Whenever any provision of this Agreement refers to action
to be taken, or consented to, by Noteholders or Certificateholders, such
provision shall be deemed to refer to

<PAGE>

Noteholders or Certificateholders, as the case may be, of record as of the
Record Date immediately preceding the date on which such action is to be taken,
or consent given, by Noteholders or Certificateholders, as the case may be.
Solely for the purposes of any action to be taken, or consented to, by
Noteholders or Certificateholders, any Note or Certificate registered in the
name of ARFC II, AFL or any Affiliate thereof shall be deemed not to be
outstanding, and the related Outstanding Amount or Certificate Balance, as
applicable, evidenced thereby shall not be taken into account in determining
whether the requisite Outstanding Amount or Certificate Balance necessary to
effect any such action or consent has been obtained; provided, however, that,
solely for the purpose of determining whether the Indenture Trustee or Owner
Trustee is entitled to rely upon any such action or consent, only Notes or
Certificates which the Indenture Trustee or Owner Trustee knows to be so owned
shall be so disregarded.

SECTION 1.7 EFFECTIVENESS. (a) The "Effectiveness Date" of this
Agreement shall occur on the date on which the conditions set forth in this
Agreement shall have been satisfied or waived by both parties to this Agreement.

(b) This Agreement amends and restates the Original Receivables
Purchase Agreement and Assignment and on the Effectiveness Date, replaces the
Original Receivables Purchase Agreement and Assignment without interruption of
the parties' performance thereunder.

ARTICLE II

CONVEYANCE OF THE RECEIVABLES
AND THE OTHER CONVEYED PROPERTY

SECTION 2.1 PURCHASE PRICE. In consideration of the conveyance of
the Receivables and the related Other Conveyed Property to ARFC II on each
Transfer Date, ARFC II shall pay or cause to be paid to AFL an amount equal to
the product of (x) the outstanding Principal Balance (as defined in the Sale and
Servicing Agreement) of each Receivable and (y) 100%. Such amount shall be paid
to AFL, by wire transfer of immediately available funds (a) on the date of such
conveyance, in an amount equal to ninety-four percent of such Purchase Price,
and (b) upon the subsequent transfer of such Receivables for securitization or
upon a "Securitized Offering" (as defined in the Sale and Servicing Agreement),
in an amount equal to the remaining balance of the Purchase Price.

SECTION 2.2. CONVEYANCE OF RECEIVABLES.

(a) Subject to the conditions set forth in paragraph (b) below, AFL,
pursuant to the mutually agreed upon terms contained herein and pursuant to one
or more Assignment Agreements, shall sell, transfer, assign and otherwise convey
to ARFC II without recourse (but without limitation of its obligations in this
Agreement or the Sale and Servicing Agreement), all of the right, title and
interest of AFL, whether then existing or thereafter acquired, in and to the
Receivables listed on the related Schedule of Receivables and the related Other
Conveyed Property. It is the intention of ARFC II and

<PAGE>

AFL that the transfers and assignments contemplated by this Agreement and each
Assignment Agreement shall constitute a sale of the Receivables and the Other
Conveyed Property from AFL to ARFC II, conveying good title thereto free and
clear of any Liens, and the Receivables and Other Conveyed Property shall not be
a part of AFL's estate in the event of the filing of a bankruptcy petition by or
against AFL under any bankruptcy or similar law.

(b) (1) AFL shall transfer to ARFC II the Receivables and the
related Other Conveyed Property as described in paragraph (a) above only upon
the satisfaction of each of the following conditions on or prior to the related
Transfer Date:

(i) AFL shall have delivered to ARFC II, the Owner Trustee and the
Indenture Trustee a duly executed Assignment Agreement (including an
acceptance by ARFC II), which shall include a Schedule of Receivables
listing the Receivables being transferred on such Transfer Date;

(ii) as of such Transfer Date, AFL shall not have been insolvent nor
shall AFL have been rendered insolvent by such sale and assignment nor
shall AFL be aware of any pending insolvency;

(iii) AFL shall have taken any action necessary or advisable to
maintain the first priority perfected ownership interest of ARFC II in the
Receivables and Other Conveyed Property;

(iv) no selection procedures adverse to the interests of ARFC II,
the Issuer or the Noteholders shall have been utilized by AFL or ARFC II in
selecting the Receivables;

(v) AFL shall have provided to ARFC II and Morgan any information
reasonably requested by any of the foregoing with respect to the
Receivables;

(vi) the conditions to the transfer of Receivables to the Trust
pursuant to Section 2.1(b) of the Sale and Servicing Agreement have been
met;

(vii) each of the representations and warranties made by AFL pursuant
to Section 3.1 shall be true and correct as of the related Transfer Date,
and AFL shall have performed all obligations to be performed by it
hereunder on or prior to such Transfer Date;

(viii) AFL shall, at its own expense, on or prior to the Transfer Date
indicate in its computer files that the Receivables identified in the
Assignment Agreement have been sold to ARFC II pursuant to this Agreement
and the related Assignment Agreement;

(ix) on any Transfer Date, AFL shall have established, in the name of
the Trustee for the benefit of the Noteholders and the Certificateholders,
an Eligible Interest Rate Cap Agreement in a notional amount equal to or
greater than the sum

<PAGE>

of the Note Balance PLUS the Certificate Balance on such date (after taking
into account the transfer of Receivables to the Trust on such date);

(x) after giving effect to the conveyance of Receivables on such
Transfer Date, the aggregate of the Principal Balances of Receivables
attributable to loans classified as Financed Repossessions shall not exceed
3.0% of the aggregate of the Principal Balances of all Receivables on such
Transfer Date; and

(xi) AFL shall have delivered to the Indenture Trustee, the Owner
Trustee and Morgan an Officer's Certificate confirming the satisfaction of
each condition precedent specified in this paragraph (b)(1).

SECTION 2.3. DELIVERY OF RECEIVABLES FILE. AFL shall use its best
efforts to deliver to the Custodian within three Business Days after each
Transfer Date, but in any event AFL shall deliver to the Custodian no later than
ten Business Days after such Transfer Date, the following documents:

(i) The fully executed original of the Receivable (together with the
original of any agreements modifying the Receivable, including without
limitation any extension agreements);

(ii) A certificate of insurance, application form signed by the
Obligor or a signed representation letter from the Obligor named in the
Receivable pursuant to which the Obligor has agreed to obtain an Insurance
Policy, or a documented verbal confirmation by the insurance agent for the
Obligor of a policy number for an Insurance Policy or any other documents
evidencing or relating to any Insurance Policy;

(iii) The original credit application, or a copy thereof, of each
Obligor, on AFL's customary form, or on a form approved by AFL, for such
application; and

(iv) The original certificate of title (when received) and otherwise
such documents, if any, that AFL keeps on file in accordance with its
customary procedures indicating that the Financed Vehicle is owned by the
Obligor and subject to the interest of AFL as first lienholder or secured
party (including any Lien Certificate received by AFL), or if such original
certificate of title has not yet been received, a copy of the application
therefor, showing AFL as secured party, or a letter from the applicable
Dealer agreeing unconditionally to repurchase the related Receivable if the
certificate of title is not received by AFL within 180 days.

It is the intention of AFL and ARFC II that the transfer and assignment
contemplated by this Agreement and the related Assignment Agreements shall
constitute a sale of the Receivables and the Other Conveyed Property from AFL to
ARFC II, conveying good title thereto free and clear of any Liens, and the
Receivables and the Other Conveyed Property shall not be part of AFL's estate in
the event of the filing of a bankruptcy petition by or against AFL under any
bankruptcy or similar law.

<PAGE>

ARTICLE III

REPRESENTATIONS AND WARRANTIES

SECTION 3.1 REPRESENTATIONS AND WARRANTIES OF AFL. AFL made the
following representations and warranties on the Initial Closing Date, on which
ARFC II relied in purchasing the Receivables and the Other Conveyed Property and
in transferring the Receivables and the Other Conveyed Property to the Trust
under the original Sale and Servicing Agreement and AFL hereby makes the
following representations and warranties on the Effectiveness Date, on which
ARFC II relies in purchasing the Receivables and the Other Conveyed Property to
the Trust under this Agreement. Such representations are made as of the Initial
Closing Date, the Effectiveness Date and each Transfer Date, and shall survive
the sale, transfer and assignment of the Receivables and the Other Conveyed
Property hereunder and under the Assignment Agreements and the sale, transfer
and assignment thereof by ARFC II to the Trust under the Sale and Servicing
Agreement. AFL and ARFC II agree that ARFC II will assign to the Trust all of
ARFC II's rights under this Agreement and that the Trust will thereafter be
entitled to enforce this Agreement against AFL in the Trust's own name.

(a) SCHEDULE OF REPRESENTATIONS. The representations and warranties
set forth on the Schedule of Representations are true and correct.

(b) ORGANIZATION AND GOOD STANDING. AFL has been duly organized and
is validly existing as a corporation in good standing under the laws of the
State of Minnesota, with power and authority to own its properties and to
conduct its business as such properties are currently owned and such business is
currently conducted, and had at all relevant times, and now has, power,
authority and legal right to acquire, own and sell the Receivables and the Other
Conveyed Property transferred to ARFC II.

(c) DUE QUALIFICATION. AFL is duly qualified to do business as a
foreign corporation in good standing, and has obtained all necessary licenses
and approvals, in all jurisdictions in which the ownership or lease of its
property or the conduct of its business requires such qualification.

(d) POWER AND AUTHORITY. AFL has the power and authority to execute
and deliver this Agreement, each Assignment Agreement and its Related Documents
and to carry out its terms and their terms, respectively; AFL has full power and
authority to sell and assign the Receivables and the Other Conveyed Property to
be sold and assigned to and deposited with ARFC II under each Assignment
Agreement and has duly authorized such sale and assignment to ARFC II by all
necessary corporate action; and the execution, delivery and performance of this
Agreement, each Assignment Agreement and AFL's Related Documents have been duly
authorized by AFL by all necessary corporate action.

(e) VALID SALE; BINDING OBLIGATIONS. This Agreement, each Assignment
Agreement and AFL's Related Documents have been duly executed and delivered,
shall effect a valid sale, transfer and assignment of the Receivables and the
Other Conveyed Property, enforceable against AFL and creditors of and purchasers
from AFL; and this

<PAGE>

Agreement, each Assignment Agreement and AFL's Related Documents constitute
legal, valid and binding obligations of AFL enforceable in accordance with their
respective terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization or other similar laws affecting the enforcement of
creditors' rights generally and by equitable limitations on the availability of
specific remedies, regardless of whether such enforceability is considered in a
proceeding in equity or at law.

(f) NO VIOLATION. The consummation of the transactions contemplated
by this Agreement, each Assignment Agreement and the Related Documents and the
fulfillment of the terms of this Agreement, each Assignment Agreement and the
Related Documents shall not conflict with, result in any breach of any of the
terms and provisions of or constitute (with or without notice, lapse of time or
both) a default under, the articles of incorporation or bylaws of AFL, or any
indenture, agreement, mortgage, deed of trust or other instrument to which AFL
is a party or by which it is bound, or result in the creation or imposition of
any Lien upon any of its properties pursuant to the terms of any such indenture,
agreement, mortgage, deed of trust or other instrument, other than this
Agreement, each Assignment Agreement and the Sale and Servicing Agreement, or
violate any law, order, rule or regulation applicable to AFL of any court or of
any federal or state regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over AFL or any of its
properties.

(g) NO PROCEEDINGS. There are no proceedings or investigations
pending or, to AFL's knowledge, threatened against AFL, before any court,
regulatory body, administrative agency or other tribunal or governmental
instrumentality having jurisdiction over AFL or its properties (i) asserting the
invalidity of this Agreement, any Assignment Agreement or any of the Related
Documents, (ii) seeking to prevent the issuance of the Notes or the Certificates
or the consummation of any of the transactions contemplated by this Agreement,
any Assignment Agreement or any of the Related Documents, (iii) seeking any
determination or ruling that might materially and adversely affect the
performance by AFL of its obligations under, or the validity or enforceability
of, this Agreement, any Assignment Agreement or any of the Related Documents or
(iv) seeking to affect adversely the federal income tax or other federal, state
or local tax attributes of, or seeking to impose any excise, franchise, transfer
or similar tax upon, the transfer and acquisition of the Receivables and the
Other Conveyed Property hereunder, under any Assignment Agreement or under the
Sale and Servicing Agreement.

(h) NO TERMINATION EVENTS. No Purchase Termination Event or Servicer
Termination Event shall have occurred and be continuing.

(i) CHIEF EXECUTIVE OFFICE. The chief executive office of AFL is
located at 7825 Washington Avenue South, Suite 400, Minneapolis, MN 55439-2435.

SECTION 3.2 REPRESENTATIONS AND WARRANTIES OF ARFC II. ARFC II made
the following representations and warranties on the Initial Closing Date on
which AFL relied in selling, assigning, transferring and conveying the
Receivables and the Other Conveyed Property to ARFC II under the Original Sale
and Servicing Agreement and under each Assignment Agreement; and ARFC II hereby
makes the following

<PAGE>

representations and warranties on the Effectiveness Date, on which AFL relies in
selling, assigning, transferring and conveying the Receivables and the Other
Conveyed Property to ARFC II under this Agreement. Such representations are
made as of the Initial Closing Date, the Effectiveness Date and each Transfer
Date, and shall survive the sale, transfer and assignment of the Receivables and
the Other Conveyed Property hereunder and under each Assignment Agreement and
the sale, transfer and assignment thereof by ARFC II to the Trust under the Sale
and Servicing Agreement.

(a) ORGANIZATION AND GOOD STANDING. ARFC II has been duly organized
and is validly existing and in good standing as a corporation under the laws of
the State of Delaware, with the power and authority to own its properties and to
conduct its business as such properties are currently owned and such business is
currently conducted, and had at all relevant times, and has, full power,
authority and legal right to acquire and own the Receivables and the Other
Conveyed Property and to transfer the Receivables and the Other Conveyed
Property to the Trust pursuant to the Sale and Servicing Agreement.

(b) DUE QUALIFICATION. ARFC II is duly qualified to do business as a
foreign corporation in good standing, and has obtained all necessary licenses
and approvals in all jurisdictions where the failure to do so would materially
and adversely affect (i) ARFC II's ability to acquire the Receivables or the
Other Conveyed Property, (ii) the validity or enforceability of the Receivables
and the Other Conveyed Property or (iii) ARFC II's ability to perform its
obligations hereunder, under any Assignment Agreement and under the Related
Documents.

(c) POWER AND AUTHORITY. ARFC II has the power, authority and legal
right to execute and deliver this Agreement, each Assignment Agreement and its
Related Documents and to carry out the terms hereof and thereof and to acquire
the Receivables and the Other Conveyed Property hereunder and under each
Assignment Agreement; and the execution, delivery and performance of this
Agreement, each Assignment Agreement and its Related Documents and all of the
documents required pursuant hereto or thereto have been duly authorized by ARFC
II by all necessary action.

(d) NO CONSENT REQUIRED. ARFC II is not required to obtain the
consent of any other Person, or any consent, license, approval or authorization
or registration or declaration with, any governmental authority, bureau or
agency in connection with the execution, delivery or performance of this
Agreement, each Assignment Agreement and the Related Documents, except for such
as have been obtained, effected or made.

(e) BINDING OBLIGATION. This Agreement, each Assignment Agreement
and each of its Related Documents constitutes a legal, valid and binding
obligation of ARFC II, enforceable against ARFC II in accordance with its terms,
subject, as to enforceability, to applicable bankruptcy, insolvency,
reorganization, conservatorship, receivership, liquidation and other similar
laws and to general equitable principles.

(f) NO VIOLATION. The execution, delivery and performance by ARFC II
of this Agreement and each Assignment Agreement, the consummation of the
transactions contemplated by this Agreement, each Assignment Agreement and the
Related Documents

<PAGE>

and the fulfillment of the terms of this Agreement, each Assignment Agreement
and the Related Documents do not and will not conflict with, result in any
breach of any of the terms and provisions of or constitute (with or without
notice or lapse of time) a default under the certificate of incorporation or
bylaws of ARFC II, or conflict with or breach any of the terms or provisions of,
or constitute (with or without notice or lapse of time) a default under, any
indenture, agreement, mortgage, deed of trust or other instrument to which ARFC
II is a party or by which ARFC II is bound or to which any of its properties are
subject, or result in the creation or imposition of any Lien upon any of its
properties pursuant to the terms of any such indenture, agreement, mortgage,
deed of trust or other instrument (other than the Sale and Servicing Agreement
and the Indenture), or violate any law, order, rule or regulation, applicable to
ARFC II or its properties, of any federal or state regulatory body or any court,
administrative agency, or other governmental instrumentality having jurisdiction
over ARFC II or any of its properties.

(g) NO PROCEEDINGS. There are no proceedings or investigations
pending, or, to the knowledge of ARFC II, threatened against ARFC II, before any
court, regulatory body, administrative agency, or other tribunal or governmental
instrumentality having jurisdiction over ARFC II or its properties: (i)
asserting the invalidity of this Agreement, any Assignment Agreement or any of
the Related Documents, (ii) seeking to prevent the consummation of any of the
transactions contemplated by this Agreement, any Assignment Agreement or any of
the Related Documents, (iii) seeking any determination or ruling that might
materially and adversely affect the performance by ARFC II of its obligations
under, or the validity or enforceability of, this Agreement, any Assignment
Agreement or any of the Related Documents or (iv) that may adversely affect the
federal or state income tax attributes of, or seeking to impose any excise,
franchise, transfer or similar tax upon, the transfer and acquisition of the
Receivables and the Other Conveyed Property hereunder or under any Assignment
Agreement or the transfer of the Receivables and the Other Conveyed Property to
the Trust pursuant to the Sale and Servicing Agreement.

In the event of any breach of a representation and warranty made by ARFC II
hereunder, AFL covenants and agrees that it will not take any action to pursue
any remedy that it may have hereunder, in law, in equity or otherwise, until a
year and a day have passed since the date on which all investor certificates,
notes or other similar securities issued by the Trust, or a trust or similar
vehicle formed by ARFC II, have been paid in full. AFL and ARFC II agree that
damages will not be an adequate remedy for such breach and that this covenant
may be specifically enforced by ARFC II or by the Owner Trustee on behalf of the
Trust.

ARTICLE IV

COVENANTS OF AFL

SECTION 4.1 PROTECTION OF TITLE OF ARFC II AND THE TRUST.

(a) At or prior to the Initial Closing Date, AFL filed or caused to
be filed a UCC-1 financing statement, executed by AFL as seller or debtor,
naming ARFC II as

<PAGE>

purchaser or secured party and describing the Receivables and the Other Conveyed
Property, with respect to this Agreement and each Assignment Agreement, being
sold by it to ARFC II as collateral, with the office of the Secretary of State
of the State of Minnesota and in such other locations as ARFC II shall have
required. From time to time thereafter, AFL shall execute and file such
financing statements and cause to be executed and filed such continuation
statements, all in such manner and in such places as may be required by law
fully to preserve, maintain and protect the interest of ARFC II under this
Agreement and each Assignment Agreement and of the Trust under the Sale and
Servicing Agreement in the Receivables and the Other Conveyed Property and in
the proceeds thereof. AFL shall deliver (or cause to be delivered) to ARFC II,
the Owner Trustee, the Indenture Trustee and DFC file-stamped copies of, or
filing receipts for, any document filed as provided above, as soon as available
following such filing. In the event that AFL fails to perform its obligations
under this subsection, ARFC II or the Owner Trustee may do so at the expense of
AFL.

(b) AFL shall not change its name, identity, or corporate structure
in any manner that would, could or might make any financing statement or
continuation statement filed by AFL (or by ARFC II or the Owner Trustee on
behalf of AFL) in accordance with paragraph (a) above seriously misleading
within the meaning of Section 9-402(7) of the UCC, unless it shall have given
ARFC II, the Owner Trustee and Morgan at least 60 days' prior written notice
thereof, and shall promptly file appropriate amendments to all previously filed
financing statements and continuation statements.

(c) AFL shall give ARFC II, Morgan, the Indenture Trustee and the
Owner Trustee at least 60 days' prior written notice of any relocation of its
principal executive office if, as a result of such relocation, the applicable
provisions of the UCC would require the filing of any amendment of any
previously filed financing or continuation statement or of any new financing
statement. AFL shall at all times maintain each office from which it services
Receivables and its principal executive office within the United States of
America.

(d) AFL shall maintain its computer systems so that, from and after
the time of sale under this Agreement and under any Assignment Agreement of the
Receivables to ARFC II, and the conveyance of the Receivables by ARFC II to the
Trust, AFL's master computer records (including archives) that shall refer to a
Receivable indicate clearly that such Receivable has been sold to ARFC II and
has been conveyed by ARFC II to the Trust. Indication of the Trust's ownership
of Receivable shall be deleted from or modified on AFL's computer systems when,
and only when, the Receivable shall become a Purchased Receivable or shall have
been paid in full. AFL shall indicate in its consolidated financial statements
that Receivables have been sold to ARFC II and are not available to the
creditors of AFL.

(e) If at any time AFL shall propose to sell, grant a security
interest in, or otherwise transfer any interest in motor vehicle receivables to
any prospective purchaser, lender or other transferee, AFL shall give to such
prospective purchaser, lender, or other transferee computer tapes, records, or
print-outs (including any restored from archives) that,

<PAGE>

if they shall refer in any manner whatsoever to any Receivable, shall indicate
clearly that such Receivable has been sold to ARFC II and is owned by the Trust.

SECTION 4.2 OTHER LIENS OR INTERESTS. Except for the conveyances
under any Assignment Agreement, AFL will not sell, pledge, assign or transfer to
any other Person, or grant, create, incur, assume or suffer to exist any Lien on
the Receivables or the Other Conveyed Property, or any interest therein, and AFL
shall defend the right, title, and interest of ARFC II and the Trust in and to
the Receivables and the Other Conveyed Property against all claims of third
parties claiming through or under AFL.

SECTION 4.3 COSTS AND EXPENSES. AFL shall pay all reasonable costs
and disbursements in connection with the performance of its obligations
hereunder and under each Assignment Agreement and its Related Documents.

SECTION 4.4 INDEMNIFICATION.

(a) AFL shall defend, indemnify and hold harmless ARFC II, the Trust,
the Owner Trustee, the Indenture Trustee, Morgan, the Backup Servicer, the
Noteholders and the Certificateholders from and against any and all costs,
expenses, losses, damages, claims, and liabilities, arising out of or resulting
from any breach of any of AFL's representations and warranties contained herein.

(b) AFL shall defend, indemnify and hold harmless ARFC II, the Trust,
the Owner Trustee, the Indenture Trustee, Morgan, the Backup Servicer, the
Noteholders and the Certificateholders from and against any and all costs,
expenses, losses, damages, claims, and liabilities, arising out of or resulting
from the use, ownership or operation by AFL or any affiliate thereof of a
Financed Vehicle.

(c) AFL shall defend and indemnify ARFC II, the Trust, the Owner
Trustee, the Indenture Trustee, Morgan, the Backup Servicer, the Noteholders and
the Certificateholders against any and all costs, expenses, losses, damages,
claims and liabilities arising out of or resulting from any action taken, or
failed to be taken, by it in respect of any portion of the Trust Property other
than in accordance with this Agreement or the Sale and Servicing Agreement.

(d) AFL agrees to pay, and shall defend, indemnify and hold harmless
ARFC II, the Trust, the Owner Trustee, the Indenture Trustee, Morgan, the Backup
Servicer, the Noteholders and the Certificateholders from and against any taxes
that may at any time be asserted against ARFC II, the Owner Trustee, the
Indenture Trustee, DFC, the Backup Servicer, the Noteholders and the
Certificateholders with respect to the transactions contemplated in this
Agreement or in any Assignment Agreement, including, without limitation, any
sales, gross receipts, general corporation, tangible or intangible personal
property, privilege, or license taxes (but not including any taxes asserted with
respect to, and as of the date of, any sale, transfer and assignment of the
Receivables and the Other Conveyed Property to ARFC II and of the Trust Property
to the Trust or the issuance and original sale of the Notes or the Certificates,
or asserted with respect to ownership of the Receivables and Other Conveyed
Property or the Trust Property which shall be

<PAGE>

indemnified by AFL pursuant to clause (e) below, or federal, state or other
income taxes, arising out of distributions on the Notes or the Certificates or
transfer taxes arising in connection with the transfer of the Notes or the
Certificates) and costs and expenses in defending against the same, arising by
reason of the acts to be performed by AFL under this Agreement or under any
Assignment Agreement or imposed against such Persons.

(e) AFL agrees to pay, and to indemnify, defend and hold harmless
ARFC II, the Trust, the Owner Trustee, the Indenture Trustee, Morgan, the Backup
Servicer, the Noteholders and the Certificateholders from, any taxes which may
at any time be asserted against such Persons with respect to, and as of the date
of, the conveyance or ownership of any Receivables or the Other Conveyed
Property hereunder or under each Assignment Agreement and the conveyance or
ownership of the Trust Property under the Sale and Servicing Agreement or the
issuance and original sale of the Notes and the Certificates, including, without
limitation, any sales, gross receipts, personal property, tangible or intangible
personal property, privilege or license taxes (but not including any federal or
other income taxes, including franchise taxes, arising out of the transactions
contemplated hereby or transfer taxes arising in connection with the transfer of
Notes or Certificates) and costs and expenses in defending against the same,
arising by reason of the acts to be performed by AFL under this Agreement or
under any Assignment Agreement or imposed against such Persons.

(f) AFL shall defend, indemnify, and hold harmless ARFC II, the Owner
Trustee, the Indenture Trustee, DFC, the Backup Servicer, the Trust, Morgan, the
Noteholders and the Certificateholders from and against any and all costs,
expenses, losses, claims, damages, and liabilities to the extent that such cost,
expense, loss, claim, damage, or liability arose out of, or was imposed upon
ARFC II, the Trust, the Indenture Trustee, Morgan, the Noteholders and the
Certificateholders through the negligence, willful misfeasance, or bad faith of
AFL in the performance of its duties under this Agreement or under any
Assignment Agreement or by reason of reckless disregard of AFL's obligations and
duties under this Agreement or under any Assignment Agreement.

(g) AFL shall indemnify, defend and hold harmless ARFC II, the Owner
Trustee, the Indenture Trustee, Morgan, the Backup Servicer, the Trust, the
Noteholders and the Certificateholders from and against any loss, liability or
expense incurred by reason of the violation by AFL of federal or state
securities laws in connection with the registration or the sale of the Notes and
the Certificates.

(h) AFL shall indemnify, defend and hold harmless ARFC II, the Owner
Trustee, the Indenture Trustee, Morgan, the Backup Servicer, the Trust, the
Noteholders and the Certificateholders from and against any loss, liability or
expense imposed upon, or incurred by, ARFC II, the Owner Trustee, the Indenture
Trustee, Morgan, the Trust, the Noteholders or the Certificateholders as a
result of the failure of any Receivable, or the sale of the related Financed
Vehicle, to comply with all requirements of applicable law.

(i) AFL shall defend, indemnify, and hold harmless ARFC II and its
assignees from and against all costs, expenses, losses, claims, damages, and
liabilities arising out of or incurred in connection with the acceptance or
performance of AFL's trusts and

<PAGE>

duties as Servicer under the Sale and Servicing Agreement, except to the extent
that such cost, expense, loss, claim, damage, or liability shall be due to the
willful misfeasance, bad faith, or negligence (except for errors in judgment) of
ARFC II.

(j) AFL shall indemnify, defend and hold harmless ARFC II, the Owner
Trustee, the Indenture Trustee, Morgan, the Backup Servicer, the Trust, the
Noteholders and the Certificateholders from and against any loss, liability or
expense imposed upon, or incurred by, ARFC II, the Owner Trustee and the
Indenture Trustee, Morgan, the Trust, the Noteholders or the Certificateholders
as a result of AFL's or ARFC II's use of the name "Olympic."

Indemnification under this Section 4.4 shall include reasonable fees
and expenses of counsel and expenses of litigation and shall survive termination
of the Trust. The indemnity obligations hereunder shall be in addition to any
obligation that AFL may otherwise have.

SECTION 4.5 ADVANCES.

(a) As of any Determination Date as of which no Trigger Event has
occurred, AFL, as Seller hereunder, shall become obligated to pay to or upon the
order of ARFC II on the related Deposit Date, an amount equal to the lesser of
(i) the aggregate Collection Shortfall with respect to Receivables for which no
Scheduled Payment was due during such Monthly Period and (ii) the Net Advance
Shortfall; PROVIDED, HOWEVER, that AFL shall not be required to make such
payments with respect to a Receivable extended pursuant to Section 3.2(b) of the
Sale and Servicing Agreement for any Monthly Period during which no Scheduled
Payment is due according to the terms of such extension.

(b) As of any Determination Date as of which a Trigger Event has
occurred, AFL, as Seller hereunder, shall become obligated to pay to or upon the
order of ARFC II on the related Deposit Date, the following amounts: If there
are Collection Shortfalls with respect to a Receivable, an amount equal to such
Collection Shortfall; PROVIDED, HOWEVER, AFL shall only be required to make such
payments with respect to Receivables for which no Scheduled Payment was due
during such Monthly Period; PROVIDED, FURTHER, that AFL shall not be required to
make such payments with respect to a Receivable extended pursuant to Section
3.2(b) of the Sale and Servicing Agreement for any Monthly Period during which
no Scheduled Payment is due according to the terms of such extension.

ARTICLE V

REPURCHASES

SECTION 5.1 REPURCHASE OF RECEIVABLES UPON BREACH OF WARRANTY OR
COVENANT. Upon the occurrence of a Repurchase Event AFL shall, unless such
breach shall have been cured in all material respects, repurchase such
Receivable from the Trust and, on or before the related Deposit Date, AFL shall
pay the Purchase Amount to the Trust

<PAGE>

pursuant to Section 4.5 of the Sale and Servicing Agreement. It is understood
and agreed that, except as set forth in Section 6.1, the obligation of AFL to
repurchase any Receivable as to which a breach has occurred and is continuing
shall, if such obligation is fulfilled, constitute the sole remedy against AFL
for such breach available to ARFC II, Certificateholders, Noteholders, or the
Owner Trustee or the Indenture Trustee on behalf of Certificateholders or
Noteholders or DFC. The provisions of this Section 5.1 are intended to grant
the Owner Trustee and the Indenture Trustee a direct right against AFL to demand
performance hereunder, and in connection therewith, AFL waives any requirement
of prior demand against ARFC II with respect to such repurchase obligation. Any
such purchase shall take place in the manner specified in Section 2.6 or Section
3.7, as applicable, of the Sale and Servicing Agreement. Notwithstanding any
other provision of this Agreement or the Sale and Servicing Agreement to the
contrary, the obligation of AFL under this Section shall not terminate upon a
termination of AFL as Servicer under the Sale and Servicing Agreement and shall
be performed in accordance with the terms hereof notwithstanding the failure of
the Servicer or ARFC II to perform any of their respective obligations with
respect to such Receivable under the Sale and Servicing Agreement.

In addition to the foregoing and notwithstanding whether the related
Receivable shall have been purchased by AFL, AFL shall indemnify the Owner
Trustee, the Indenture Trustee, Morgan, the Backup Servicer, the Trust, the
Noteholders and the Certificateholders against all costs, expenses, losses,
damages, claims and liabilities, including reasonable fees and expenses of
counsel, which may be asserted against or incurred by any of them as a result of
third party claims arising out of the events or facts giving rise to such
Repurchase Events.

SECTION 5.2 REASSIGNMENT OF PURCHASED RECEIVABLES. Upon deposit in
the Collection Account of the Purchase Amount of any Receivable repurchased by
AFL under Section 5.1, ARFC II and the Owner Trustee shall take such steps as
may be reasonably requested by AFL in order to assign to AFL all of ARFC II's
and the Trust's right, title and interest in and to such Receivable and all
security and documents and all Other Conveyed Property conveyed to ARFC II and
the Trust directly relating thereto, without recourse, representation or
warranty, except as to the absence of liens, charges or encumbrances created by
or arising as a result of actions of ARFC II or the Owner Trustee. Such
assignment shall be a sale and assignment outright, and not for security. If,
following the reassignment of a Purchased Receivable, in any enforcement suit or
legal proceeding, it is held that AFL may not enforce any such Receivable on the
ground that it shall not be a real party in interest or a holder entitled to
enforce the Receivable, ARFC II and the Owner Trustee shall, at the expense of
AFL, take such steps as AFL deems reasonably necessary to enforce the
Receivable, including bringing suit in ARFC II's or the Owner Trustee's name or
the names of the Certificateholders.

SECTION 5.3 REPURCHASE OF INELIGIBLE RECEIVABLES UPON SECURITIZED
OFFERING. Upon the purchase of Ineligible Receivables by ARFC II pursuant to
Section 6.5 of the Sale and Servicing Agreement, AFL shall be obligated to
purchase from ARFC II all such Ineligible Receivables for a purchase price equal
to the fair market value of such Ineligible Receivables.

<PAGE>

SECTION 5.4 WAIVERS. No failure or delay on the part of ARFC II, or
the Owner Trustee as assignee of ARFC II, in exercising any power, right or
remedy under this Agreement shall operate as a waiver thereof, nor shall any
single or partial exercise of any such power, right or remedy preclude any other
or future exercise thereof or the exercise of any other power, right or remedy.

ARTICLE VI

MISCELLANEOUS

SECTION 6.1 LIABILITY OF AFL. AFL shall be liable in accordance
herewith only to the extent of the obligations in this Agreement or in any
Assignment Agreement specifically undertaken by AFL and the representations and
warranties of AFL.

SECTION 6.2 [RESERVED].

SECTION 6.3 MERGER OR CONSOLIDATION OF AFL OR ARFC II. Any
corporation or other entity (i) into which AFL or ARFC II may be merged or
consolidated, (ii) resulting from any merger or consolidation to which AFL or
ARFC II is a party or (iii) succeeding to the business of AFL or ARFC II, in the
case of ARFC II, which corporation has a certificate of incorporation containing
provisions relating to limitations on business and other matters substantively
identical to those contained in ARFC II's certificate of incorporation, provided
that in any of the foregoing cases such corporation shall execute an agreement
of assumption to perform every obligation of AFL or ARFC II, as the case may be,
under this Agreement and each Assignment Agreement and, whether or not such
assumption agreement is executed, shall be the successor to AFL or ARFC II, as
the case may be, hereunder and under each such Assignment Agreement (without
relieving AFL or ARFC II of its responsibilities hereunder, if it survives such
merger or consolidation) without the execution or filing of any document or any
further act by any of the parties to this Agreement or each Assignment
Agreement. Notwithstanding the foregoing, ARFC II shall not merge or
consolidate with any other Person or permit any other Person to become the
successor to ARFC II's business without the prior written consent of Morgan and
the Rating Agencies. AFL or ARFC II shall promptly inform the other party, the
Owner Trustee, the Indenture Trustee, Morgan and the Rating Agencies of such
merger, consolidation or purchase and assumption. Notwithstanding the
foregoing, as a condition to the consummation of the transactions referred to in
clauses (i), (ii) and (iii) above, (x) immediately after giving effect to such
transaction, no representation or warranty made pursuant to Sections 3.1 and 3.2
and this Agreement, or similar representation or warranty made in any Assignment
Agreement, shall have been breached (for purposes hereof, such representations
and warranties shall speak as of the date of the consummation of such
transaction), (y) AFL or ARFC II, as applicable, shall have delivered prompt
written notice of such consolidation, merger or purchase and assumption to the
Owner Trustee, the Indenture Trustee, Morgan, and the Rating Agencies prior to
the consummation of such transaction and shall have delivered to the Owner
Trustee, the Indenture Trustee and DFC an Officer's Certificate and an Opinion
of Counsel each stating that such consolidation, merger or succession and such

<PAGE>

agreement of assumption comply with this Section 6.3 and that all conditions
precedent, if any, provided for in this Agreement, or in each Assignment
Agreement, relating to such transaction have been complied with, and (z) AFL or
ARFC II, as applicable, shall have delivered to the Owner Trustee, the Indenture
Trustee and Morgan an Opinion of Counsel, stating that, in the opinion of such
counsel, either (A) all financing statements and continuation statements and
amendments thereto have been executed and filed that are necessary to preserve
and protect the interest of the Owner Trustee in the Trust Property and reciting
the details of the filings or (B) no such action shall be necessary to preserve
and protect such interest.

SECTION 6.4 LIMITATION ON LIABILITY OF AFL AND OTHERS. AFL and any
director, officer, employee or agent may rely in good faith on the advice of
counsel or on any document of any kind prima facie properly executed and
submitted by any Person respecting any matters arising under this Agreement.
AFL shall not be under any obligation to appear in, prosecute or defend any
legal action that is not incidental to its obligations under this Agreement, any
Assignment Agreement or its Related Documents and that in its opinion may
involve it in any expense or liability.

SECTION 6.5 AFL MAY OWN NOTES OR CERTIFICATES. Subject to the
provisions of the Sale and Servicing Agreement, AFL and any Affiliate of AFL may
in its individual or any other capacity become the owner or pledgee of Notes or
Certificates with the same rights as it would have if it were not AFL or an
Affiliate thereof.

SECTION 6.6 AMENDMENT.

(a) This Agreement and any Assignment Agreement may be amended by AFL
and ARFC II, without the consent of the Owner Trustee, the Indenture Trustee or
Morgan (A) to cure any ambiguity or (B) to correct any provisions in this
Agreement or any such Assignment Agreement; PROVIDED, HOWEVER, that such action
shall not, as evidenced by an Opinion of Counsel delivered to the Owner Trustee,
the Indenture Trustee and Morgan adversely affect in any material respect the
interests of any Certificateholder or Noteholder.

(b) This Agreement and any Assignment Agreement may also be amended
from time to time by AFL and ARFC II, with the prior written consent of the
Owner Trustee, the Indenture Trustee, a Certificate Majority, a Note Majority
and Morgan for the purpose of adding any provisions to or changing in any manner
or eliminating any of the provisions of this Agreement or any Assignment
Agreement, or of modifying in any manner the rights of the Certificateholders or
the Noteholders; PROVIDED, HOWEVER, that no such amendment shall directly or
indirectly (i) increase or reduce in any manner the amount of, or accelerate or
delay the timing of, collections of payments on Receivables, distributions that
shall be required to be made on any Certificate or Note or the Certificate Rate
or the Note Interest Rate or (ii) reduce the aforesaid percentage required to
consent to any such amendment or any waiver hereunder, without the consent of
the Holders of all Certificates or Notes then outstanding or of the Holders of
all Notes then outstanding.

<PAGE>

(c) Prior to the execution of any such amendment or consent, AFL
shall have furnished written notification of the substance of such amendment or
consent to each Rating Agency.

(d) Promptly after the execution of any such amendment or consent,
the Owner Trustee or the Indenture Trustee, as applicable, shall furnish written
notification of the substance of such amendment or consent to Morgan and each
Certificateholder and Noteholder.

(e) It shall not be necessary for the consent of Certificateholders
or Noteholders pursuant to this Section to approve the particular form of any
proposed amendment or consent, but it shall be sufficient if such consent shall
approve the substance thereof. The manner of obtaining such consents and of
evidencing the authorization of the execution thereof by Certificateholders or
Noteholders shall be subject to such reasonable requirements as the Owner
Trustee or the Indenture Trustee, as applicable, may prescribe, including the
establishment of record dates. The consent of any Holder of a Certificate or
Note given pursuant to this Section or pursuant to any other provision of this
Agreement shall be conclusive and binding on such Holder and on all future
Holders of such Certificate or Note and of any Certificate or Note issued upon
the transfer thereof or in exchange thereof or in lieu thereof whether or not
notation of such consent is made upon the Certificate or Note.

SECTION 6.7 NOTICES. All demands, notices and communications to AFL
or ARFC II hereunder shall be in writing, personally delivered, or sent by
telecopier (subsequently confirmed in writing), reputable overnight courier or
mailed by certified mail, return receipt requested, and shall be deemed to have
been given upon receipt (a) in the case of AFL, to Arcadia Financial Ltd., 7825
Washington Avenue South, Minneapolis, Minnesota 55439-2435, Attention: John A.
Witham, or such other address as shall be designated by AFL in a written notice
delivered to the other party or to the Owner Trustee or the Indenture Trustee,
as applicable, (b) in case of ARFC II, to Arcadia Receivables Finance Corp. II,
7825 Washington Avenue South, Suite 410, Minneapolis, Minnesota 55439-2435,
Attention: John A. Witham, or (c) in the case of Morgan, 500 Stanton Christiana
Road, Newark, Delaware 19713-2107, Attention: Asset Finance Group.

SECTION 6.8 MERGER AND INTEGRATION. Except as specifically stated
otherwise herein, this Agreement, each Assignment Agreement and the Related
Documents set forth the entire understanding of the parties relating to the
subject matter hereof, and all prior understandings, written or oral, are
superseded by this Agreement, each Assignment Agreement and the Related
Documents. Neither this Agreement nor any Assignment Agreement may be modified,
amended, waived or supplemented except as provided herein.

SECTION 6.9 SEVERABILITY OF PROVISIONS. If any one or more of the
covenants, provisions or terms of this Agreement or any Assignment Agreement
shall be for any reason whatsoever held invalid, then such covenants, provisions
or terms shall be deemed severable from the remaining covenants, provisions or
terms of this Agreement or

<PAGE>

any Assignment Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or any Assignment
Agreement.

SECTION 6.10 INTENTION OF THE PARTIES. The execution and delivery of
this Agreement shall constitute an acknowledgment by AFL and ARFC II that they
intend that the assignments and transfers herein contemplated pursuant to each
Assignment Agreement constitute a sale and assignment outright, and not for
security, of the Receivables and the Other Conveyed Property, conveying good
title thereto free and clear of any Liens, from AFL to ARFC II, and that the
Receivables and the Other Conveyed Property shall not be a part of AFL's estate
in the event of the bankruptcy, reorganization, arrangement, insolvency or
liquidation proceeding, or other proceeding under any federal or state
bankruptcy or similar law, or the occurrence of another similar event, of, or
with respect to, AFL. In the event that such conveyance is determined to be
made as security for a loan made by ARFC II, the Trust, the Certificateholders
or the Noteholders to AFL, the parties intend that AFL shall have granted to
ARFC II a security interest in all of AFL's right, title and interest in and to
the Receivables and the Other Conveyed Property conveyed pursuant to each
Assignment Agreement and that this Agreement shall constitute a security
agreement under applicable law.

SECTION 6.11 GOVERNING LAW. This Agreement shall be construed in
accordance with, the laws of the State of New York without regard to the
principles of conflicts of laws thereof and the obligations, rights and remedies
of the parties under this Agreement shall be determined in accordance with such
laws.

SECTION 6.12 COUNTERPARTS. For the purpose of facilitating the
execution of this Agreement and for other purposes, this Agreement may be
executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and all of which counterparts
shall constitute but one and the same instrument.

SECTION 6.13 CONVEYANCE OF THE RECEIVABLES AND THE OTHER CONVEYED
PROPERTY TO THE TRUST. AFL acknowledges that ARFC II intends, pursuant to the
Sale and Servicing Agreement, to convey the Receivables and the Other Conveyed
Property, together with its rights under this Agreement, to the Trust on the
date hereof. AFL acknowledges and consents to such conveyance and waives any
further notice thereof and covenants and agrees that the representations and
warranties of AFL contained in this Agreement and the rights of ARFC II
hereunder are intended to benefit the Owner Trustee, the Indenture Trustee,
Morgan, the Trust, the Certificateholders and the Noteholders. In furtherance
of the foregoing, AFL covenants and agrees to perform its duties and obligations
hereunder, in accordance with the terms hereof for the benefit of the Owner
Trustee, the Indenture Trustee, Morgan, the Trust, the Certificateholders and
the Noteholders and that, notwithstanding anything to the contrary in this
Agreement, AFL shall be directly liable to the Owner Trustee and the Trust
(notwithstanding any failure by the Servicer, the Backup Servicer or ARFC II to
perform its duties and obligations hereunder or under the Sale and Servicing
Agreement) and that the Owner Trustee may enforce the duties and obligations of
AFL under this Agreement against AFL for the benefit of the Trust, Morgan, the
Certificateholders and the Noteholders.

<PAGE>

SECTION 6.14 NONPETITION COVENANT. Neither ARFC II nor AFL shall
petition or otherwise invoke the process of any court or government authority
for the purpose of commencing or sustaining a case against the Trust (or, in the
case of AFL, against ARFC II) under any federal or state bankruptcy, insolvency
or similar law or appointing a receiver, liquidator, assignee, trustee,
custodian, sequestrator or other similar official of the Trust (or ARFC II) or
any substantial part of its property, or ordering the winding up or liquidation
of the affairs of the Trust (or ARFC II).

<PAGE>

IN WITNESS WHEREOF, the parties have caused this Amended and Restated
Receivables Purchase Agreement and Assignment to be duly executed by their
respective officers as of the day and year first above written.

Arcadia Receivables Finance Corp. II,
as Purchaser

By: /s/ John A. Witham
------------------------------------------
Name: John A. Witham
Title: EVP CFO

Arcadia Financial Ltd., as Seller

By: /s/ John A. Witham
------------------------------------------
Name: John A. Witham
Title: EVP CFO

[Signature page to Amended and Restated Receivables Purchase Agreement]

<PAGE>

EXECUTION COPY

AMENDED AND RESTATED
SALE AND SERVICING AGREEMENT

Dated as of July 31, 1997

among

OLYMPIC AUTOMOBILE RECEIVABLES WAREHOUSE TRUST
Issuer

ARCADIA RECEIVABLES FINANCE CORP. II
Seller

ARCADIA FINANCIAL LTD.
In its individual capacity and as Servicer

and

NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION
Backup Servicer

<PAGE>
TABLE OF CONTENTS

Page
----

ARTICLE I
DEFINITIONS

Section 1.1. Definitions................................................... 1
Section 1.2. Usage of Terms................................................ 22
Section 1.3. Calculations.................................................. 22
Section 1.4. Section References............................................ 22
Section 1.5. No Recourse................................................... 22
Section 1.6. Condition to Effectiveness of Agreements...................... 22

ARTICLE II
CONVEYANCE OF RECEIVABLES

Section 2.1. Conveyance of Receivables..................................... 23
Section 2.2. Custody of Receivables Files.................................. 27
Section 2.3. Conditions to Acceptance by Owner Trustee..................... 29
Section 2.4. Deemed Acceptance by Owner Trustee and Indenture Trustee...... 29
Section 2.5. Representations and Warranties of Seller...................... 29
Section 2.6. Repurchase of Receivables Upon Breach of Warranty............. 33
Section 2.7. Nonpetition Covenant.......................................... 34
Section 2.8. Collecting Lien Certificates Not Delivered on the Initial
Closing Date or Transfer Date................................. 34
Section 2.9. Trust's Assignment of Administrative Receivables and
Warranty Receivables.......................................... 35

ARTICLE III
ADMINISTRATION AND SERVICING OF RECEIVABLES

Section 3.1. Duties of the Servicer........................................ 35
Section 3.2. Collection of Receivable Payments; Modifications of
Receivables; Lockbox Agreements............................... 36
Section 3.3. Realization Upon Receivables.................................. 39
Section 3.4. Insurance..................................................... 40
Section 3.5. Maintenance of Security Interests in Vehicles................. 41
Section 3.6. Covenants, Representations, and Warranties of Servicer........ 42
Section 3.7. Purchase of Receivables Upon Breach of Covenant............... 44
Section 3.8. Total Servicing Fee; Payment of Certain Expenses by Servicer.. 44
Section 3.9. Servicer's Certificate........................................ 45

<PAGE>

Page
----

Section 3.10. Annual Statement as to Compliance; Notice of Servicer
Termination Event............................................. 46
Section 3.11. Annual Independent Accountants' Report........................ 46
Section 3.12. Access to Certain Documentation and Information Regarding
Receivables................................................... 47
Section 3.13. Monthly Tape.................................................. 47
Section 3.14. Retention of Servicer......................................... 48
Section 3.15. Fidelity Bond................................................. 48
Section 3.16. Duties of the Servicer under the Indenture.................... 48
Section 3.17. Daily Report.................................................. 50
Section 3.18. Certain Duties of the Servicer under the Trust Agreement...... 50
Section 3.19. Monthly Reports............................................... 50

ARTICLE IV
DISTRIBUTIONS; STATEMENTS TO
CERTIFICATEHOLDERS AND NOTEHOLDERS

Section 4.1. Trust Accounts................................................ 50
Section 4.2. Collections................................................... 52
Section 4.3. Application of Collections.................................... 53
Section 4.4. Monthly Advances.............................................. 54
Section 4.5. Additional Deposits........................................... 55
Section 4.6. Distributions................................................. 55
Section 4.7. Distributions on Trust Property Liquidation................... 57
Section 4.8. Net Deposits.................................................. 58
Section 4.9. Statements to Certificateholders and Noteholders.............. 59
Section 4.10. Indenture Trustee as Agent.................................... 60
Section 4.11. Eligible Accounts............................................. 60

ARTICLE V
THE SPREAD ACCOUNT

Section 5.1. Withdrawals from Spread Account............................... 60

ARTICLE VI
THE SELLER

Section 6.1. Liability of Seller........................................... 61
Section 6.2. Merger or Consolidation of, or Assumption of the Obligations
of, Seller; Amendment of Certificate of Incorporation......... 61
Section 6.3. Limitation on Liability of Seller and Others.................. 62
Section 6.4. Seller May Own Certificates or Notes.......................... 62
Section 6.5. Limited Recourse Upon Securitized Offering.................... 62

<PAGE>

Page
----

ARTICLE VII
THE SERVICER

Section 7.1. Liability of Servicer; Indemnities............................ 62
Section 7.2. Merger or Consolidation of, or Assumption of the Obligations
of, the Servicer or Backup Servicer........................... 64
Section 7.3. Limitation on Liability of Servicer, Backup Servicer and
Others........................................................ 65
Section 7.4. Delegation of Duties.......................................... 65
Section 7.5. Servicer and Backup Servicer Not to Resign.................... 65

ARTICLE VIII
SERVICER TERMINATION EVENTS

Section 8.1. Servicer Termination Event.................................... 66
Section 8.2. Consequences of a Servicer Termination Event.................. 67
Section 8.3. Appointment of Successor...................................... 68
Section 8.4. Notification to Certificateholders and Noteholders............ 69
Section 8.5. Waiver of Past Defaults....................................... 69

ARTICLE IX
TERMINATION

Section 9.1. Optional Purchase of Receivables; Liquidation of Trust Estate. 69

ARTICLE X
MISCELLANEOUS PROVISIONS

Section 10.1. Amendment..................................................... 72
Section 10.2. Protection of Title to Trust Property......................... 73
Section 10.3. Governing Law................................................. 75
Section 10.4. Severability of Provisions.................................... 75
Section 10.5. Assignment.................................................... 75
Section 10.6. Third-Party Beneficiaries..................................... 75
Section 10.7. [RESERVED].................................................... 75
Section 10.8. Counterparts.................................................. 75
Section 10.9. Intention of Parties.......................................... 76
Section 10.10. Notices....................................................... 76
Section 10.11. Limitation of Liability....................................... 77

iii

<PAGE>

SCHEDULE

SCHEDULE A SCHEDULE OF RECEIVABLES
SCHEDULE B REPRESENTATIONS AND WARRANTIES OF SELLER AND AFL
SCHEDULE C SERVICING POLICIES AND PROCEDURES

EXHIBIT

EXHIBIT B FORM OF CUSTODIAN AGREEMENT
EXHIBIT D FORM OF RECEIVABLES PURCHASE AGREEMENT
EXHIBIT E FORM OF SERVICER'S CERTIFICATE
EXHIBIT F FORM OF TRANSFER AGREEMENT

<PAGE>

THIS AMENDED AND RESTATED SALE AND SERVICING AGREEMENT, dated as of July
31, 1997, is made among Olympic Automobile Receivables Warehouse Trust (the
"Issuer"), Arcadia Receivables Finance Corp. II, a Delaware corporation, as
Seller (the "Seller"), Arcadia Financial Ltd., a Minnesota corporation, in its
individual capacity and as Servicer (in its individual capacity, "AFL"; in its
capacity as Servicer, the "Servicer") and Norwest Bank Minnesota, National
Association, a national banking association, as Backup Servicer (the "Backup
Servicer").

In consideration of the mutual agreements herein contained, and of other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties agree as follows:

ARTICLE I
DEFINITIONS

Section I.1. DEFINITIONS. All terms defined in the Indenture or the Trust
Agreement (each as defined below) shall have the same meaning in this Agreement.
Whenever capitalized and used in this Agreement, the following words and
phrases, unless the context otherwise requires, shall have the following
meanings:

ACCOUNTANTS' REPORT: The report of a firm of nationally recognized
independent accountants described in Section 3.11.

ACCOUNTING DATE: With respect to a Distribution Date or a Determination
Date, the last day of the Monthly Period immediately preceding such Distribution
Date or Determination Date.

ADMINISTRATIVE RECEIVABLE: With respect to any Monthly Period, a
Receivable which the Servicer is required to purchase pursuant to Section 3.7 or
which the Servicer has elected to purchase pursuant to Section 3.4(c).

ADMINISTRATOR: The meaning assigned to such term in the Trust Agreement.

AFFILIATE: With respect to any Person, any other Person directly or
indirectly controlling, controlled by, or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person, means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.

AFL: Arcadia Financial Ltd., a Minnesota corporation.

AGGREGATE MONTHLY ADVANCE AMOUNT: As of any Determination Date, the
excess, if any, of (x) the amount of interest accrued on the Receivables (for
the number of calendar days in the related Monthly Period) (calculated according
to the method specified in the

1
<PAGE>

related retail installment sale contract or promissory note at the APR on the
Principal Balance of such Receivable as of the second Accounting Date preceding
such Determination Date) over (y) the amounts deposited into the Collection
Account during the related Monthly Period in respect of the Receivables and
allocable to interest (determined in accordance with Section 4.3).

AGGREGATE PRINCIPAL BALANCE: With respect to any Determination Date, the
sum of the Principal Balances (computed as of the related Accounting Date) for
all Receivables (other than (i) any Receivable that became a Liquidated
Receivable during the related Monthly Period and (ii) any Receivable that became
a Purchased Receivable as of the related Accounting Date).

AGREEMENT OR "THIS AGREEMENT": This Amended and Restated Sale and
Servicing Agreement, all amendments and supplements thereto and all exhibits and
schedules to any of the foregoing.

AMOUNT FINANCED: With respect to a Receivable or an Auto Receivable, the
aggregate amount advanced under such Receivable or Auto Receivable, as
applicable, toward the purchase price of the Financed Vehicle and related costs,
including amounts advanced in respect of accessories, insurance premiums,
service and warranty contracts, other items customarily financed as part of
retail automobile installment sale contracts or promissory notes, and related
costs. The term "Amount Financed" shall not include any Insurance Add-On
Amounts.

ANNUAL PERCENTAGE RATE OR APR: With respect to a Receivable, the rate per
annum of finance charges stated in such Receivable as the "annual percentage
rate" (within the meaning of the Federal Truth-in-Lending Act). If after the
Initial Closing Date or the applicable Transfer Date, the rate per annum with
respect to a Receivable as of the Initial Closing Date or the applicable
Transfer Date is reduced as a result of (i) an insolvency proceeding involving
the Obligor or (ii) pursuant to the Soldiers' and Sailors' Civil Relief Act of
1940, Annual Percentage Rate or APR shall refer to such reduced rate.

ARFC II: Arcadia Receivables Finance Corp. II, a Delaware Corporation.

ASSIGNMENT AGREEMENT: The assignment agreement between AFL and the Seller
pursuant to which AFL sells and assigns Receivables and related Other Conveyed
Property to the Seller, the form of which is attached to the Purchase Agreement
as Exhibit A.

AUTO RECEIVABLES: Any consumer installment sale contracts or promissory
notes (and related security agreements) secured by new and used automobiles and
light trucks (and all accessories thereto) purchased or otherwise acquired by
AFL or any Affiliate of AFL from Dealers.

AVAILABLE FUNDS: With respect to any Determination Date, the sum of (i)
the Collected Funds for such Determination Date, (ii) all Purchase Amounts to be
deposited in the Collection Account on the related Deposit Date, (iii) all
Monthly Advances to be made

2
<PAGE>

by the Seller or the Servicer on the related Deposit Date, and (iv) all net
income from investments of funds in the Trust Accounts and the Certificate
Distribution Account during the related Monthly Period.

AVERAGE NET EXCESS SPREAD PERCENTAGE: (i) As of any Determination Date on
which there are Receivables in the Trust, the average of the Net Excess Spread
Percentages for the three preceding Monthly Periods during which there were
Receivables in the Trust, calculated as of the Accounting Date of each such
Monthly Period.

AVERAGE SERVICING PORTFOLIO: As of any date, the average of the Servicing
Portfolio for the seven preceding Monthly Periods, calculated in each case as of
the Accounting Date with respect to each Monthly Period.

BACKUP SERVICER: Norwest Bank Minnesota, National Association, or its
successor in interest pursuant to Section 8.2, or such Person as shall have been
appointed as Backup Servicer or successor Servicer pursuant to Section 8.3.

BASIC SERVICING FEE: With respect to any Monthly Period, the fee payable
to the Servicer for services rendered during such Monthly Period, which shall be
equal to one-twelfth of the Basic Servicing Fee Rate multiplied by the Aggregate
Principal Balance as of the Determination Date falling in such Monthly Period.

BASIC SERVICING FEE RATE: 1.00% per annum, payable monthly at one-twelfth
of the annual rate.

BUSINESS DAY: Any day other than a Saturday, Sunday, legal holiday or
other day on which commercial banking institutions in Minneapolis, Minnesota,
New York, New York, Wilmington, Delaware or any other location of any successor
Servicer, successor Owner Trustee or successor Indenture Trustee are authorized
or obligated by law, executive order or governmental decree to be closed.

CERTIFICATE BALANCE: The meaning assigned to such term in the Trust
Agreement.

CERTIFICATE DISTRIBUTION ACCOUNT: The meaning assigned to such term in the
Trust Agreement.

CERTIFICATE MAJORITY: The meaning assigned to such term in the Trust
Agreement.

CERTIFICATE PURCHASE AGREEMENT: The meaning assigned to such term in the
Trust Agreement

CERTIFICATE PURCHASE TERMINATION EVENT: Any event or occurrence designated
as such in the Certificate Purchase Agreement.

CERTIFICATE RATE: The meaning assigned to such term in the Certificate
Purchase Agreement.

3
<PAGE>

CERTIFICATEHOLDERS' DISTRIBUTABLE AMOUNT: With respect to any Distribution
Date, the sum of the Certificateholders' Interest Distributable Amount and the
Certificateholders' Principal Distributable Amount.

CERTIFICATEHOLDERS' INTEREST CARRYOVER SHORTFALL: With respect to any
Distribution Date, the excess of the Certificateholders' Interest Distributable
Amount for the preceding Distribution Date over the amount in respect of
interest on the Certificates that was actually deposited in the Certificate
Distribution Account on such preceding Distribution Date, plus interest on such
excess, to the extent permitted by law, at the Certificate Rate from such
preceding Distribution Date to but excluding the current Distribution Date.

CERTIFICATEHOLDERS' INTEREST DISTRIBUTABLE AMOUNT: With respect to any
Distribution Date, the sum of the Certificateholders' Monthly Interest
Distributable Amount for such Distribution Date and the Certificateholders'
Interest Carryover Shortfall for such Distribution Date.

CERTIFICATEHOLDERS' MONTHLY INTEREST DISTRIBUTABLE AMOUNT: With respect to
any Distribution Date, for the related Interest Accrual Period, the sum of (i)
the sum of the interest accrued on each day during such Interest Accrual Period
on the Certificates at the Certificate Rate on the Certificate Balance as of the
close of business on the immediately preceding day and (ii) the Interest
Arrearage.

CERTIFICATEHOLDERS' MONTHLY PRINCIPAL DISTRIBUTABLE AMOUNT: With respect
to any Distribution Date, the Certificateholders' Percentage of the Principal
Distribution Amount plus, with respect to the Distribution Date on which the
outstanding principal balance of the Notes is reduced to zero, the remainder of
the Principal Distribution Amount on such Distribution Date.

CERTIFICATEHOLDERS' PERCENTAGE: With respect to any Determination Date
relating to a Distribution Date, 100% minus the Noteholders' Percentage as of
such Determination Date.

CERTIFICATEHOLDERS' PRINCIPAL CARRYOVER SHORTFALL: As of the close of any
Distribution Date, the excess of the sum of the Certificateholders' Principal
Distributable Amount over the amount in respect of principal that was actually
deposited in the Certificate Distribution Account on such Distribution Date.

CERTIFICATEHOLDERS' PRINCIPAL DISTRIBUTABLE AMOUNT: With respect to any
Distribution Date (other than the Final Scheduled Distribution Date), the sum of
the Certificateholders' Monthly Principal Distributable Amount for such
Distribution Date and any Certificateholders' Principal Carryover Shortfall as
of the close of the preceding Distribution Date; PROVIDED, HOWEVER, that the
Certificateholders' Principal Distributable Amount shall not exceed the
Certificate Balance. The "Certificateholders' Principal Distributable Amount"
on the Final Scheduled Distribution Date will equal the Certificate Balance as
of the Final Scheduled Distribution Date.

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CERTIFICATES: The meaning assigned to such term in the Trust Agreement.

COLLATERAL INSURANCE: The meaning set forth in Section 3.4(a).

COLLECTED FUNDS: With respect to any Determination Date, the amount of
funds in the Collection Account representing collections on the Receivables
during the related Monthly Period, including all Liquidation Proceeds collected
during the related Monthly Period (but excluding any Monthly Advances and any
Purchase Amounts) and any payments under, or proceeds from, any Eligible
Interest Rate Cap Agreement maintained pursuant to Section 2.1(b)(1)(xiv).

COLLECTION ACCOUNT: The account designated as the Collection Account in,
and which is established and maintained pursuant to, Section 4.1(a).

COLLECTION RECORDS: All manually prepared or computer generated records
relating to collection efforts or payment histories with respect to the
Receivables.

COLLECTION SHORTFALL: As of any Determination Date, with respect to a
Receivable, if the amounts deposited into the Collection Account during a
Monthly Period in respect of such Receivable and allocable to interest
(determined in accordance with Section 4.3) is less than the interest accrued on
such Receivable (for the number of calendar days in such Monthly Period)
(calculated according to the method specified in the related retail installment
sale contract or promissory note at the APR on the Principal Balance of such
Receivable as of the Accounting Date for the immediately preceding Monthly
Period), the amount of such shortfall.

COMMERCIAL PAPER NOTES: The commercial paper notes issued from time to
time by DFC and related to the Notes.

CORPORATE TRUST OFFICE: With respect to the Owner Trustee, the principal
office of the Owner Trustee at which at any particular time its corporate trust
business shall be administered, which office on the Effectiveness Date is
located at Rodney Square North, 1100 North Market Street, Wilmington, Delaware
19890-0001, Attention: Corporate Trust Administration; the telecopy number for
the Corporate Trust Office of the Owner Trustee on the date of the execution of
this Agreement is (302) 651-8882; with respect to the Indenture Trustee, the
principal office of the Indenture Trustee at which at any particular time its
corporate trust business shall be administered, which office on the
Effectiveness Date is located at Sixth Street and Marquette Avenue, Minneapolis,
Minnesota 55479-0070, Attention: Corporate Trust Services - Asset Backed
Administration; the telecopy number for the Corporate Trust Office of the
Indenture Trustee on the date of execution of this Agreement is (612) 667-3539.

CRAM DOWN LOSS: With respect to a Receivable or an Auto Receivable, as
applicable, if a court of appropriate jurisdiction in an insolvency proceeding
shall have issued an order reducing the amount owed on a Receivable or an Auto
Receivable or otherwise modifying or restructuring the Scheduled Payments to be
made on a Receivable

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or an Auto Receivable, an amount equal to the excess of the principal balance of
such Receivable or Auto Receivable, as applicable, immediately prior to such
order over the principal balance of such Receivable or Auto Receivable, as
applicable, as so reduced or the net present value (using as the discount rate
the higher of the contract rate or the rate of interest, if any, specified by
the court in such order) of the scheduled payments as so modified or
restructured. A Cram Down Loss will be deemed to have occurred on the date of
issuance of such order.

CUSTODIAN: AFL and any other Person named from time to time as custodian
in any Custodian Agreement acting as agent for the Trust, which Person must be
acceptable to Morgan.

CUSTODIAN AGREEMENT: Any Amended and Restated Custodian Agreement from
time to time in effect between the Custodian named therein and the Trust,
substantially in the form of Exhibit B hereto, as the same may be amended,
supplemented or otherwise modified from time to time in accordance with the
terms thereof, which Custodian Agreement and any amendments, supplements or
modifications thereto shall be acceptable to Morgan.

CUTOFF DATE: With respect to any Receivables, the date specified in the
related Transfer Agreement, which may in no event be later than the related
Transfer Date.

DEALER: A seller of new or used automobiles or light trucks that
originated one or more of the Receivables and sold the respective Receivable,
directly or indirectly, to AFL under an agreement between such seller and AFL.

DEALER AGREEMENT: An agreement between AFL and a Dealer relating to the
sale of Auto Receivables to AFL and all documents and instruments relating
thereto.

DEALER ASSIGNMENT: With respect to an Auto Receivable, the executed
assignment executed by a Dealer conveying such Receivable to AFL.

DEFICIENCY CLAIM AMOUNT: The meaning set forth in Section 5.1.

DELINQUENCY RATIO: As of any Determination Date, a fraction, expressed as
a percentage, the numerator of which equals the aggregate of the principal
balances of all Auto Receivables that are Delinquent Receivables and the
denominator of which equals the Servicing Portfolio as of such Determination
Date.

DELINQUENT RECEIVABLE: With respect to any Determination Date, any
Receivable or Auto Receivable, as applicable, as to which all or a portion of a
Scheduled Payment is more than 31 days delinquent as of the related Accounting
Date.

DEPOSIT DATE: With respect to any Monthly Period, the Business Day
immediately preceding the related Distribution Date.

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DETERMINATION DATE: With respect to any Monthly Period, the fifth Business
Day immediately preceding the related Distribution Date.

DFC: Delaware Funding Corporation, a Delaware corporation.

DFC ASSET PURCHASE AGREEMENT: The meaning assigned to such term in the
Note Purchase Agreement.

DISTRIBUTION AMOUNT: With respect to a Distribution Date, the sum of (i)
the Available Funds for such Distribution Date, and (ii) the Deficiency Claim
Amount, if any, received by the Indenture Trustee with respect to such
Distribution Date.

DISTRIBUTION DATE: The 15th day of each calendar month, or if such 15th
day is not a Business Day, the next succeeding Business Day, commencing February
15, 1996 to and including the Distribution Date on which all amounts due and
owing with respect to the Notes and the Certificates have been paid in full and
the Purchase Termination Date has occurred.

EFFECTIVENESS DATE: July 31, 1997.

ELECTRONIC LEDGER: The electronic master record of the retail installment
sales contracts or installment loans of AFL.

ELIGIBLE ACCOUNT: A segregated direct deposit account maintained with a
depository institution or trust company organized under the laws of the United
States of America, or any of the States thereof, or the District of Columbia,
having a certificate of deposit, short term deposit or commercial paper rating
of at least "A-1+" by Standard & Poor's and "P-1" by Moody's.

ELIGIBLE INTEREST RATE CAP AGREEMENT: An interest rate cap agreement that:
(i) is on a standard ISDA form; (ii) is an amortizing interest rate cap with a
maturity date that is no earlier than the final scheduled payment date with
respect to the last maturing Receivable in the Trust; (iii) is purchased in a
minimum notional amount of at least $100,000,000; (iv) is issued by a bank or
other financial institution whose short term unsecured debt obligations are
rated A-1+/P-1 by Standard & Poor's and Moody's, respectively or that it is
otherwise acceptable to Morgan; (v) has a capped interest rate equal to a 30-day
LIBOR rate of 9.50% per annum; (vi) provides that any payments made by the
counterparty shall be made directly to the Collection Account; (vii) provides
that it may not be materially amended, terminated, waived or assigned by the
counterparty without the prior written consent of the Note Majority and the
Certificate Majority; (viii) provided that it may be sold by the Trust on any
Trust Property Liquidation Date on which not less than all of the Receivables in
the Trust are disposed pursuant to Section 9.1; and (ix) is otherwise in form
and substance reasonably satisfactory to Morgan.

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ELIGIBLE INVESTMENTS: Any one or more of the following types of
investments:

(a) (i) direct interest-bearing obligations of, and interest-bearing
obligations guaranteed as to timely payment of principal and interest by,
the United States or any agency or instrumentality of the United States,
the obligations of which are backed by the full faith and credit of the
United States; and (ii) direct interest-bearing obligations of, and
interest-bearing obligations guaranteed as to timely payment of principal
and interest by, the Federal National Mortgage Association or the Federal
Home Loan Mortgage Corporation, but only if, at the time of investment,
such obligations are assigned the highest credit rating by each Rating
Agency;

(b) demand or time deposits in, certificates of deposit of, or
bankers' acceptances issued by any depository institution or trust company
organized under the laws of the United States or any State and subject to
supervision and examination by federal and/or State banking authorities
(including, if applicable, the Indenture Trustee, the Owner Trustee or any
agent of either of them acting in their respective commercial capacities);
provided that the short-term unsecured debt obligations of such depository
institution or trust company at the time of such investment, or contractual
commitment providing for such investment, are assigned the highest credit
rating by each Rating Agency;

(c) repurchase obligations pursuant to a written agreement (i) with
respect to any obligation described in clause (a) above, where the
Indenture Trustee has taken actual or constructive delivery of such
obligation in accordance with Section 4.1, and (ii) entered into with the
corporate trust department of a depository institution or trust company
organized under the laws of the United States or any State thereof, the
deposits of which are insured by the Federal Deposit Insurance Corporation
and the short-term unsecured debt obligations of which are rated "A-1+" by
Standard & Poor's and "P-1" by Moody's (including, if applicable, the
Indenture Trustee, the Owner Trustee or any agent of either of them acting
in their respective commercial capacities);

(d) securities bearing interest or sold at a discount issued by any
corporation incorporated under the laws of the United States or any State
whose long-term unsecured debt obligations are assigned the highest credit
rating by each Rating Agency at the time of such investment or contractual
commitment providing for such investment; PROVIDED, HOWEVER, that
securities issued by any particular corporation will not be Eligible
Investments to the extent that an investment therein will cause the then
outstanding principal amount of securities issued by such corporation and
held in the Trust Accounts to exceed 10% of the Eligible Investments held
in the Trust Accounts (with Eligible Investments held in the Trust Accounts
valued at par);

(e) commercial paper that (i) is payable in United States dollars and
(ii) is rated in the highest credit rating category by each Rating Agency;

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<PAGE>

(f) units of money market funds rated in the highest credit rating
category by each Rating Agency; provided that all Eligible Investments
shall be held in the name of the Indenture Trustee; or

(g) any other demand or time deposit, obligation, security or
investment (including, without limitation, a hedging arrangement) as may be
acceptable to Morgan and that satisfies the Rating Agency Condition;

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

ELIGIBLE SERVICER: AFL, the Backup Servicer or another Person which at the
time of its appointment as Servicer (i) is servicing a portfolio of motor
vehicle retail installment sales contracts and/or motor vehicle installment
loans, (ii) is legally qualified and has the capacity to service the
Receivables, (iii) has demonstrated the ability professionally and competently
to service a portfolio of motor vehicle retail installment sales contracts
and/or motor vehicle installment loans similar to the Receivables with
reasonable skill and care, and (iv) is qualified and entitled to use, pursuant
to a license or other written agreement, and agrees to maintain the
confidentiality of, the software which the Servicer uses in connection with
performing its duties and responsibilities under this Agreement or otherwise has
available software which is adequate to perform its duties and responsibilities
under this Agreement.

FACILITY BALANCE: As of any date, the sum of (i) the aggregate Outstanding
Amount of the Notes, plus (ii) the Certificate Balance.

FACILITY LIMIT: $272,727,300.

FINAL SCHEDULED DISTRIBUTION DATE: With respect to the Notes and the
Certificates, the earlier of (i) the Distribution Date that is 85 months from
the Purchase Termination Date and (ii) the date on which the Notes or the
Certificates are fully redeemed in accordance with the Indenture or the Trust
Agreement, as the case may be (or, if such day is not a Business Day, the next
succeeding Business Day).

FINANCED REPOSSESSIONS: Receivables with respect to loans financing the
purchase of Vehicles that were previously repossessed by or for the benefit of
the Servicer.

FINANCED VEHICLE: A new or used automobile or light truck, together with
all accessories thereto, securing or purporting to secure an Obligor's
indebtedness under a Receivable or an Auto Receivable, as applicable.

FORCE-PLACED INSURANCE: The meaning set forth in Section 3.4(b).

FUNDING PERIOD: The period from and including the Initial Closing Date to
but excluding the Purchase Termination Date.

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GENERAL PARTNER: Seller in its capacity as general partner of the Trust,
and any successors thereto as permitted by the Trust Agreement.

INDENTURE: The Amended and Restated Indenture, dated as of July 31, 1997,
between the Trust and the Indenture Trustee, as the same may be amended and
supplemented from time to time.

INDENTURE COLLATERAL: The meaning assigned to such term in the Indenture.

INDENTURE TRUSTEE: The Person acting as Trustee under the Indenture, its
successors in interest and any successor Trustee under the Indenture.

INDEPENDENT ACCOUNTANTS: The meaning set forth in Section 3.11(a).

INDEPENDENT CERTIFICATE: The meaning assigned to such term in the
Indenture.

INELIGIBLE RECEIVABLES: With respect to a Securitized Offering, any
Receivables that do not meet the eligibility criteria as of the cutoff date for
such Securitized Offering.

INITIAL CLOSING DATE: December 28, 1995.

INSOLVENCY EVENT: With respect to a specified Person, (a) the commencement
of an involuntary case against such Person under the federal bankruptcy laws, as
now or hereinafter in effect, or another present or future federal or state
bankruptcy, insolvency or similar law, and such case is not dismissed within 60
days; or (b) the filing of a decree or entry of an order for relief by a court
having jurisdiction in the premises in respect of such Person or any substantial
part of its property in an involuntary case under any applicable Federal or
state bankruptcy, insolvency or other similar law now or hereafter in effect, or
appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator or
similar official for such Person or for any substantial part of its property, or
ordering the winding-up or liquidation of such Person's affairs; or (c) the
commencement by such Person of a voluntary case under any applicable Federal or
state bankruptcy, insolvency or other similar law now or hereafter in effect, or
the consent by such Person to the entry of an order for relief in an involuntary
case under any such law, or the consent by such Person to the appointment of or
taking possession by a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official for such Person or for any substantial part of
its property, or the making by such Person of any general assignment for the
benefit of creditors, or the failure by such Person generally to pay its debts
as such debts become due, or the taking of action by such Person in furtherance
of any of the foregoing.

INSOLVENCY PROCEEDS: The meaning set forth in Section 9.1(c).

INSURANCE ADD-ON AMOUNT: The premium charged to the Obligor in the event
that the Servicer obtains Force-Placed Insurance pursuant to Section 3.4.

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<PAGE>

INSURANCE POLICY: With respect to a Receivable, any insurance policy
benefiting the holder of the Receivable providing loss or physical damage,
credit life, credit disability, theft, mechanical breakdown or similar coverage
with respect to the Financed Vehicle or the Obligor.

INTEREST ACCRUAL PERIOD: The meaning set forth in the Note Purchase
Agreement or the Certificate Purchase Agreement, as applicable

INTEREST ARREARAGE: The meaning assigned to such term in the Certificate
Purchase Agreement.

INVESTOR GROUP: The group of investors committed to purchasing Investor
Certificates under the Certificate Purchase Agreement.

ISSUER: The meaning assigned to such term in the Indenture.

ISSUER ORDER: The meaning assigned to such term in the Indenture.

LIEN: Any security interest, lien, charge, pledge, preference, equity or
encumbrance of any kind, including tax liens, mechanics' liens and any liens
that attach by operation of law.

LIEN CERTIFICATE: With respect to a Financed Vehicle, an original
certificate of title, certificate of lien or other notification issued by the
Registrar of Titles of the applicable state to a secured party which indicates
that the lien of the secured party on the Financed Vehicle is recorded on the
original certificate of title. In any jurisdiction in which the original
certificate of title is required to be given to the Obligor, the term "Lien
Certificate" shall mean only a certificate or notification issued to a secured
party.

LIQUIDATED RECEIVABLE: With respect to any Monthly Period, a Receivable as
to which (i) 91 days have elapsed since the Servicer repossessed the related
Financed Vehicle, (ii) the Servicer has determined in good faith that all
amounts it expects to recover have been received, or (iii) all or any portion of
a Scheduled Payment shall have become more than 180 days delinquent.

LIQUIDATION PROCEEDS: With respect to a Liquidated Receivable, all amounts
realized with respect to such Receivable net of (i) reasonable expenses incurred
by the Servicer in connection with the collection of such Receivable and the
repossession and disposition of the Financed Vehicle and (ii) amounts that are
required to be refunded to the Obligor on such Receivable; PROVIDED, HOWEVER,
that the Liquidation Proceeds with respect to any Receivable shall in no event
be less than zero.

LOCKBOX ACCOUNT: The segregated account maintained on behalf of the Trust
by the Lockbox Bank in accordance with Section 3.2(d).

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<PAGE>

LOCKBOX AGREEMENT: The Agency Agreement, dated as of November 13, 1992 by
and among Harris Trust and Savings Bank, AFL, Shawmut Bank, N.A., as Trustee,
Saturn Financial Services, Inc. and the Program Parties (as defined therein),
taken together with the Retail Lockbox Agreement, dated as of November 13, 1992,
among such parties, and the Counterpart to Agency Agreement and Retail Lockbox
Agreement, dated as of December 18, 1995, among Harris Trust and Savings Bank,
AFL, the Trust and the Indenture Trustee, as such agreements may be amended from
time to time, unless the Indenture Trustee hereunder shall cease to be a Program
Party thereunder, or such agreement shall be terminated in accordance with its
terms, in which event "Lockbox Agreement" shall mean such other agreement, in
form and substance acceptable to Morgan, among the Servicer, the Trust, the
Indenture Trustee and the Lockbox Bank.

LOCKBOX BANK: Harris Trust and Savings Bank or a depository institution
named by the Servicer and acceptable to Morgan.

MATERIAL ADVERSE EFFECT: With respect to any event or circumstance, means
a material adverse effect on:

(i) the ability of AFL, the Seller or the Servicer to perform in all
material respects its obligations under this Agreement or any other Related
Document;

(ii) the validity or enforceability of this Agreement, any other
Related Document or the Receivables or the collectibility of the
Receivables; or

(iii) the status, existence, perfection, priority or
enforceability of the Trust's interest in the Receivables.

MAXIMUM CERTIFICATE BALANCE: $32,727,300.

MAXIMUM PRINCIPAL BALANCE: With respect to the Notes, $240,000,000
(excluding capitalized interest thereon).

MAXIMUM PROGRAM SIZE: The sum of (i) the Maximum Principal Balance PLUS
(ii) the Maximum Certificate Balance.

MONTHLY ADVANCE: The amount that the Servicer or the Seller, as the case
may be, is required to advance on any Receivables pursuant to Section 4.4(a) or
(b).

MONTHLY INTEREST COLLECTION SHORTFALL: As of any Determination Date, the
excess, if any, of (x) the amount necessary to make the payments required by
Sections 4.6(i), (ii), (iii), (iv) and (v) hereof over (y) the sum of (i) the
Collected Funds for such Determination Date, to the extent allocable to interest
on the related Receivables, (ii) all Purchase Amounts to be deposited in the
Collection Account on the related Deposit Date, to the extent allocable to
interest on the related Receivables, and (iii) all net income from investments
of funds in the Trust Accounts and the Certificate Distribution Account during
the related Monthly Period.

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MONTHLY PERIOD: With respect to a Distribution Date or a Determination
Date, the calendar month preceding the month in which such Distribution Date or
Determination Date occurs (or, in the case of the first Distribution Date or
Determination Date, the portion of the calendar month preceding the month in
which such Distribution Date or Determination Date occurs, from and including
the initial Transfer Date to and including the last day of such calendar month)
(such calendar month (or portion thereof) being referred to as the "related"
Monthly Period with respect to such Distribution Date or Determination Date).
With respect to an Accounting Date, the calendar month in which such Accounting
Date occurs is referred to herein as the "related" Monthly Period to such
Accounting Date.

MONTHLY RECORDS: All records and data maintained by the Servicer with
respect to the Receivables, including the following with respect to each
Receivable: the account number; the identity of the originating Dealer; Obligor
name; Obligor address; Obligor home phone number; Obligor business phone number;
original Principal Balance; original term; Annual Percentage Rate; current
Principal Balance; current remaining term; origination date; first payment date;
final scheduled payment date; next payment due date; date of most recent
payment; new/used classification; collateral description; days currently
delinquent; number of contract extensions (months) to date; amount, if any, of
Force-Placed Insurance payable monthly; amount of the Scheduled Payment; current
Insurance Policy expiration date; and past due late charges, if any.

MONTHLY REPORTS: The meaning set forth in Section 3.19.

MOODY'S: Moody's Investors Service, Inc., or any successor thereto.

MORGAN: Morgan Guaranty Trust Company of New York, in its capacity as
Administrative Agent for DFC and the purchasers under the DFC Asset Purchase
Agreement and as agent for the banks under the Program Facility, or as agent for
the Investor Group.

NET ADVANCE AMOUNT: As of any Determination Date, an amount equal to the
lesser of (i) the Aggregate Monthly Advance Amount and (ii) the Monthly Interest
Collection Shortfall.

NET ADVANCE SHORTFALL: The meaning set forth in Section 4.4(a)(ii).

NET EXCESS SPREAD PERCENTAGE: As of any Determination Date, (i) the
weighted average APR of the Receivables (taking into account any Eligible
Interest Rate Cap Agreement maintained pursuant to Section 2.1(b)(xiv)) as of
the related Accounting Date, minus (ii) the weighted average of the Note
Interest Rate and the Certificate Rate for the immediately preceding Interest
Accrual Period, minus (iii) 1.00%, minus (iv) the Net Loss Rate for such
Determination Date.

NET LOSS RATE: As of any Determination Date, a fraction expressed as a
percentage, the numerator of which is equal to the annualized total of the
difference between (i) the

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sum of (a) the aggregate of the Principal Balances as of the related Accounting
Date of all Receivables that became Liquidated Receivables during the related
Monthly Period and (b) the amount of any Cram Down Losses MINUS (ii) the
Liquidation Proceeds received by the Trust during the related Monthly Period,
and the denominator of which is equal to the average of the Aggregate Principal
Balance as of the related Accounting Date and the Aggregate Principal Balance as
of the next preceding Accounting Date.

NET PORTFOLIO LOSSES: With respect to any Monthly Period, the aggregate
amount of gross charge-offs of Auto Receivables serviced by AFL or any of its
Affiliates during such Monthly Period net of all recoveries with respect to any
such Auto Receivables (including post-disposition amounts received on previously
charged-off Auto Receivables), calculated in a manner consistent with the
calculation of net losses in AFL's Annual Report on Form 10-K for the year ended
December 31, 1996.

NON-CALLABLE NOTES: The meaning assigned to such term in the Indenture.

NOTE DISTRIBUTION ACCOUNT: The account designated as such, established and
maintained pursuant to Section 4.1(b).

NOTE INTEREST ARREARAGE: The meaning assigned to such term in the Note
Purchase Agreement.

NOTE INTEREST RATE: The meaning assigned to such term in the Note Purchase
Agreement.

NOTE MAJORITY: Holders of Notes representing a majority of the Outstanding
principal balance of Notes or if no Notes are Outstanding but the Purchase
Termination Date has not occurred, holders of commitments to purchase a majority
of the Maximum Principal Balance of Notes; PROVIDED, HOWEVER, any Notes held by
AFL or any affiliate thereof shall be excluded when calculating a Note Majority.

NOTE PURCHASE AGREEMENT: The Amended and Restated Note Purchase Agreement,
dated as of July 31, 1997, among the Trust, AFL, the owners named therein and
Morgan Guaranty Trust Company of New York, as agent for those owners, as the
same may be amended and supplemented from time to time.

NOTE PURCHASE TERMINATION EVENT: Any event or occurrence designated as
such in the Note Purchase Agreement.

NOTEHOLDERS' DISTRIBUTABLE AMOUNT: With respect to any Distribution Date,
the sum of the Noteholders' Interest Distributable Amount and the Noteholders'
Principal Distributable Amount.

NOTEHOLDERS' INTEREST CARRYOVER SHORTFALL: With respect to any
Distribution Date, the excess of the Noteholders' Interest Distributable Amount
for the preceding Distribution Date over the amount in respect of interest on
the Notes that was actually

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deposited in the Note Distribution Account on such preceding Distribution Date,
plus interest on the amount of interest due but not paid to Noteholders on the
preceding Distribution Date, to the extent permitted by law, at the Note
Interest Rate from such preceding Distribution Date to but excluding the current
Distribution Date.

NOTEHOLDERS' INTEREST DISTRIBUTABLE AMOUNT: With respect to any
Distribution Date, the sum of the Noteholders' Monthly Interest Distributable
Amount for such Distribution Date and the Noteholders' Interest Carryover
Shortfall for such Distribution Date.

NOTEHOLDERS' MONTHLY INTEREST DISTRIBUTABLE AMOUNT: With respect to any
Distribution Date, for the related Interest Accrual Period, the sum of (i) the
sum of the interest accrued on each day during such Interest Accrual Period on
the Notes at the Note Interest Rate on the outstanding principal balance of the
Notes as of the close of business on the immediately preceding day and (ii) the
Note Interest Arrearage.

NOTEHOLDERS' PERCENTAGE: (i) with respect to any Determination Date
relating to a Distribution Date prior to the Distribution Date on which the
principal balance of the Notes is reduced to zero, 100%, (ii) with respect to
the Determination Date relating to the Distribution Date on which the principal
balance of the Notes is reduced to zero, 100% with respect to that portion of
the Principal Distribution Amount equal to the unpaid principal balance of the
Notes, and with respect to the remaining portion of the Principal Distribution
Amount, zero, and (iii) with respect to any Determination Date relating to a
Distribution Date thereafter (if any), zero.

NOTEHOLDERS' PRINCIPAL DISTRIBUTABLE AMOUNT: With respect to any
Distribution Date (other than the Final Scheduled Distribution Date with respect
to the Notes), the Noteholders' Percentage of the Principal Distribution Amount
for such Distribution Date. The Noteholders' Principal Distributable Amount on
the Final Scheduled Distribution Date will equal the sum of (i) the Noteholders'
Percentage of the Principal Distribution Amount for such Distribution Date, and
(ii) the excess of the outstanding principal balance of the Notes, if any, over
the amounts in clause (i). In no event may the Noteholders' Principal
Distributable Amount for any Distribution Date exceed the outstanding principal
balance of the Notes immediately prior to such Distribution Date.

NOTES: The meaning assigned to such term in the Indenture.

OBLIGOR: The purchaser or the co-purchasers of the Financed Vehicle and
any other Person or Persons who are primarily or secondarily obligated to make
payments under a Receivable or an Auto Receivable, as applicable.

OFFICER'S CERTIFICATE: The meaning assigned to such term in the Indenture.

OPINION OF COUNSEL: A written opinion of counsel acceptable in form and
substance and from counsel acceptable to the Owner Trustee and, if such opinion
or a copy

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thereof is required to be delivered to the Indenture Trustee or Morgan, to the
Indenture Trustee or Morgan, as applicable.

ORIGINAL CUSTODIAN AGREEMENT: The Custodian Agreement (as amended and
supplemented) dated as of December 28, 1995, by and among AFL, Norwest Bank
Minnesota, National Association, as indenture trustee, and the Issuer.

ORIGINAL SALE AND SERVICING AGREEMENT: The Sale and Servicing Agreement
(as amended and supplemented) dated as of December 28, 1995 by and among the
Issuer, ARFC II, AFL and the Backup Servicer.

OTHER CONVEYED PROPERTY: The meaning assigned to such term in the Purchase
Agreement.

OUTSTANDING: The meaning assigned to such term in the Indenture.

OUTSTANDING AMOUNT: The meaning assigned to such term in the Indenture.

OUTSTANDING MONTHLY ADVANCES: With respect to a Receivable and a
Determination Date, the sum of all Monthly Advances made on any Determination
Date pursuant to Section 4.4(b) prior to such Determination Date relating to
that Receivable which have not been reimbursed pursuant to Section 4.6(i) or
Section 4.8.

OWNER TRUSTEE: Wilmington Trust Company, acting not individually but
solely as trustee, or its successor in interest, and any successor Owner Trustee
appointed as provided in the Trust Agreement.

PAYING AGENT: The meaning assigned to such term in the Indenture.

PERSON: Any legal person, including any individual, corporation,
partnership, joint venture, estate, association, joint stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof, or any other entity.

PORTFOLIO LOSS RATIO: As of any Determination Date, a fraction, expressed
as a percentage, the numerator of which equals the product of 2.0 times the Net
Portfolio Losses for the six preceding Monthly Periods and the denominator of
which equals the Average Servicing Portfolio as of such Determination Date;
PROVIDED, HOWEVER, the Net Portfolio Loss for the March 1997 Monthly Period
shall, for purposes of calculating the Portfolio Loss Ratio, be deemed to be
$8,942,416.

PRINCIPAL BALANCE: With respect to any Receivable, as of any date, the
Amount Financed minus (i) that portion of all amounts received on or prior to
such date and allocable to principal in accordance with the terms of the
Receivable, and (ii) any Cram Down Loss in respect of such Receivable.

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PRINCIPAL DISTRIBUTION AMOUNT: With respect to any Distribution Date, the
amount equal to the sum of the following amounts with respect to the related
Monthly Period, in each case computed with respect to each Receivable in
accordance with the method specified in the related retail installment sale
contract or promissory note: (i) that portion of all collections on Receivables
(other than Liquidated Receivables and Purchased Receivables) allocable to
principal, including all full and partial principal prepayments, (ii) the
Principal Balance (as of the related Accounting Date) of all Receivables that
became Liquidated Receivables during the related Monthly Period (other than
Purchased Receivables), (iii) the Principal Balance of all Receivables that
became Purchased Receivables as of the related Accounting Date, and (iv) the
aggregate amount of Cram Down Losses that shall have occurred during the related
Monthly Period.

PRINCIPAL FUNDING ACCOUNT: The account designated as the Principal Funding
Account in, and which is established and maintained pursuant to, Section 4.1(d).

PRINCIPAL FUNDING EXCESS AMOUNT: The meaning specified in Section 4.2(b).

PROGRAM FACILITY: The meaning assigned to such term in the Note Purchase
Agreement.

PURCHASE AGREEMENT: (i) The Amended and Restated Receivables Purchase
Agreement and Assignment, dated as of July 31, 1997, between AFL and the Seller
and (ii) one or more Assignment Agreements pursuant thereto, pursuant to which,
together, AFL transfers the Receivables and Other Conveyed Property to the
Seller.

PURCHASE AMOUNT: With respect to a Receivable, the Principal Balance and
all accrued and unpaid interest on the Receivable (without regard to any Monthly
Advances that may have been made with respect to the Receivable) as of the
Accounting Date on which the obligation to purchase such Receivable arises.

PURCHASE PRICE: With respect to any Receivables, Other Conveyed Property
and other property conveyed to the Trust by the Seller on any Transfer Date, an
amount equal to the sum of the Principal Balances of all such Receivables
conveyed as of the applicable Cutoff Date.

PURCHASED RECEIVABLE: As of any Accounting Date, any Receivable (including
any Liquidated Receivable) that became a Warranty Receivable or Administrative
Receivable as of such Accounting Date (or which AFL or the Servicer has elected
to purchase as of an earlier Accounting Date, as permitted by Section 2.6 or
3.7), and as to which the Purchase Amount has been deposited in the Collection
Account by the Seller, AFL or the Servicer, as applicable, on or before the
related Deposit Date.

PURCHASE TERMINATION DATE: The meaning set forth in Section 2.1(c)(1).

PURCHASE TERMINATION EVENT: The meaning set forth in Section 2.1(c)(2).

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RATING AGENCY: Each of Moody's and Standard & Poor's, so long as such
Persons maintain a rating on the Commercial Paper Notes; and if either
Moody's or Standard & Poor's no longer maintains a rating on the Commercial
Paper Notes, such other nationally recognized statistical rating organization
selected by Morgan.

RATING AGENCY CONDITION: With respect to any action, that each Rating
Agency shall have been given 10 days' prior notice thereof and that each of the
Rating Agencies shall have notified Morgan in writing that such action will not
result in a reduction or withdrawal of the then current rating of the Commercial
Paper Notes.

RECAPITALIZATION: A recapitalization of the Trust in which (a) the Trust
issues Non-Callable Notes under the Indenture, the proceeds of which are used to
redeem, in full or in part, the Notes Outstanding prior to that recapitalization
and (b) the Seller waives its rights under Section 9.1(b) to purchase the Trust
Property.

RECEIVABLE: An Auto Receivable that is included in the Schedule of
Receivables, and all rights and obligations under such a contract, but not
including (i) any Liquidated Receivable (other than for purposes of calculating
Certificateholders' Distributable Amounts and Noteholders' Distributable Amounts
hereunder and for the purpose of determining the obligations pursuant to Section
2.6 and 3.7 to purchase Receivables), or (ii) any Purchased Receivable on or
after the Accounting Date immediately preceding the Deposit Date on which
payment of the Purchase Amount is made in connection therewith pursuant to
Section 4.5.

RECEIVABLE FILE: The documents, electronic entries, instruments and
writings listed in Section 2.2(a) pertaining to a particular Receivable.

REGISTRAR OF TITLES: With respect to any state, the governmental agency or
body responsible for the registration of, and the issuance of certificates of
title relating to, motor vehicles and liens thereon.

RELATED DOCUMENTS: The Trust Agreement, the Indenture, the Certificates,
the Notes, the Purchase Agreement, each Transfer Agreement, the Custodian
Agreement, the Lockbox Agreement, the Certificate Purchase Agreement and the
Note Purchase Agreement. The Related Documents executed by any party are
referred to herein as "such party's Related Documents," "its Related Documents"
or by a similar expression.

REQUISITE AMOUNT: As of any Determination Date, (i) if no Trigger Event
shall have occurred, 7.0% of the sum (a) of the Note Balance on such
Determination Date and (b) the Certificate Balance on such Determination Date;
and (ii) if a Trigger Event shall have occurred, an unlimited amount.

RESPONSIBLE OFFICER: When used with respect to the Owner Trustee, any
officer of the Owner Trustee assigned by the Owner Trustee to administer its
corporate trust affairs relating to the Trust. When used with respect to any
other Person that is not an

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individual, the President, any Vice-President or Assistant Vice-President or the
Controller of such Person, or any other officer or employee having similar
functions.

SCHEDULED PAYMENT: With respect to any Monthly Period for any Receivable
or Auto Receivable, as applicable, the amount set forth in such Receivable or
Auto Receivable, as applicable, as required to be paid by the Obligor in such
Monthly Period. If after the Initial Closing Date or the related Cutoff Date,
the Obligor's obligation under a Receivable or Auto Receivable with respect to a
Monthly Period has been modified so as to differ from the amount specified in
such Receivable or Auto Receivable, as applicable, as a result of (i) the order
of a court in an insolvency proceeding involving the Obligor, (ii) pursuant to
the Soldiers' and Sailors' Civil Relief Act of 1940 or (iii) modifications or
extensions of the Receivable permitted by Section 3.2(b), the Scheduled Payment
with respect to such Monthly Period shall refer to the Obligor's payment
obligation with respect to such Monthly Period as so modified.

SCHEDULE OF RECEIVABLES: The schedule of all automobile retail installment
loan contracts and promissory notes sold and transferred pursuant to each
Transfer Agreement which is attached hereto as Schedule A, as such Schedule
shall be supplemented from time to time (i) by each Schedule of Receivables with
respect to each Transfer Agreement, which Schedules of Receivables shall be
deemed incorporated and made a part of Schedule A hereto and (ii) by the
Servicer from time to time to reflect removal from the Trust of (a) Purchased
Receivables and (b) Receivables purchased from the Trust pursuant to Section
9.1, such comprehensive schedule to be maintained by the Indenture Trustee.
With respect to a Transfer Agreement, "Schedule of Receivables" shall mean the
Schedule attached to such Transfer Agreement as Exhibit A thereto.

SCHEDULE OF REPRESENTATIONS: The Schedule of Representations and
Warranties attached hereto as Schedule B.

SECURED OBLIGATIONS: The meaning assigned to such term in the Indenture.

SECURITIZED OFFERING: An offering of certificates and notes of this Trust,
the proceeds of which are used to redeem, in full, the Certificates issued under
the Trust Agreement and the Notes issued under the Indenture.

SELLER: Arcadia Receivables Finance Corp. II, a Delaware corporation, or
its successor in interest pursuant to Section 6.2.

SERVICER: Arcadia Financial Ltd., its successor in interest pursuant to
Section 8.2 or, after any termination of the Servicer upon a Servicer
Termination Event, the Backup Servicer or any other successor Servicer.

SERVICER FEE THRESHOLD: The meaning specified in Section 4.6(ii).

SERVICER TERMINATION EVENT: An event described in Section 8.1.

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SERVICER'S CERTIFICATE: With respect to each Determination Date, a
certificate, completed by and executed on behalf of the Servicer, in accordance
with Section 3.9, substantially in the form attached hereto as Exhibit E.

SERVICING PORTFOLIO: As of any date, the aggregate principal balance of
all Auto Receivables (whether or not thereafter sold or disposed of) which are
serviced by AFL or any of its Affiliates at such time, calculated in a manner
consistent with the calculation of the components of Average Servicing Portfolio
in AFL's most recent Annual Report on Form 10-K to the extent such calculation
is consistent with the calculation of the components of Average Servicing
Portfolio in AFL's Annual Report on Form 10-K for the year ended December 31,
1996, as amended.

SPREAD ACCOUNT: The account designated as the Spread Account in, and which
is established and maintained pursuant to, Section 4.1(c).

STANDARD & POOR'S: Standard & Poor's Ratings Services, a division of
McGraw-Hill, Inc., or any successor thereto.

SUBCOLLECTION ACCOUNT: The account designated as the Subcollection Account
in, and which is established and maintained pursuant to Section 4.2(a).

SUPPLEMENTAL SERVICING FEE: With respect to any Monthly Period, all
administrative fees, expenses and charges paid by or on behalf of Obligors,
including late fees, collected on the Receivables during such Monthly Period.

TOTAL SERVICING FEE: The sum of the Basic Servicing Fee and the
Supplemental Servicing Fee.

TRANSFER AGREEMENT: With respect to any Receivables, the transfer
agreement between the Seller and the Trust pursuant to which the Seller sells
and assigns Receivables, Other Conveyed Property and other property to the
Trust, the form of which is attached hereto as Exhibit F.

TRANSFER DATE: Any date during the Funding Period on which Receivables are
transferred to the Trust pursuant to Section 2.1.

TRIGGER EVENT: As of any Determination Date, if (i) the Delinquency Ratio
exceeds 3.125%; (ii) the Portfolio Loss Ratio exceeds 3.125%; (iii) the
Warehousing Loss Ratio exceeds 0.75%; or (iv) the Net Excess Spread Percentage
is less than 3.0%.

TRUST: Olympic Automobile Receivables Warehouse Trust.

TRUST ACCOUNTS: The meaning specified in 4.1(e).

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TRUST AGREEMENT: The Amended and Restated Trust Agreement, dated as of
July 31, 1997, between the Seller and the Owner Trustee, as the same may be
amended and supplemented from time to time.

TRUST ESTATE: The meaning assigned to such term in the Indenture.

TRUST PROPERTY: The meaning specified in the Trust Agreement.

TRUST PROPERTY LIQUIDATION DATE: The date specified in the notice issued
pursuant to Section 9.1(b) as the date on which proceeds from a sale of the
Trust Property will be distributed to Noteholders and Certificateholders.

UCC: The Uniform Commercial Code as in effect in the relevant
jurisdiction.

WAREHOUSING LOSS RATIO: With respect to any Determination Date, a
fraction, expressed as a percentage, calculated as of the related Accounting
Date, the numerator of which is equal to the excess of (A) the sum of (i) the
aggregate of the Principal Balances of Receivables conveyed to the Trust since
the immediately preceding Trust Property Liquidation Date, or, if no Trust
Property Liquidation Date has occurred, since the Initial Closing Date (plus
accrued and unpaid interest to the end of the relevant Monthly Period, at the
applicable APR) of all Receivables that became Liquidated Receivables since the
immediately preceding Trust Property Liquidation Date, or, if no Trust Property
Liquidation Date has occurred, since the Initial Closing Date, plus (ii) the
aggregate of the Principal Balances of all Receivables that became Purchased
Receivables since the immediately preceding Trust Property Liquidation Date, or,
if no Trust Property Liquidation Date has occurred, since the Initial Closing
Date and that were delinquent with respect to all or a portion of a Scheduled
Payment more than 31 days as of the related Accounting Date, plus (iii) the
aggregate of all Cram Down Losses that occurred since the immediately preceding
Trust Property Liquidation Date, or, if no Trust Property Liquidation Date has
occurred, since the Initial Closing Date, over (B) the Liquidation Proceeds
received by the Trust since the immediately preceding Trust Property Liquidation
Date, or, if no Trust Property Liquidation Date has occurred, since the Initial
Closing Date and the denominator of which is equal to the Aggregate Principal
Balance as of the related Accounting Date.

WAREHOUSING PERIOD: (i) The period beginning upon the first sale of
Receivables to the Trust and ending on the day immediately preceding a Trust
Property Liquidation Date on which all of the Receivables in the Trust are
purchased and (ii) thereafter, any period beginning upon the first sale of
Receivables to the Trust immediately following a Trust Property Liquidation Date
on which all of the Receivables in the Trust are purchased and ending on the day
immediately preceding a Trust Property Liquidation Date on which all of the
Receivables in the Trust are purchased.

WARRANTY RECEIVABLE: With respect to any Monthly Period, a Receivable
which AFL has become obligated to repurchase pursuant to Section 2.6.

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Section I.2. USAGE OF TERMS. (a) With respect to all terms used in this
Agreement, the singular includes the plural and the plural the singular; words
importing any gender include the other gender; references to "writing" include
printing, typing, lithography, and other means of reproducing words in a visible
form; references to agreements and other contractual instruments include all
subsequent amendments thereto or changes therein entered into in accordance with
their respective terms and not prohibited by this Agreement; references to
Persons include their permitted successors and assigns; and the terms "include"
or "including" mean "include without limitation" or "including without
limitation."

(b) The references to the documents entered into in connection with this
Agreement, namely, the Certificate Purchase Agreement, the Indenture, the Note
Purchase Agreement, the Purchase Agreement and the Trust Agreement shall be read
to include, where appropriate, the original (as amended and supplemented)
agreement related to each such amended and restated document.

Section 1.3. CALCULATIONS. (a) All calculations of the amount of
interest accrued on the Certificates and the Notes shall be made on the basis of
the actual number of days elapsed in either a 360-day or a 365-day year, as
specified in the Note Purchase Agreement or Certificate Purchase Agreement, as
the case may be; and (b) all calculations of the amount of the Basic Servicing
Fee shall be made on the basis of a 360-day year consisting of twelve 30-day
months. All references to the Principal Balance of a Receivable as of an
Accounting Date shall refer to the close of business on such day.

Section 1.4. SECTION REFERENCES. All references to Articles, Sections,
paragraphs, subsections, exhibits and schedules shall be to such portions of
this Agreement unless otherwise specified.

Section 1.5. NO RECOURSE. Subject to the provisions of Section 6.5 with
respect to the Seller, no recourse may be taken, directly or indirectly, under
this Agreement or any certificate or other writing delivered in connection
herewith or therewith, against any stockholder, officer, or director, as such,
of the Seller, AFL, the Servicer, the Indenture Trustee, the Backup Servicer or
the Owner Trustee or of any predecessor or successor of the Seller, AFL, the
Servicer, the Indenture Trustee, the Backup Servicer or the Owner Trustee.

Section 1.6. CONDITION TO EFFECTIVENESS OF AGREEMENTS. This Agreement and
the Related Documents shall not be effective until such time as this Agreement,
the Related Documents and any and all certificates, opinions and other documents
required hereby and thereby have been executed and delivered to the satisfaction
of Morgan, in its sole discretion.

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ARTICLE II
CONVEYANCE OF RECEIVABLES

Section 2.1. CONVEYANCE OF RECEIVABLES. (a) Subject to the terms and
conditions of this Agreement, including the conditions set forth in paragraph
(b) below, the Seller, pursuant to the mutually agreed upon terms contained
herein and pursuant to one or more Transfer Agreements, shall sell, transfer,
assign, and otherwise convey to the Trust, without recourse (but without
limitation of its obligations in this Agreement), all of the right, title and
interest of the Seller, whether then existing or thereafter acquired, in and to
the Receivables and the Other Conveyed Property, an assignment of the rights of
the Seller under the Purchase Agreement, all funds on deposit from time to time
in the Trust Accounts and all investments therein and proceeds thereof, and all
proceeds of the foregoing. It is the intention of the Seller that the transfer
and assignment contemplated by this Agreement and each Transfer Agreement shall
constitute a sale of the Receivables and other Trust Property from the Seller to
the Trust and the beneficial interest in and title to the Receivables and the
other Trust Property shall not be part of the Seller's estate in the event of
the filing of a bankruptcy petition by or against the Seller under any
bankruptcy law. In the event that, notwithstanding the intent of the Seller,
the transfer and assignment contemplated hereby and each Transfer Agreement is
held not to be a sale, this Agreement and each Transfer Agreement shall
constitute a grant of a security interest to the Trust in the property referred
to in this Section 2.1 or transferred to the Trust pursuant to the related
Transfer Agreement.

(b) (1) The Seller shall transfer to the Trust the Receivables and the
other property and rights related thereto described in paragraph (a) above only
upon the satisfaction of each of the following conditions on or prior to the
related Transfer Date:

(i) the Funding Period shall not have terminated;

(ii) the Seller shall have provided the Owner Trustee, the Indenture
Trustee and the Rating Agencies with any information reasonably requested
by any of the foregoing with respect to the Receivables;

(iii) the Seller shall have delivered to the Owner Trustee and the
Indenture Trustee a duly executed Transfer Agreement, which shall include a
Schedule of Receivables listing the Receivables being transferred on such
Transfer Date;

(iv) AFL shall have delivered to the Seller, the Owner Trustee and
the Indenture Trustee a duly executed Assignment Agreement, which shall
include a Schedule of Receivables listing the Receivables being transferred
on such Transfer Date;

(v) the Seller shall, to the extent required by Section 4.1, have
deposited in the Collection Account collections in respect of the
Receivables;

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(vi) the Seller shall have taken any action necessary or advisable to
maintain the first perfected ownership interest of the Trust in the Trust
Property and the first perfected security interest of the Indenture Trustee
in the Indenture Collateral;

(vii) the aggregate Principal Balances of Receivables in the Trust,
including the Receivables to be conveyed to the Trust on each Transfer
Date, that were owed by any single Obligor or its Affiliates shall not
exceed $250,000;

(viii) after giving effect to the conveyance of Receivables on such
Transfer Date, the aggregate of the Principal Balances of Receivables with
original maturities ranging from 73 to 84 months shall not exceed 7.5% of
the aggregate of the Principal Balances of all Receivables on such Transfer
Date;

(ix) each of the representations and warranties made by the Seller
pursuant to Section 2.5 shall be true and correct as of the related
Transfer Date, and the Seller shall have performed all obligations to be
performed by it hereunder on or prior to such Transfer Date;

(x) the Seller shall, at its own expense, on or prior to the Transfer
Date indicate in its computer files that the Receivables identified in the
Transfer Agreement have been sold to the Trust pursuant to this Agreement
and the related Transfer Agreement;

(xi) no event has occurred and is continuing, or would result from
the conveyance on such Transfer Date, that constitutes a Purchase
Termination Event or Servicer Termination Event;

(xii) after giving effect to the conveyance of Receivables on such
Transfer Date, the Facility Balance shall not exceed the Facility Limit;

(xiii) the Seller shall have provided the Indenture Trustee, the
Owner Trustee and Morgan a statement listing (A) the aggregate of the
Principal Balances of such Receivables so transferred, (B) the related
Purchase Price, (C) the Facility Balance after giving effect to the
transfers on such date and (D) any other information reasonably requested
by any of the foregoing with respect to such Receivables;

(xiv) (A) on any Transfer Date, AFL shall have established, in
accordance with Section 2.2(b)(1)(ix) of the Receivables Purchase
Agreement, in the name of the Trustee for the benefit of the Noteholders
and the Certificateholders, an Eligible Interest Rate Cap Agreement in a
notional amount equal to or greater than the sum of the Note Balance PLUS
the Certificate Balance on such Transfer Date (after taking into account
the transfer of Receivables to the Trust on such date);

(xv) after giving effect to the conveyance of Receivables on such
Transfer Date, the aggregate of the Principal Balances of Receivables
attributable to loans

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originated under AFL's "Classic" program shall not exceed 60% of the
aggregate of the Principal Balances of all Receivables on such Transfer
Date;

(xvi) after giving effect to the conveyance of Receivables on such
Transfer Date, the aggregate of the Principal Balances of Receivables
attributable to loans classified as Financed Repossessions shall not exceed
3.0% of the aggregate of the Principal Balances of all Receivables on such
Transfer Date;

(xvii) the Seller shall have deposited into the Spread Account an
amount at least equal to 6.0% of the aggregate of the Principal Balances of
the Receivables sold to the Trust on such Transfer Date.

(xviii) the condition to effectiveness set forth in Section 1.6 shall
have been satisfied; and

(xix) the Seller shall have delivered to the Owner Trustee and the
Indenture Trustee an Officer's Certificate confirming the satisfaction of
each condition precedent specified in this paragraph (b)(1).

(2) On each such Transfer Date, if all the conditions specified in
paragraph (b)(1) above have been satisfied, the Trust shall accept the transfer
of such Receivables and shall pay or cause to be paid to the Seller an amount
equal to the Purchase Price. The Purchase Price shall be paid FIRST, from
amounts, if any, on deposit in the Principal Funding Account, and SECOND, from
amounts, if any, received by the Trust in connection with the issuance and sale
of Notes or Certificates (or additional principal amounts thereof), as
applicable.

(c) (1) PURCHASE TERMINATION DATE. The Trust's commitment to purchase
Receivables and other property hereunder and under any Transfer Agreement shall
terminate upon the earliest to occur of the following (the "Purchase Termination
Date"):

(i) The date that is 364 days from the Effectiveness Date; PROVIDED,
HOWEVER, the parties to this Agreement (with the consent of Morgan) may
mutually agree in writing to the extension of such date to a date no later
than 364 days following the date of such extension;

(ii) A date upon which a Purchase Termination Event has occurred and
is continuing and (A) Morgan declares a Purchase Termination Date in a
notice in accordance with the terms of subsection 2 below, or (B) such date
becomes a Purchase Termination Date automatically in accordance with the
terms of subsection 2 below;

(iii) The initial cutoff date with respect to a Securitized Offering,
as specified in the preliminary offering document with respect to the
securities to be issued in connection with such Securitized Offering;

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(iv) A date on which a Note Purchase Termination Event has occurred
and is continuing; or

(v) A date on which a Certificate Purchase Termination Event has
occurred and is continuing.

(2) PURCHASE TERMINATION EVENTS. If any of the following events
(each, a "Purchase Termination Event") shall have occurred and be continuing,
then (a) in the case of a Purchase Termination Event other than a Purchase
Termination Event described in subsection (ii) below, Morgan shall, at the
written request of, or may with the consent of, a Note Majority or a Certificate
Majority, by notice (which notice shall be in writing) to the Seller, the
Indenture Trustee and the Owner Trustee declare the Purchase Termination Date to
have occurred, and (b) in the case of a Purchase Termination Event described in
subsection (ii) below, the Purchase Termination Date shall occur automatically:

(i) Any event or occurrence that constitutes a Servicer Termination
Event pursuant to Section 8.1 (other than an event described in Section
8.1(d));

(ii) Any event or occurrence that constitutes a Servicer Termination
Event pursuant to Section 8.1(d);

(iii) There shall exist any event or occurrence that has a Material
Adverse Effect;

(iv) The Seller, for any reason, shall fail to grant to the Trust and
to maintain in favor of the Trust a valid and perfected ownership interest
(or, if not an ownership interest, a valid and perfected first priority
security interest) in any material portion of the Receivables and other
Trust Property;

(v) The Internal Revenue Service shall file notice of a lien pursuant
to Section 6323 of the Internal Revenue Code with regard to any of the
assets of the Seller or AFL, or the Pension Benefit Guaranty Corporation
shall file notice of a lien pursuant to Section 4068 of the Employee
Retirement Income Security Act of 1974 with regard to any of the assets of
the Seller or AFL, and in either such case such lien shall secure a
liability in excess of $1,000,000 and shall not have been released within
40 days;

(vi) A default shall have occurred and be continuing (x) under any
instrument or agreement evidencing, securing or providing for the issuance
of indebtedness for borrowed money in excess of $10,000,000 of, or
guaranteed by, AFL, the Seller or the Servicer which default (A) is a
default in payment of any principal or interest on such indebtedness when
due or within any applicable grace period, or (B) such default shall have
resulted in acceleration of the maturity of such indebtedness; or (y) under
any agreement providing for the sales of Receivables by AFL, the Seller or
the Servicer with an aggregate purchase price outstanding over $10,000,000,
resulting in the early amortization of the purchasers' or investors'

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<PAGE>

interest in such Receivables, or the replacement of the Servicer as
servicer thereunder; unless, in the case of each of CLAUSES (x) and (y)
above, (1) AFL, the Seller or the Servicer, as the case may be, is
contesting in good faith, by appropriate proceedings, that such
indebtedness is due and payable or that such acceleration or early
amortization is rightful, and (2) no final judgment adverse to AFL, the
Seller or the Servicer, as the case may be, shall have been entered on such
proceedings;

(vii) (A) Any litigation (including, without limitation, derivative
actions), arbitration proceedings or governmental proceedings not disclosed
in writing by AFL, the Seller or the Servicer, as the case may be, prior to
the date of execution and delivery of this Agreement is pending against
AFL, the Seller or the Servicer, as the case may be, or any Affiliate
thereof, which, in the reasonable opinion of Morgan, if adversely
determined, would have a Material Adverse Effect, or (B) any material
development not so disclosed has occurred in any litigation (including,
without limitation, derivative actions), arbitration proceedings or
governmental proceedings so disclosed, which, in the reasonable opinion of
Morgan, would have a reasonable probability of causing a Material Adverse
Effect; or

(viii) AFL (if it is the Servicer) shall make any material adverse
change in the Servicing Policy and Procedures without the prior written
consent of Morgan (which consent shall not be unreasonably withheld);

(ix) On any Determination Date after the first Transfer Date but
prior to the Purchase Termination Date, (A) the Delinquency Ratio shall
exceed 3.50%; (B) the Portfolio Loss Ratio shall exceed 3.50%; (C) the
Warehousing Loss Ratio shall exceed 1.0%; or (D) the Average Net Excess
Spread Percentage shall be less than 4.0%;

(x) The notional amount of the Eligible Interest Rate Cap Agreement
required pursuant to Section 2.1(b)(1)(xiv) shall on any date be less than
the sum of the Note Balance PLUS the Certificate Balance on such date
(after taking into account the transfer of Receivables to the Trust, if
any, on such date) and such notional amount shortfall remains unremedied
for a period of three Business Days after the date of such determination;
or

(xi) Any Warehousing Period exceeds 120 days.

(xii) Material noncompliance with Sections 3.9(c) or 3.19 and such
noncompliance is not remedied within five (5) Business Days thereof.

Section 2.2. CUSTODY OF RECEIVABLES FILES. (a) In connection with the
sale, transfer and assignment of the Receivables and the other Trust Property to
the Trust pursuant to the Original Sale and Servicing Agreement and each
Transfer Agreement before the Effectiveness Date, the Trust entered into the
Original Custodian Agreement with the Custodian, pursuant to which the Custodian
accepted such appointment to act as the agent of the Trust as Custodian of the
documents set forth below; and in connection with the

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sale, transfer and assignment of the Receivables and other Trust Property to the
Trust pursuant to this Agreement and each Transfer Agreement from and after the
Effectiveness Date, the Trust shall enter into the Custodian Agreement with the
Custodian, pursuant to which the Custodian shall continue to act as the agent of
the Trust as Custodian of the documents set forth below. Pursuant to the terms
of the Purchase Agreement, AFL has agreed to use its best efforts to deliver to
the Custodian as agent of the Trust within three Business Days after each
Transfer Date, but in any event AFL shall deliver to the Custodian no later than
ten Business Days after such Transfer Date, the following documents:

(i) The fully executed original of the Receivable (together with any
agreements modifying the Receivable, including without limitation any
extension agreements);

(iii) The original credit application, or a copy thereof, of each
Obligor, fully executed by each such Obligor on AFL's customary form, or on
a form approved by AFL, for such application; and

(iv) The original certificate of title (when received) and otherwise
such documents, if any, that AFL keeps on file in accordance with its
customary procedures indicating that the Financed Vehicle is owned by the
Obligor and subject to the interest of AFL as first lienholder or secured
party (including any Lien Certificate received by AFL), or, if such
original certificate of title has not yet been received, a copy of the
application therefor, showing AFL as secured party or a letter from the
applicable Dealer agreeing unconditionally to repurchase the related
Receivable if the certificate of title is not received by AFL within 180
days.

In connection with the grant of the security interest in the Trust Estate
to the Indenture Trustee in respect of the Secured Obligations pursuant to the
Indenture, the Trust agrees that from and after the Initial Closing Date through
the date of release of such security interest pursuant to the terms of the
Indenture, the Custodian shall not be acting as agent of the Trust, but rather
shall be acting as agent of the Indenture Trustee in respect of the Secured
Obligations.

The Indenture Trustee may act as the Custodian, in which case the Indenture
Trustee shall be deemed to have assumed the obligations of the Custodian
specified in the Custodian Agreement, and the terms of Exhibit B shall be deemed
incorporated by reference herein.

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(b) Upon payment in full on any Receivable, the Servicer will notify the
Custodian by certification of an officer of the Servicer (which certification
shall include a statement to the effect that all amounts received in connection
with such payments which are required to be deposited in the Collection Account
pursuant to Section 3.1 have been so deposited) and shall request delivery of
the Receivable and Receivable File to the Servicer. From time to time as
appropriate for servicing and enforcing any Receivable, the Custodian shall,
upon written request of an officer of the Servicer and delivery to the Custodian
of a receipt signed by such officer, cause the original Receivable and the
related Receivable File to be released to the Servicer. The Servicer's receipt
of a Receivable and/or Receivable File shall obligate the Servicer to return the
original Receivable and the related Receivable File to the Custodian when its
need by the Servicer has ceased unless the Receivable shall be repurchased as
described in Section 2.6 or 3.7.

Section 2.3. CONDITIONS TO ACCEPTANCE BY OWNER TRUSTEE. As conditions to
the Owner Trustee's execution and delivery of the Notes on behalf of the Trust
and execution, authentication and delivery of the Certificates on behalf of the
Trust on the Initial Closing Date, the Owner Trustee shall have received the
following on or before the Initial Closing Date:

(a) Copies of resolutions of the Board of Directors of the Seller
approving the execution, delivery and performance of this Agreement, the
Related Documents and the transactions contemplated hereby and thereby,
certified by a Secretary or an Assistant Secretary of the Seller;

(b) Copies of resolutions of the Board of Directors of AFL approving
the execution, delivery and performance of this Agreement, the Related
Documents and the transactions contemplated hereby and thereby, certified
by a Secretary or an Assistant Secretary of AFL; and

(c) Evidence that all filings (including, without limitation, UCC
filings) required to be made by any Person and actions required to be taken
or performed by any Person in any jurisdiction to give the Owner Trustee a
first priority perfected lien on, or ownership interest in, the Receivables
and the other Trust Property have been made, taken or performed.

Section 2.4. DEEMED ACCEPTANCE BY OWNER TRUSTEE AND INDENTURE TRUSTEE. By
its execution or acceptance, as the case may be, of this Agreement, each of the
Owner Trustee and the Indenture Trustee, on each Transfer Date, subject to the
satisfaction of the conditions to conveyance set forth in Section 2.1(b), shall
be deemed to have accepted the conveyance of the Receivables and other property
conveyed to the Trust under the related Transfer Agreement and assigned to the
Indenture Trustee pursuant to the Indenture without any further act on their
behalf.

Section 2.5. REPRESENTATIONS AND WARRANTIES OF SELLER. By its execution
of this Agreement and each Transfer Agreement, the Seller makes the following
representations and warranties on which the Trust relies in accepting the
Receivables and the other Trust

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Property in trust and on which the Owner Trustee relies in issuing, on behalf of
the Trust, the Certificates and Notes. Unless otherwise specified, such
representations and warranties speak as of the Initial Closing Date, the
Effectiveness Date and each Transfer Date, as appropriate, but shall survive the
sale, transfer, and assignment of the Receivables to the Trust.

(a) SCHEDULE OF REPRESENTATIONS. The representations and warranties
set forth on the Schedule of Representations are true and correct.

(b) ORGANIZATION AND GOOD STANDING. The Seller has been duly
organized and is validly existing as a corporation in good standing under
the laws of the State of Delaware, with power and authority to own its
properties and to conduct its business as such properties are currently
owned and such business is currently conducted, and had at all relevant
times, and now has, power, authority and legal right to acquire, own and
sell the Receivables and the other property transferred to the Trust.

(c) DUE QUALIFICATION. The Seller is duly qualified to do business
as a foreign corporation in good standing, and has obtained all necessary
licenses and approvals, in all jurisdictions in which the ownership or
lease of its property or the conduct of its business requires such
qualification.

(d) POWER AND AUTHORITY. The Seller has the power and authority to
execute and deliver this Agreement and its Related Documents and to carry
out its terms and their terms, respectively; the Seller has full power and
authority to sell and assign the Trust Property to be sold and assigned to
and deposited with the Trust by it and has duly authorized such sale and
assignment to the Trust by all necessary corporate action; and the
execution, delivery and performance of this Agreement and the Seller's
Related Documents have been duly authorized by the Seller by all necessary
corporate action.

(e) VALID SALE; BINDING OBLIGATIONS. This Agreement and each
Transfer Agreement effects a valid sale, transfer and assignment of the
Receivables and the other Trust Property, enforceable against the Seller
and creditors of and purchasers from the Seller; and this Agreement and
each Transfer Agreement and the Seller's Related Documents, when duly
executed and delivered, shall constitute legal, valid and binding
obligations of the Seller enforceable in accordance with their respective
terms, except as enforceability may be limited by bankruptcy, insolvency,
reorganization or other similar laws affecting the enforcement of
creditors' rights generally and by equitable limitations on the
availability of specific remedies, regardless of whether such
enforceability is considered in a proceeding in equity or at law.

(f) NO VIOLATION. The consummation of the transactions contemplated
by this Agreement and each Transfer Agreement and the Related Documents and
the fulfillment of the terms of this Agreement and each Transfer Agreement
and the

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Related Documents shall not conflict with, result in any breach of any of
the terms and provisions of or constitute (with or without notice, lapse of
time or both) a default under the certificate of incorporation or by-laws
of the Seller, or any indenture, agreement, mortgage, deed of trust or
other instrument to which the Seller is a party or by which it is bound, or
result in the creation or imposition of any Lien upon any of its properties
pursuant to the terms of any such indenture, agreement, mortgage, deed of
trust or other instrument, other than this Agreement, or violate any law,
order, rule or regulation applicable to the Seller of any court or of any
federal or state regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Seller or any of
its properties. Notwithstanding the foregoing, it is understood that no
representation or warranty is expressed herein with respect to the legality
of the use of word "Olympic" by the Seller or its Affiliates.

(g) NO PROCEEDINGS. There are no proceedings or investigations
pending or, to the Seller's knowledge, threatened against the Seller or
AFL, before any court, regulatory body, administrative agency or other
tribunal or governmental instrumentality having jurisdiction over the
Seller or its properties (A) asserting the invalidity of this Agreement,
any Transfer Agreement or any of the Related Documents, (B) seeking to
prevent the issuance of the Certificates or the Notes or the consummation
of any of the transactions contemplated by this Agreement, any Transfer
Agreement or any of the Related Documents, (C) seeking any determination or
ruling that might materially and adversely affect the performance by the
Seller of its obligations under, or the validity or enforceability of, this
Agreement, any Transfer Agreement or any of the Related Documents, or (D)
seeking to adversely affect the federal income tax or other federal, state
or local tax attributes of the Certificates or the Notes.

(h) NO TERMINATION EVENTS. To the Seller's knowledge, no Purchase
Termination Event or Servicer Termination Event shall have occurred and be
continuing.

(i) CHIEF EXECUTIVE OFFICE. The chief executive office of the Seller
is at 7825 Washington Avenue South, Suite 900, Minneapolis, MN 55439-2435.

(j) SEPARATE CORPORATE EXISTENCE. The Seller shall:

(1) Maintain in full effect its existence, rights and franchises
as a corporation under the laws of the state of its incorporation and
will obtain and preserve its qualification to do business in each
jurisdiction in which such qualification is or shall be necessary to
protect the validity and enforceability of this Agreement and its
Related Documents and each other instrument or agreement necessary or
appropriate to proper administration hereof and permit and effectuate
the transactions contemplated hereby.

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(2) Maintain its own deposit account or accounts, separate from
those of any Affiliate of the Seller, with commercial banking
institutions. The funds of the Seller will not be diverted to any
other Person or for other than the corporate use of the Seller
(including the payment of duly declared dividends to the Seller's
stockholders), and, except as may be expressly permitted by this
Agreement or the Related Documents, the funds of the Seller shall not
be commingled with those of any Affiliate of the Seller.

(3) Ensure that, to the extent that it shares the same officers
or other employees as any of its stockholders or Affiliates, the
salaries of and the expenses related to providing benefits to such
officers and other employees shall be fairly allocated among such
entities, and each such entity shall bear its fair share of the salary
and benefit costs associated with all such common officers and
employees.

(4) Ensure that, to the extent that it jointly contracts with
any of its stockholders or Affiliates to do business with vendors or
service providers or to share overhead expenses, the costs incurred in
so doing shall be allocated fairly among such entities, and each such
entity shall bear its fair share of such costs. To the extent that
the Seller contracts or does business with vendors or service
providers where the goods and services provided are partially for the
benefit of any other Person, the costs incurred in so doing shall be
fairly allocated to or among such entities for whose benefit the goods
and services are provided, and each such entity shall bear its fair
share of such costs. All material transactions between the Seller and
any of its Affiliates shall be only on an arm's-length basis and shall
receive the approval of the Seller's Board of Directors including at
least one Independent Director (as defined below).

(5) Maintain a principal executive and administrative office
through which its business is conducted separate from those of its
stockholders and Affiliates. To the extent that the Seller and any of
its stockholders or Affiliates have offices in contiguous space, there
shall be fair and appropriate allocation of overhead costs among them,
and each such entity shall bear its fair share of such expenses.

(6) Conduct its affairs strictly in accordance with its
Certificate of Incorporation and observe all necessary, appropriate
and customary corporate formalities, including, but not limited to,
holding all regular and special stockholders' and directors' meetings
appropriate to authorize all corporate action, keeping separate and
accurate minutes of such meetings, passing all resolutions or consents
necessary to authorize actions taken or to be taken, and maintaining
accurate and separate books, records and accounts, including, but not
limited to, payroll and intercompany transaction accounts. Regular
stockholders' and directors' meetings shall be held at least annually.

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(7) Ensure that its Board of Directors shall be elected
independently from the Boards of Directors of its Affiliates and shall
at all times after January 15, 1995 include at least one Independent
Director (for purposes hereof, "INDEPENDENT DIRECTOR" shall mean any
member of the Board of Directors of the Seller that is not and has not
at any time been (x) a director, officer, employee or shareholder of
any Affiliate of the Seller or (y) a member of the immediate family of
any of the foregoing).

(8) Ensure that decisions with respect to its business and daily
operations shall be independently made by the Seller (although the
officer making any particular decision may also be an officer or
director of an Affiliate of the Seller) and shall not be dictated by
an Affiliate of the Seller.

(9) Act solely in its own corporate name and through its own
authorized officers and agents, and no Affiliate of the Seller shall
be appointed to act as agent of the Seller, except as expressly
contemplated by this Agreement or the Related Documents;

(10) Ensure that no Affiliate of the Seller shall advance funds
to the Seller, other than capital contributions made to enable the
Seller to pay the purchase price of Receivables or to otherwise
conduct its business as contemplated by this Agreement and the Related
Documents, and no Affiliate of the Seller will otherwise supply funds
to, or guaranty debts of, the Seller.

(11) Not enter into any guaranty, or otherwise become liable,
with respect to any obligation of any Affiliate of the Seller other
than as expressly contemplated by this Agreement or the Related
Documents.

(12) Ensure that any financial reports required of the Seller
shall comply with generally accepted accounting principles and shall
be issued separately from, but may be consolidated with, any reports
prepared for any of its Affiliates.

(13) Maintain capitalization adequate for the conduct of its
business.

Section 2.6. REPURCHASE OF RECEIVABLES UPON BREACH OF WARRANTY.
Concurrently with the execution and delivery of this Agreement and each Transfer
Agreement, respectively, AFL and the Seller have entered into the Purchase
Agreement and an Assignment Agreement, the rights of the Seller under which have
been assigned by the Seller to the Trust. Under the Purchase Agreement and each
Assignment Agreement AFL has made the same representations and warranties to the
Seller with respect to the Receivables as those made by Seller pursuant to the
Schedule of Representations, upon which the Owner Trustee has relied in
accepting the Trust Property in trust and executing the Certificates and Notes
and upon which the Indenture Trustee has relied in authenticating the Notes.
Upon discovery by any of AFL, the Seller, the Servicer, the

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Indenture Trustee or the Owner Trustee of a breach of any of the representations
and warranties contained in Section 2.5 that materially and adversely affects
the interests of the Noteholders, the Certificateholders or the Trust in any
Receivable (including any Liquidated Receivable), the party discovering such
breach shall give prompt written notice to the others; PROVIDED, HOWEVER, that
the failure to give any such notice shall not affect any obligation of AFL or
the Seller. As of the second Accounting Date (or, at AFL's election, the first
Accounting Date) following its discovery or its receipt of notice of any breach
of the representations and warranties set forth on the Schedule of
Representations that materially and adversely affects the interests of the
Noteholders, the Certificateholders or the Trust in any Receivable (including
any Liquidated Receivable) AFL shall, unless such breach shall have been cured
in all material respects, purchase such Receivable from the Trust and, on or
before the related Deposit Date, AFL shall pay the Purchase Amount to the Owner
Trustee pursuant to Section 4.5. The obligations of the Seller with respect to
any such breach of representations and warranties shall be limited to taking any
and all actions necessary to enable the Owner Trustee to enforce directly the
obligations of AFL under the Purchase Agreement and any Assignment Agreement, as
applicable. It is understood and agreed that, except as set forth in this
Section 2.6, the obligation of AFL to repurchase any Receivable as to which a
breach has occurred and is continuing shall, if such obligation is fulfilled,
constitute the sole remedy against AFL or the Seller for such breach available
to the Indenture Trustee on behalf of the Noteholders or the Owner Trustee on
behalf of Certificateholders.

In addition to the foregoing and notwithstanding whether the related
Receivable shall have been purchased by the Seller or AFL, AFL shall indemnify
the Owner Trustee, the Indenture Trustee, the Backup Servicer, the Trust, the
Noteholders and the Certificateholders against all reasonable costs, expenses,
losses, damages, claims and liabilities, including reasonable fees and expenses
of counsel, which may be asserted against or incurred by any of them as a result
of third party claims arising out of the events or facts giving rise to such
breach.

Section 2.7. NONPETITION COVENANT. Until the date that is one year and
one day following the termination of the Trust pursuant to the terms of the
Trust Agreement, none of the Seller, the Servicer, the Owner Trustee (in its
individual capacity or on behalf of the Trust), the Backup Servicer nor AFL
shall petition or otherwise invoke the process of any court or government
authority for the purpose of commencing or sustaining a case against the Trust
or the General Partner under any federal or state bankruptcy, insolvency or
similar law or appointing a receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar official of the Trust or any substantial part of
its property, or ordering the winding up or liquidation of the affairs of the
Trust.

Section 2.8. COLLECTING LIEN CERTIFICATES NOT DELIVERED ON THE INITIAL
CLOSING DATE OR TRANSFER DATE. In the case of any Receivable in respect of
which written evidence from the Dealer selling the related Financed Vehicle that
the Lien Certificate for such Financed Vehicle showing AFL as first lienholder
has been applied for from the Registrar of Titles was delivered to the Custodian
on the Initial Closing Date or Transfer Date, as appropriate, in lieu of a Lien
Certificate, the Servicer shall use its best efforts to collect

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such Lien Certificate from the Registrar of Titles as promptly as practicable.
If such Lien Certificate showing AFL as first lienholder is not received by the
Custodian within 180 days after the Initial Closing Date or Transfer Date, as
appropriate, then the representation and warranty in paragraph 5 of the Schedule
of Representations in respect of such Receivable shall be deemed to have been
incorrect in a manner that materially and adversely affects the
Certificateholders, the Noteholders and the Trust.

Section 2.9. TRUST'S ASSIGNMENT OF ADMINISTRATIVE RECEIVABLES AND WARRANTY
RECEIVABLES. With respect to all Administrative Receivables and all Warranty
Receivables purchased by the Servicer, the Seller or AFL, the Owner Trustee and
the Indenture Trustee shall take any and all actions reasonably requested by the
Seller, AFL or Servicer, at the expense of the requesting party, to assign,
without recourse, representation or warranty, to the Seller, AFL or the
Servicer, as applicable, all of the Indenture Trustee's and the Trust's right,
title and interest in and to such purchased Receivable, all monies due thereon,
the security interests in the related Financed Vehicles, proceeds from any
Insurance Policies, proceeds from recourse against Dealers on such Receivables
and the interests of the Trust in certain rebates of premiums and other amounts
relating to the Insurance Policies and any documents relating thereto, such
assignment being an assignment outright and not for security; and the Seller,
AFL or the Servicer, as applicable, shall thereupon own such Receivable, and all
such security and documents, free of any further obligation to the Owner
Trustee, the Trust, the Indenture Trustee, the Certificateholders or the
Noteholders with respect thereto.

ARTICLE III
ADMINISTRATION AND SERVICING OF RECEIVABLES

Section 3.1. DUTIES OF THE SERVICER. The Servicer is hereby authorized to
act as agent for the Trust and in such capacity shall manage, service,
administer and make collections on the Receivables, and perform the other
actions required by the Servicer under this Agreement. The Servicer agrees that
its servicing of the Receivables shall be carried out in accordance with
customary and usual procedures of institutions which service motor vehicle
retail installment sales contracts and, to the extent more exacting, the degree
of skill and attention that the Servicer exercises from time to time with
respect to all comparable motor vehicle receivables that it services for itself
or others. In performing such duties, so long as AFL is the Servicer, it shall
comply with the policies and procedures attached hereto as Schedule C. The
Servicer's duties shall include, without limitation, collection and posting of
all payments, responding to inquiries of Obligors on the Receivables,
investigating delinquencies, sending payment coupons to Obligors, reporting any
required tax information to Obligors, policing the collateral, complying with
the terms of the Lockbox Agreement, accounting for collections and furnishing
monthly and annual statements to the Owner Trustee, the Indenture Trustee and
Morgan with respect to distributions, monitoring the status of Insurance
Policies with respect to the Financed Vehicles and performing the other duties
specified herein. The Servicer shall also administer and enforce all rights and
responsibilities of the holder of the Receivables provided for in the Dealer
Agreements (and shall maintain possession of the Dealer

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Agreements, to the extent it is necessary to do so), the Dealer Assignments and
the Insurance Policies, to the extent that such Dealer Agreements, Dealer
Assignments and Insurance Policies relate to the Receivables, the Financed
Vehicles or the Obligors. To the extent consistent with the standards, policies
and procedures otherwise required hereby, the Servicer shall follow its
customary standards, policies, an procedures and shall have full power and
authority, acting alone, to do any and all things in connection with such
managing, servicing, administration and collection that it may deem necessary or
desirable. Without limiting the generality of the foregoing, the Servicer is
hereby authorized and empowered by the Owner Trustee and the Indenture Trustee
to execute and deliver, on behalf of the Certificateholders and the Trust or any
of them, any and all instruments of satisfaction or cancellation, or of partial
or full release or discharge, and all other comparable instruments, with respect
to the Receivables and with respect to the Financed Vehicles; PROVIDED, HOWEVER,
that notwithstanding the foregoing, the Servicer shall not, except pursuant to
an order from a court of competent jurisdiction, release an Obligor from payment
of any unpaid amount under any Receivable or waive the right to collect the
unpaid balance of any Receivable from the Obligor, except that the Servicer may
forego collection efforts if the amount subject to collection is DE MINIMIS and
if it would forego collection in accordance with its customary procedures. The
Servicer is hereby authorized to commence, in its own name or in the name of the
Trust (provided the Servicer has obtained the Owner Trustee's consent, which
consent shall not be unreasonably withheld), a legal proceeding to enforce a
Receivable pursuant to Section 3.3 or to commence or participate in any other
legal proceeding (including, without limitation, a bankruptcy proceeding)
relating to or involving a Receivable, an Obligor or a Financed Vehicle. If the
Servicer commences or participates in such a legal proceeding in its own name,
the Trust shall thereupon be deemed to have automatically assigned such
Receivable to the Servicer solely for purposes of commencing or participating in
any such proceeding as a party or claimant, and the Servicer is authorized and
empowered by the Owner Trustee to execute and deliver in the Servicer's name any
notices, demands, claims, complaints, responses, affidavits or other documents
or instruments in connection with any such proceeding. The Owner Trustee shall
furnish the Servicer with any powers of attorney and other documents which the
Servicer may reasonably request and which the Servicer deems necessary or
appropriate and take any other steps which the Servicer may deem necessary or
appropriate to enable the Servicer to carry out its servicing and administrative
duties under this Agreement.

Section 3.2. COLLECTION OF RECEIVABLE PAYMENTS; MODIFICATIONS OF
RECEIVABLES; LOCKBOX AGREEMENTS. (a) Consistent with the standards, policies
and procedures required by this Agreement, the Servicer shall make reasonable
efforts to collect all payments called for under the terms and provisions of the
Receivables as and when the same shall become due, and shall follow such
collection procedures as it follows with respect to all comparable automobile
receivables that it services for itself or others and otherwise act with respect
to the Receivables, the Dealer Agreements, the Dealer Assignments, the Insurance
Policies and the other Trust Property in such manner as will, in the reasonable
judgment of the Servicer, maximize the amount to be received by the Trust with
respect thereto. The Servicer is authorized in its discretion to waive any
prepayment charge, late payment

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charge or any other similar fees that may be collected in the ordinary course of
servicing any Receivable.

(b) The Servicer may at any time agree to a modification or amendment of a
Receivable in order to (i) change the Obligor's regular due date to a date
within the Monthly Period in which such due date occurs or (ii) re-amortize the
scheduled payments on the Receivable following a partial prepayment of
principal.

(c) The Servicer may grant payment extensions on, or other modifications
or amendments to, a Receivable (in addition to those modifications permitted by
Section 3.2(b)) in accordance with its customary procedures if the Servicer
believes in good faith that such extension, modification or amendment is
necessary to avoid a default on such Receivable, will maximize the amount to be
received by the Trust with respect to such Receivable, and is otherwise in the
best interests of the Trust; PROVIDED, HOWEVER, that:

(i) The aggregate period of all extensions on a Receivable shall not
exceed three months;

(ii) In no event may a Receivable be extended beyond the Monthly
Period immediately preceding the Final Scheduled Distribution Date;

(iii) The aggregate Principal Balances of the Receivables which have
been extended during any calendar quarter (computed as of the Accounting
Date immediately prior to the first day of such calendar quarter) shall not
exceed 1.5% of the average of the Aggregate Principal Balances as of the
Accounting Date immediately prior to the first day of such Calendar Quarter
and the three immediately succeeding Accounting Dates; and

(iv) No such extension, modification or amendment shall be granted
more than 90 days after the Initial Closing Date or the related Transfer
Date if such action would have the effect of causing such Receivable to be
deemed to have been exchanged for another Receivable within the meaning of
Section 1001 of the Internal Revenue Code of 1986, as amended, or any
proposed, temporary or final Treasury Regulations issued thereunder.

(d) The Servicer shall use its best efforts to cause Obligors to make all
payments on the Receivables, whether by check or by direct debit of the
Obligor's bank account, to be made directly to one or more Lockbox Banks, acting
as agent for the Trust pursuant to a Lockbox Agreement. Amounts received by a
Lockbox Bank in respect of the Receivables may initially be deposited into a
demand deposit account maintained by the Lockbox Bank as agent for the Trust and
for other owners of automobile receivables serviced by the Servicer. The
Servicer shall use its best efforts to cause any Lockbox Bank to deposit all
payments on the Receivables in the Lockbox Account no later than the Business
Day after receipt, and to cause all amounts credited to the Lockbox Account on
account of such payments to be transferred to the Collection Account no later
than the second Business Day after receipt of such payments. The Lockbox
Account shall be a demand deposit

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account held by the Lockbox Bank, or an Eligible Account satisfying clause (i)
of the definition thereof.

Prior to the Initial Closing Date and any Transfer Date the Servicer shall
have notified each Obligor that makes its payments on the Receivables by check
to make such payments thereafter directly to the Lockbox Bank (except in the
case of Obligors that have already been making such payments to the Lockbox
Bank), and shall have provided each such Obligor with a supply of mailing
address labels in order to enable such Obligors to make such payments directly
to the Lockbox Bank for deposit into the Lockbox Account, and the Servicer will
continue, not less often than every three months, to so notify those Obligors
who have failed to make payments to the Lockbox Bank. If and to the extent
requested by Morgan, the Servicer shall request each Obligor that makes payment
on the Receivables by direct debit of such Obligor's bank account, to execute a
new authorization for automatic payment which in the judgment of Morgan is
sufficient to authorize direct debit by the Lockbox Bank on behalf of the Trust.
If at any time the Lockbox Bank is unable to directly debit an Obligor's bank
account that makes payment on the Receivables by direct debit and if such
inability is not cured within 15 days or cannot be cured by execution by the
Obligor of a new authorization for automatic payment, the Servicer shall notify
such Obligor that it cannot make payment by direct debit and must thereafter
make payment by check.

Notwithstanding any Lockbox Agreement, or any of the provisions of this
Agreement relating to the Lockbox Agreement, the Servicer shall remain obligated
and liable to the Owner Trustee, Indenture Trustee, Certificateholders and
Noteholders for servicing and administering the Receivables and the other Trust
Property in accordance with the provisions of this Agreement without diminution
of such obligation or liability by virtue thereof.

In the event the Servicer shall for any reason no longer be acting as such,
the successor Servicer shall thereupon assume all of the rights and obligations
of the outgoing Servicer under the Lockbox Agreement. In such event, the
successor Servicer shall be deemed to have assumed all of the outgoing
Servicer's interest therein and to have replaced the outgoing Servicer as a
party to each such Lockbox Agreement to the same extent as if such Lockbox
Agreement had been assigned to the successor Servicer, except that the outgoing
Servicer shall not thereby be relieved of any liability or obligations on the
part of the outgoing Servicer to the Lockbox Bank under such Lockbox Agreement.
The outgoing Servicer shall, upon request of the Owner Trustee but at the
expense of the outgoing Servicer, deliver to the successor Servicer all
documents and records relating to each such Agreement and an accounting of
amounts collected and held by the Lockbox Bank and otherwise use its best
efforts to effect the orderly and efficient transfer

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of any Lockbox Agreement to the successor Servicer. In the event that Morgan
elects to change the identity of the Lockbox Bank, the outgoing Servicer, at its
expense, shall cause the Lockbox Bank to deliver, at the direction of Morgan to
the Owner Trustee or a successor Lockbox Bank, all documents and records
relating to the Receivables and all amounts held (or thereafter received) by the
Lockbox Bank (together with an accounting of such amounts) and shall otherwise
use its best efforts to effect the orderly and efficient transfer of the lockbox
arrangements and the Servicer shall notify the Obligors to make payments to the
Lockbox established by the successor.

(e) The Servicer shall remit all payments by or on behalf of the Obligors
received directly by the Servicer to the Subcollection Account or to the Lockbox
Bank for deposit into the Collection Account without deposit into any
intervening account as soon as practicable, but in no event later than the
Business Day after receipt thereof.

Section 3.3. REALIZATION UPON RECEIVABLES. (a) Consistent with the
standards, policies and procedures required by this Agreement, the Servicer
shall use its best efforts to repossess (or otherwise comparably convert the
ownership of) and liquidate any Financed Vehicle securing a Receivable with
respect to which the Servicer has determined that payments thereunder are not
likely to be resumed, as soon as is practicable after default on such Receivable
but in no event later than the date on which all or any portion of a Scheduled
Payment has become 91 days delinquent. The Servicer is authorized to follow
such customary practices and procedures as it shall deem necessary or advisable,
consistent with the standard of care required by Section 3.1, which practices
and procedures may include reasonable efforts to realize upon any recourse to
Dealers, the sale of the related Financed Vehicle at public or private sale, the
submission of claims under an Insurance Policy and other actions by the Servicer
in order to realize upon such a Receivable. The foregoing is subject to the
provision that, in any case in which the Financed Vehicle shall have suffered
damage, the Servicer shall not expend funds in connection with any repair or
towards the repossession of such Financed Vehicle unless it shall determine in
its discretion that such repair and/or repossession shall increase the proceeds
of liquidation of the related Receivable by an amount greater than the amount of
such expenses. All amounts received upon liquidation of a Financed Vehicle
shall be remitted directly by the Servicer to the Subcollection Account without
deposit into any intervening account as soon as practicable, but in no event
later than the Business Day after receipt thereof. The Servicer shall be
entitled to recover all reasonable expenses incurred by it in the course of
repossessing and liquidating a Financed Vehicle into cash proceeds, but only out
of the cash proceeds of such Financed Vehicle, any deficiency obtained from the
Obligor or any amounts received from the related Dealer, which amonts may be
retained by the Servicer (and shall not be required to be deposited as provided
in Section 3.2(e)) to the extent of such expenses. The Servicer shall pay on
behalf of the Trust any personal property taxes assessed on repossessed Financed
Vehicles; the Servicer shall be entitled to reimbursement of any such tax from
Liquidation Proceeds with respect to such Receivable.

(b) If the Servicer elects to commence a legal proceeding to enforce a
Dealer Agreement or Dealer Assignment, the act of commencement shall be deemed
to be an automatic assignment from the Trust and the Indenture Trustee to the
Servicer of the rights under such Dealer Agreement and Dealer Assignment for
purposes of collection only. If, however, in any enforcement suit or legal
proceeding, it is held that the Servicer may not enforce a Dealer Agreement or
Dealer Assignment on the grounds that it is not a real party in interest or a
Person entitled to enforce the Dealer

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Agreement or Dealer Assignment, the Owner Trustee, at the Servicer's expense, or
the Seller, at the Seller's expense, shall take such steps as the Servicer deems
necessary to enforce the Dealer Agreement or Dealer Assignment, including
bringing suit in its name or the name of the Seller or of the Owner Trustee for
the benefit of the Certificateholders and the Indenture Trustee in respect of
the Secured Obligations. All amounts recovered shall be remitted directly by
the Servicer as provided in Section 3.2(e).

Section 3.4. INSURANCE. (a) The Servicer shall require that each
Financed Vehicle be insured by the Insurance Policies referred to in Paragraph
24 of the Schedule of Representations (the "Collateral Insurance") and shall
monitor the status of such physical loss and damage insurance coverage
thereafter, in accordance with its customary servicing procedures. Each
Receivable requires the Obligor to maintain such physical loss and damage
insurance, naming AFL and its successors and assigns as additional insureds, and
permits the holder of such Receivable to obtain physical loss and damage
insurance at the expense of the Obligor if the Obligor fails to maintain such
insurance. If the Servicer shall determine that an Obligor has failed to obtain
or maintain a physical loss and damage Insurance Policy covering the related
Financed Vehicle which satisfies the conditions set forth in clause (i)(a) of
such Paragraph 24 (including, without limitation, during the repossession of
such Financed Vehicle) the Servicer shall enforce the rights of the holder of
the Receivable under the Receivable to require the Obligor to obtain such
physical loss and damage insurance.

(b) The Servicer may, if an Obligor fails to obtain or maintain a physical
loss and damage Insurance Policy, obtain insurance with respect to the related
Financed Vehicle and advance on behalf of such Obligor, as required under the
terms of the insurance policy, the premiums for such insurance (such insurance
being referred to herein as "Force-Placed Insurance"). All policies of
Force-Placed Insurance shall be endorsed with clauses providing for loss payable
to the Owner Trustee. Any cost incurred by the Servicer in maintaining such
Force-Placed Insurance shall only be recoverable out of premiums paid by the
Obligors or Liquidation Proceeds with respect to the Receivable, as provided in
Section 3.4(c).

(c) In connection with any Force-Placed Insurance obtained hereunder, the
Servicer may, in the manner and to the extent permitted by applicable law,
require the Obligors to repay the entire premium to the Servicer. In no event
shall the Servicer include the amount of the premium in the Amount Financed
under the Receivable. For all purposes of this Agreement, the Insurance Add-On
Amount with respect to any Receivable having Force-Placed Insurance will be
treated as a separate obligation of the Obligor and will not be added to the
Principal Balance of such Receivable, and amounts allocable thereto will not be
available for distribution on the Notes or the Certificates. The Servicer shall
retain and separately administer the right to receive payments from Obligors
with respect to Insurance Add-On Amounts or rebates of Forced-Placed Insurance
premiums. If an Obligor makes a payment with respect to a Receivable having
Force-Placed Insurance, but the Servicer is unable to determine whether the
payment is allocable to the Receivable or to the Insurance Add-On Amount, the
payment shall be applied first to any unpaid Scheduled Payments and then to the
Insurance Add-On Amount. Liquidation Proceeds on any Receivable will be used
first to pay the Principal Balance and accrued interest on such Receivable and
then to pay the related Insurance Add-On Amount. If an Obligor under a

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Receivable with respect to which the Servicer has placed Force-Placed Insurance
fails to make scheduled payments of such Insurance Add-On Amount as due, and the
Servicer has determined that eventual payment of the Insurance Add-On Amount is
unlikely, the Servicer may, but shall not be required to, purchase such
Receivable from the Trust for the Purchase Amount on any subsequent Deposit
Date. Any such Receivable, and any Receivable with respect to which the
Servicer has placed Force-Placed Insurance which has been paid in full
(excluding any Insurance Add-On Amounts) will be assigned to the Servicer.

(d) The Servicer may sue to enforce or collect upon the Insurance
Policies, in its own name, if possible, or as agent of the Trust. If the
Servicer elects to commence a legal proceeding to enforce an Insurance Policy,
the act of commencement shall be deemed to be an automatic assignment of the
rights of the Trust under such Insurance Policy to the Servicer for purposes of
collection only. If, however, in any enforcement suit or legal proceeding it is
held that the Servicer may not enforce an Insurance Policy on the grounds that
it is not a real party in interest or a holder entitled to enforce the Insurance
Policy, the Owner Trustee, on behalf of the Trust, at the Servicer's expense, or
the Seller, at the Seller's expense, shall take such steps as the Servicer deems
necessary to enforce such Insurance Policy, including bringing suit in its name
or the name of the Owner Trustee for the benefit of the Certificateholders and
the Indenture Trustee in respect of the Secured Obligations.

(e) Subject to the fourth sentence of this subsection (e), the Servicer
shall maintain a vendor's single interest or other collateral protection
insurance policy with respect to all Financed Vehicles which policy shall by its
terms insure against physical damage in the event any Obligor fails to maintain
physical loss and damage insurance with respect to the related Financed Vehicle.
Costs incurred by the Servicer in maintaining such insurance shall be paid by
the Servicer. The Servicer will cause itself to be named as named insured and
the Owner Trustee to be named a loss payee under all such policies. The
Servicer may, with the consent of Morgan, elect not to maintain such insurance
policy but in such event will be obligated to indemnify the Trust against any
losses arising from an Obligor's failure to maintain physical loss and damage
insurance with respect to the related Financed Vehicle.

Section 3.5. MAINTENANCE OF SECURITY INTERESTS IN VEHICLES. (a)
Consistent with the policies and procedures required by this Agreement, the
Servicer shall take such steps as are necessary to maintain perfection of the
security interest created by each Receivable in the related Financed Vehicle on
behalf of the Trust, including but not limited to obtaining the execution by the
Obligors and the recording, registering, filing, re-recording, re-filing, and
re-registering of all security agreements, financing statements and continuation
statements as are necessary to maintain the security interest granted by the
Obligors under the respective Receivables. The Owner Trustee hereby authorizes
the Servicer, and the Servicer agrees, to take any and all steps necessary to
re-perfect such security interest on behalf of the Trust as necessary because of
the relocation of a Financed Vehicle or for any other reason. In the event that
the assignment of a Receivable to the Owner Trustee on behalf of the Trust is
insufficient, without a notation on the related Financed Vehicle's certificate
of title, or

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without fulfilling any additional administrative requirements under the laws of
the state in which the Financed Vehicle is located, to perfect a security
interest in the related Financed Vehicle in favor of the Trust, the Servicer
hereby agrees that the Servicer's designation as the secured party on the
certificate of title is in its capacity as agent of the Trust.

(b) Upon the occurrence of a Servicer Termination Event, the Owner Trustee
and the Servicer shall take or cause to be taken such action as may, in the
opinion of counsel to the Owner Trustee, be necessary to perfect or re-perfect
the security interests in the Financed Vehicles securing the Receivables in the
name of the Trust by amending the title documents of such Financed Vehicles or
by such other reasonable means as may, in the opinion of counsel to the Owner
Trustee, be necessary or prudent. AFL hereby agrees to pay all expenses related
to such perfection or re-perfection and to take all action necessary therefor.

Section 3.6. COVENANTS, REPRESENTATIONS, AND WARRANTIES OF SERVICER. By
its execution and delivery of this Agreement, the Servicer makes the following
representations, warranties and covenants on which the Owner Trustee relies in
accepting the Receivables in trust and issuing the Certificates and the Notes on
behalf of the Trust and on which the Indenture Trustee relies in authenticating
the Notes.

(a) The Servicer covenants as follows:

(i) LIENS IN FORCE. The Financed Vehicle securing each Receivable
shall not be released in whole or in part from the security interest
granted by the Receivable, except upon payment in full of the Receivable or
as otherwise contemplated herein;

(ii) NO IMPAIRMENT. The Servicer shall do nothing to impair the
rights of the Trust, the Certificateholders or the Noteholders in the
Receivables, the Dealer Agreements, the Dealer Assignments, the Insurance
Policies or the other Trust Property; and

(iii) NO AMENDMENTS. The Servicer shall not extend or otherwise
amend the terms of any Receivable, except in accordance with Section 3.2.

(b) The Servicer represents, warrants and covenants as of the Initial
Closing Date and the Effectiveness Date as to itself:

(i) ORGANIZATION AND GOOD STANDING. The Servicer has been duly
organized and is validly existing and in good standing under the laws of
its jurisdiction of organization, with power, authority and legal right to
own its properties and to conduct its business as such properties are
currently owned and such business is currently conducted, and had at all
relevant times, and now has, power, authority and legal right to enter into
and perform its obligations under this Agreement;

(ii) DUE QUALIFICATION. The Servicer is duly qualified to do
business as a foreign corporation in good standing, and has obtained all
necessary licenses and

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approvals, in all jurisdictions in which the ownership or lease of property
or the conduct of its business (including the servicing of the Receivables
as required by this Agreement) requires or shall require such
qualification;

(iii) POWER AND AUTHORITY. The Servicer has the power and authority
to execute and deliver this Agreement and its Related Documents and to
carry out its terms and their terms, respectively, and the execution,
delivery and performance of this Agreement and the Servicer's Related
Documents have been duly authorized by the Servicer by all necessary
corporate action;

(iv) BINDING OBLIGATION. This Agreement and the Servicer's Related
Documents shall constitute legal, valid and binding obligations of the
Servicer enforceable in accordance with their respective terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization, or
other similar laws affecting the enforcement of creditors' rights generally
and by equitable limitations on the availability of specific remedies,
regardless of whether such enforceability is considered in a proceeding in
equity or at law;

(v) NO VIOLATION. The consummation of the transactions contemplated
by this Agreement and the Servicer's Related Documents, and the fulfillment
of the terms of this Agreement and the Servicer's Related Documents, shall
not conflict with, result in any breach of any of the terms and provisions
of, or constitute (with or without notice or lapse of time) a default
under, the articles of incorporation or bylaws of the Servicer, or any
indenture, agreement, mortgage, deed of trust or other instrument to which
the Servicer is a party or by which it is bound, or result in the creation
or imposition of any Lien upon any of its properties pursuant to the terms
of any such indenture, agreement, mortgage, deed of trust or other
instrument, other than this Agreement, or violate any law, order, rule or
regulation applicable to the Servicer of any court or of any federal or
state regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Servicer or any of its
properties. Notwithstanding the foregoing, it is understood that no
representation or warranty is expressed herein with respect to the legality
of the use of the word "Olympic" by the Servicer;

(vi) NO PROCEEDINGS. There are no proceedings or investigations
pending or, to the Servicer's knowledge, threatened against the Servicer,
before any court, regulatory body, administrative agency or other tribunal
or governmental instrumentality having jurisdiction over the Servicer or
its properties (A) asserting the invalidity of this Agreement or any of the
Related Documents, (B) seeking to prevent the issuance of the Certificates
or the Notes or the consummation of any of the transactions contemplated by
this Agreement or any of the Related Documents, or (C) seeking any
determination or ruling that might materially and adversely affect the
performance by the Servicer of its obligations under, or the validity or
enforceability of, this Agreement or any of the Related Documents or (D)
seeking to adversely affect the federal income tax or other federal, state
or local tax attributes of the Certificates or the Notes;

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(vii) NO CONSENTS. The Servicer is not required to obtain the
consent of any other party or any consent, license, approval or
authorization, or registration or declaration with, any governmental
authority, bureau or agency in connection with the execution, delivery,
performance, validity or enforceability of this Agreement;

(viii) COLLATERAL INSURANCE. The Collateral Insurance is in full
force and effect.

Section 3.7. PURCHASE OF RECEIVABLES UPON BREACH OF COVENANT. Upon
discovery by any of the Servicer, the Owner Trustee or the Indenture Trustee of
a breach of any of the covenants set forth in Sections 3.5(a) or 3.6(a), the
party discovering such breach shall give prompt written notice to the others;
PROVIDED, HOWEVER, that the failure to give any such notice shall not affect any
obligation of the Servicer. As of the second Accounting Date following its
discovery or receipt of notice of any breach of any covenant set forth in
Sections 3.5(a) or 3.6(a) which materially and adversely affects the interests
of the Certificateholders, the Noteholders or the Trust in any Receivable
(including any Liquidated Receivable) (or, at the Servicer's election, the first
Accounting Date so following), the Servicer shall, unless it shall have cured
such breach in all material respects, purchase from the Trust the Receivable
affected by such breach and, on the related Deposit Date, the Servicer shall pay
the related Purchase Amount. It is understood and agreed that the obligation of
the Servicer to purchase any Receivable (including any Liquidated Receivable)
with respect to which such a breach has occurred and is continuing shall, if
such obligation is fulfilled, constitute the sole remedy against the Servicer
for such breach available to the Certificateholders, the Noteholders, the Owner
Trustee on behalf of Certificateholders or the Indenture Trustee on behalf of
Noteholders; PROVIDED, HOWEVER, that the Servicer shall indemnify the Owner
Trustee, the Backup Servicer, the Trust, the Indenture Trustee, the Noteholders
and the Certificateholders against all costs, expenses, losses, damages, claims
and liabilities, including reasonable fees and expenses of counsel, which may be
asserted against or incurred by any of them as a result of third party claims
arising out of the events or facts giving rise to such breach.

Section 3.8. TOTAL SERVICING FEE; PAYMENT OF CERTAIN EXPENSES BY SERVICER.
On each Distribution Date, the Servicer shall be entitled to receive out of the
Collection Account the Basic Servicing Fee and any Supplemental Servicing Fee
for the related Monthly Period pursuant to Section 4.6. The Servicer shall be
required to pay all expenses incurred by it in connection with its activities
under this Agreement (including taxes imposed on the Servicer), expenses
incurred in connection with distributions and reports to Certificateholders and
Noteholders and all other fees and expenses of the Trust, including taxes levied
or assessed against the Trust, and claims against the Trust in respect of
indemnification, unless such fees, expenses or claims in respect of
indemnification are expressly stated to be for the account of AFL or not to be
for the account of the Servicer. The Servicer shall be liable for the fees and
expenses of the Owner Trustee, the Administrator, the Indenture Trustee, the
Custodian, the Backup Servicer, the Lockbox Bank (and any fees under the Lockbox
Agreement) and the Independent Accountants. Notwithstanding the foregoing, if
the Servicer shall not be AFL, a successor to AFL as Servicer permitted by
Section 7.2 or an Affiliate of any of the foregoing, such Servicer shall

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not be liable for taxes levied or assessed against the Trust or claims against
the Trust in respect of indemnification.

Section 3.9. SERVICER'S CERTIFICATE. (a) No later than 10:00 a.m. New
York City time on each Determination Date, the Servicer shall deliver to the
Owner Trustee, the Indenture Trustee, the Backup Servicer, Morgan and each
Rating Agency a Servicer's Certificate executed by a Responsible Officer of
the Servicer containing, among other things, (i) all information necessary to
enable the Indenture Trustee to make the distributions required by Section
4.6 and to determine the amount to which the Servicer is entitled to be
reimbursed or has been reimbursed during the related Monthly Period for
Monthly Advances pursuant to Section 4.4(d), (ii) all information necessary
to enable the Indenture Trustee to send the statements to Noteholders,
Certificateholders and Morgan required by Section 4.9, (iii) a listing of all
Warranty Receivables and Administrative Receivables purchased as of the
related Deposit Date, identifying the Receivables so purchased and (iv) all
information necessary to enable the Indenture Trustee to reconcile all
deposits to, and withdrawals from, the Collection Account for the related
Monthly Period and Distribution Date, including the accounting required by
Section 4.8. Receivables purchased by the Servicer or by the Seller or AFL
on the related Deposit Date and each Receivable which became a Liquidated
Receivable or which was paid in full during the related Monthly Period shall
be identified by account number (as set forth in the Schedule of
Receivables). A copy of such certificate may be obtained by any
Certificateholder or Noteholder (or by a Certificate Owner or Note Owner,
upon certification that such Person is a Certificate Owner or Note Owner and
payment of any expenses associated with the distribution thereof) by a
request in writing to the Indenture Trustee addressed to the Corporate Trust
Office. In addition to the information set forth in the preceding sentence,
the Servicer's Certificate delivered to the Indenture Trustee and Morgan on
the Determination Date shall also contain the following information: (A) the
Delinquency Ratio, Portfolio Loss Ratio, Warehousing Loss Ratio and Average
Net Excess Spread Percentage for such Determination Date; (B) whether any
Trigger Event has occurred as of such Determination Date; (C) whether to the
knowledge of the Servicer a Purchase Termination Event or Servicer
Termination Event has occurred; and (D) such other information as Morgan
requests from time to time.

(b) No later than 10:00 a.m. New York City time on the date that is five
Business Days prior to a Trust Property Liquidation Date, the Servicer shall
deliver to the Owner Trustee, the Indenture Trustee, the Backup Servicer,
Morgan and each Rating Agency, a Servicer's Certificate executed by a
Responsible Officer of the Servicer containing, among other things, (i) all
information necessary for the distributions in Section 4.7, (ii) a listing of
all purchasers of Receivables identifying the Receivables being purchased by
each purchaser, (iii) for Receivables being purchased by the Seller
specifying the specific source of funds for payment of the Seller's portion
of the purchase price, (iv) the aggregate purchase price, and (v) whether the
purchase of Trust Property will be in connection with a final liquidation and
termination of the Trust.

(c) On or before October 31 and April 30 of each year, beginning on
October 31, 1997, the Servicer shall cause a firm of Independent Accountants
to review, in accordance

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with procedures agreed upon by the Servicer, Morgan, and such Independent
Accountants, two randomly selected Servicer's Certificates prepared for the
Trust within the immediately preceding six calendar months and to issue
promptly, but in no event any later than 30 days after such review, its report
in connection with such review to Morgan. If Morgan does not receive such
reports in accordance with the preceding sentence, Morgan shall provide written
notice of non-delivery thereof to the Servicer.

Section 3.10. ANNUAL STATEMENT AS TO COMPLIANCE; NOTICE OF SERVICER
TERMINATION EVENT. (a) The Servicer shall deliver to the Owner Trustee, the
Indenture Trustee, the Backup Servicer, Morgan and each Rating Agency, on or
before March 31 (or 90 days after the end of the Servicer's fiscal year, if
other than December 31) of each year, beginning on March 31, 1997, an officer's
certificate signed by any Responsible Officer of the Servicer, dated as of
December 31 (or other applicable date) of the immediately preceding year,
stating that (i) a review of the activities of the Servicer during the preceding
12-month period (or such other period as shall have elapsed from the Initial
Closing Date to the date of the first such certificate) and of its performance
under this Agreement has been made under such officer's supervision, and (ii) to
such officer's knowledge, based on such review, the Servicer has fulfilled all
its obligations under this Agreement throughout such period, or, if there has
been a default in the fulfillment of any such obligation, specifying each such
default known to such officer and the nature and status thereof.

(b) The Servicer shall deliver to the Owner Trustee, the Indenture
Trustee, the Backup Servicer, Morgan and each Rating Agency, promptly after
having obtained knowledge thereof, but in no event later than 2 Business Days
thereafter, written notice in an officer's certificate of any event which with
the giving of notice or lapse of time, or both, would become a Servicer
Termination Event under Section 8.1(a). The Seller or the Servicer shall
deliver to the Owner Trustee, the Indenture Trustee, the Backup Servicer,
Morgan, the Servicer or the Seller (as applicable) and each Rating Agency
promptly after having obtained knowledge thereof, but in no event later than 2
Business Days thereafter, written notice in an officer's certificate of any
event which with the giving of notice or lapse of time, or both, would become a
Servicer Termination Event under any other clause of Section 8.1.

Section 3.11. ANNUAL INDEPENDENT ACCOUNTANTS' REPORT. (a) The Servicer
shall cause a firm of nationally recognized independent certified public
accountants (the "Independent Accountants"), who may also render other services
to the Servicer or to the Seller, to deliver to the Owner Trustee, the Indenture
Trustee, the Backup Servicer, Morgan and each Rating Agency, on or before March
31 (or 90 days after the end of the Servicer's fiscal year, if other than
December 31) of each year, beginning on March 31, 1998, with respect to the
twelve months ended the immediately preceding December 31 (or other applicable
date) (or such other period as shall have elapsed from the Initial Closing Date
to the date of such certificate), a statement (the "Accountant's Report")
addressed to the Board of Directors of the Servicer, to the Owner Trustee, the
Indenture Trustee, the Backup Servicer and to Morgan to the effect that such
firm has audited the financial statements of the Servicer and issued its report
thereon and that such audit was made in

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accordance with generally accepted auditing standards, and accordingly included
such tests of the accounting records and such other auditing procedures as such
firm considered necessary in the circumstances including procedures as
determined by the Independent Accountants related to (1) the documents and
records concerning the servicing of automobile installment sales contracts under
pooling and servicing agreements and sale and servicing agreements substantially
similar one to another (such statement to have attached thereto a schedule
setting forth the pooling and servicing agreements and sale and servicing
agreements covered thereby, including this Agreement); and (2) the delinquency
and loss statistics relating to the Servicer's portfolio of automobile
installment sales contracts; and except as described in the statement, disclosed
no exceptions or errors in the records relating to automobile and light truck
loans serviced for others that, in the firm's opinion, generally accepted
auditing standards requires such firm to report. The Accoutants' Report shall
further state that (1) a review in accordance with agreed upon procedures was
made of three randomly selected Servicer's Certificates for each Trust and (2)
except as disclosed in the Report, no exceptions or errors in the Servicer's
Certificates so examined were found.

(b) The Accountants' Report shall also indicate that the firm is
independent of the Seller and the Servicer within the meaning of the Code of
Professional Ethics of the American Institute of Certified Public Accountants.

(c) A copy of the Accountants' Report may be obtained by any
Certificateholder or Noteholder by a request in writing to the Indenture Trustee
addressed to the Corporate Trust Office.

Section 3.12. ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION REGARDING
RECEIVABLES. The Servicer shall provide to representatives of the Owner
Trustee, Indenture Trustee, the Backup Servicer and Morgan reasonable access to
the documentation regarding the Receivables. The Servicer shall provide such
access to any Certificateholder or Noteholder only after the occurrence of a
Certificate Purchase Termination Event or a Note Purchase Termination Event, as
the case may be, or in such cases where the Servicer is required by applicable
statutes or regulations (whether applicable to the Servicer or to such
Certificateholder or Noteholder) to permit such Certificateholder or Noteholder
to review such documentation. In each case, such access shall be afforded
without charge but only upon reasonable request and during normal business
hours. Nothing in this Section shall derogate from the obligation of the
Servicer to observe any applicable law prohibiting disclosure of information
regarding the Obligors, and the failure of the Servicer to provide access as
provided in this Section as a result of such obligation shall not constitute a
breach of this Section. Any Certificateholder or Noteholder, by its acceptance
of a Certificate or Note (or by acquisition of its beneficial interest therein),
as applicable, shall be deemed to have agreed to keep confidential and not to
use for its own benefit any information obtained by it pursuant to this Section,
except as may be required by applicable law or requested or required in court
proceedings or by regulatory authority.

Section 3.13. MONTHLY TAPE. On or before the third Business Day, but in
no event later than the fifth calendar day, of each month, the Servicer will
deliver to the Indenture

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Trustee and the Backup Servicer a computer tape and a diskette (or any other
electronic transmission acceptable to the Indenture Trustee and the Backup
Servicer) in a format acceptable to the Indenture Trustee and the Backup
Servicer containing the information with respect to the Receivables as of the
preceding Accounting Date necessary for preparation of the Servicer's
Certificate relating to the immediately succeeding Determination Date and
necessary to determine the application of collections as provided in Section
4.3. The Backup Servicer shall use such tape or diskette (or other electronic
transmission acceptable to the Indenture Trustee and the Backup Servicer) to
verify the Servicer's Certificate delivered by the Servicer, and the Backup
Servicer shall certify to Morgan that it has verified the Servicer's Certificate
in accordance with this Section 3.13 and shall notify the Servicer and Morgan of
any discrepancies, in each case, on or before the second Business Day following
the Determination Date. In the event that the Backup Servicer reports any
discrepancies, the Servicer and the Backup Servicer shall attempt to reconcile
such discrepancies prior to the fourth Business Day prior to the related
Distribution Date, but in the absence of a reconciliation, the Servicer's
Certificate shall control for the purpose of calculations and distributions with
respect to the related Distribution Date. In the event that the Backup Servicer
and the Servicer are unable to reconcile discrepancies with respect to a
Servicer's Certificate by the related Distribution Date, the Servicer shall
cause the Independent Accountants, at the Servicer's expense, to audit the
Servicer's Certificate and, prior to the third Business Day, but in no event
later than the fifth calendar day, of the following month, reconcile the
discrepancies. The effect, if any, of such reconciliation shallbe reflected in
the Servicer's Certificate for such next succeeding Determination Date. In
addition, the Servicer shall, if so requested by the Backup Servicer deliver to
the Backup Servicer its Collection Records and its Monthly Records within one
Business Day of demand therefor and a computer tape containing as of the close
of business on the date of demand all of the data maintained by the Servicer in
computer format in connection with servicing the Receivables. Other than the
duties specifically set forth in this Agreement, the Backup Servicer shall have
no obligations hereunder, including, without limitation, to supervise, verify,
monitor or administer the performance of the Servicer. The Backup Servicer
shall have no liability for any actions taken or omitted by the Servicer. The
duties and obligations of the Backup Servicer shall be determined solely by the
express provisions of this Agreement, and no implied covenants or obligations
shall be read into this Agreement against the Backup Servicer.

Section 3.14. RETENTION OF SERVICER. The Servicer hereby covenants and
agrees to act as such under this Agreement until the termination of the Trust,
subject to and in accordance with the terms and conditions of this Agreement.

Section 3.15. FIDELITY BOND. The Servicer shall maintain a fidelity bond
in such form and amount as is customary for entities acting as custodian of
funds and documents in respect of consumer contracts on behalf of institutional
investors.

Section 3.16. DUTIES OF THE SERVICER UNDER THE INDENTURE. The Servicer
shall, and hereby agrees that it will, perform on behalf of the Trust and the
Owner Trustee the following duties of the Trust or the Owner Trustee, as
applicable, under the Indenture (references are to the applicable Sections in
the Indenture):

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(a) the direction to the Paying Agents, if any, to deposit moneys
with the Indenture Trustee (Section 3.03);

(b) the obtaining and preservation of the Issuer's qualification to
do business in each jurisdiction in which such qualification is or shall be
necessary to protect the validity and enforceability of the Indenture, the
Notes, the Indenture Collateral and each other instrument and agreement
included in the Trust Estate (Section 3.04);

(c) the preparation of all supplements, amendments, financing
statements, continuation statements, instruments of further assurance and
other instruments, in accordance with Section 3.05 of the Indenture,
necessary to protect the Trust Estate (Section 3.05);

(d) the delivery of the Opinion of Counsel on the Initial Closing
Date, the Effectiveness Date and the annual delivery of Opinions of
Counsel, in accordance with Section 3.06 of the Indenture, as to the Trust
Estate, and the annual delivery of the Officer's Certificate and certain
other statements, in accordance with Section 3.09 of the Indenture, as to
compliance with the Indenture (Sections 3.06 and 3.09);

(e) the preparation and obtaining of documents and instruments
required for the release of the Issuer from its obligations under the
Indenture (Section 3.10(b));

(f) the monitoring of the Issuer's obligations as to the satisfaction
and discharge of the Indenture and the preparation of an Officer's
Certificate and the obtaining of the Opinion of Counsel and the Independent
Certificate relating thereto (Section 4.01);

(g) the preparation of any written instruments required to confirm
more fully the authority of any co-trustee or separate trustee and any
written instruments necessary in connection with the resignation or removal
of any co-trustee or separate trustee (Sections 6.08 and 6.10);

(h) the opening of one or more accounts in the Trust's name, the
preparation of Issuer Orders, Officer's Certificates and Opinions of
Counsel and all other actions necessary with respect to investment and
reinvestment of funds in the Trust Accounts (Sections 8.02 and 8.03);

(i) the preparation of Trust Orders and the obtaining of Opinions of
Counsel with respect to the execution of supplemental indentures (Sections
9.01, 9.02 and 9.03);

(j) the preparation of all Officer's Certificates, Opinions of
Counsel and Independent Certificates with respect to any requests by the
Issuer to the Indenture Trustee to take any action under the Indenture
(Section 11.01(a));

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(k) the preparation and delivery of Officer's Certificates and the
obtaining of Independent Certificates, if necessary, for the release of
property from the lien of the Indenture (Section 11.01(b)); and

(l) the recording of the Indenture, if applicable (Section 11.15).

In addition to the duties of the Servicer set forth above, the Servicer shall,
and hereby agrees that it will, prepare, distribute and file any reports
required by Section 313(b) of the Trust Indenture Act of 1939 as a result of any
transfer of Receivables. Such distribution and filing is to be effected by the
Servicer's distribution and filing of the Servicer's Certificate.

Section 3.17. DAILY REPORT. The Servicer shall provide to the Indenture
Trustee, the Owner Trustee and Morgan a daily report setting forth the principal
collections with respect to the Receivables for the previous day.

Section 3.18. CERTAIN DUTIES OF THE SERVICER UNDER THE TRUST AGREEMENT.
The Servicer shall, and hereby agrees that it will, monitor the Trust's
compliance with all applicable provisions of state and federal securities laws,
notify the Trust and the Administrator of any actions to be taken by the Trust
necessary for compliance with such laws and prepare on behalf of the Trust and
the Administrator all notices, filings or other documents or instruments
required to be filed under such laws.

Section 3.19. MONTHLY REPORTS. The Servicer (if AFL is the Servicer)
shall deliver to Morgan on or prior to the 20th of each month (or if the
twentieth is not a Business Day, the next succeeding Business Day), the
"Internal Static Pool Analysis" with respect to the Receivables and AFL's
"Credit Administration" report (together, the "MONTHLY REPORTS"), in each case
with respect to the immediately preceding Monthly Period. If Morgan does not
receive the Monthly Reports in accordance with the preceding sentence, Morgan
shall provide written notice of non-delivery thereof to the Servicer.

ARTICLE IV
DISTRIBUTIONS; STATEMENTS TO
CERTIFICATEHOLDERS AND NOTEHOLDERS

Section 4.1. TRUST ACCOUNTS. (a) The Servicer shall establish the
Collection Account in the name of the Indenture Trustee for the benefit of the
Certificateholders and in respect of the Secured Obligations. The Collection
Account shall be an Eligible Account and initially shall be a segregated trust
account established with the Indenture Trustee and maintained with the Indenture
Trustee.

(b) The Servicer shall establish the Note Distribution Account in the name
of the Indenture Trustee in respect of the Secured Obligations. The Note
Distribution Account shall be an Eligible Account and initially shall be a
segregated trust account established with the Indenture Trustee and maintained
with the Indenture Trustee.

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(c) The Servicer shall establish the Spread Account in the name of the
Indenture Trustee for the benefit of the Certificateholders and in respect of
the Secured Obligations. The Spread Account shall be an Eligible Account and
initially shall be a segregated trust account established with the Indenture
Trustee and maintained with the Indenture Trustee.

(d) The Servicer shall establish the Principal Funding Account in the name
of the Indenture Trustee for the benefit of the Certificateholders and in
respect of the Secured Obligations. The Principal Funding Account shall be an
Eligible Account and initially shall be a segregated trust account established
with the Indenture Trustee and maintained with the Indenture Trustee.

(e) All amounts held in the Collection Account, the Note Distribution
Account, the Spread Account and the Principal Funding Account (collectively,
together with the Certificate Distribution Account and the Subcollection
Account, the "Trust Accounts") shall, to the extent permitted by applicable
laws, rules and regulations, be invested, as directed by the Servicer, in
Eligible Investments that mature not later than one Business Day prior to the
Distribution Date for the Monthly Period to which such amounts relate. Any such
written direction shall certify that any such investment is authorized by this
Section 4.1. Any investment of funds in the Trust Accounts (other than the
Certificate Distribution Account) shall be made in Eligible Investments held by
a financial institution in accordance with the following requirements: (a) all
Eligible Investments shall be held in an account with such financial institution
in the name of the Indenture Trustee, (b) with respect to securities held in
such account, such securities shall be (i) certificated securities (as such term
is used in N.Y. UCC Section 8-313(d)(i)), securities deemed to be certificated
securities under applicable regulations of the United States government, or
uncertificated securities issued by an issuer organized under the laws of the
State of New York or the State of Delaware, (ii) either (A) in the possession of
such institution, (B) in the possession of a clearing corporation (as such term
is used in Minn. Stat. Section 336.8-313(g)) in the State of New York,
registered in the name of such clearing corporation or its nominee, not endorsed
for collection or surrender or any other purpose not involving transfer, not
containing any evidence of a right or interest inconsistent with the Indenture
Trustee's security interest therein, and held by such clearing corporation in an
account of such institution, (C), held in an account of such institution with
the Federal Reserve Bank of New York or the Federal Reserve Bank of Minneapolis,
or (D) in the case of uncertificated securities, issued in the name of such
institution, and (iii) identified, by book entry or otherwise, as held for the
account of, or pledged to, the Indenture Trustee on the records of such
institution, and such institution shall have sent the Indenture Trustee a
confirmation thereof, (c) with respect to repurchase obligations held in such
account, such repurchase obligations shall be identified by such institution, by
book entry or otherwise, as held for the account of, or pledged to, the
Indenture Trustee on the records of such institution, and the related securities
shall be held in accordance with the requirements of clause (b) above, and (d)
with respect to other Eligible Investments other than securities and repurchase
agreements, such Eligible Investments shall be held in a manner acceptable to
the Indenture Trustee. Subject to the other provisions hereof, the Indenture
Trustee shall have sole control over each such investment and the income
thereon, and any certificate or other instrument evidencing any such investment,
if any, shall be delivered directly to the Indenture Trustee

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or its agent, together with each document of transfer, if any, necessary to
transfer title to such investment to the Indenture Trustee in a manner which
complies with this Section 4.1. All interest, dividends, gains upon sale and
other income from, or earnings on, investments of funds in the Trust Accounts
(other than the Spread Account) shall be deposited in the Collection Account an
distributed on the next Distribution Date pursuant to Section 4.6. All
interest, dividends, gains upon sale and other income from, or earnings on,
investments of funds in the Spread Account shall remain in the Spread Account.
The Servicer shall deposit in the applicable Trust Account an amount equal to
any net loss on such investments immediately as realized.

(f) On each Transfer Date, the Servicer shall deposit in the Collection
Account (i) all Scheduled Payments and prepayments of Receivables received by
the Servicer after the Cutoff Date and on or prior to the Business Day
immediately preceding the applicable Transfer Date or received by the Lockbox
Bank after the Cutoff Date and on or prior to the second Business Day
immediately preceding the applicable Transfer Date and (ii) all Liquidation
Proceeds and proceeds of Insurance Policies realized in respect of a Financed
Vehicle and applied by the Servicer after the Cutoff Date.

Section 4.2. COLLECTIONS. (a) The Servicer shall establish the
Subcollection Account in the name of the Indenture Trustee for the benefit of
the Certificateholders and the Noteholders. The Subcollection Account shall be
an Eligible Account and shall initially be established with the Indenture
Trustee. The Servicer shall remit directly to the Subcollection Account without
deposit into any intervening account all payments by or on behalf of the
Obligors on the Receivables and all Liquidation Proceeds received by the
Servicer, in each case, as soon as practicable, but in no event later than the
Business Day after receipt thereof. Within two days of deposit of payments into
the Subcollection Account, the Indenture Trustee shall transfer all amounts
credited to the Subcollection Account on account of such payments to the
Collection Account. Amounts in the Subcollection Account shall not be invested.

(b) On each Deposit Date related to a Distribution Date (i) prior to the
Purchase Termination Date and (ii) so long as the Facility Balance is less than
or equal to the Facility Limit, all amounts on deposit in the Collection Account
allocable to the Noteholders' Principal Distributable Amount and the
Certificateholders' Principal Distributable Amount shall be deposited into the
Principal Funding Account. On each Deposit Date preceding a Distribution Date
on or after the occurrence of the Purchase Termination Date, amounts on deposit
in the Principal Funding Account shall be deposited into the Note Distribution
Account or the Certificate Distribution Account, as Collections and applied in
accordance with Section 4.6 hereof. On each Deposit Date preceding a
Distribution Date on which the Facility Balance would exceed the Facility Limit
(after giving effect to a reduction thereof requested by the Seller) (provided
that a Purchase Termination Date shall not have been declared pursuant to
Section 2.1(c)(2)), amounts on deposit in the Principal Funding Account equal to
such excess shall be deposited into the Note Distribution Account as Collections
and applied in accordance with Section 4.6 hereof. Notwithstanding the
foregoing, if on any Determination Date the amount on deposit in the Principal
Funding Account exceeds the aggregate Purchase Price with respect

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to Receivables to be purchased during the remainder of the Monthly Period during
which such Determination Date occurs, as determined by the Servicer in its sole
discretion (the amount of such excess, the "Principal Funding Excess Amount"),
an amount equal to the Principal Funding Excess Amount shall be deposited into
the Note Distribution Account and the Certificate Distribution Account, as
applicable, and applied in accordance with Section 4.6 hereof.

(c) Notwithstanding the provisions of subsection (a) hereof, the Servicer
will be entitled to be reimbursed from amounts on deposit in the Collection
Account with respect to a Monthly Period for amounts previously deposited in the
Collection Account but later determined by the Servicer or the Lockbox Bank to
have resulted from mistaken deposits or postings or checks returned for
insufficient funds. The amount to be reimbursed hereunder shall be paid to the
Servicer on the related Distribution Date pursuant to Section 4.6(iii) upon
certification by the Servicer of such amounts and the provision of such
information to the Indenture Trustee as may be necessary in the opinion of the
Indenture Trustee to verify the accuracy of such certification.

Section 4.3. APPLICATION OF COLLECTIONS. For the purposes of this
Agreement, all collections for a Monthly Period shall be applied by the Servicer
as follows:

(a) With respect to each Receivable, payments by or on behalf of the
Obligor thereof (other than of Supplemental Servicing Fees with respect to such
Receivable, to the extent collected) shall be applied to interest and principal
with respect to such Receivable in accordance with the terms of such Receivable.
With respect to each Liquidated Receivable, Liquidation Proceeds shall be
applied to interest and principal with respect to such Receivable in accordance
with the terms of such Receivable, and then to any Insurance Add-On Amount due
and payable with respect to such Receivable. The Servicer shall not be entitled
to any Supplemental Servicing Fees with respect to a Liquidated Receivable.

(b) With respect to each Receivable that has become a Purchased Receivable
on any Deposit Date, the Purchase Amount shall be applied, for purposes of this
Agreement only, to interest and principal on the Receivable in accordance with
the terms of the Receivable as if the Purchase Amount had been paid by the
Obligor on the Accounting Date. The Servicer shall not be entitled to any
Supplemental Servicing Fees with respect to such a Receivable. Nothing
contained herein shall relieve any Obligor of any obligation relating to any
Receivable.

(c) All amounts collected that are payable to the Servicer as Supplemental
Servicing Fees hereunder shall be deposited in the Collection Account and paid
to the Servicer in accordance with Section 4.6(iii).

(d) All payments by or on behalf of an Obligor received with respect to
any Purchased Receivable after the Accounting Date immediately preceding the
Deposit Date on which the Purchase Amount was paid by the Seller, AFL or the
Servicer shall be paid

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to the Seller, AFL or the Servicer, respectively, and shall not be included in
the Available Funds.

Section 4.4. MONTHLY ADVANCES. (a) As of any Determination Date as of
which no Trigger Event has occurred, (i) the Servicer shall be obligated to make
a Monthly Advance on the related Deposit Date in an amount equal to the lesser
of (x) the aggregate Collection Shortfall with respect to Receivables for which
a Scheduled Payment was due during such Monthly Period and (y) the Net Advance
Amount; and (ii) to the extent the amount the Servicer is obligated to advance
pursuant to sub-clause (i) above is less than the Net Advance Amount (such
amount, the "Net Advance Shortfall"), the Seller shall be obligated to make a
Monthly Advance on the related Deposit Date in an amount equal to the lesser of
(x) the aggregate Collection Shortfall with respect to Receivables for which no
Scheduled Payment was due during such Monthly Period and (y) the Net Advance
Shortfall; PROVIDED, HOWEVER, that neither the Servicer nor the Seller shall be
required to make a Monthly Advance with respect to a Receivable extended
pursuant to Section 3.2(b) for any Monthly Period during which no Scheduled
Payment is due according to the terms of such extension.

(b) As of any Determination Date as of which a Trigger Event has occurred,
the Servicer and the Seller, as specified below, shall be required to make
Monthly Advances as follows: if there are Collection Shortfalls with respect to
any Receivables, the Servicer, with respect to Receivables for which a Scheduled
Payment was due during such Monthly Period, or the Seller, with respect to
Receivables for which no Scheduled Payment was due during such Monthly Period,
shall make a Monthly Advance equal to the amount of such Collection Shortfall;
PROVIDED, HOWEVER, that neither the Servicer nor the Seller shall be required to
make a Monthly Advance for a Collection Shortfall with respect to a Receivable
extended pursuant to Section 3.2(b) for any Monthly Period during which no
Scheduled Payment is due according to the terms of such extension.

(c) On or before each Deposit Date, the Servicer and the Seller, as
applicable, shall deposit in the Collection Account the aggregate amount of
Monthly Advances required for the related Monthly Period in immediately
available funds (subject to Section 4.8).

(d) The Servicer shall be entitled to be reimbursed for Outstanding
Monthly Advances made in accordance with Section 4.4(a)(i) or Section 4.4(b)
pursuant to Section 4.6(i), Section 4.7(i) or Section 4.8 with respect to any
Receivable with respect to which a Collection Shortfall existed from the
following sources received on any day subsequent to the Distribution Date in
respect of which such Monthly Advance was made: (i) subsequent payments by or
on behalf of the Obligor with respect to such Receivable, (ii) collections of
Liquidation Proceeds with respect to such Receivable if such Receivable becomes
a Liquidated Receivable and (iii) payment of any Purchase Amount with respect to
such Receivable if such Receivable becomes a Purchased Receivable. If any
Receivable shall become a Liquidated Receivable and the Servicer shall not have
been fully reimbursed for Outstanding Monthly Advances with respect to such
Receivable from the sources of funds previously described in this paragraph, the
Servicer shall be entitled to reimbursement from

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collections on Receivables other than the Receivable in respect of which such
Outstanding Monthly Advance shall have been made.

Section 4.5. ADDITIONAL DEPOSITS. On or before each Deposit Date, the
Servicer or AFL shall deposit in the Collection Account the aggregate Purchase
Amounts with respect to Administrative Receivables and Warranty Receivables,
respectively. All such deposits of Purchase Amounts shall be made in
immediately available funds.

Section 4.6. DISTRIBUTIONS. On each Distribution Date (except as
otherwise provided in priorities (v) and (vii) below), the Indenture Trustee
shall (based on the information contained in the Servicer's Certificate
delivered on the related Determination Date) distribute the following amounts
and in the order of priority specified below. Within each order of priority
(other than priority (viii) or (ix)), amounts shall be deemed withdrawn first
from Available Funds and second from any Deficiency Claim Amount.

(i) first, from the Distribution Amount, (A) to the Trust for payment
of any taxes due and unpaid with respect to the Trust, to the extent such
taxes have not been previously paid by AFL or by the Servicer pursuant to
Section 3.8, and (B) then to the Servicer, the amount of Outstanding
Monthly Advances for which the Servicer is entitled to be reimbursed
pursuant to Section 4.4(d) and for which the Servicer has not previously
been reimbursed pursuant to Section 4.8;

(ii) second, from the Distribution Amount, to the Owner Trustee, any
accrued and unpaid fees of the Owner Trustee in accordance with the Trust
Agreement and including amounts with respect to which the Administrator is
entitled to be reimbursed pursuant to the Administration Agreement; to the
Indenture Trustee, any accrued and unpaid fees of the Indenture Trustee in
accordance with the Indenture; to any Lockbox Bank, Custodian, Backup
Servicer or Administrator (including the Owner Trustee or Indenture Trustee
if acting in any such additional capacity), any accrued and unpaid fees (in
each case, to the extent such Person has not previously received such
amount from the Servicer or AFL), to the Backup Servicer, any transition
expenses (not to exceed $50,000) in accordance with Section 8.3; PROVIDED,
HOWEVER, if the accrued and unpaid fees of the Owner Trustee, the Indenture
Trustee, the Backup Servicer and the Administrator to be distributed
pursuant to this clause (ii) are in excess of the amount (the "Servicer Fee
Threshold") obtained by dividing (x) .20% of the Aggregate Principal
Balance by (y) twelve, any accrued and unpaid fees in excess of the
Servicer Fee Threshold remaining to be distributed pursuant to this clause
(ii) shall not be distributed pursuant to this clause (ii) but shall be
distributed after the distributions to be made pursuant to clause (v) below
but before the distributions to be made pursuant to clause (vi) below;

(iii) third, from the Distribution Amount, to the Servicer, the Basic
Servicing Fee for the related Monthly Period, any Supplemental Servicing
Fees for the related Monthly Period, and any amounts specified in Section
4.2(b), to the

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extent the Servicer has not reimbursed itself in respect of such amounts
pursuant to Section 4.8;

(iv) fourth, from the Distribution Amount, to the Note Distribution
Account, an amount equal to the Noteholders' Interest Distributable Amount
for such Distribution Date;

(v) fifth, from the Distribution Amount, to the Certificate
Distribution Account, an amount equal to the Certificateholders' Interest
Distributable Amount for such Distribution Date;

(vi) sixth, to the Note Distribution Account, (w) on each
Distribution Date, an amount equal to the Noteholders' Percentage of any
Principal Funding Excess Amount, (x) on each Distribution Date prior to the
Purchase Termination Date on which the Facility Balance exceeds the
Facility Limit, an amount equal to the excess of (1) the Facility Balance
over (2) the Facility Limit and (y) on each Distribution Date on or after
the Purchase Termination Date, from the Distribution Amount, an amount
equal to the Noteholders' Principal Distributable Amount for such
Distribution Date;

(vii) seventh, to the Certificate Distribution Account, (x) on each
Distribution Date, an amount equal to the Certificateholders' Percentage of
any Principal Funding Excess Amount and (y) (a) on each Distribution Date
on or after the Purchase Termination Date but prior to the Distribution
Date on which the outstanding principal balance of the Notes is reduced to
zero, from the Distribution Amount, an amount equal to the
Certificateholders' Principal Distributable Amount for such Distribution
Date, and (b) on each Distribution Date thereafter, from the Distribution
Amount, an amount equal to the outstanding principal balance of the
Certificates on such Distribution Date; and

(viii) eighth, FIRST, an amount equal to the lesser of (x) all
remaining Available Funds and (y) the excess, if any, of the Requisite
Amount as of the immediately preceding Determination Date over the amount
on deposit in the Spread Account as of such date (after taking into account
all withdrawals from the Spread Account on such Distribution Date), shall
be deposited into the Spread Account; SECOND, from Available Funds, if any
amounts are due and owing to any Indemnified Party (as such term is used in
the Note Purchase Agreement) under Section 11.01, Section 11.04 or Section
11.05 of the Note Purchase Agreement, such amount shall be deposited into
the Note Distribution Account for distribution to such Indemnified Parties,
THIRD, from Available Funds, if any amounts are due and owing to any
Indemnified Party (as such term is used in the Certificate Purchase
Agreement) under Section 11.01, Section 11.04 or Section 11.05 of the
Certificate Purchase Agreement, such amount shall be deposited into the
Certificate Distribution Account for distribution to such Indemnified
Parties, and FOURTH, any remaining Available Funds shall be released to the
Seller.

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Section 4.7. DISTRIBUTIONS ON TRUST PROPERTY LIQUIDATION. On any Trust
Property Liquidation Date, the Indenture Trustee shall (based on the information
contained in the Servicer's Certificate delivered pursuant to Section 3.9(b))
distribute the following amounts and in the order of priority specified below.
Within each order of priority amounts shall be withdrawn first from Available
Funds and second from any Deficiency Claim Amount.

(i) first, from the Distribution Amount and, without duplication,
from amounts deposited into the Collection Account pursuant to Section
9.1(b), (A) to the Trust for payment of any taxes due and unpaid with
respect to the Trust, to the extent such taxes have not been previously
paid by AFL or by the Servicer pursuant to Section 3.8, and (B) then to the
Servicer, the amount of Outstanding Monthly Advances for which the Servicer
is entitled to be reimbursed pursuant to Section 4.4(d) and for which the
Servicer has not previously been reimbursed pursuant to Section 4.8;

(ii) second, from the Distribution Amount and, without duplication,
from amounts deposited into the Collection Account pursuant to Section
9.1(b), to the Owner Trustee, any accrued and unpaid fees of the Owner
Trustee in accordance with the Trust Agreement and including amounts with
respect to which the Administrator is entitled to be reimbursed pursuant to
the Administration Agreement; to the Indenture Trustee, any accrued and
unpaid fees of the Indenture Trustee in accordance with the Indenture; to
any Lockbox Bank, Custodian, Backup Servicer or Administrator (including
the Owner Trustee or Indenture Trustee if acting in any such additional
capacity), any accrued and unpaid fees (in each case, to the extent such
Person has not previously received such amount from the Servicer or AFL),
to the Backup Servicer, any transition expenses (not to exceed $50,000) in
accordance with Section 8.3; PROVIDED, HOWEVER, if the accrued and unpaid
fees of the Owner Trustee, the Indenture Trustee, the Backup Servicer and
the Administrator to be distributed pursuant to this clause (ii) are in
excess of the Servicer Fee Threshold, any accrued and unpaid fees in excess
of the Servicer Fee Threshold remaining to be distributed pursuant to this
clause (ii) shall not be distributed pursuant to this clause (ii) but shall
be distributed after the distributions to be made pursuant to clause (v)
below but before the distributions to be made pursuant to clause (vi)
below;

(iii) third, from the Distribution Amount and, without duplication,
from amounts deposited into the Collection Account pursuant to Section
9.1(b), to the Servicer, the Basic Servicing Fee, any Supplemental
Servicing Fees that have accrued and remain unpaid and any amounts
specified in Section 4.2(b), to the extent the Servicer has not reimbursed
itself in respect of such amounts pursuant to Section 4.8;

(iv) fourth, from the Distribution Amount and, without duplication,
from amounts deposited into the Collection Account pursuant to Section
9.1(b), to the Note Distribution Account, an amount equal to all accrued
and unpaid interest on the Notes to and including the Trust Property
Liquidation Date, plus all breakage

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payments on the Notes specified in the Note Purchase Agreement (together
with any amounts required to fund the Commercial Paper Funding Account
pursuant to the Note Purchase Agreement);

(v) fifth, from the Distribution Amount and, without duplication,
from amounts deposited into the Collection Account pursuant to Section
9.1(b), to the Certificate Distribution Account, an amount equal to all
accrued and unpaid interest on the Certificates to and including the Trust
Property Liquidation Date plus all breakage payments on the Certificates as
specified in the Certificate Purchase Agreement;

(vi) sixth, from the Distribution Amount and, without duplication,
from amounts deposited into the Collection Account pursuant to Section
9.1(b), to the Note Distribution Account, an amount equal to the
Outstanding principal amount of Notes;

(vii) seventh, from the Distribution Amount and, without duplication,
from amounts deposited into the Collection Account pursuant to Section
9.1(b), to the Certificate Distribution Account, an amount equal to the
Certificate Balance; and

(viii) eighth, from Available Funds and, without duplication, from
amounts deposited into the Collection Account pursuant to Section 9.1(b),
FIRST, if any amounts are due and owing to any Indemnified Party (as such
term is used in the Note Purchase Agreement) under Section 11.01, Section
11.04 or Section 11.05 of the Note Purchase Agreement, such amount shall be
deposited into the Note Distribution Account for distribution to such
Indemnified Parties, SECOND, from Available Funds and, without duplication,
from amounts deposited into the Collection Account pursuant to Section
9.1(b), if any amounts are due and owing to any Indemnified Party (as such
term is used in the Certificate Purchase Agreement) under Section 11.01,
Section 11.04 or Section 11.05 of the Certificate Purchase Agreement, such
amount shall be deposited into the Certificate Distribution Account for
distribution to such Indemnified Parties, and THIRD, any remaining
Available Funds shall be released to the Seller.

Section 4.8. NET DEPOSITS. Subject to payment by the Servicer of amounts
otherwise payable pursuant to Section 4.6(ii) and provided that no Servicer
Termination Event shall have occurred and be continuing with respect to such
Servicer, the Servicer may make the remittances to be made by it pursuant to
Sections 4.2, 4.4 and 4.5 net of amounts (which amounts may be netted prior to
any such remittance for a Monthly Period) to be distributed to it pursuant to
Sections 3.8, 4.2(b) and 4.6(i); PROVIDED, HOWEVER, that the Servicer shall
account for all of such amounts in the related Servicer's Certificate as if such
amounts were deposited and distributed separately; and, PROVIDED, FURTHER, that
if an error is made by the Servicer in calculating the amount to be deposited or
retained by it, with the result that an amount less than required is deposited
in the Collection Account, the Servicer shall make a payment of the deficiency
to the Collection Account,

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immediately upon becoming aware, or receiving notice from the Indenture Trustee,
of such error.

Section 4.9. STATEMENTS TO CERTIFICATEHOLDERS AND NOTEHOLDERS. (a) On
each Distribution Date, the Owner Trustee shall deliver to each
Certificateholder (other than the General Partner) and Morgan, a statement based
on information in the Servicer's Certificate delivered on the related
Determination Date pursuant to Section 3.9, setting forth for the Monthly Period
or Interest Accrual Period, as applicable, relating to such Distribution Date
the following information:

(i) the amount of such distribution allocable to principal;

(ii) the amount of such distribution allocable to interest;

(iii) the amount of such distribution payable out of amounts
withdrawn from the Spread Account;

(iv) the Certificate Balance and the remaining balance of the Notes
(after giving effect to distributions made on such Distribution Date);

(v) the Noteholders' Interest Carryover Shortfall, the
Certificateholders' Interest Carryover Shortfall and the
Certificateholders' Principal Carryover Shortfall, if any, and the change
in such amounts from the preceding statement; and

(vi) the amount of fees paid by the Trust with respect to such
Monthly Period.

Each amount set forth pursuant to subclauses (i) through (iv) above may be
expressed as a dollar amount per $1,000 of original principal balance of a
Certificate.

(b) On each Payment Date, the Indenture Trustee shall deliver to each
Noteholder and Morgan, a statement based on information in the Servicer's
Certificate delivered on the related Determination Date pursuant to Section 3.9,
setting forth for the Monthly Period or Interest Accrual Period, as applicable,
relating to such Payment Date the following information with respect to the
Notes:

(i) the amount of such distribution allocable to principal;

(ii) the amount of such distribution allocable to interest;

(iii) the amount of such distribution payable out of amounts
withdrawn from the Spread Account;

(iv) the outstanding principal balance of the Notes and the remaining
Certificate Balance (after giving effect to distributions made on such
Payment Date);

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(vi) the amount of fees paid by the Trust with respect to such
Monthly Period.

Each amount set forth pursuant to subclauses (i) through (iv) above may be
expressed as a dollar amount per $1,000 of original principal balance of a Note.

Section 4.10. INDENTURE TRUSTEE AS AGENT. The Indenture Trustee, in
holding all funds in the Trust Accounts and in making distributions as provided
in this Agreement, shall act solely on behalf of and as agent for the
Certificateholders and the Noteholders.

Section 4.11. ELIGIBLE ACCOUNTS. Any account which is required to be
established as an Eligible Account pursuant to this Agreement and which ceases
to be an Eligible Account shall within 5 Business Days (or such longer period,
not to exceed 30 days, as to which each Rating Agency may consent) be
established as a new account which shall be an Eligible Account and any cash
and/or any investments shall be transferred to such new account.

ARTICLE V
THE SPREAD ACCOUNT

Section 5.1. WITHDRAWALS FROM SPREAD ACCOUNT. (a) In the event that the
Servicer's Certificate with respect to any Determination Date shall state that
the Deficiency Claim Amount (as defined below) with respect to the related
Distribution Date is greater than zero, then the Indenture Trustee shall, on the
Deposit Date, withdraw from the Spread Account an amount equal to the lesser of
(x) the Deficiency Claim Amount and (y) the amount on deposit in the Spread
Account, and deposit such amount into the Collection Account. The "Deficiency
Claim Amount" with respect to any Distribution Date shall equal the excess, if
any, of

(i) the amount required to be distributed pursuant to clauses (i) -
(vii) of Section 4.6, or clauses (i) - (vii) of Section 4.7, as applicable,
over

(ii) the Available Funds with respect to such Distribution Date.

(b) All amounts, if any, remaining on deposit in the Spread Account
immediately following the distribution of the amounts required by clauses (i) -
(vii) of Section 4.7 in connection with a sale of not less than all of the
Receivables in the Trust pursuant to Section 9.1(b) hereof shall be distributed
to the Seller.

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ARTICLE VI
THE SELLER

Section 6.1. LIABILITY OF SELLER. The Seller shall be liable hereunder
only to the extent of the obligations in this Agreement specifically undertaken
by the Seller and the representations made by the Seller.

Section 6.2. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE OBLIGATIONS
OF, SELLER; AMENDMENT OF CERTIFICATE OF INCORPORATION. (a) The Seller shall
not merge or consolidate with any other Person or permit any other Person to
become the successor to the Seller's business without the prior written consent
of Morgan. The certificate of incorporation of any corporation (i) into which
the Seller may be merged or consolidated, (ii) resulting from any merger or
consolidation to which the Seller shall be a party, or (iii) succeeding to the
business of Seller, shall contain provisions relating to limitations on business
and other matters substantively identical to those contained in the Seller's
certificate of incorporation. Any such successor corporation shall execute an
agreement of assumption of every obligation of the Seller under this Agreement
and each Related Document and, whether or not such assumption agreement is
executed, shall be the successor to the Seller under this Agreement without the
execution or filing of any document or any further act on the part of any of the
parties to this Agreement. The Seller shall provide prompt, written notice of
any merger, consolidation or succession pursuant to this Section 6.2 to the
Owner Trustee, the Indenture Trustee, Morgan and the Rating Agencies.
Notwithstanding the foregoing, the Seller shall not merge or consolidate with
any other Person or permit any other Person to become a successor to the
Seller's business, unless (x) immediately after giving effect to such
transaction, no representation or warranty made pursuant to Section 2.5 shall
have been breached (for purposes hereof, such representations and warranties
shall speak as of the date of the consummation of such transaction) and no event
that, after notice or lapse of time, or both, would become a Servicer
Termination Event shall have occurred and be continuing, (y) the Seller shall
have delivered to the Owner Trustee, the Indenture Trustee and Morgan an
officer's certificate and an Opinion of Counsel each stating that such
consolidation, merger or succession and such agreement of assumption comply with
this Section 6.2 and that allconditions precedent, if any, provided for in this
Agreement relating to such transaction have been complied with, and (z) the
Seller shall have delivered to the Owner Trustee, the Indenture Trustee and
Morgan an Opinion of Counsel, stating, in the opinion of such counsel, either
(A) all financing statements and continuation statements and amendments thereto
have been executed and filed that are necessary to preserve and protect the
interest of the Trust in the Trust Property and reciting the details of the
filings or (B) no such action shall be necessary to preserve and protect such
interest.

(b) The Seller hereby agrees that it shall not (i) take any action
prohibited by Article XVI of its certificate of incorporation or (ii) without
the prior written consent of the Owner Trustee, the Indenture Trustee and
Morgan, amend Article III, Article IX, Article XIV or Article XVI of its
certificate of incorporation.

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Section 6.3. LIMITATION ON LIABILITY OF SELLER AND OTHERS. The Seller and
any director or officer or employee or agent of the Seller may rely in good
faith on the advice of counsel or on any document of any kind prima facie
properly executed and submitted by any Person respecting any matters arising
under this Agreement. The Seller shall not be under any obligation to appear
in, prosecute or defend any legal action that is not incidental to its
obligations as Seller of the Receivables under this Agreement and that in its
opinion may involve it in any expense or liability.

Section 6.4. SELLER MAY OWN CERTIFICATES OR NOTES. Each of the Seller and
any Affiliate of the Seller may in its individual or any other capacity become
the owner or pledgee of Certificates or Notes with the same rights as it would
have if it were not the Seller or an Affiliate thereof except as otherwise
specifically provided herein or in the Related Documents. Certificates or Notes
so owned by or pledged to the Seller or such Affiliate shall have an equal and
proportionate benefit under the provisions of this Agreement or any Related
Document, without preference, priority, or distinction as among all of the
Certificates or Notes, provided that any Certificates or Notes owned by the
Seller or any Affiliate thereof, during the time such Certificates or Notes are
owned by them, shall be without voting rights for any purpose set forth in this
Agreement or any Related Document. The Seller shall notify the Owner Trustee,
the Indenture Trustee and Morgan promptly after it or any of its Affiliates
become the owner or pledgee of a Certificate or Note.

Section 6.5. LIMITED RECOURSE UPON SECURITIZED OFFERING. As a condition
precedent to the optional redemption of the Notes under Section 10.01(b) of the
Indenture in connection with a Securitized Offering, the Seller shall be
obligated to purchase from the Trust, on or prior to the date on which such
redemption of Notes occurs, all Ineligible Receivables for a purchase price
equal to the Purchase Amount for such Ineligible Receivables.

ARTICLE VII
THE SERVICER

Section 7.1. LIABILITY OF SERVICER; INDEMNITIES. (a) The Servicer (in
its capacity as such and, in the case of AFL, without limitation of its
obligations under the Purchase Agreement) shall be liable hereunder only to the
extent of the obligations in this Agreement specifically undertaken by the
Servicer and the representations made by the Servicer.

(b) The Servicer shall defend, indemnify and hold harmless the Trust, the
Owner Trustee, the Indenture Trustee, the Backup Servicer, Morgan, their
respective officers, directors, agents and employees, the Certificateholders and
the Noteholders from and against any and all costs, expenses, losses, damages,
claims and liabilities, including reasonable fees and expenses of counsel and
expenses of litigation arising out of or resulting from the use, ownership or
operation by the Servicer or any Affiliate thereof of any Financed Vehicle.

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(c) The Servicer shall indemnify, defend and hold harmless the Trust, the
Owner Trustee, the Indenture Trustee, the Backup Servicer, Morgan, their
respective officers, directors, agents and employees, the Certificateholders and
the Noteholders from and against any taxes that may at any time be asserted
against the Trust, the Owner Trustee, the Indenture Trustee, the Backup
Servicer, Morgan, the Certificateholders or the Noteholders with respect to the
transactions contemplated in this Agreement, including, without limitation, any
sales, gross receipts, general corporation, tangible personal property,
privilege or license taxes (but not including any taxes asserted with respect
to, and as of the date of, the sale of the Receivables and the other Trust
Property to the Trust or the issuance and original sale of the Certificates and
the Notes, or federal or other income taxes arising out of distributions on the
Certificates) and costs and expenses in defending against the same.

(d) The Servicer shall indemnify, defend and hold harmless the Trust, the
Owner Trustee, the Indenture Trustee, the Backup Servicer, Morgan, their
respective officers, directors, agents and employees, the Certificateholders and
the Noteholders from and against any and all costs, expenses, losses, claims,
damages, and liabilities to the extent that such cost, expense, loss, claim,
damage, or liability arose out of, or was imposed upon the Trust, the Owner
Trustee, the Indenture Trustee, the Backup Servicer, Morgan, the
Certificateholders or the Noteholders through the breach of this Agreement, the
negligence, willful misfeasance, or bad faith of the Servicer in the performance
of its duties under this Agreement or by reason of reckless disregard of its
obligations and duties under this Agreement.

(e) The Servicer shall indemnify, defend, and hold harmless the Owner
Trustee, in its individual capacity, its officers, directors, agents and
employees, from and against all costs, taxes (other than income taxes on fees
and expenses payable to the Owner Trustee), expenses, losses, claims, damages
and liabilities arising out of or incurred in connection with the acceptance or
performance of the trusts and duties contained in the Trust Agreement and the
Related Documents, except to the extent that such cost, taxes (other than income
taxes), expense, loss, claim, damage or liability (A) is due to the willful
misfeasance or gross negligence of the Owner Trustee, or (B) arises from the
Owner Trustee's breach of any of its representations or warranties set forth in
Section 7.3 of the Trust Agreement; PROVIDED, HOWEVER, that amounts payable
under this paragraph shall be increased by the amount of income taxes actually
paid by the Owner Trustee in respect of any indemnity payment unless the Owner
Trustee received or can reasonably be expected to receive a tax deduction for
the related loss or cost.

(f) Indemnification under this Article shall include, without limitation,
reasonable fees and expenses of counsel and expenses of litigation. If the
Servicer has made any indemnity payments pursuant to this Article and the
recipient thereafter collects any of such amounts from others, the recipient
shall promptly repay such amounts collected to the Servicer, without interest.

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(g) AFL, in its individual capacity, hereby acknowledges that the
indemnification provisions in the Purchase Agreement benefiting the Trust, the
Owner Trustee, the Indenture Trustee, the Backup Servicer and Morgan are
enforceable by each hereunder.

Section 7.2. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE OBLIGATIONS
OF, THE SERVICER OR BACKUP SERVICER. (a) The Servicer shall not merge or
consolidate with any other person, convey, transfer or lease substantially all
its assets as an entirety to another Person, or permit any other Person to
become the successor to the Servicer's business unless, after the merger,
consolidation, conveyance, transfer, lease or succession, the successor or
surviving entity shall be an Eligible Servicer and shall be capable of
fulfilling the duties of the Servicer contained in this Agreement. Any
corporation (i) into which the Servicer may be merged or consolidated, (ii)
resulting from any merger or consolidation to which the Servicer shall be a
party, (iii) which acquires by conveyance, transfer, or lease substantially all
of the assets of the Servicer, or (iv) succeeding to the business of the
Servicer, in any of the foregoing cases shall execute an agreement of assumption
to perform every obligation of the Servicer under this Agreement and, whether or
not such assumption agreement is executed, shall be the successor to the
Servicer under this Agreement without the execution or filing of any paper or
any further act on the part of any of the parties to this Agreement, anything in
this Agreement to the contrary notwithstanding; PROVIDED, HOWEVER, that nothing
contained herein shall be deemed to release the Servicer from any obligation.
The Servicer shall provide notice of any merger, consolidation or succession
pursuant to this Section 7.2(a) to the Owner Trustee, the Indenture Trustee, the
Backup Servicer, Morgan and each Rating Agency. Notwithstanding the foregoing,
the Servicer shall not merge or consolidate with any other Person or permit any
other Person to become a successor to the Servicer's business, unless (x)
immediately after giving effect to such transaction, no representation or
warranty made pursuant to Section 3.6 shall have been breached (for purposes
hereof, such representations and warranties shall speak as of the date of the
consummation of such transaction) and no event that, after notice or lapse of
time, or both, would become a Servicer Termination Event shall have occurred and
be continuing, (y) the Servicer shall have delivered to the Owner Trustee, the
Indenture Trustee and Morgan an Officer's Certificate and an Opinion of Counsel
each stating that such consolidation, merger or succession and such agreement of
assumption comply with this Section 7.2(a) and that all conditions precedent, if
any, provided for in this Agreement relating to such transaction have been
complied with, and (z) the Servicer shall have delivered to the Owner Trustee,
the Indenture Trustee and Morgan an Opinion of Counsel, stating that, in the
opinion of such counsel, either (A) all financing statements and continuation
statements and amendments thereto have been executed and filed that are
necessary to preserve and protect the interest of the Owner Trustee and the
Indenture Trustee in the Trust Property and reciting the details of the filings
or (B) no such action shall be necessary to preserve and protect such interest.

(b) Any corporation (i) into which the Backup Servicer may be merged or
consolidated, (ii) resulting from any merger or consolidation to which the
Backup Servicer shall be a party, (iii) which acquires by conveyance, transfer
or lease substantially all of the assets of the Backup Servicer, or (iv)
succeeding to the business of the Backup Servicer, in any of the foregoing cases
shall execute an agreement of assumption to perform every

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obligation of the Backup Servicer under this Agreement and, whether or not such
assumption agreement is executed, shall be the successor to the Backup Servicer
under this Agreement without the execution or filing of any paper or any further
act on the part of any of the parties to this Agreement, anything in this
Agreement to the contrary notwithstanding; PROVIDED, HOWEVER, that nothing
contained herein shall be deemed to release the Backup Servicer from any
obligation.

Section 7.3. LIMITATION ON LIABILITY OF SERVICER, BACKUP SERVICER AND
OTHERS. (a) Neither the Servicer, the Backup Servicer nor any of the directors
or officers or employees or agents of the Servicer or Backup Servicer shall be
under any liability to the Trust, the Certificateholders or the Noteholders,
except as provided in this Agreement, for any action taken or for refraining
from the taking of any action pursuant to this Agreement; PROVIDED, HOWEVER,
that this provision shall not protect the Servicer, the Backup Servicer or any
such person against any liability that would otherwise be imposed by reason of a
breach of this Agreement or willful misfeasance, bad faith or negligence
(excluding errors in judgment) in the performance of duties, by reason of
reckless disregard of obligations and duties under this Agreement or any
violation of law by the Servicer, Backup Servicer or such person, as the case
may be; PROVIDED FURTHER, that this provision shall not affect any liability to
indemnify the Owner Trustee and the Indenture Trustee for costs, taxes,
expenses, claims, liabilities, losses or damages paid by the Owner Trustee or
the Indenture Trustee, each in its individual capacity. The Servicer, the
Backup Servicer and any director, officer, employee or agent of the Servicer or
Backup Servicer may rely in good faith on the advice of counsel or on any
document of any kind PRIMA FACIE properly executed and submitted by any Person
respecting any matters arising under this Agreement.

(b) The Backup Servicer shall not be liable for any obligation of the
Servicer contained in this Agreement, and the Owner Trustee, the Indenture
Trustee, the Seller, Morgan, the Noteholders and the Certificateholders shall
look only to the Servicer to perform such obligations.

Section 7.4. DELEGATION OF DUTIES. The Servicer may delegate duties under
this Agreement to an Affiliate of AFL with the prior written consent of Morgan,
the Indenture Trustee, the Owner Trustee and the Backup Servicer (which consent
shall not be unreasonably withheld). Neither AFL nor any party acting as
Servicer hereunder shall appoint any subservicer hereunder without the prior
written consent of Morgan, the Indenture Trustee, the Owner Trustee and the
Backup Servicer (which consent shall not be unreasonably withheld).
Notwithstanding the foregoing, the Servicer also may at any time and in its sole
discretion perform the specific duty of repossession of Financed Vehicles
through sub-contractors who are in the business of servicing automotive
receivables, PROVIDED, HOWEVER, that no such delegation or sub-contracting of
duties by the Servicer shall relieve the Servicer of its responsibility with
respect to such duties.

Section 7.5. SERVICER AND BACKUP SERVICER NOT TO RESIGN. Subject to the
provisions of Section 7.2, neither the Servicer nor the Backup Servicer shall
resign from the obligations and duties imposed on it by this Agreement as
Servicer or Backup Servicer except upon a determination that by reason of a
change in legal requirements the

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performance of its duties under this Agreement would cause it to be in violation
of such legal requirements in a manner which would have a material adverse
effect on the Servicer or the Backup Servicer, as the case may be, and Morgan
does not elect to waive the obligations of the Servicer or the Backup Servicer,
as the case may be, to perform the duties which render it legally unable to act
or to delegate those duties to another Person. Any such determination
permitting the resignation of the Servicer or Backup Servicer shall be evidenced
by an Opinion of Counsel to such effect delivered and acceptable to Morgan, the
Owner Trustee and the Indenture Trustee. No resignation of the Servicer shall
become effective until the Backup Servicer or a successor Servicer that is an
Eligible Servicer shall have assumed the responsibilities and obligations of the
Servicer. No resignation of the Backup Servicer shall become effective until a
Person that is an Eligible Servicer shall have assumed the responsibilities and
obligations of the Backup Servicer; PROVIDED, HOWEVER, that in the event a
successor Backup Servicer is not appointed within 60 days after the Backup
Servicer has given notice of its resignation and has provided the Opinion of
Counsel required by this Section 7.5, the Backup Servicer may petition a court
for its removal.

ARTICLE VIII
SERVICER TERMINATION EVENTS

Section 8.1. SERVICER TERMINATION EVENT. For purposes of this Agreement,
each of the following shall constitute a "Servicer Termination Event":

(a) Any failure by the Servicer to deliver to the Indenture Trustee
for distribution to Certificateholders or Noteholders any proceeds or
payment required to be so delivered under the terms of this Agreement (or,
if AFL is the Servicer, the Purchase Agreement);

(b) Failure by the Servicer to deliver to the Indenture Trustee, the
Owner Trustee and Morgan the Servicer's Certificate by the third Business
Day prior to the Distribution Date, or failure on the part of the Servicer
to observe its covenants and agreements set forth in Section 7.2(a);

(c) Failure on the part of the Servicer or the Seller duly to observe
or perform in any material respect any other covenants or agreements of the
Servicer or the Seller set forth in this Agreement (or, if AFL is the
Servicer, the Purchase Agreement), which failure (i) materially and
adversely affects the rights of Certificateholders or Noteholders and (ii)
continues unremedied for a period of 30 days after the date on which
written notice of such failure, requiring the same to be remedied, shall
have been given to the Servicer or the Seller by the Owner Trustee, the
Indenture Trustee or any Certificateholder or Noteholder;

(d) The occurrence of an Insolvency Event with respect to the Seller
or the Servicer;

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(e) Any representation, warranty or statement of the Servicer or the
Seller made in this Agreement or any certificate, report or other writing
delivered pursuant hereto shall prove to be incorrect in any material
respect as of the time when the same shall have been made (excluding,
however, any representation or warranty set forth in Section 2.5(a)), and
the incorrectness of such representation, warranty or statement has a
material adverse effect on the Trust and, within 30 days after written
notice thereof shall have been given to the Servicer or the Seller by the
Owner Trustee, the Indenture Trustee or a Certificateholder or Noteholder,
the circumstances or condition in respect of which such representation,
warranty or statement was incorrect shall not have been eliminated or
otherwise cured; or

(f) An Event of Default under the Indenture shall have occurred.

Section 8.2. CONSEQUENCES OF A SERVICER TERMINATION EVENT. If a Servicer
Termination Event shall occur and be continuing, either the Indenture Trustee,
the Owner Trustee, Morgan, by notice given in writing to the Servicer (and to
the Indenture Trustee and the Owner Trustee if given by Morgan) may terminate
all of the rights and obligations of the Servicer under this Agreement. On or
after the receipt by the Servicer of such written notice, all authority, power,
obligations and responsibilities of the Servicer under this Agreement, whether
with respect to the Certificates, the Notes or the Trust Property or otherwise,
shall be terminated and automatically shall pass to, be vested in and become
obligations and responsibilities of the Backup Servicer (or such other successor
Servicer appointed pursuant to Section 8.3(b)); PROVIDED, HOWEVER, that the
successor Servicer shall have no liability with respect to any obligation which
was required to be performed by the terminated Servicer prior to the date that
the successor Servicer becomes the Servicer or any claim of a third party based
on any alleged action or inaction of the terminated Servicer. The successor
Servicer is authorized and empowered by this Agreement to execute and deliver,
on behalf of the terminated Servicer, as attorney-in-fact or otherwise, any and
all documents and other instruments and to do or accomplish all other acts or
things necessary or appropriate to effect the purposes of such notice of
termination, whether to complete the transfer and endorsement of the Receivables
and the other Trust Property and related documents to show the Owner Trustee as
lienholder or secured party on the related Lien Certificates, or otherwise. The
terminated Servicer agrees to cooperate with the successor Servicer in effecting
the termination of the responsibilities and rights of the terminated Servicer
under this Agreement, including, without limitation, the transfer to the
successor Servicer for administration by it of all cash amounts that shall at
the time be held by the terminated Servicer for deposit, or have been deposited
by the terminated Servicer, in the Collection Account or thereafter received
with respect to the Receivables and the delivery to the successor Servicer of
all Receivables Files, Monthly Records and Collection Records and a computer
tape in readable form as of the most recent Business Day containing all
information necessary to enable the successor Servicer or a successor Servicer
to service the Receivables and the other Trust Property. If requested by
Morgan, the successor Servicer shall terminate the Lockbox Agreement and direct
the Obligors to make all payments under the Receivables directly to the
successor Servicer (in which event the successor Servicer shall process such
payments in accordance with Section 3.2(e)), or to a lockbox established by the
successor Servicer at the direction of Morgan, at the successor

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Servicer's expense. In addition to any other amounts that are then payable to
the terminated Servicer under this Agreement, the terminated Servicer shall then
be entitled to receive out of Available Funds reimbursements for any Outstanding
Monthly Advances (in accordance with Section 4.4(d)) made during the period
prior to the notice pursuant to this Section 8.2 which terminates the obligation
and rightsof the terminated Servicer under this Agreement. The Owner Trustee,
the Indenture Trustee and the successor Servicer may set off and deduct any
amounts owed by the terminated Servicer from any amounts payable to the
terminated Servicer pursuant to the preceding sentence. The terminated Servicer
shall grant the Owner Trustee, the Indenture Trustee, Morgan and the successor
Servicer reasonable access to the terminated Servicer's premises at the
terminated Servicer's expense.

Section 8.3. APPOINTMENT OF SUCCESSOR. (a) On and after (i) the time the
Servicer receives a notice of termination pursuant to Section 8.2 or (ii) the
resignation of the Servicer pursuant to Section 7.5, the Backup Servicer (unless
pursuant to Section 8.3(b) an alternate successor Servicer has been appointed)
shall be the successor in all respects to the Servicer in its capacity as
servicer under this Agreement and the transactions set forth or provided for in
this Agreement, and shall be subject to all the responsibilities, restrictions,
duties, liabilities and termination provisions relating thereto placed on the
Servicer by the terms and provisions of this Agreement. The Owner Trustee and
such successor shall take such action, consistent with this Agreement, as shall
be necessary to effectuate any such succession. If a successor Servicer is
acting as Servicer hereunder, it shall be subject to termination under Section
8.2 upon the occurrence of any Servicer Termination Event applicable to it as
Servicer and shall serve from term to term as provided in Section 3.14.

(b) If the Backup Servicer shall be legally unable or unwilling to act as
Servicer, the Backup Servicer, the Indenture Trustee, Morgan or the Owner
Trustee may petition a court of competent jurisdiction to appoint any Eligible
Servicer as the successor to the Servicer. Pending appointment pursuant to the
preceding sentence, the Backup Servicer shall act as successor Servicer unless
it is legally unable to do so, in which event the outgoing Servicer shall
continue to act as Servicer until a successor has been appointed and accepted
such appointment. Subject to Section 7.5, no provision of this Agreement shall
be construed as relieving the Backup Servicer of its obligation to succeed as
successor Servicer upon the termination of the Servicer pursuant to Section 8.2
or the resignation of the Servicer pursuant to Section 7.5.

(c) Any successor Servicer shall be entitled to such compensation (whether
payable out of the Collection Account or otherwise) as the Servicer would have
been entitled to under the Agreement if the Servicer had not resigned or been
terminated hereunder. If any successor Servicer is appointed as a result of the
Backup Servicer's refusal (in contravention of the terms of this Agreement) to
act as Servicer although it is legally able to do so, Morgan and such successor
Servicer may agree on reasonable additional compensation to be paid to such
successor Servicer by the Backup Servicer, which additional compensation shall
be paid by the Backup Servicer in its individual capacity and solely out of its
own funds. If any successor Servicer is appointed for any reason other than the
Backup Servicer's refusal to act as Servicer although legally able to do so,
Morgan and such successor Servicer may agree on additional compensation to be
paid to such successor Servicer, which

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additional compensation shall be payable from Available Funds. If the Backup
Servicer is the successor Servicer, the Backup Servicer shall be entitled to
reimbursement, pursuant to Section 4.6(ii), of reasonable transition expenses,
not in excess of $50,000, incurred in acting as successor Servicer. In
addition, any successor Servicer shall be entitled to reimbursement from
Available Funds of reasonable transition expenses incurred in acting as
successor Servicer.

Section 8.4. NOTIFICATION TO CERTIFICATEHOLDERS AND NOTEHOLDERS. Upon any
termination of, or appointment of a successor to, the Servicer pursuant to this
Article VIII, the Owner Trustee shall give prompt written notice thereof to
Certificateholders at their respective addresses appearing in the Certificate
Register and to each Rating Agency, and the Indenture Trustee shall give prompt
written notice thereof to Noteholders at their respective addresses appearing in
the Note Register.

Section 8.5. WAIVER OF PAST DEFAULTS. A Note Majority together with a
Certificate Majority may, on behalf of all Holders of Notes and Certificates,
waive any default by the Servicer in the performance of its obligations
hereunder and its consequences. Upon any such waiver of a past default, such
default shall cease to exist, and any Servicer Termination Event arising
therefrom shall be deemed to have been remedied for every purpose of this
Agreement. No such waiver shall extend to any subsequent or other default or
impair any right consequent thereon.

ARTICLE IX
TERMINATION

Section 9.1. OPTIONAL PURCHASE OF RECEIVABLES; LIQUIDATION OF TRUST
ESTATE. (a) On each Determination Date with respect to a Distribution Date
following the Distribution Date as of which the Aggregate Principal Balance is
less than 10% of the Facility Limit, the Servicer and the Seller each shall have
the option to purchase the corpus of the Trust; PROVIDED, HOWEVER, that the
amount to be paid for such purchase (as set forth in the following sentence)
shall be sufficient to pay the full amount of principal, premium, if any, and
interest then due and payable on the Notes and the Certificates, together with
any breakage payments (including amounts needed to fund the Commercial Paper
Funding Account pursuant to the Note Purchase Agreement). To exercise such
option, the Servicer or the Seller, as the case may be, shall pay the aggregate
Purchase Amounts for the Receivables, plus the appraised value of any other
property (including the right to receive any future recoveries) held as part of
the Trust, such appraisal to be conducted by an appraiser acceptable to the
Servicer and the Seller, and shall succeed to all interests in and to the Trust
Property. The fees and expenses related to such appraisal shall be paid by the
party exercising the option to purchase. The party exercising such option to
repurchase shall deposit the aggregate Purchase Amounts for the Receivables and
the amount of the appraised value of any other property held as part of the
Trust into the Collection Account, and the Indenture Trustee shall distribute
the amounts so deposited in accordance with Section 4.6.

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(b) Prior to a Recapitalization, the Seller may purchase the Trust
Property and apply the proceeds of such purchase or purchases to redeem or pay
in full Outstanding Notes and Certificates; PROVIDED, THAT,

(1) the Seller shall have provided a written notice to the
Servicer, the Indenture Trustee, the Owner Trustee, the Backup
Servicer, Morgan and the Rating Agencies setting forth the Trust
Property Liquidation Date at least 3 days prior to such proposed Trust
Property Liquidation Date and stating whether such liquidation will be
a final termination of the Trust;

(2) the Seller shall pay no later than 3:00 P.M. (New York time)
on the Trust Property Liquidation Date the aggregate Purchase Amounts
for the Receivables, plus the appraised value of any other property
(including the right to receive any future recoveries) held as part of
the Trust, plus all breakage payments (including amounts needed to
fund the Commercial Paper Funding Account pursuant to the Note
Purchase Agreement) provided in the Note Purchase Agreement and the
Certificate Purchase Agreement, and the Seller shall succeed to all
interests in and to the Trust Property. Any such appraisal shall be
conducted by an appraiser acceptable to the Seller and Morgan and the
fees and expenses related thereto shall be paid by the Seller;

(3) the source of funds for the purchase of Trust Property
specified in clause (2) above shall be fully disclosed to Morgan and
shall be acceptable to Morgan;

(4) each of the Seller and AFL shall provide an Officer's
Certificate executed by its Chief Financial Officer or Treasurer
stating that the Seller or AFL, as applicable, is not insolvent
(within the meaning of the Bankruptcy Code) prior to and will not be
insolvent (within the meaning of the Bankruptcy Code) subsequent to
the purchase of Trust Property;

(5) each of the Seller and AFL shall provide to Morgan such
Opinions of Counsel as Morgan shall deem necessary and advisable in
connection with the purchase of Trust Property; and

(6) the proceeds from the purchase are sufficient to pay all the
obligations required to be paid in clauses (i) through (vii) of
Section 4.7.

All proceeds from a sale of the Trust Property pursuant to this
Section 9.1(b) shall be deposited in the Collection Account for
distribution by the Indenture Trustee pursuant to Section 4.7 hereof.

(c) Upon any sale of the assets of the Trust pursuant to Section 9.2 of
the Trust Agreement, the Owner Trustee shall instruct the Indenture Trustee to
deposit the proceeds from such sale after all payments and reserves therefrom
have been made (the "Insolvency Proceeds") in the Collection Account. On the
Distribution Date on which the Insolvency

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Proceeds are deposited in the Collection Account (or, if such proceeds are not
so deposited on a Distribution Date, on the Distribution Date immediately
following such deposit), the Owner Trustee shall instruct the Indenture Trustee
to make the following deposits (after the application on such Distribution Date
of the Available Funds) from the Insolvency Proceeds:

(i) (A) to the Trust for payment of any taxes due and unpaid with
respect to the Trust, to the extent such taxes have not been previously
paid by AFL or by the Servicer pursuant to Section 3.8; (B) to the
Servicer, the amount of Outstanding Monthly Advances for which the Servicer
is entitled to be reimbursed pursuant to Section 4.4(d) and for which the
Servicer has not previously been reimbursed pursuant to Section 4.8; (C) to
the Owner Trustee, any accrued and unpaid fees of the Owner Trustee in
accordance with the Trust Agreement and including amounts with respect to
which the Administrator is entitled to be reimbursed pursuant to the
Administration Agreement; (D) to the Indenture Trustee, any accrued and
unpaid fees of the Indenture Trustee in accordance with the Indenture; (E)
to any Lockbox Bank, Custodian, Backup Servicer or Administrator (including
the Owner Trustee or Indenture Trustee if acting in any such additional
capacity), any accrued and unpaid fees (in each case, to the extent such
Person has not previously received such amount from the Servicer or AFL);
and (F) to the Servicer, the Basic Servicing Fee for the related Monthly
Period, any Supplemental Servicing Fees for the related Monthly Period, and
any amounts specified in Section 4.2(b), to the extent the Servicer has not
reimbursed itself in respect of such amounts pursuant to Section 4.8;

(ii) to the Note Distribution Account, any portion of the
Noteholders' Interest Distributable Amount not otherwise deposited into the
Note Distribution Account on such Distribution Date plus any breakage
payments specified in the Note Purchase Agreement;

(iii) to the Certificate Distribution Account, any portion of the
Certificateholders' Interest Distributable Amount not otherwise deposited
into the Certificate Distribution Account on such Distribution Date plus
any breakage payments specified in the Certificate Purchase Agreement;

(iv) to the Note Distribution Account, the outstanding principal
balance of the Notes (after giving effect to the reduction in the
outstanding principal balance of the Notes to result from the deposits
otherwise made in the Note Distribution Account on such Distribution Date);

(v) to the Certificate Distribution Account, the Certificate Balance
(after giving effect to the reduction in the Certificate Balance to result
from the deposits otherwise made in the Certificate Distribution Account on
such Distribution Date); and

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any Insolvency Proceeds remaining after the deposits described above shall be
paid to the Seller.

(d) Notice of any termination of the Trust shall be given by the Servicer
to the Owner Trustee and the Indenture Trustee as soon as practicable after the
Servicer has received notice thereof.

ARTICLE X
MISCELLANEOUS PROVISIONS

Section 10.1. AMENDMENT. (a) This Agreement may be amended by the
Seller, the Servicer and the Trust, with the prior written consent of the
Indenture Trustee and Morgan (which consent shall not be unreasonably withheld)
but without the consent of any of the Noteholders or Certificateholders, (i) to
cure any ambiguity, (ii) to correct or supplement any provisions in this
Agreement or (iii) for the purpose of adding any provision to or changing in any
manner or eliminating any provision of this Agreement or of modifying in any
manner the rights of the Noteholders or the Certificateholders; PROVIDED,
HOWEVER, that such action shall not, as evidenced by an Opinion of Counsel,
adversely affect in any material respect the interests of the Noteholders or
Certificateholders.

(b) This Agreement may also be amended from time to time by the Seller,
the Servicer and the Trust with the prior written consent of the Indenture
Trustee and the Backup Servicer (which consent shall not be unreasonably
withheld) and with the consent of a Certificate Majority and a Note Majority
(which consent of any Holder of a Certificate or Note given pursuant to this
Section or pursuant to any other provision of this Agreement shall be conclusive
and binding on such Holder and on all future Holders of such Certificate or Note
and of any Certificate or Note issued upon the transfer thereof or in exchange
thereof or in lieu thereof whether or not notation of such consent is made upon
the Certificate or Note) for the purpose of adding any provisions to or changing
in any manner or eliminating any of the provisions of this Agreement, or of
modifying in any manner the rights of the Holders of Certificates or Notes;
PROVIDED, HOWEVER, that, subject to the provisions of Section 5.04 of the
Indenture, no such amendment shall directly or indirectly (a) increase or reduce
in any manner the amount of, or accelerate or delay the timing of, collections
of payments on Receivables or distributions required to be made on any
Certificate or Note or the Certificate Rate or Note Interest Rate, (b) amend any
provisions of Section 4.6 or Section 4.7 in such a manner as to affect the
priority of payment of interest, principal or premium to Noteholders or
Certificateholders, or (c) reduce the aforesaid percentage required to consent
to any such amendment or any waiver hereunder, without the consent of the
Holders of all Certificates or Notes then outstanding.

(c) Prior to the execution of any such amendment or consent, the Owner
Trustee shall furnish written notification of the substance of such amendment or
consent to each Rating Agency.

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(d) Promptly after the execution of any such amendment or consent, the
Owner Trustee shall furnish written notification of the substance of such
amendment or consent to each Certificateholder and the Indenture Trustee.

(e) It shall not be necessary for the consent of Certificateholders or
Noteholders pursuant to Section 10.1(b) to approve the particular form of any
proposed amendment or consent, but it shall be sufficient if such consent shall
approve the substance thereof. The manner of obtaining such consents (and any
other consents of Certificateholders and Noteholders provided for in this
Agreement) and of evidencing the authorization of the execution thereof by
Certificateholders or Noteholders shall be subject to such reasonable
requirements as the Owner Trustee or Indenture Trustee, as applicable, may
prescribe, including the establishment of record dates.

(f) Prior to the execution of any amendment to this Agreement, the Owner
Trustee and the Backup Servicer shall be entitled to receive and rely upon an
Opinion of Counsel stating that the execution of such amendment is authorized or
permitted by this Agreement, in addition to the Opinion of Counsel referred to
in Section 10.2(i). The Owner Trustee and the Backup Servicer may, but shall
not be obligated to, enter into any such amendment which affects the Owner
Trustee's and the Backup Servicer's own rights, duties or immunities under this
Agreement or otherwise.

Section 10.2. PROTECTION OF TITLE TO TRUST PROPERTY. (a) The Servicer
shall execute and file such financing statements and cause to be executed and
filed such continuation and other statements, all in such manner and in such
places as may be required by law fully to preserve, maintain and protect the
interest of the Trust, the Owner Trustee and the Indenture Trustee in the Trust
Property and in the proceeds thereof. The Servicer shall deliver (or cause to
be delivered) to the Owner Trustee, the Indenture Trustee and Morgan
file-stamped copies of, or filing receipts for, any document filed as provided
above, as soon as available following such filing.

(b) Neither the Seller, the Servicer nor the Trust shall change its name,
identity or corporate structure in any manner that would, could or might make
any financing statement or continuation statement filed by the Seller in
accordance with paragraph (a) above seriously misleading within the meaning of
Section 9-402(7) of the UCC, unless it shall have given the Owner Trustee, the
Indenture Trustee and Morgan at least 60 days' prior written notice thereof, and
shall promptly file appropriate amendments to all previously filed financing
statements and continuation statements.

(c) Each of the Seller, the Servicer and the Trust shall give the Owner
Trustee, the Indenture Trustee and Morgan at least 60 days' prior written notice
of any relocation of its principal executive office if, as a result of such
relocation, the applicable provisions of the UCC would require the filing of any
amendment of any previously filed financing or continuation statement or of any
new financing statement. The Servicer shall at all times maintain each office
from which it services Receivables and its principal executive office within the
United States of America.

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(d) The Servicer shall maintain accounts and records as to each Receivable
accurately and in sufficient detail to permit (i) the reader thereof to know at
any time the status of such Receivable, including payments and recoveries made
and payments owing (and the nature of each) and (ii) reconciliation between
payments or recoveries on (or with respect to) each Receivable and the amounts
from time to time deposited in the Collection Account in respect of such
Receivable.

(e) The Servicer shall maintain its computer systems so that, from and
after the time of sale under this Agreement of the Receivables to the Trust, the
Servicer's master computer records (including any backup archives) that refer to
any Receivable indicate clearly (with reference to the particular trust) that
the Receivable is owned by the Trust. Indication of the Trust's ownership of a
Receivable shall be deleted from or modified on the Servicer's computer systems
when, and only when, the Receivable has been paid in full or repurchased by the
Seller or Servicer.

(f) If at any time the Seller or the Servicer proposes to sell, grant a
security interest in, or otherwise transfer any interest in automotive
receivables to any prospective purchaser, lender or other transferee, the
Servicer shall give to such prospective purchaser, lender or other transferee
computer tapes, records or print-outs (including any restored from backup
archives) that, if they refer in any manner whatsoever to any Receivable,
indicate clearly that such Receivable has been sold and is owned by the Trust
unless such Receivable has been paid in full or repurchased by the Seller or
Servicer.

(g) The Servicer shall permit the Owner Trustee, the Indenture Trustee,
the Backup Servicer, Morgan and their respective agents, at any time to inspect,
audit and make copies of and abstracts from the Servicer's records regarding any
Receivables or any other portion of the Trust Property.

(h) The Servicer shall furnish to the Owner Trustee, the Indenture
Trustee, the Backup Servicer and Morgan at any time upon request a list of all
Receivables then held as part of the Trust, together with a reconciliation of
such list to the Schedule of Receivables and to each of the Servicer's
Certificates furnished before such request indicating removal of Receivables
from the Trust. Upon request, the Servicer shall furnish a copy of any list to
the Seller. The Owner Trustee shall hold any such list and Schedule of
Receivables for examination by interested parties during normal business hours
at the Corporate Trust Office upon reasonable notice by such Persons of their
desire to conduct an examination.

(i) The Seller and the Servicer shall deliver to the Owner Trustee, the
Indenture Trustee and Morgan simultaneously with the execution and delivery of
this Agreement and of each amendment thereto and upon the occurrence of the
events giving rise to an obligation to give notice pursuant to Section 10.2(b)
or (c), an Opinion of Counsel either (a) stating that, in the opinion of such
Counsel, all financing statements and continuation statements have been executed
and filed that are necessary fully to preserve and protect the interest of the
Owner Trustee and the Indenture Trustee in the Receivables and the other Trust
Property, and reciting the details of such filings or referring to prior
Opinions of

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Counsel in which such details are given, or (b) stating that, in the opinion of
such counsel, no such action is necessary to preserve and protect such interest.

(j) The Servicer shall deliver to the Owner Trustee, the Indenture Trustee
and Morgan, within 90 days after the beginning of each calendar year beginning
with the first calendar year beginning more than three months after the Initial
Closing Date, an Opinion of Counsel, either (a) stating that, in the opinion of
such counsel, all financing statements and continuation statements have been
executed and filed that are necessary fully to preserve and protect the interest
of the Trust and the Indenture Trustee in the Receivables, and reciting the
details of such filings or referring to prior Opinions of Counsel in which such
details are given, or (b) stating that, in the opinion of such counsel, no
action shall be necessary to preserve and protect such interest.

Section 10.3. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York without regard to
the principles of conflicts of laws thereof and the obligations, rights and
remedies of the parties under this Agreement shall be determined in accordance
with such laws.

Section 10.4. SEVERABILITY OF PROVISIONS. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Certificates
or the Notes or the respective rights of the Holders thereof.

Section 10.5. ASSIGNMENT. Notwithstanding anything to the contrary
contained in this Agreement, except as provided in Section 7.2 or Section 8.2
(and as provided in the provisions of the Agreement concerning the resignation
of the Servicer and the Backup Servicer), this Agreement may not be assigned by
the Seller or the Servicer without the prior written consent of the Owner
Trustee, the Indenture Trustee, the Backup Servicer, Morgan and a Certificate
Majority (which consent, in the case of the Owner Trustee or the Indenture
Trustee, shall not be unreasonably withheld).

Section 10.6. THIRD-PARTY BENEFICIARIES. This Agreement shall inure to
the benefit of and be binding upon the parties hereto and their respective
successors and permitted assigns. Each of Morgan and the Certificateholders and
their successors and assigns shall be a third-party beneficiary to the
provisions of this Agreement, and shall be entitled to rely upon and directly to
enforce such provisions of this Agreement. Nothing in this Agreement, express
or implied, shall give to any Person, other than the parties hereto and their
successors hereunder, any benefit or any legal or equitable right, remedy or
claim under this Agreement.

Section 10.7. [RESERVED].

Section 10.8. COUNTERPARTS. For the purpose of facilitating its execution
and for other purposes, this Agreement may be executed simultaneously in any
number of

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counterparts, each of which counterparts shall be deemed to be an original, and
all of which counterparts shall constitute but one and the same instrument.

Section 10.9. INTENTION OF PARTIES. (a) The execution and delivery of
this Agreement and each Transfer Agreement shall constitute an acknowledgement
by the Seller, that it is intended that the assignment and transfer contemplated
herein and therein constitute a sale and assignment outright, and not for
security, of the Receivables and the other Trust Property, conveying good title
thereto free and clear of any Liens, from the Seller to the Trust, and that the
Receivables and the other Trust Property shall not be a part of the Seller's
estate in the event of the insolvency, receivership, conservatorship or the
occurrence of another similar event, of, or with respect to, the Seller. In the
event that any such conveyance is determined to be made as security for a loan
made by the Trust or the Certificateholders to the Seller, the Seller intends
that it shall have granted to the Owner Trustee a first priority security
interest in all of the Seller's right, title and interest in and to the Trust
Property conveyed to the Trust pursuant to Section 2.1 of this Agreement, and
that this Agreement shall constitute a security agreement under applicable law.

(b) The execution and delivery of this Agreement shall constitute an
acknowledgement by the Seller and the Owner Trustee on behalf of the
Certificateholders that they intend that the Certificates will qualify as
indebtedness, and that the Trust will be treated as a security device, for
federal income tax purposes. The Seller and the Owner Trustee on behalf of the
Certificateholders further acknowledge that they intend, in the event that the
Certificates are deemed for federal income tax purposes to represent equity
interests in the Trust, that the Trust will be treated for federal income tax
purposes as a partnership, rather than an association taxable as a corporation.
The powers granted and obligations undertaken in this Agreement shall be
construed so as to further such intent.

Section 10.10. NOTICES. All demands, notices and communications under
this Agreement shall be in writing, personally delivered or mailed by certified
mail-return receipt requested, and shall be deemed to have been duly given upon
receipt (a) in the case of AFL, the Seller or the Servicer, at the following
address: Arcadia Receivables Finance Corp. II, 7825 Washington Avenue South,
Suite 410, Minneapolis, Minnesota 55439-2435, with copies to: Arcadia
Financial Ltd., 7825 Washington Avenue South, Minneapolis, Minnesota
55439-2435, Attention: John A. Witham, (b) in the case of the Owner Trustee, at
the Corporate Trust Office, (c) in the case of the Indenture Trustee and, for so
long as the Indenture Trustee is the Backup Servicer, at Sixth Street and
Marquette Avenue, Minneapolis, Minnesota 55479-0070, Attention: Corporate
Trust Services - Asset Backed Administration, (d) in the case of each Rating
Agency, 99 Church Street, New York, New York 10007 (for Moody's) and 26
Broadway, New York, New York 10004 (for Standard & Poor's), Attention:
Asset-Backed Surveillance, (e) in the case of Morgan, Morgan Guaranty Trust
Company of New York, 500 Stanton Christiana Road, Newark, Delaware 19713-2107,
Attention: Asset Finance Group, and (f) any notice required or permitted to be
mailed to a Certificateholder or a Noteholder shall be given by first class
mail, postage prepaid, at the address of such Holder as shown in the Certificate
Register or the Note Register (as the case may be), and any notice so mailed
within the time prescribed in this

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Agreement shall be conclusively presumed to have been duly given, whether or not
the Certificateholder or the Noteholder receives such notice.

Section 10.11. LIMITATION OF LIABILITY. It is expressly understood and
agreed by the parties hereto that (a) this Agreement is executed and delivered
by Wilmington Trust Company, not individually or personally but solely as Owner
Trustee of the Trust under the Trust Agreement, in the exercise of the powers
and authority conferred and vested in it, (b) each of the representations,
undertakings and agreements herein made on the part of the Trust is made and
intended not as personal representations, undertakings and agreements by
Wilmington Trust Company but is made and intended for the purpose for binding
only the Trust, (c) nothing herein contained shall be construed as creating any
liability on Wilmington Trust Company, individually or personally, to perform
any covenant either expressed or implied contained herein, all such liability,
if any, being expressly waived by the parties to this Agreement and by any
person claiming by, through or under them and (d) under no circumstances shall
Wilmington Trust Company be personally liable for the payment of any
indebtedness or expenses of the Trust or be liable for the breach or failure of
any obligation, representation, warranty or covenant made or undertaken by the
Trust under this Agreement or any related documents.

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IN WITNESS WHEREOF, the Issuer, the Seller, AFL, the Servicer and the
Backup Servicer have caused this Amended and Restated Sale and Servicing
Agreement to be duly executed by their respective officers as of the day and
year first above written.

ISSUER:

OLYMPIC AUTOMOBILE RECEIVABLES
WAREHOUSE TRUST

By WILMINGTON TRUST COMPANY,
not in its individual capacity but
solely as Owner Trustee

By /s/ D. Geran
----------------------------------
Name: Denise M. Geran
Title: Financial Services Officer

SELLER:

ARCADIA RECEIVABLES FINANCE
CORP. II

By /s/ John A. Witham
----------------------------------
Name: John A. Witham
Title: Senior Vice President/
Chief Financial Officer

ARCADIA FINANCIAL LTD.,
in its individual capacity and as
Servicer

By /s/ John A. Witham
----------------------------------
Name: John A. Witham
Title: Senior Vice President and
Chief Financial Officer

[Signature page to Amended and Restated Sale and Servicing Agreement]

<PAGE>

BACKUP SERVICER:

NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION

By /s/ Thomas D. Wraalstad
----------------------------------
Name:
Title:

Acknowledged and Accepted:

NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION,
not in its individual capacity but as
Indenture Trustee

By /s/ Thomas D. Wraalstad
-----------------------------------
Name:
Title:

[Signature page to Amended and Restated Sale and Servicing Agreement]

<PAGE>

EXECUTION COPY

AMENDED AND RESTATED CUSTODIAN AGREEMENT

among

ARCADIA FINANCIAL LTD.,
as Custodian,

NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,
as Indenture Trustee

and

OLYMPIC AUTOMOBILE RECEIVABLES WAREHOUSE TRUST

Dated as of July 31, 1997

<PAGE>

This Amended and Restated Custodian Agreement, dated as of July 31, 1997
(the "Custodian Agreement"), is made with respect to the formation of Olympic
Automobile Receivables Warehouse Trust (the "Trust"), among Arcadia Financial
Ltd., a Minnesota corporation, as Custodian (in such capacity, the "Custodian"),
Norwest Bank Minnesota, National Association, as Indenture Trustee (the
"Indenture Trustee") and the Trust. Capitalized terms used herein which are not
defined herein shall have the meanings set forth in the Sale and Servicing
Agreement (as hereinafter defined).

W I T N E S S E T H:

WHEREAS, the Trust, Arcadia Financial Ltd. ("AFL"), in its individual
capacity and as Servicer (in such capacity, the "Servicer"), Arcadia Receivables
Finance Corp. II (the "Seller") and Norwest Bank Minnesota, National
Association, as Backup Servicer, entered into the Sale and Servicing Agreement,
dated as of December 28, 1995 (as previously amended, the "Original Sale and
Servicing Agreement"), pursuant to which the Seller, pursuant to one or more
Transfer Agreements, sold, transferred and assigned and undertook to continue to
so sell, transfer and assign from time to time to the Trust all of the Seller's
right, title and interest in and to the Receivables and the related Other
Conveyed Property;

WHEREAS, in connection with such sales, transfers and assignments, the
Original Sale and Servicing Agreement provides that the Trust shall hold the
Receivables Files directly or through one or more custodians acting as agents of
the Trust under a custodian agreement;

WHEREAS, pursuant to the Indenture, dated as of December 28, 1995 (as
previously amended, the "Original Indenture"), between the Trust and Norwest
Bank Minnesota, National Association, as Indenture Trustee, the Trust pledged
the Indenture Collateral (as defined in the Original Indenture) to the Indenture
Trustee for the benefit of the Noteholders to secure the performance of the
Secured Obligations (as defined in the Original Indenture);

WHEREAS, pursuant to the Custodian Agreement dated as of December 28, 1995,
(as previously amended, the "Original Custodian Agreement"), the Owner Trustee
on behalf of the Trust and on behalf of the Indenture Trustee in respect of the
Secured Obligations appointed the Custodian as Custodian of the Receivables
Files and as agent of the Indenture Trustee in respect of the Secured
Obligations;

WHEREAS, the Original Sale and Servicing Agreement and the Original
Indenture are being amended and restated by the original parties thereto as of
the date hereof and, after such amendment and restatement, will supersede the
Original Sale and Servicing Agreement and the Original Indenture (such amended
and restated agreements referred to herein as the "Sale and Servicing Agreement"
and the "Indenture," respectively);

WHEREAS, the Custodian, the Indenture Trustee and the Trust desire to enter
into this Custodian Agreement which amends and restates and will supersede the
Original Custodian Agreement; and

<PAGE>

WHEREAS, pursuant to this Custodian Agreement, the Custodian will continue
to serve as Custodian of the Receivables Files and as agent for the Indenture
Trustee in respect of the Secured Obligations.

NOW, THEREFORE, in consideration of the mutual agreements herein contained
and of other good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, the parties agree as follows:

1. APPOINTMENT OF CUSTODIAN: ACKNOWLEDGMENT OF RECEIPT. Subject to the
terms and conditions of the Original Custodian Agreement, the Owner Trustee on
behalf of the Trust and the Indenture Trustee on behalf of the Noteholders
revocably appointed the Custodian, and the Custodian accepted such appointment,
as custodian and bailee and subject to the terms and conditions hereof, the
Owner Trustee on behalf of the Trust and the Indenture Trustee on behalf of the
Noteholders hereby confirms such revocable appointment of the Custodian, and the
Custodian hereby confirms its acceptance of such appointment, as custodian and
bailee. Pursuant to the Indenture, from and after the Initial Closing Date
through the date of release (such date, the "Release Date") of the security
interest granted to the Indenture Trustee in respect of the Secured Obligations
pursuant to the terms of the Indenture the Custodian shall not be acting as
agent of the Trust, but rather shall be acting as agent of the Indenture Trustee
for the benefit of the Noteholders in respect of the Secured Obligations to
maintain exclusive custody of the Receivables Files relating to the Receivables
from time to time held as part of the Trust. In performing its duties
hereunder, the Custodian agrees to act with reasonable care, using that degree
of skill and attention that a commercial bank acting in the capacity of a
custodian would exercise with respect to files relating to comparable automotive
or other receivables that it services or holds for itself or others. The
Custodian hereby acknowledges that on the Initial Closing Date, it received the
Receivable File for each Receivable listed on the Initial Closing Date in the
Schedule of Receivables attached as Exhibit A to the Original Sale and Servicing
Agreement (the "Master Schedule of Receivables") and that on each subsequent
Transfer Date, it received the Receivable File for each Receivable listed in the
Schedule of Receivables attached as Exhibit A to the related Transfer Agreement
and made part of the Master Schedule of Receivables.

As evidence of such acknowledgement, the Custodian executed and delivered
on the Initial Closing Date, and on each subsequent Transfer Date, a Custodian's
Acknowledgment substantially in the form attached to the Original Custodian
Agreement. In connection with each conveyance of Receivables to the Trust
pursuant to each Transfer Agreement from and after the date of this Custodian
Agreement the Custodian shall execute and deliver on the applicable Transfer
Date a Custodian's Acknowledgement, substantially in the form attached hereto as
Exhibit B, acknowledging the Custodian's receipt of the Receivable File for each
Receivable listed in the Schedule of Receivables attached as Exhibit A to the
related Transfer Agreement and made part of the Master Schedule of Receivables.

2. MAINTENANCE OF CUSTODIAL ACCOUNT AT OFFICE. The Custodian agrees to
maintain the Receivables Files at its principal office or, subject to the prior
written consent of Morgan and AFL to perform at such other office as shall from
time to time be identified to the Indenture Trustee and Morgan, and the
Custodian will hold the Receivables Files in such office as agent of the Owner
Trustee and on behalf of the Indenture Trustee for the

2
<PAGE>

benefit of the Noteholders until the Release Date, clearly segregated from any
other instruments and files on its records, including other instruments and
files held by the Custodian with respect to other trusts established by the
Seller, and in compliance with Section 3(b) hereof.

3. DUTIES OF CUSTODIAN.

(a) COLLATERAL REVIEWS. The Indenture Trustee agrees to perform, and
the Custodian agrees to allow the Indenture Trustee or another party acceptable
to Morgan to perform, reviews of the Collateral (a) within five (5) business
days of the beginning of each Warehousing Period, (b) every thirty (30) days
after the initial audit during such Warehousing Period, and (c) during each
Warehousing Period, upon five Business Days notice from the Administrative
Agent. Each review shall include a physical inventory (which may be electronic
if so approved by the Administrative Agent) of the Receivables Files relating to
the Receivables transferred since the beginning of the Warehousing Period, in
order to determine that AFL is in possession of a Receivable File for each
Receivable listed in the Schedule of Receivables attached as Exhibit A to each
Transfer Agreement executed during such Warehousing Period, and to perform a
limited review of at least fifty (50) of the Receivables Files relating to the
Receivables transferred since the beginning of the applicable Warehousing Period
to determine that each Receivable File so reviewed includes (i) a fully executed
original retail installment sales contract or promissory note, (ii) a
certificate of insurance, application form for insurance signed by the Obligor
or a signed representation letter from the Obligor named in the Receivable File
pursuant to which the Obligor has agreed to obtain physical damage insurance for
the related Financed Vehicle, or a documented verbal confirmation of the
insurance policy for the Financed Vehicle, (iii) the original Lien Certificate
or application therefor and (iv) a credit application or a copy thereof. As
evidence of the performance of each such review on each review date, the
Indenture Trustee or such other person shall execute and deliver to Morgan and
the Owner Trustee, on behalf of the Trust, an Acknowledgement in the form of
Exhibit C hereto. If such review reveals, in Morgan's opinion, an
unsatisfactory number of missing items Morgan in its sole discretion may require
a full review of every Receivable File by the Indenture Trustee or such other
party acceptable to Morgan. The party performing such full review shall be
entitled to reimbursement from AFL for any costs or expenses incurred in
connection therewith.

(b) SAFEKEEPING. The Custodian shall hold the Receivables Files on behalf
of the Noteholders, and maintain such accurate and complete accounts, records
and computer systems pertaining to each Receivable File as will enable the Trust
to comply with the terms and conditions of the Sale and Servicing Agreement.
Each Receivable shall be stamped on both the first page and the signature page
(if different) in accordance with the instructions from time to time provided by
Morgan, and the form and content of the stamp shall be acceptable to Morgan.
Each Receivable shall be identified on the books and records of the Custodian in
a manner that (i) is consistent with the practices of a commercial bank acting
in the capacity of custodian with respect to similar receivables, (ii) indicates
that the Receivable is held by the Custodian as agent of the Owner Trustee and
on behalf of the Indenture Trustee for the benefit of the Noteholders until the
Release Date and (iii) is otherwise necessary, as reasonably determined by the
Custodian, to comply with the terms of this

3
<PAGE>

Custodian Agreement. The Custodian shall conduct, or cause to be conducted,
periodic physical inspections of the Receivables Files held by it under this
Custodian Agreement, and of the related accounts, records and computer systems,
in such a manner as shall enable Morgan, the Owner Trustee on behalf of the
Trust, the Indenture Trustee and the Custodian to verify the accuracy of the
Custodian's inventory and recordkeeping. Such inspections shall be conducted at
such times, in such manner and by such persons including, without limitation,
independent accountants, as Morgan, the Owner Trustee or the Indenture Trustee
may request, and the cost of such inspections shall be borne directly by the
Custodian and not by the Trust. The Custodian shall promptly report to Morgan,
the Owner Trustee and the Indenture Trustee any failure on its part to hold the
Receivables Files and maintain its accounts, records and computer systems as
herein provided and promptly take appropriate action to remedy any such failure.
Notwithstanding the above, the Custodian shall make microfiche copies of the
Receivables Files and may maintain such microfiche copies of the Receivables
Files in lieu of maintaining physical possession of the Receivables Files;
PROVIDED, HOWEVER, that such microfiche copies shall duplicate the entire
contents of each Receivable File and, provided further, that the Custodian shall
at all times maintain the original of the fully executed original retail
installment sales contract or promissory note and of the Lien Certificate or
application therefor, if no such Lien Certificate has yet been issued, relating
to each Receivable. Such original sales contracts and promissory notes and Lien
Certificate and application therefor shall be stored in a fireproof vault. The
Custodian shall cause the Indenture Trustee to have at all times a copy of the
microfiche made with respect to all Receivables Files, and the Indenture Trustee
shall hold such microfiche copy on behalf of the Noteholders.

(c) ACCESS TO RECORDS. The Custodian shall, subject only to the
Custodian's security requirements applicable to its own employees having access
to similar records held by the Custodian, which requirements shall be consistent
with the practices of a commercial bank acting in the capacity of custodian with
respect to similar receivable files or records, and at such times as may be
reasonably imposed by the Custodian, permit only Morgan, the Indenture Trustee
and the Owner Trustee, on behalf of the Trust, or their duly authorized
representatives, attorneys or auditors to inspect the Receivables Files and the
related accounts, records, computer systems and microfiche maintained by the
Custodian pursuant hereto at such times as Morgan, the Indenture Trustee and the
Owner Trustee, on behalf of the Trust, may reasonably request.

(d) RELEASE OF DOCUMENTS. The Custodian shall release any Receivable in
the Receivables Files to the Servicer or the Trust, if appropriate, only under
the circumstances provided in the Sale and Servicing Agreement.

(e) ADMINISTRATION; REPORTS. The Custodian shall, in general, attend to
all non-discretionary details in connection with maintaining custody of the
Receivables Files on behalf of the Trust. In addition, the Custodian shall
assist the Indenture Trustee and the Owner Trustee, on behalf of the Trust,
generally in the preparation of any routine reports to Noteholders,
Certificateholders or to regulatory bodies, to the extent necessitated by the
Custodian's custody of the Receivables Files.

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<PAGE>

(f) REVIEW OF LIEN CERTIFICATES. On any Transfer Date, as applicable, the
Custodian shall deliver to the Indenture Trustee a listing of all Receivables
with respect to which a Lien Certificate, showing Arcadia Financial Ltd. as
secured party, was not included in the related Receivable File as of such
Transfer Date. No later than 180 days after such Transfer Date, the Indenture
Trustee shall review the Receivable File for each Receivable that is identified
in such listing as not including a Lien Certificate in the related Receivable
File to confirm that such Receivable File contains a Lien Certificate showing
Arcadia Financial Ltd. as secured party and shall notify Morgan, the Indenture
Trustee, the Owner Trustee and the Seller of the results of such review,
including the failure of any such Receivable File to contain such a Lien
Certificate.

4. INSTRUCTIONS; AUTHORITY TO ACT. The Custodian shall be deemed to have
received proper instructions with respect to the Receivables Files upon its
receipt of written instructions signed by a Responsible Officer of the Indenture
Trustee. A certified copy of a bylaw or of a resolution of the Board of
Directors of the Indenture Trustee may be received and accepted by the Custodian
as conclusive evidence of the authority of any such officer to act and may be
considered as in full force and effect until receipt of written notice to the
contrary by the Indenture Trustee. Such instructions may be general or specific
in terms. A copy of any such instructions shall be furnished by the Indenture
Trustee to the Owner Trustee and Morgan.

5. INDEMNIFICATION BY THE CUSTODIAN. The Custodian agrees to indemnify
the Trust, the Owner Trustee, the Indenture Trustee and Morgan for any and all
liabilities obligations, losses, damage, payments, costs or expenses of any kind
whatsoever (including the fees and expenses of counsel) that may be imposed on,
incurred or asserted against the Trust, the Owner Trustee, the Indenture Trustee
or Morgan as the result of any act or omission in any way relating to the
maintenance and custody by the Custodian of the Receivables Files; PROVIDED,
HOWEVER, that the Custodian shall not be liable for any portion of any such
liabilities, obligations, losses, damages, payments or costs or expenses due to
the willful misfeasance, bad faith or gross negligence of the Indenture Trustee
or Morgan on behalf of the Noteholders or the Owner Trustee on behalf of the
Trust.

6. ADVICE OF COUNSEL. The Custodian, the Indenture Trustee for the
benefit of the Noteholders and Morgan further agree that the Custodian shall be
entitled to rely and act upon advice of counsel with respect to its performance
hereunder as custodian and shall be without liability for any action reasonably
taken pursuant to such advice, provided that such action is not in violation of
applicable Federal or state law.

7. EFFECTIVE PERIOD, TERMINATION AND AMENDMENT, INTERPRETIVE AND
ADDITIONAL PROVISIONS. This Custodian Agreement shall become effective as of
the date hereof and shall continue in full force and effect until terminated as
hereinafter provided. This Custodian Agreement may be amended at any time by
mutual agreement of the parties hereto and may be terminated by any party by
giving written notice to the other parties, such termination to take effect no
sooner than thirty (30) days after the date of such notice. Upon any
termination or amendment of this Custodian Agreement, the Indenture Trustee for
the benefit of the Noteholders in the case of amendments, and the party seeking
termination, in the case of terminations, shall give written notice to Standard
& Poor's and Moody's (the "Rating

5
<PAGE>

Agencies"). Immediately after receipt of notice of termination of this
Custodian Agreement, the Custodian shall deliver the Receivables Files to the
Indenture Trustee for the benefit of the Noteholders, or the Indenture Trustee's
agent, at such place or places as the Indenture Trustee may designate, and the
Indenture Trustee, or its agent, as the case may be, shall act as custodian for
such Receivables Files for the benefit of the Noteholders until such time as a
successor custodian, approved by Morgan, has been appointed. If, within
twenty-four (24) hours after the termination of this Custodian Agreement, the
Custodian has not delivered the Receivables Files in accordance with the
preceding sentence, the Indenture Trustee may enter the premises of the
Custodian and remove the Receivables Files from such premises. In connection
with the administration of this Agreement, the parties may agree from time to
time upon the interpretation of the provisions of this Agreement as may in their
joint opinion be consistent with the general tenor and purposes of this
Agreement, any such interpretation to be signed by all parties and annexed
hereto.

8. GOVERNING LAW. This Custodian Agreement shall be governed by and
construed in accordance with the laws of the State of New York.

9. NO PETITION. The Custodian and the Indenture Trustee, by entering
into this Agreement, hereby covenant and agree that they will not at any time
institute against the Seller, the Trust or the General Partner, or join in any
institution against the Seller, the Trust or the General Partner, in any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceeding,
or other proceeding under any United States Federal or state bankruptcy or
similar law in connection with any obligations relating to this Agreement or any
of the Related Documents until the date that is one year and one day after the
termination of the Trust pursuant to the terms of the Trust Agreement.

10. NOTICES. All demands, notices and communications hereunder shall be
in writing, delivered or mailed, and shall be deemed to have been duly given
upon receipt (a) in the case of the Custodian, at the following address:
Arcadia Financial Ltd., 7825 Washington Avenue South, Minneapolis, Minnesota
55439-2435, Attention: President, (b) in the case of the Seller, at the
following address: Arcadia Receivables Finance Corp. II, 7825 Washington Avenue
South, Suite 410, Minneapolis, Minnesota 55439-2435, Attention: Secretary, (c)
in the case of the Trust, in care of the Owner Trustee, at the following
address: Wilmington Trust Company, Rodney Square North, 1100 North Market
Street, Wilmington, Delaware 19890-0001, Attention: Corporate Trust
Administration, (d) in the case of the Indenture Trustee: Norwest Bank
Minnesota, National Association, Sixth Street and Marquette Avenue, Minneapolis,
Minnesota 55479-0069, Attention: Corporate Trust Department, (e) in the case
of Morgan, at the following address: Morgan Guaranty Trust Company of New York,
500 Stanton Christiana Road, Newark, Delaware 19713-2107, Attention: Asset
Finance Group, and (f) in the case of each Rating Agency at the following
address: 99 Church Street, New York, New York 10007 (for Moody's) and 26
Broadway, New York, New York 10004 (for Standard & Poor's), Attention:
Asset-Backed Surveillance, or at such other address as shall be designated by
such party in a written notice to the other parties.

11. BINDING EFFECT. This Custodian Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective successors
and assigns.

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<PAGE>

Concurrently with the appointment of a successor trustee under the Trust
Agreement, the parties hereto shall amend this Custodian Agreement to make said
successor trustee the successor to the Owner Trustee hereunder. Concurrently
with the appointment of a successor indenture trustee under the Indenture, the
parties hereto shall amend this Custodian Agreement to make said successor
indenture, the successor to the Indenture Trustee hereunder, as the case may be.

12. LIMITATION OF LIABILITY. It is expressly understood and agreed by the
parties hereto that (a) this Agreement is executed and delivered by Wilmington
Trust Company, not individually or personally but solely as Owner Trustee of the
Trust under the Trust Agreement, in the exercise of the powers and authority
conferred and vested in it, (b) each of the representations, undertakings and
agreements herein made on the part of the Trust is made and intended not as
personal representations, undertakings and agreements by Wilmington Trust
Company but is made and intended for the purpose for binding only the Trust, (c)
nothing herein contained shall be construed as creating any liability on
Wilmington Trust Company, individually or personally, to perform any covenant
either expressed or implied contained herein, all such liability, if any, being
expressly waived by the parties to this Agreement and by any person claiming by,
through or under them and (d) under no circumstances shall Wilmington Trust
Company be personally liable for the payment of any indebtedness or expenses of
the Trust or be liable for the breach or failure of any obligation,
representation, warranty or covenant made or undertaken by the Trust under this
Agreement or any related documents.

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<PAGE>

IN WITNESS WHEREOF, each of the parties hereto has caused this Amended and
Restated Custodian Agreement to be in its name and on its behalf by a duly
authorized officer on the day and year first above written.

OLYMPIC AUTOMOBILE RECEIVABLES
WAREHOUSE TRUST

By WILMINGTON TRUST COMPANY,
not in its individual capacity, but solely as
Owner Trustee on behalf of the Trust

By /s/ D. Geran
---------------------------------------
Name: Denise M. Geran
Title: Financial Services Officer

NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION,
as Indenture Trustee

By /s/ Thomas D. Wraalstad
---------------------------------------
Name: Thomas D. Wraalstad
Title: Corporate Trust Officer

ARCADIA FINANCIAL LTD., as Custodian

By /s/ John A. Witham
---------------------------------------
Name: John A. Witham
Title: EVP CFO

[Signature page to Amended and Restated Custodian Agreement]

<PAGE>

EXECUTION COPY

- --------------------------------------------------------------------------------

AMENDED AND RESTATED
NOTE PURCHASE AGREEMENT

among

OLYMPIC AUTOMOBILE RECEIVABLES WAREHOUSE TRUST,
as Seller,

ARCADIA FINANCIAL LTD.,
as Servicer and in its individual capacity

DELAWARE FUNDING CORPORATION
as Purchaser,

and

MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
as Administrative Agent for the benefit of the DFC Owners,

dated as of July 31, 1997

- --------------------------------------------------------------------------------

<PAGE>

TABLE OF CONTENTS

Page
----
ARTICLE I

DEFINITIONS

SECTION 1.01 Certain Defined Terms......................................... 1
SECTION 1.02 Other Definitional Provisions................................. 11

ARTICLE II

PURCHASE AND SALE

SECTION 2.01 Purchase and Sale of the Notes................................ 12
SECTION 2.02 Initial Purchase Price........................................ 12
SECTION 2.03 Incremental Purchases......................................... 12
SECTION 2.04 Extension of Purchase Commitment
Expiration Date............................................... 13
SECTION 2.05 Reduction or Increase of Purchase
Commitment.................................................... 14
SECTION 2.06 Redemption of Notes; Exchanges................................ 14
SECTION 2.07 AFL's Call Option............................................. 15
SECTION 2.08 Note Purchase Termination Events.............................. 15
SECTION 2.09 Calculation and Payment of Interest
and Fees...................................................... 17
SECTION 2.10 Commercial Paper Funding Account.............................. 18

ARTICLE III

CLOSING AND EFFECTIVENESS

SECTION 3.01 Closing....................................................... 19
SECTION 3.02 Funding Date.................................................. 19
SECTION 3.03 Transactions Effected at the Initial
Closing....................................................... 19
SECTION 3.04 Effectiveness Date............................................ 19

ARTICLE IV

CONDITIONS PRECEDENT TO OBLIGATION OF THE PURCHASER
ON THE INITIAL CLOSING DATE

SECTION 4.01 Performance by Parties........................................ 20
SECTION 4.02 Representations and Warranties................................ 20
SECTION 4.03 Corporate Documents........................................... 20
SECTION 4.04 Opinions of Counsel........................................... 20
SECTION 4.05 Opinions of Counsel to the Indenture
Trustee....................................................... 21
SECTION 4.06 Financing Statements.......................................... 21
SECTION 4.07 Ratings....................................................... 21
SECTION 4.08 Documents..................................................... 21

i
<PAGE>

Page
----

SECTION 4.09 No Actions or Proceedings..................................... 22
SECTION 4.10 Approvals and Consents........................................ 22
SECTION 4.11 Officer's Certificate......................................... 22
SECTION 4.12 Investor Certificates......................................... 22
SECTION 4.13 Accounts...................................................... 22
SECTION 4.14 Lockbox Account............................................... 22
SECTION 4.15 Syndication................................................... 22
SECTION 4.16 Other Documents............................................... 22

ARTICLE IV A

CONDITIONS PRECEDENT TO EFFECTIVENESS

SECTION 4.01A Article IV Conditions......................................... 23
SECTION 4.02A Executed Agreements........................................... 23

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF THE SELLER

SECTION 5.01 Authority, etc................................................ 23
SECTION 5.02 Notes......................................................... 24
SECTION 5.03 Litigation.................................................... 24
SECTION 5.04 Taxes, etc.................................................... 25
SECTION 5.05 Financial Condition of the Seller............................. 25
SECTION 5.06 Absence of Material Adverse Effect............................ 25
SECTION 5.07 Investment Company Act........................................ 25
SECTION 5.08 Full Disclosure............................................... 25

ARTICLE VI

REPRESENTATIONS AND WARRANTIES
OF THE PURCHASER

SECTION 6.01 Organization.................................................. 26
SECTION 6.02 Authority, etc................................................ 26
SECTION 6.03 Securities Act................................................ 26
SECTION 6.04 Investment Company Act........................................ 27

ARTICLE VII

REPRESENTATIONS AND WARRANTIES OF AFL

SECTION 7.01 Organization.................................................. 27
SECTION 7.02 Authority, etc................................................ 27
SECTION 7.03 Litigation.................................................... 28
SECTION 7.04 Full Disclosure............................................... 28

ii
<PAGE>

Page
----

ARTICLE VIII

COVENANTS OF THE SELLER

SECTION 8.01 Rating of Purchaser's Commercial Paper
Notes......................................................... 29
SECTION 8.02 Information from the Seller................................... 29
SECTION 8.03 Access to Information......................................... 30
SECTION 8.04 Security Interests; Further Assurances........................ 30
SECTION 8.05 Covenants..................................................... 30
SECTION 8.06 Agreement Amendments.......................................... 30
SECTION 8.07 Receivables Files............................................. 30

ARTICLE IX

COVENANTS OF AFL

SECTION 9.01 Rating of Purchaser's Commercial Paper
Notes......................................................... 31
SECTION 9.02 Information from AFL.......................................... 31
SECTION 9.03 Access to Information......................................... 31
SECTION 9.04 Security Interests; Further Assurances........................ 32
SECTION 9.05 Sale and Servicing Agreement and Purchase
Agreement Covenants........................................... 32
SECTION 9.06 Amendments.................................................... 32

ARTICLE X

MUTUAL COVENANTS AND AGREEMENTS

SECTION 10.01 Legal Conditions to Closing................................... 33
SECTION 10.02 Expenses and Fees............................................. 33
SECTION 10.03 Mutual Obligations............................................ 33
SECTION 10.04 Funding of Purchase Price..................................... 33
SECTION 10.05 Restrictions on Transfer...................................... 34

ARTICLE XI

INDEMNIFICATION

SECTION 11.01 Indemnification by the Seller and AFL......................... 35
SECTION 11.02 Procedure..................................................... 35
SECTION 11.03 Defense of Claims............................................. 35
SECTION 11.04 Indemnity for Taxes, Reserves and Expenses.................... 36
SECTION 11.05 Costs, Expenses, Taxes, Breakage Payments
and Increased Costs under Note Purchase
Agreement and Program Facility................................ 38

iii
<PAGE>

Page
----

ARTICLE XII

THE ADMINISTRATIVE AGENT

SECTION 12.01 Authorization and Action...................................... 39
SECTION 12.02 Administrative Agent's Reliance, Etc.......................... 39
SECTION 12.03 Administrative Agent and Affiliates........................... 40
SECTION 12.04 Indemnification............................................... 40
SECTION 12.05 Purchase Decision............................................. 41
SECTION 12.06 Successor Administrative Agent................................ 41

ARTICLE XIII

MISCELLANEOUS

SECTION 13.01 Amendments.................................................... 42
SECTION 13.02 Notices....................................................... 42
SECTION 13.03 No Waiver; Remedies........................................... 43
SECTION 13.04 Binding Effect; Assignability................................. 43
SECTION 13.05 Provision of Documents and Information........................ 43
SECTION 13.06 GOVERNING LAW; JURISDICTION................................... 44
SECTION 13.07 No Proceedings................................................ 44
SECTION 13.08 Execution in Counterparts..................................... 44
SECTION 13.09 No Recourse................................................... 44
SECTION 13.10 Limited Recourse.............................................. 45
SECTION 13.11 Survival...................................................... 45
SECTION 13.12 Consent to Amended and Restated Agreements.................... 45
SECTION 13.13 Third-Party Beneficiaries..................................... 45

EXHIBITS

EXHIBIT A-1 Opinions of Counsel to Seller
EXHIBIT A-2 Opinions of Counsel to AFL
EXHIBIT A-3 Opinions of Counsel to ARFC II
EXHIBIT A-4 Opinions of Counsel to Owner Trustee
EXHIBIT C Opinions of Counsel to Indenture Trustee
EXHIBIT D Form of Notice of Incremental Purchase

Appendix 1 Form of Investment Letter

iv
<PAGE>

AMENDED AND RESTATED NOTE PURCHASE AGREEMENT ("NOTE PURCHASE
AGREEMENT") dated as of July 31, 1997, among OLYMPIC AUTOMOBILE RECEIVABLES
WAREHOUSE TRUST, a Delaware business trust (the "SELLER"), Arcadia Financial
Ltd., a Minnesota corporation, as Servicer (as defined below) and in its
individual capacity ("AFL"), DELAWARE FUNDING CORPORATION (with its respective
successors and assigns, the "PURCHASER"), and Morgan Guaranty Trust Company of
New York, as Administrative Agent for the benefit of the DFC Owners (as defined
below) (the "ADMINISTRATIVE AGENT").

The parties hereto agree as follows:

ARTICLE I

DEFINITIONS

SECTION 1.01 CERTAIN DEFINED TERMS. Capitalized terms used herein
without definition shall have the meanings set forth in the Sale and Servicing
Agreement (as defined below), the Trust Agreement (as defined below) or the
Indenture (as defined below), as applicable. Additionally, the following terms
shall have the following meanings:

"ACQUISITION" means the purchase, in one transaction or a series of
related transactions, directly or indirectly (including by merger, tender offer,
exchange offer, consolidation or otherwise) by AFL and/or any of its
Subsidiaries of more than 50% of the assets or issued and outstanding stock of
another Person.

"ACT" means the Securities Act of 1933, as amended.

"ADJUSTED LIBOR" shall mean, with respect to any Interest Accrual
Period (or portion thereof), a rate per annum equal to the quotient obtained
(rounded upwards, if necessary, to the next higher 1/100 of 1%) by dividing (i)
LIBOR for such Interest Accrual Period (or portion thereof) by (ii) a percentage
equal to 100% minus the maximum rate of all reserve requirements as specified in
Regulation D of the Board of Governors of the Federal Reserve System (or any
successor to all or any portion thereof establishing reserve requirements)
including any marginal, emergency, supplemental, special or other reserves, that
are applicable to a DFC Owner during such Interest Accrual Period (or portion
thereof) in respect of eurocurrency or eurodollar funding, lending or
liabilities.

"ADMINISTRATION AGREEMENT" means the Amended and Restated
Administration Agreement between the Seller and Wilmington Trust Company, a
Delaware corporation, as administrator, dated as of July 31, 1997, as it may be
amended, modified or supplemented.

<PAGE>

"ADMINISTRATIVE AGENT" means Morgan Guaranty Trust Company of New
York, in its capacity as administrative agent for the DFC Owners.

"AFL" means Arcadia Financial Ltd., a Minnesota Corporation, and its
successors and assigns.

"ARFC II" means Arcadia Receivables Financial Corp. II, a Delaware
corporation, and its successors and assigns.

"ASSIGNMENT AGREEMENT" means each assignment agreement between AFL and
ARFC II, pursuant to which AFL sells and assigns a specified pool of Receivables
to ARFC II.

"BASE RATE" shall mean, with respect to each day, a rate per annum
equal to the higher of (i) the prime rate announced from time to time by the
Administrative Agent and in effect on the morning of each such day, and (ii) the
rate 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, as published for each such day (or, if such day is not a Business
Day, the next succeeding Business Day) by the Federal Reserve Bank of New York,
or if such rate is not so published for any such day, the average of the
quotations for such day for such transactions received by the Administrative
Agent from three Federal funds brokers of recognized standing selected by it
plus one-half of one percent (1/2 of 1%). Each determination of the Base Rate
shall be calculated on the basis of actual days elapsed and a year of 365 or 366
days, as the case may be.

"BREAKAGE PAYMENT" shall mean, if any DFC Purchaser shall (i) receive
payment of principal with respect to its Percentage Interest in the Purchased
Interest (as such terms are defined in the DFC Asset Purchase Agreement) on any
day other than on a Payment Date, (ii) at the request of the Seller, receive a
Repurchase Amount (as such term is defined in the DFC Asset Purchase Agreement)
on a day other than the last day of a Tranche Period or (iii) at the request of
the Seller, have arranged funding of its anticipated Percentage Interest in the
Purchased Interest for a period to commence on a future date and all or a
portion of the Purchased Interest is not available for purchase on such day, any
resulting loss (calculated as the difference between the interest that would
have been payable on such Purchased Interest through such Payment Date or last
day of such Tranche Period, or beginning on such purchase date, as the case may
be, and the amount earned by such DFC Purchaser in re-employing such funds) or
expense incurred by such DFC Purchaser, but excluding losses or expenses for the
period after any such payment or purchase date, as the case may be; PROVIDED
that such DFC Purchaser shall have delivered to the Administrative Agent and the
Administrative Agent shall have delivered to the Seller, the Indenture Trustee
and the Owner Trustee on or prior to the date on which such DFC Purchaser
requests reimbursement for such losses or expenses a certificate as to the
amount of such loss or

2
<PAGE>

expense and showing, in reasonable detail, the calculation employed by such DFC
Purchaser to determine the amount of such loss or expense, which certificate
shall be conclusive in the absence of manifest error.

"CALL OPTION" means AFL's option to purchase the Notes from the
Administrative Agent pursuant to Section 2.07 hereof.

"CAPITAL BASE" shall mean, at any date, AFL's Tangible Net Worth at
such date.

"CAPITAL BASE PROCEEDS," for any period, shall mean the proceeds
received by AFL from any sale of equity securities during such period (net of
direct, out-of-pocket expenses incurred in connection with such sale).

"CHANGE OF CONTROL" shall mean the occurrence of any of the following
with respect to AFL:

(a) (i) a majority of the directors of AFL shall be Persons other than
Persons (x) for whose election proxies shall have been solicited by the
board of directors of AFL or (y) who are then serving as directors
appointed by the board of directors to fill vacancies on the board of
directors caused by death or resignation (but not by removal) or to fill
newly-created directorships or (ii) any person or group of persons (within
the meaning of Section 13 or 14 of the Securities Exchange Act of 1934, as
amended) shall have acquired beneficial ownership (within the meaning of
Rule 13d-3 promulgated by the Securities and Exchange Commission under said
Act) of 50% or more in voting power of the outstanding voting stock of AFL;
or

(b) AFL shall fail to own, directly or indirectly, 100% of the
outstanding capital stock of ARFC II.

"CLOSING DATE" shall mean either the Initial Closing Date or the
Effectiveness Date, as applicable.

"COLLATERAL AGENT" means Morgan Guaranty Trust Company of New York, in
its capacity as collateral agent under the Security Agreement.

"COMMERCIAL PAPER FUNDING ACCOUNT" means the account established
pursuant to Section 2.10 hereof.

"COMMERCIAL PAPER NOTES" means the commercial paper notes issued by
the Purchaser.

"CUSTODIAN" means AFL or other custodian named in the related
Custodian Agreement.

"CUSTODIAN AGREEMENT" means each custodian agreement between the
Seller and the Custodian named therein, as the same may be amended, modified or
supplemented.

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"DFC ASSET PURCHASE AGREEMENT" means the amended and restated asset
purchase agreement dated as of the date hereof among the Administrative Agent
and each of the DFC Purchasers signatory thereto, as the same may from time to
time be amended, supplemented or otherwise modified.

"DFC EVENT OF DEFAULT" means an event of default as defined in the
Program Facility.

"DFC FEE LETTER" means the agreement dated as of July 31, 1997,
between the Seller, AFL and the Administrative Agent setting forth the fees
payable in connection with the Purchaser's purchase of the Notes.

"DFC FUNDING RATE" shall mean, with respect to any Interest Accrual
Period, a rate per annum (expressed as a percentage and an interest yield
equivalent and calculated on the basis of a 360-day year and the actual days
elapsed) equal to the rate of interest (or if more than one rate, the weighted
average of the rates) at which funds are borrowed, drawn down or otherwise
obtained during such Interest Accrual Period to fund the Notes, which shall be
(a) to the extent the Notes are funded by the issuance of the Purchaser's
Commercial Paper Notes, the weighted average of the effective interest rates on
such Commercial Paper Notes, (b) to the extent Purchased Interests in the Notes
are sold to the DFC Purchasers pursuant to the DFC Asset Purchase Agreement, the
weighted average of the rates provided for in the DFC Asset Purchase Agreement,
and (c) to the extent the Notes are funded by loans or other credit enhancement
or liquidity under the Program Facility, the weighted average of the effective
rates of such funding under the Program Facilities, including any Breakage
Payments incurred but excluding from the computation of such rates any dealer's
or Placement Agent's discount or fees and excluding any and all other fees
directly attributable to such funding.

"DFC OWNERS" means Delaware Funding Corporation and the DFC
Purchasers.

"DFC PROGRAM RATE" shall have the meaning set forth in the DFC Fee
Letter.

"DFC PURCHASERS" means each of the purchasers from time to time party
to the DFC Asset Purchase Agreement.

"DEFAULT RATE EVENT" means the occurrence of any one of the following
events: (i) an Event of Default under Section 5.01(i), (ii), (v) or (vi) of the
Indenture; (ii) a Note Purchase Termination Event under Section 2.08(d), (e),
(f) or (i) of this Note Purchase Agreement; or (iii) a Servicer Termination
Event under Section 8.1(a), (b), (c) or (d) of the Sale and Servicing Agreement.

"DELAWARE FUNDING CORPORATION" or "DFC" means Delaware Funding
Corporation, a Delaware corporation.

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"EFFECTIVENESS DATE" has the meaning specified in Section 3.0 hereof.

"FEDERAL BANKRUPTCY CODE" means the bankruptcy code of the United
States of America codified in Title 11 of the United States Code.

"FUNDING DATE" has the meaning specified in Section 3.02 hereof.

"GAAP" means generally accepted accounting principles set forth from
time to time in the opinions and pronouncements of the Accounting Principles
Board and the American Institute of Certified Public Accountants and statements
and pronouncements of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within the U.S. accounting
profession), which are applicable to the circumstances as of the date of any
determination.

"GENERAL PARTNER" means ARFC II as general partner of the Trust, or
any successor General Partner as permitted by the Trust Agreement.

"GOVERNMENTAL ACTIONS" means any and all consents, approvals, permits,
orders, authorizations, waivers, exceptions, variances, exemptions or licenses
of, or registrations, declarations or filings with, any Governmental Authority
required under any Governmental Rules.

"GOVERNMENTAL AUTHORITY" means any nation or government, any state or
other political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government,
and any corporation or other entity owned or controlled, through stock or
capital ownership or otherwise by any of the foregoing.

"GOVERNMENTAL RULES" means any and all laws, statutes, codes, rules,
regulations, ordinances, orders, writs, decrees and injunctions, of any
Governmental Authority and any and all legally binding conditions, standards,
prohibitions, requirements and judgments of any Governmental Authority.

"HOSTILE ACQUISITION" means an Acquisition of a Person if such Person
(or its Board of Directors or equivalent governing body) has (i) announced that
it will oppose such Acquisition or (ii) commenced any litigation which alleges
that such Acquisition violates, or will violate, any Requirement of Law.

"INCREMENTAL PURCHASE" means the Purchaser's obligation to fund an
increase in the aggregate Outstanding Amount of the Notes in accordance with the
provisions of Section 2.03 hereof.

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"INCREMENTAL PURCHASE CONDITIONS" means the conditions to an
Incremental Purchase set forth in Section 2.03 hereof.

"INCREMENTAL PURCHASE DATE" means the date on which each Incremental
Purchase occurs, which date shall also be a Business Day that is a Transfer Date
under the Sale and Servicing Agreement.

"INDEMNIFIED PARTY" has the meaning specified in Section 11.02 hereof.

"INDENTURE" means the Amended and Restated Indenture dated as of July
31, 1997, between the Trust and the Indenture Trustee, as the same may be
amended, modified or supplemented.

"INDENTURE TRUSTEE" means Norwest Bank Minnesota, National
Association, and its successors and assigns.

"INITIAL CLOSING" has the meaning specified in Section 3.01 hereof.

"INITIAL CLOSING DATE" has the meaning specified in Section 3.01
hereof.

"INITIAL PURCHASE PRICE" has the meaning specified in Section 2.02
hereof.

"INTEREST ACCRUAL PERIOD" with respect to any Payment Date means the
calendar month preceding the month in which such Payment Date occurs (or, in the
case of the first Payment Date, the period commencing on the Funding Date and
ending on the last day of the calendar month preceding the month in which the
first Payment Date occurs); PROVIDED, HOWEVER, that (a) with respect to each
Incremental Purchase, the first Interest Accrual Period shall begin on the date
of such Incremental Purchase and (b) in the event of a Securitized Offering or a
redemption of the Notes with the proceeds of sale of Trust Property, the
Interest Accrual Period will end on the date of such Securitized Offering or
redemption.

"INVESTMENT LETTER" has the meaning specified in Section 6.03 hereof.

"INVESTOR CERTIFICATES" means Variable Funding Certificates issued
under the Trust Agreement.

"LIBOR" shall mean, with respect to any Interest Accrual Period (or
portion thereof), a rate per annum determined by the Administrative Agent to be
the rate at which deposits in Dollars are offered to the Administrative Agent by
prime banks in the London Interbank market at approximately 11:00 a.m. (London
time) on the related LIBOR Determination Date for a period of time comparable to
such Interest Accrual Period.

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"LIBOR BUSINESS DAY" shall mean any Business Day on which commercial
banks are open for dealings in Dollar deposits in London.

"LIBOR DETERMINATION DATE" shall mean with respect to any Interest
Accrual Period, the second London Business Day preceding (i) the first day of
such Interest Accrual Period, (ii) the day on which the Collateral Agent or the
Administrative Agent sells or transfers the Notes, or (iii) the day on which AFL
purchases all the Notes, as the case may be.

"LOSSES" has the meaning specified in Section 11.01 hereof.

"NET INCOME" shall mean, for any period, AFL's after-tax net income
for such period determined in accordance with GAAP but after deduction of
dividend payments on AFL's Cumulative Convertible Exchangeable Preferred Stock
(as described in AFL's Amendment No. 3 to Form S-1 Registration Statement dated
November 22, 1993).

"NET WORTH" shall mean the total of all assets appearing on AFL's
balance sheet after deducting all proper reserves (including reserves for
depreciation, obsolescence and amortization) minus all liabilities of AFL, in
each case determined in accordance with GAAP.

"NON-CALLABLE NOTES" means a Note issued in connection with a
Recapitalization, which is not subject to AFL's Call Option.

"NOTE INTEREST ARREARAGE" for each Payment Date means the aggregate of
the sum of, for each DFC Purchaser and for each Tranche Period that ends within
the related Interest Accrual Period, the interest on the interest accrued but
not paid to such DFC Purchaser at the end of such Tranche Period on such DFC
Purchaser's Percentage Interest of the Purchased Interest (as such terms are
defined in the DFC Asset Purchase Agreement), at the DFC Funding Rate applicable
on each day remaining in such Interest Accrual Period, together with interest on
the Interest Arrearage from the end of the prior Interest Accrual Period through
the date such interest is paid at the DFC Funding Rate applicable on each day in
such period.

"NOTE INTEREST RATE" means for any day during a Interest Accrual
Period, a per annum interest rate equal to the sum of the DFC Funding Rate and
the DFC Program Rate; PROVIDED, HOWEVER, in the event that (i) following the
occurrence of a DFC Event of Default, any Notes owned by DFC Owners (other than
pursuant to the DFC Asset Purchase Agreement) are sold by the Collateral Agent,
then from and after the effective date of such sale or transfer, the Note
Interest Rate with respect to such Notes shall be a per annum rate of 1.00% in
excess of Adjusted LIBOR determined on the related LIBOR Determination Date,
calculated on the basis of actual days elapsed and a 360-day

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<PAGE>

year, (ii) the Administrative Agent sells any or all of the Notes (other than
pursuant to the DFC Asset Purchase Agreement) following the occurrence of a
Default Rate Event or a Note Purchase Termination Event, then from and after
such sale or transfer date, the Note Interest Rate with respect to such Notes
shall be the Base Rate plus 1.00% per annum, (following the occurrence of a
Default Rate Event) or Adjusted LIBOR plus 1.00% per annum (following the
occurrence of a Note Purchase Termination Event (other than a Default Rate
Event)) or (iii) following the exercise of a Call Option, if (A) AFL purchases a
portion of the Notes and there are Commercial Paper Notes outstanding which are
attributable to such Notes, the Note Interest Rate for the portion of Notes
owned by AFL shall be the same as the Note Interest Rate for the Notes owned by
the Administrative Agent (with the DFC Program Rate part of the Note Interest
Rate to be retained by the Administrative Agent and applied in accordance with
the DFC Fee Letter), (B) AFL purchases a portion of the Notes and there are no
Commercial Paper Notes outstanding which are attributable thereto, the Note
Interest Rate for the portion of Notes owned by AFL shall be the same as the
weighted average DFC Funding Rate for the Notes owned by the DFC Owners, and (C)
AFL purchases all of the Notes, the Note Interest Rate shall be a per annum rate
of .375% in excess of Adjusted LIBOR determined as provided above.

"NOTE PURCHASE TERMINATION EVENT" means any event described in Section
2.08 hereof which, upon its occurrence, terminates the Purchaser's obligation to
fund Incremental Purchases hereunder.

"NOTES" means the Variable Funding Notes, including the Non-Callable
Notes, in the maximum aggregate principal amount as of the date hereof of
$240,000,000 to be issued by the Seller pursuant to the Indenture.

"NOTICE OF INCREMENTAL PURCHASE" means a written notice of an
Incremental Purchase in the form of Exhibit D hereto.

"ORIGINAL NOTE PURCHASE AGREEMENT" means the Note Purchase Agreement
dated as of December 28, 1995, as amended and supplemented, by and among the
Trust, AFL, the Purchaser and the Administrative Agent, which Original Note
Purchase Agreement is superseded by this Note Purchase Agreement.

"OWNER TRUSTEE" means Wilmington Trust Company, a Delaware
corporation, in its capacity as trustee of the Seller, and its successors and
assigns.

"PERMITTED ACQUISITION" means an Acquisition by AFL or any Subsidiary
of AFL that is a going concern that satisfies the following conditions:

(a) the Person acquired in such Acquisition is in the same or a similar
line of business as AFL is in on the Effective Date;

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<PAGE>

(b) the Administrative Agent shall have received from AFL in form and
substance satisfactory to it, PRO FORMA calculations demonstrating that as of
the date of such Acquisition after giving effect thereto such Acquisition would
not cause (i) a "Purchase Termination Event" (as defined in the Sale and
Servicing Agreement) or (ii) a violation of AFL's minimum Capital Base
requirement as set forth in Section 9.07.

(d) the total consideration for all such Acquisitions (including cash and
noncash purchase price, liabilities assumed, deferred or financed purchase
price, purchase price characterized as consulting agreements, noncompetition
payments and the like) does not exceed $100,000,000 in the aggregate.

"PERSON" means an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust, unincorporated
association, joint venture or Governmental Authority.

"PROGRAM FACILITY" means the Amended and Restated APA Credit Agreement
dated as of December 6, 1995 and the Amended and Restated Program Letter of
Credit Reimbursement Agreement dated as of December 6, 1995, which provide
credit enhancement for, and/or support the liquidity of, the Purchaser's
Commercial Paper Notes.

"PURCHASE AGREEMENT" means the Amended and Restated Receivables
Purchase Agreement and Assignment dated as of July 31, 1997, between AFL and
ARFC II, pursuant to which AFL sells and assigns Receivables to ARFC II.

"PURCHASE AVAILABILITY FEE" means the fee payable by the Seller and
AFL with respect to the unused Purchase Commitment, as provided in the DFC Fee
Letter.

"PURCHASE COMMITMENT" means the obligation of the Purchaser to
purchase, and fund Incremental Purchases of, the Notes in an outstanding
aggregate principal amount not to exceed $240,000,000, as such amount may be
increased or decreased from time to time in accordance with Section 2.05 hereof.

"PURCHASE COMMITMENT EXPIRATION DATE" means the earliest of (i) July
30, 1998, (ii) the date on which an event which causes or might cause a Note
Purchase Termination Event occurs, and (iii) the date on which a Securitized
Offering occurs; provided that the Purchase Commitment Expiration Date may be
extended from time to time in accordance with Section 2.04 hereof.

"PURCHASE PRICE" for any Incremental Purchase has the meaning
specified in Section 2.03(d) hereof.

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<PAGE>

"RECAPITALIZATION" means a recapitalization of the Trust in which (a)
the Trust issues Non-Callable Notes under the Indenture, the proceeds of which
are used to redeem, in whole or in part, the Notes outstanding prior to that
recapitalization and (b) ARFC II waives its rights under Section 9.1(b)(ii) of
the Sale and Servicing Agreement to purchase the Trust Property and effect a
redemption of the Notes.

"REQUIREMENT OF LAW" means, as to any Person, any law (statutory or
common), treaty, rule or regulation or determination of an arbitrator or of a
Governmental Authority, in each case applicable to or binding upon such Person
or any of its property or to which such Person or any of its property is
subject.

"SALE AND SERVICING AGREEMENT" means the Amended and Restated Sale and
Servicing Agreement dated as of July 31, 1997 among the Seller, as purchaser,
ARFC II, as seller, AFL, in its individual capacity and as Servicer, and Norwest
Bank Minnesota, National Association, as backup servicer, as the same may be
amended, modified or supplemented.

"SECURITY AGREEMENT" means the Amended and Restated Security Agreement
dated as of December 6, 1995, between the Purchaser and the Collateral Agent,
pursuant to which such Purchaser grants to the Collateral Agent for the benefit
of the holders of its Commercial Paper Notes and the other secured parties
specified therein, a security interest in certain assets of the Purchaser, as
the same may be amended, modified or supplemented.

"SERVICER" means AFL, or if replaced, Norwest Bank Minnesota, as
backup Servicer, or any Successor Servicer appointed pursuant to Section 7.5 of
the Sale and Servicing Agreement.

"SUBSIDIARY" of a Person means any corporation, association,
partnership, limited liability company, joint venture or other business entity
of which more than 50% of the voting stock, membership interests or other equity
interests (in the case of Persons other than corporations), is owned or
controlled directly or indirectly by such Person, or one of the Subsidiaries of
such Person, or a combination thereof. Without limiting the generality of the
foregoing, the term "Subsidiary" specifically includes any special purpose
vehicle or conduit formed by a Person that is otherwise within the ambit of the
immediately preceding sentence. Unless the context otherwise clearly requires,
references herein to a "Subsidiary" refer to a Subsidiary of AFL.

"TANGIBLE NET WORTH" shall mean, at any time, AFL's Net Worth at such
time, excluding the value of goodwill (other than goodwill arising from a
Permitted Acquisition), trademarks, trade names, copyrights, patents, licenses
and similar intangibles but specifically including, all of AFL's finance income
receivable

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(calculated in a manner consistent with AFL's audited consolidated balance sheet
as of December 31, 1996) as at such time.

"THIRD PARTY CLAIM" has the meaning specified in Section 11.02 hereof.

"TRANCHE PERIOD" has the meaning specified in the DFC Asset Purchase
Agreement.

"TRANSFER AGREEMENT" means each transfer agreement between ARFC II and
the Trust pursuant to which ARFC II sells and assigns a specified pool of
Receivables to the Trust.

"TRUST" means Olympic Automobile Receivables Warehouse Trust, a
Delaware business trust, and its successors and assigns.

"TRUST AGREEMENT" means the Amended and Restated Trust Agreement dated
as of July 31, 1997, between ARFC II and the Owner Trustee, as the same may be
amended, modified or supplemented.

SECTION 1.02 OTHER DEFINITIONAL PROVISIONS.

(a) All terms defined in this Note Purchase Agreement shall have the
defined meanings when used in any certificate or other document made or
delivered pursuant hereto unless otherwise defined therein.

(b) As used herein and in any certificate or other document made or
delivered pursuant hereto or thereto, accounting terms not defined in Section
1.01, and accounting terms partially defined in Section 1.01 to the extent not
defined, shall have the respective meanings given to them under generally
accepted accounting principles. To the extent that the definitions of
accounting terms herein are inconsistent with the meanings of such terms under
generally accepted accounting principles, the definitions contained herein shall
control.

(c) The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Note Purchase Agreement shall refer to this Note
Purchase Agreement as a whole and not to any particular provision of this Note
Purchase Agreement; and Section, subsection, Schedule, Exhibit and Appendix
references contained in this Note Purchase Agreement are references to Sections,
subsections, Schedules, Exhibits and the Appendix in or to this Note Purchase
Agreement unless otherwise specified.

(d) The references to the documents entered into in connection with
this Note Purchase Agreement, namely, the Administration Agreement, the
Indenture, the Purchase Agreement, the Sale and Servicing Agreement and the
Trust Agreement, shall be read to include, where appropriate, the original (as
amended

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<PAGE>

and supplemented) agreement related to each such amended and restated document.

ARTICLE II

PURCHASE AND SALE

SECTION 2.01 PURCHASE AND SALE OF THE NOTES. On the terms and
subject to the conditions set forth in the Original Note Purchase Agreement, and
in reliance on the covenants, representations, warranties and agreements therein
set forth, the Seller instructed the Indenture Trustee to issue to the Purchaser
and to sell, transfer and deliver to the Purchaser, and the Purchaser purchased
on the Funding Date, the Notes in the initial aggregate principal amount
designated by the Seller.

SECTION 2.02 INITIAL PURCHASE PRICE. The Notes were initially
purchased at the price (the "INITIAL PURCHASE PRICE") of 100% of the initial
Outstanding Amount of the Notes.

SECTION 2.03 INCREMENTAL PURCHASES.

(a) Since the Funding Date, the Purchaser has been obligated, and
from and after the Effectiveness Date, the Purchaser shall be obligated, to make
Incremental Purchases from time to time until the Purchase Commitment Expiration
Date, upon satisfaction, as of the applicable Incremental Purchase Date, of each
of the following conditions (the "Incremental Purchase Conditions"):

(i) the Outstanding Amount of the Notes shall have been increased in
accordance with Section 2.03 of the Indenture;

(ii) The Administrative Agent shall have received a completed Notice
of Incremental Purchase by 2:00 p.m., New York City time, on the Business
Day immediately preceding such Incremental Purchase Date (or if any such
Notice is received after 2:00 p.m., the related Incremental Purchase shall
occur on the second Business Day following such receipt);

(iii) the Administrative Agent shall have received copies of all
settlement statements and all reports required to be delivered by Servicer
to Morgan Guaranty Trust Company of New York pursuant to Article III of the
Sale and Servicing Agreement;

(iv) Each of the representations and warranties of the Seller, the
Owner Trustee, AFL, ARFC II and the General Partner, as applicable, made in
the Sale and Servicing Agreement, the Administration Agreement, the
Purchase Agreement, each Assignment Agreement, each Transfer Agreement, the
Trust Agreement, the Indenture and this Note

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<PAGE>

Purchase Agreement shall be true and correct in all material respects as of
the applicable Incremental Purchase Date (except to the extent they
expressly relate to an earlier or later time);

(v) All of the conditions for transferring Receivables and other
property to the Trust specified in Section 2.1(b)(1) of the Sale and
Servicing Agreement shall have been satisfied;

(vi) The Seller, the Owner Trustee, the General Partner, AFL and ARFC
II shall be in compliance with all of their respective covenants contained
in the Trust Agreement, the Sale and Servicing Agreement, the Purchase
Agreement, each Assignment Agreement, each Transfer Agreement, the
Indenture and this Note Purchase Agreement;

(vii) No Note Purchase Termination Event, or event which with the
giving of notice or passage of time could become a Note Purchase
Termination Event, shall have occurred;

(viii) The Maximum Purchases of the DFC Purchasers under the DFC
Asset Purchase Agreement and the credit and/or liquidity coverage committed
under the Program Facilities shall be in the amounts required to maintain
the then-current ratings of the Purchaser's Notes; and

(ix) the aggregate Certificate Balance of the Investor Certificates
shall equal at least twelve (12) percent of the sum of the Facility
Balance.

(b) Each Incremental Purchase shall be requested in a minimum
aggregate principal amount of $5,000,000; PROVIDED, that an Incremental Purchase
may be requested in such lesser amount as remains available under the
Purchaser's Purchase Commitment.

(c) The Purchaser shall not be required to make any Incremental
Purchase if, after giving effect to such funding, the Outstanding Amount of the
Notes will exceed the Purchaser's Purchase Commitment.

(d) The purchase price of each Incremental Purchase shall be equal to
100% of the increase in the Outstanding Amount of the Notes (the "Purchase
Price").

SECTION 2.04 EXTENSION OF PURCHASE COMMITMENT EXPIRATION DATE.
Unless some other event causes the termination of the Purchaser's obligations to
purchase the Notes or make Incremental Purchases hereunder, the parties to this
Note Purchase Agreement may mutually agree in writing to the extension of clause
(i) of the definition of the Purchase Commitment Expiration Date to a date no
later than 364 days following the date of such extension; PROVIDED, that the
Purchaser shall not be obligated to extend the Purchase Commitment Expiration
Date

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<PAGE>

unless (i) the Maximum Purchases of the DFC Purchasers under the DFC Asset
Purchase Agreement and the credit and/or liquidity coverage committed under the
Program Facility will continue to be in effect after such extension in the
aggregate amounts necessary to maintain the then-current ratings of the
Purchaser's Commercial Paper Notes and (ii) each of S&P and Moody's shall have
confirmed that such extension will not cause a downgrade of their then-current
ratings of the Commercial Paper Notes.

SECTION 2.05 REDUCTION OR INCREASE OF PURCHASE COMMITMENT.

(a) The Seller may reduce in whole or in part the unused Purchase
Commitment by giving the Administrative Agent written notice thereof at least
five Business Days before such reduction is to take place; PROVIDED, HOWEVER,
that any partial reduction shall be in an amount of $5,000,000 for the Purchaser
or any integral multiples of $1,000,000 thereof; and PROVIDED FURTHER, that if
any partial reduction of the Purchase Commitment would cause the Outstanding
Amount of the Notes to exceed the Purchase Commitment, then, as a condition of
such reduction, the Seller shall pay, on or before such reduction date, (i) that
portion of the Outstanding Amount of the Notes which, after giving effect
thereto, would result in the Outstanding Amount of the Notes being no greater
than the Purchase Commitment, (ii) accrued and unpaid interest on the
Outstanding Amount of the Notes prepaid at the Note Interest Rate as applicable,
and (iii) any Breakage Payments. In addition, on the date of any reduction of
the Purchase Commitment, the Seller shall pay the Purchaser any accrued and
unpaid Purchase Availability Fee on the date of such reduction with respect to
the reduction amount.

(b) The Seller may request an increase in the Purchase Commitment by
written notice to the Administrative Agent at least 30 days before the date on
which such increase is requested to become effective. No such increase will
take effect unless (i) the Purchaser and the Administrative Agent agree thereto,
(ii) the Maximum Purchases of the DFC Purchasers under the DFC Asset Purchase
Agreement and the credit and/or liquidity coverage committed under the Program
Facility are increased as necessary to maintain the then-current ratings of the
Purchaser's Notes and (iii) each of S&P and Moody's shall have confirmed that
such increase will not cause a downgrade of their then-current ratings of the
Commercial Paper Notes.

SECTION 2.06 REDEMPTION OF NOTES; EXCHANGES.

(a) The Seller shall have the right, from time to time to redeem the
Notes, in whole, pursuant to the provisions of Sections 10.01(a), (b) and (c) of
the Indenture, at the Redemption Price and after the giving of notice as
provided in Section 10.02 of the Indenture. In the event that the Notes are
redeemed from the proceeds of the sale of the Receivables and other Trust
Property pursuant to Section 9.1(b) of the Sale and Servicing Agreement, the
Seller shall be obligated to fund the

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<PAGE>

Commercial Paper Funding Account if and as required by Section 2.10 hereof. In
addition, in the event of any such redemption of the Notes from such sale
proceeds, the Seller may reissue the Notes and the Purchaser shall be obligated
to make Incremental Purchases in accordance with Section 2.03 of this Note
Purchase Agreement. The Purchaser and the Administrative Agent acknowledge that
no Breakage Payments or deposits into the Commercial Paper Funding Account will
be required with respect to Notes redeemed and reissued on the same day.

(b) In addition, in the event of a Recapitalization, the Seller shall
have the right to redeem the Notes, in whole or in part, pursuant to Section
10.01(d) of the Indenture. The Redemption Price for such a redemption will be
payable partly in cash and partly from the exchange of newly-issued Non-Callable
Notes for the Notes being redeemed, which Non-Callable Notes shall be issued in
the principal amount equal to the Notes being redeemed minus any cash Redemption
Price. The Non-Callable Notes will be identical in every respect to the other
Notes except that AFL will not have a Call Option with respect to such
Non-Callable Notes. The Seller will also be required to pay any Breakage
Payments arising from such redemption and exchange, PROVIDED that the Purchaser
and the Administrative Agent acknowledge that no Breakage Payments or deposits
into the Commercial Paper Funding Account will be required with respect to Notes
exchanged for Non-Callable Notes.

SECTION 2.07 AFL'S CALL OPTION. AFL shall have the option (the
"Call Option") from time to time to require the Administrative Agent, as agent
for the Purchaser and/or the DFC Purchasers to sell all or some of the Notes
(other than the Non-Callable Notes) to AFL at a purchase price equal to the
principal amount of Notes as to which the Call Option is being exercised, plus
accrued interest thereon at the Note Interest Rate and any Breakage Costs. In
addition, in connection with any such purchase, the Seller will be obligated to
fund the Commercial Paper Funding Account if and as required by Section 2.10
hereof. The Purchaser shall be obligated to repurchase such Notes from AFL, at
the request of AFL, at a purchase price equal to the principal amount thereof
plus accrued interest thereon, as long as no Note Purchase Termination Event
shall have occurred and be continuing.

SECTION 2.08 NOTE PURCHASE TERMINATION EVENTS. The occurrence of
any one of the following events shall constitute a "Note Purchase Termination
Event":

(a) an Event of Default under the Indenture;

(b) a Purchase Termination Event under the Sale and Servicing
Agreement;

(c) default in the observance or performance of any covenant or
agreement by the Seller, ARFC II or AFL (in its individual capacity) in the Sale
and Servicing Agreement, the

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<PAGE>

Purchase Agreement, each Assignment Agreement or each Transfer Agreement, as
applicable, and such default shall continue for a period of 30 days after notice
thereof shall have been given by any of the Seller, ARFC II, the Servicer, AFL,
the Indenture Trustee or the Owner Trustee to the defaulting party;

(d) (i) the commencement of an involuntary case against AFL or ARFC
II under any applicable Federal or state bankruptcy, insolvency or other similar
law now or hereafter in effect, and such case is not dismissed within 60 days;
(ii) the commencement by AFL or ARFC II of a voluntary case under any applicable
Federal or state bankruptcy, insolvency or other similar law now or hereafter in
effect; (iii) the entry of an order for relief in an involuntary case against
AFL or ARFC II under any such law; (iv) the consent by AFL or ARFC II to the
entry of any such order for relief; (v) the consent by AFL or ARFC II to the
appointment or taking possession by a receiver, liquidator, assignee, custodian,
trustee, sequestrator or similar official of AFL or ARFC II; (vi) the making by
AFL or ARFC II of any general assignment for the benefit of creditors; (vii) the
failure by AFL or ARFC II generally to pay its debts as such debts become due,
or (viii) the taking of action by AFL or ARFC II in furtherance of any of the
foregoing;

(e) the Facility Balance shall exceed the sum of (i) the aggregate
Principal Balance of Receivables and (ii) the amount on deposit in the Principal
Funding Account (after giving effect to an Incremental Purchase or any payments
to be made on such date) and shall continue to so exceed for two (2) Business
Days after the Servicer has prepared such calculation;

(f) the Facility Balance shall exceed the Facility Limit (after
giving effect to an Incremental Purchase or any payments to be made on such
date) and shall continue to so exceed for two (2) Business Days after the
Servicer has prepared such calculation;

(g) unless no Notes are issued and outstanding, the aggregate
Certificate Balance of the Investor Certificates shall be less than twelve (12)
percent of the sum of (i) the Facility Balance and (ii) the Certificate Balance
of the General Partner Certificates;

(h) 60 days following the date on which (A) the Securities and
Exchange Commission, any banking regulatory authority or any other Governmental
Body having jurisdiction over J.P. Morgan & Co. Incorporated ("JPM") or any of
its subsidiaries shall require the consolidation of the assets and liabilities
of Delaware Funding Corporation on the balance sheet of JPM or any of its
subsidiaries (including Morgan Guaranty Trust Company of New York) or shall
require that capital be maintained with respect thereto under any capital
requirements as if such assets were owned by JPM or any of its subsidiaries, or
(B) the independent auditors for JPM shall have advised JPM or any of its

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subsidiaries in writing that in their opinion such consolidation is required by
GAAP or applicable Law, rule or regulations; or

(i) failure by the Seller and AFL to pay the Purchase Availability
Fee and such failure shall continue for two (2) Business Days.

(j) a Change of Control shall have occurred without the consent of
the Administrative Agent, which consent shall not be unreasonably withheld.

SECTION 2.09 CALCULATION AND PAYMENT OF INTEREST AND FEES. (a) On
or before the Business Day immediately preceding each Determination Date, the
Administrative Agent shall notify the Seller, the Servicer and the Indenture
Trustee of the Note Interest Rate for the Interest Accrual Period ending
immediately prior to such Determination Date. In addition, when the Note
Interest Rate is based on LIBOR, the Administrative Agent shall determine on
each LIBOR Determination Date the LIBOR to be in effect for the next succeeding
Interest Accrual Period, and shall promptly notify the Seller, the Servicer and
the Indenture Trustee of the rate so determined;

(b) The Seller agrees to instruct the Indenture Trustee to pay all
amounts due with respect to the Notes and arising under this Note Purchase
Agreement to an account maintained by Morgan Guaranty Trust Company of New York
in the name of Morgan Guaranty Trust Company of New York, as Administrative
Agent and designated "Note Payment Account" (Acct. No. 600-17-115), or such
other account designated from time to time by the Administrative Agent. In the
event AFL owns any or all of the Notes following the exercise of its Call
Option, the Administrative Agent will instruct Morgan Guaranty Trust Company of
New York (or such other bank which holds funds related to the Notes for the
benefit of the Administrative Agent) to make payments from such account with
respect to the Notes owned by AFL.

Moneys in the Note Payment Account shall be invested by the
Administrative Agent in Eligible Investments scheduled to mature not later than
one Business Day prior to the Payment Date on which such moneys are required to
be used to make payments to the DFC Owners.

(c) On each Payment Date, the Administrative Agent will pay out of
moneys available in the Note Payment Account to each DFC Owner, for the related
Interest Accrual Period, the following amounts: (i) to the Purchaser, the
interest accrued at the weighted average of the funding rates applicable to the
Purchaser (whether funded by Commercial Paper Notes and/or loans or credit
enhancement under the Program Facility) on the weighted average Outstanding
Balance of the Notes funded by the Purchaser during such Interest Accrual Period
and (ii) to each DFC Purchaser, the sum of (a) with respect to each Tranche
Period that ended before such Payment Date, the interest accrued on each

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day during such Tranche Period that occurred within such Interest Accrual
Period, at the applicable Purchaser Funding Rate (as defined in the DFC Asset
Purchase Agreement) on such DFC Purchaser's Percentage Interest in the Purchased
Interest relating to such Tranche Period; and (b) such DFC Purchaser's Interest
Arrearage, if any.

(d) All amounts, if any, remaining on deposit in the Note Payment
Account immediately following the redemption in full of the Notes in connection
with a Securitized Offering or a sale of not less than all of the Trust Property
shall be distributed to ARFC II.

SECTION 2.10 COMMERCIAL PAPER FUNDING ACCOUNT. If (a) the Notes are
(i) redeemed pursuant to Section 10.01(a), (b) or (c) of the Indenture or (ii)
purchased by AFL following the exercise of its Call Option and (b) all or any
portion of the Notes redeemed or called were funded with Commercial Paper Notes
and such Commercial Paper Notes are scheduled to mature on any day or days after
such redemption or repurchase (the "CP Funded Portion"), the Seller shall be
required to make a payment to the Administrative Agent in an amount equal to the
difference between (A) the sum of (1) the face amount of such Commercial Paper
Notes scheduled to mature after such redemption or purchase (or, in the case of
such Commercial Paper Notes issued on an interest-bearing basis, the principal
amount of such Commercial Paper Notes plus accrued interest thereon to the
maturity date or dates) plus (2) the DFC Program Rate with respect to the CP
Funded Portion and (B) the portion of the Redemption Price or purchase price
paid to the Purchaser and attributable to the CP Funded Portion. Such payment,
together with the portion of the Redemption Price received by the Purchaser and
attributable to the CP Funded Portion, shall be deposited into a Commercial
Paper Funding Account established by the Administrative Agent (the "Commercial
Paper Funding Account"). Moneys in the Commercial Paper Funding Account shall
be transferred to the Collateral Agent on each maturity date of Commercial Paper
Notes in an amount sufficient to repay such Commercial Paper Notes. Pending
such transfers, moneys in the Commercial Paper Funding Account shall be invested
by the Administrative Agent in obligations that are rated A-1+ by S&P and P-1 by
Moody's. Earnings on such investments (after deducting any losses), if any,
shall be paid by the Administrative Agent to the Seller on the last maturity
date of all of the Commercial Paper Notes occurring after the related redemption
or repurchase date. The Seller hereby pledges to the Administrative Agent any
and all of its right, title and interest in and to the Commercial Paper Funding
Account, including any and all instruments, moneys and securities in such
Commercial Paper Funding Account and all proceeds thereof, to secure repayment
of the Purchaser's Commercial Paper Notes.

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ARTICLE III

CLOSING AND EFFECTIVENESS

SECTION 3.01 CLOSING. The closing (the "INITIAL CLOSING") took
place on December 28, 1995, upon satisfaction (or waiver) of the conditions to
closing set forth in Article IV of this Note Purchase Agreement (the date of the
Initial Closing being referred to herein as the "INITIAL CLOSING DATE").

SECTION 3.02 FUNDING DATE. The Initial "Funding Date" occurred on
the date on which the Purchaser made the initial purchase of the Notes. The
Purchaser's initial purchase of Notes was subject to the conditions set forth in
Article IV hereof, any other conditions which are Incremental Purchase
Conditions, and the condition that at least one director of ARFC II shall be an
"Independent Director" as defined in the Certificate of Incorporation of ARFC
II.

SECTION 3.03 TRANSACTIONS EFFECTED AT THE INITIAL CLOSING AND ON
THE FUNDING DATE. (a) On the Initial Closing Date, the parties hereto
executed and delivered the Original Note Purchase Agreement and (b) on the
Funding Date, (i) the Administrative Agent delivered to the Seller funds in
an amount equal to the Initial Purchase Price of the Notes (by wire transfer
of immediately available funds to a bank account designated by the Seller at
least two Business Days prior to the Funding Date); and (ii) the Seller
delivered the Notes to the Collateral Agent in satisfaction of the Seller's
obligation to the Purchaser hereunder.

SECTION 3.04 EFFECTIVENESS DATE. (a) The "Effectiveness Date" of
this Note Purchase Agreement shall occur on the date on which the conditions set
forth in Article IV A of this Note Purchase Agreement shall have been satisfied
or waived by the Purchaser.

(b) This Note Purchase Agreement amends and restates the Original
Note Purchase Agreement and on the Effectiveness Date, replaces the Original
Note Purchase Agreement without interruption of the parties' performance
thereunder.

ARTICLE IV

CONDITIONS PRECEDENT TO OBLIGATION OF THE PURCHASER
ON THE INITIAL CLOSING DATE

The obligation of the Purchaser to purchase and pay for the Notes on
the Funding Date was subject to the satisfaction at the time of the Initial
Closing (and, in the case of Sections 4.02 and 4.12, on the Funding Date) of the
following conditions (any or all of which may have been waived by the Purchaser
in its sole discretion):

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SECTION 4.01 PERFORMANCE BY PARTIES.

All the terms, covenants, agreements and conditions of the Sale and
Servicing Agreement, Purchase Agreement, each Assignment Agreement, each
Transfer Agreement, the Trust Agreement, the Indenture, the Administration
Agreement, the Custodian Agreement and this Note Purchase Agreement to be
complied with and performed by the Seller, the Owner Trustee, AFL or ARFC II, as
applicable, at or before the Closing shall have been complied with and performed
in all material respects.

SECTION 4.02 REPRESENTATIONS AND WARRANTIES.

Each of the representations and warranties of the Seller, the Owner
Trustee, AFL and ARFC II, as applicable, made in the Purchase Agreement, each
Assignment Agreement, the Sale and Servicing Agreement, each Transfer Agreement,
the Trust Agreement, the Indenture, the Administration Agreement, the Custodian
Agreement and this Note Purchase Agreement shall be true and correct in all
material respects as of the time of the Closing (except to the extent they
expressly relate to an earlier or later time, in which event they shall be true
as of such earlier or later time).

SECTION 4.03 CORPORATE DOCUMENTS.

(a) The Purchaser shall have received copies of the (i) Articles of
Incorporation, long form good standing certificate and By-Laws of AFL, (ii)
Board of Directors resolutions of AFL with respect to the Purchase Agreement,
the Sale and Servicing Agreement, the Custodian Agreement and this Note Purchase
Agreement and (iii) incumbency certificate of AFL, each certified by appropriate
corporate authorities.

(b) The Purchaser shall have received copies of the (i) Certificate
of Incorporation, long form good standing certificate and By-Laws of ARFC II,
(ii) Board of Directors resolutions of ARFC II with respect to the Sale and
Servicing Agreement, the Purchase Agreement, each Assignment Agreement, each
Transfer Agreement and the Trust Agreement, and (iii) incumbency certificate of
ARFC II, each certified by appropriate corporate authorities.

(d) The Purchaser shall have received copies of (i) the Certificate
of Incorporation, long-form good standing certificate and By-Laws of the Owner
Trustee, (ii) Board of directors resolutions of the Owner Trustee with respect
to the Trust Agreement and (iii) an incumbency certificate of the Owner Trustee,
each certified by appropriate corporate authorities.

SECTION 4.04 OPINIONS OF COUNSEL. Counsel to each of the Seller,
Owner Trustee, AFL and ARFC II shall have delivered

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to the Purchaser favorable opinions, dated as of the Closing Date and reasonably
satisfactory in form and substance to the Purchaser and its counsel, covering
the matters set forth in Exhibit A, or any other matters required to be covered
by S&P or Moody's, and addressed to the parties set forth in Exhibit A.

SECTION 4.05 OPINIONS OF COUNSEL TO THE INDENTURE TRUSTEE. Counsel
to the Indenture Trustee shall have delivered to the Purchaser a favorable
opinion, dated as of the Closing Date and reasonably satisfactory in form and
substance to the Purchaser and its counsel, covering the matters set forth in
Exhibit C, or any other matters required to be covered by S&P or Moody's, and
addressed to the parties set forth in Exhibit C.

SECTION 4.06 FINANCING STATEMENTS. The Purchaser shall have
received evidence satisfactory to it of the completion of all recordings,
registrations, and filings as may be necessary or, in the opinion of the
Purchaser or its counsel, desirable to perfect or evidence the assignment by AFL
to ARFC II, ARFC II to the Trust, and the Trust to the Indenture Trustee of
their respective ownership interests in the Receivables and the other Indenture
Collateral and the proceeds thereof, including:

(a) Acknowledgement copies of all UCC financing statements and
assignments that have been filed in the offices of the Secretary of State of the
applicable states and in the appropriate office or offices of such other
locations as may be specified in the opinions of counsel delivered pursuant to
Section 4.04; and

(b) Certified copies of requests for information (Form UCC-11) (or a
similar search report certified by parties acceptable to the Purchaser and its
counsel) dated a date reasonably near the Closing Date and listing all effective
financing statements which name AFL, ARFC II or the Trust, as seller, assignor
or debtor and which are filed in all jurisdictions in which the filings were or
will be made, together with copies of such financing statements.

SECTION 4.07 RATINGS. The Purchaser's Commercial Paper Notes shall
have received at least an A-1+ rating from S&P and P-1 from Moody's and the
Purchaser shall have received confirmation from S&P and Moody's, respectively,
that such ratings shall continue in effect on the Closing Date, after giving
effect to the purchase of the Notes.

SECTION 4.08 DOCUMENTS. The Purchaser shall have received (i) a
duly executed counterpart of this Note Purchase Agreement and (ii) an executed
copy of each of the Purchase Agreement, each Assignment Agreement, the Sale and
Servicing Agreement, each Transfer Agreement, the Trust Agreement, the
Indenture, the Administration Agreement, the Custodian Agreement and each and
every document or certification delivered by any party in connection with any of
the above agreements.

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SECTION 4.09 NO ACTIONS OR PROCEEDINGS. No action, suit, proceeding
or investigation by or before any Governmental Authority shall have been
instituted to restrain or prohibit the consummation of, or to invalidate, the
transactions contemplated by the Purchase Agreement, the Trust Agreement, the
Indenture, the Administration Agreement, this Note Purchase Agreement or the
documents related thereto in any material respect.

SECTION 4.10 APPROVALS AND CONSENTS. All Governmental Actions of
all Governmental Authorities required with respect to the transactions
contemplated by this Note Purchase Agreement and the other documents related
thereto shall have been obtained or made.

SECTION 4.11 OFFICER'S CERTIFICATE. The Purchaser shall have
received an Officer's Certificate from each of the Seller, the Owner Trustee,
AFL and ARFC II, each in form and substance reasonably satisfactory to the
Purchaser and its counsel, dated as of the Closing Date, certifying as to the
satisfaction of the conditions set forth in Sections 4.01 and 4.02 hereof, with
regard to the Seller, the Owner Trustee, AFL and ARFC II, as applicable.

SECTION 4.12 INVESTOR CERTIFICATES. On or prior to the Funding
Date, the Seller shall have issued the Investor Certificates in the initial
aggregate Certificate Balance of $19,800,000 and the same shall have been duly
and validly authorized by the Seller and issued under the Indenture.

SECTION 4.13 ACCOUNTS. The Purchaser shall have received evidence
that the Collection Account, the Note Distribution Account, the Certificate
Distribution Account, the Principal Funding Account, the Subcollection Account
and the Spread Account have been established in accordance with the terms of the
Sale and Servicing Agreement, the Trust Agreement and the Indenture.

SECTION 4.14 LOCKBOX ACCOUNT. The Purchaser shall have received
evidence of the establishment of the Lockbox Account as required by Section
3.2(d) of the Sale and Servicing Agreement.

SECTION 4.15 SYNDICATION. The Purchaser shall have syndicated the
rights and obligations under the DFC Asset Purchase Agreement such that the
aggregate maximum purchase commitments under the DFC Asset Purchase Agreement
shall at least equal 102% of the Purchaser's Purchase Commitment.

SECTION 4.16 OTHER DOCUMENTS. The Seller shall have furnished to
the Purchaser such other information, certificates and documents as the
Purchaser may reasonably request.

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ARTICLE IV A

CONDITIONS PRECEDENT TO EFFECTIVENESS

This Note Purchase Agreement shall become effective on the
Effectiveness Date upon satisfaction of the following conditions (any or all of
which may be waived by the Purchaser in its sole discretion):

SECTION 4.01A ARTICLE IV CONDITIONS

All of the conditions set forth in Sections 4.01 through 4.11 and 4.16
shall have been satisfied as of the Effectiveness Date.

SECTION 4.02A EXECUTED AGREEMENTS.

The Administrative Agent shall have received duly executed
counterparts of this Note Purchase Agreement, the Certificate Purchase
Agreement, the Asset Purchase Agreement, the Trust Agreement, the Custodian
Agreement, the Sale and Servicing Agreement, the Receivables Purchase Agreement,
the Indenture, the Administration Agreement and the DFC Fee Letter.

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF THE SELLER

The Seller made the following representations and warranties to the
Purchaser, the DFC Purchasers and the Administrative Agent as of the Initial
Closing Date, as of the Funding Date and as of each Incremental Purchase Date
before the Effectiveness Date, and hereby makes the following representations
and warranties to the Purchaser, the DFC Purchasers and the Administrative Agent
as of the Effectiveness Date and as of each Incremental Purchase Date
thereafter, and the Purchaser and the DFC Purchasers shall rely on such
representations and warranties in making each Incremental Purchase on each
Incremental Purchase Date.

SECTION 5.01 AUTHORITY, ETC.

(a) The Seller has been duly organized and is validly existing and in
good standing as a business trust under the laws of the State of Delaware, with
power and authority to own its properties and to transact the business in which
it is now engaged, and the Seller is duly qualified to do business and is in
good standing in each State of the United States where the nature of its
business requires it to be so qualified.

(b) The issuance, sale, assignment and conveyance of the Notes, the
performance of the Seller's obligations under this Note Purchase Agreement, and
the consummation of the transactions herein contemplated will not conflict with
or result in a breach

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of any of the terms or provisions of, or constitute a default under, or result
in the creation or imposition of any Lien, charge or encumbrance upon any of the
property or assets of the Seller or any of its Affiliates pursuant to the terms
of, any indenture, mortgage, deed of trust, loan agreement or other agreement
(including this Note Purchase Agreement) or instrument to which it or any of its
Affiliates is bound or to which any of its property or assets is subject, nor
will such action result in any violation of the provisions of its Certificate of
Trust or any Governmental Rule applicable to the Seller is required for the sale
of the Notes.

(c) No Governmental Action which has not been obtained is required by
or with respect to the Seller in connection with the execution and delivery of
the Notes, the Sale and Servicing Agreement, any Transfer Agreement, the Trust
Agreement, the Indenture, the Administration Agreement, the Custodian Agreement
or this Note Purchase Agreement by the Seller or the consummation by the Seller
of the transactions contemplated hereby or thereby.

(d) The Administration Agreement, the Sale and Servicing Agreement,
each Transfer Agreement, the Indenture, the Custodian Agreement and this Note
Purchase Agreement have been duly authorized, executed and delivered by the
Seller and the Sale and Servicing Agreement, each Transfer Agreement, the Trust
Agreement, the Indenture, the Administration Agreement, the Custodian Agreement
and this Note Purchase Agreement are the valid and legally binding obligations
of the Seller, enforceable against the Seller in accordance with their
respective terms, subject as to enforcement to bankruptcy, insolvency,
reorganization, moratorium and other similar laws of general applicability
relating to or affecting creditors' rights and to general principles of equity.

SECTION 5.02 NOTES. The Notes have been duly and validly
authorized, and, when executed and authenticated in accordance with the terms of
the Indenture, and delivered to and paid for by the Purchaser in accordance with
this Note Purchase Agreement, will be duly and validly issued and outstanding,
and will be entitled to the benefits of the Indenture.

SECTION 5.03 LITIGATION. There is no pending or, to the Seller's
knowledge, threatened action, suit or proceeding by or against the Seller before
any Governmental Authority or any arbitrator with respect to the Sale and
Servicing Agreement, any Transfer Agreement, the Indenture, the Trust, the Trust
Agreement, the Custodian Agreement, this Note Purchase Agreement, the Notes, the
Administration Agreement, the Purchase Agreement, any Assignment Agreement or
any of the transactions contemplated herein or therein, or with respect to the
Seller which, in the case of any such action, suit or proceeding with respect to
the Seller, if adversely determined, would have a material adverse effect on the
ability of the Seller to perform its obligations hereunder or thereunder.

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SECTION 5.04 TAXES, ETC. Any taxes, fees and other charges of
Governmental Authorities applicable to the Seller, except for franchise or
income taxes, in connection with the execution, delivery and performance by the
Seller of the Sale and Servicing Agreement, the Administration Agreement, this
Note Purchase Agreement, the Custodian Agreement, the Trust Agreement and the
Indenture or otherwise applicable to the Seller in connection with the Trust
have been paid or will be paid by the Seller at or prior to the Effectiveness
Date or Incremental Purchase Date, as applicable, to the extent then due.

SECTION 5.05 FINANCIAL CONDITION OF THE SELLER. On the date hereof
and on each Incremental Purchase Date, the Seller is not insolvent or the
subject of any voluntary or involuntary bankruptcy proceeding.

SECTION 5.06 ABSENCE OF MATERIAL ADVERSE EFFECT. There exists no
event or occurrence which has a material adverse effect on the status,
existence, perfection, priority or enforceability of the Seller's interest in
the Receivables.

SECTION 5.07 INVESTMENT COMPANY ACT. The Trust is not an
"investment company" or controlled by an "investment company" within the meaning
of the Investment Company Act of 1940, as amended.

SECTION 5.08 FULL DISCLOSURE. All written factual information
heretofore furnished by the Seller or any of its representatives to the
Purchaser for purposes of or in connection with this Note Purchase Agreement,
including, without limitation, information relating to the Receivables and the
Trust, was true and correct in all material respects on the date as of which
such information was stated or certified and remains true and correct in all
material respects as of the Effectiveness Date (except with respect to the
Receivables) and the Funding Date, or as of the Incremental Purchase Date, as
the case may be. If any information furnished pursuant to the preceding
sentence is subsequently revised due to a change in the methodology used to
derive such information or for any other reason, such revised information shall
be promptly delivered, but in any event no later than the Monthly Report
delivered pursuant to Section 3.19 of the Sale and Servicing Agreement, to the
Purchaser together with an explanation of such change.

ARTICLE VI

REPRESENTATIONS AND WARRANTIES
OF THE PURCHASER

The Purchaser made the following representations and warranties to the
Seller on which the Seller relied in entering into the Original Note Purchase
Agreement and hereby makes the following representations and warranties to the
Seller on which

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the Seller shall rely in entering into this Note Purchase Agreement.

SECTION 6.01 ORGANIZATION. The Purchaser has been duly organized
and is validly existing and in good standing as a corporation under the laws of
the State of Delaware, with power and authority to own its properties and to
transact the business in which it is now engaged, and the Purchaser is duly
qualified to do business and is in good standing in each State of the United
States where the nature of its business requires it to be so qualified.

SECTION 6.02 AUTHORITY, ETC. The Purchaser has all requisite power
and authority to enter into and perform its obligations under this Note Purchase
Agreement and to consummate the transactions contemplated hereby and thereby.
The execution and delivery by the Purchaser of this Note Purchase Agreement and
the consummation by the Purchaser of the transactions contemplated hereby have
been duly and validly authorized by all necessary corporate action on the part
of the Purchaser. This Note Purchase Agreement has been duly and validly
executed and delivered by the Purchaser and constitutes a legal, valid and
binding obligation of the Purchaser, enforceable against the Purchaser in
accordance with its terms, subject as to enforcement to bankruptcy,
reorganization, insolvency, moratorium and other similar laws of general
applicability relating to or affecting creditors' rights and to general
principles of equity. Neither the execution and delivery by the Purchaser of
this Note Purchase Agreement nor the consummation by the Purchaser of any of the
transactions contemplated hereby, nor the fulfillment by the Purchaser of the
terms hereof, will conflict with, or violate, result in a breach of or
constitute a default under (i) any term or provision of the Articles of
Incorporation or By-laws of the Purchaser or any Governmental Rule applicable to
the Purchaser or (ii) any term or provision of any indenture or other agreement
or instrument, to which the Purchaser is a party or by which the Purchaser or
any portion of its properties are bound. No Governmental Action which has not
been obtained is required by or with respect to the Purchaser in connection with
the execution and delivery of this Note Purchase Agreement by the Purchaser or
the consummation by the Purchaser of the transactions contemplated hereby or
thereby.

SECTION 6.03 SECURITIES ACT. The Notes purchased by the
Administrative Agent on behalf of the Purchaser pursuant to this Note Purchase
Agreement will be acquired for investment only and not with a view to any public
distribution thereof, and the Purchaser will not offer to sell or otherwise
dispose of its Notes so acquired by it (or any interest therein) in violation of
any of the registration requirements of the Act or any applicable state or other
securities laws. The Purchaser acknowledges that it has no right to require the
Seller to register under the Act or any other securities law the Notes to be
acquired by the Purchaser pursuant to this Note Purchase Agreement.

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Pursuant to the terms of the Original Note Purchase Agreement, the
Purchaser and the Administrative Agent executed and delivered to the Seller on
or before the Initial Closing Date a certain letter (the "INVESTMENT LETTER"),
in the form attached hereto as Appendix 1, with respect to the purchase of the
Notes. The Purchaser agrees with the Seller that all of the statements made by
the Purchaser and the Administrative Agent in the Investment Letter are true and
correct in all respects as of the date made.

SECTION 6.04 INVESTMENT COMPANY ACT. Neither the Purchaser nor the
Administrative Agent is required to register as an "investment company" nor is
the Purchaser or the Administrative Agent controlled by an "investment company"
within the meaning of the Investment Company Act of 1940, as amended.

ARTICLE VII

REPRESENTATIONS AND WARRANTIES OF AFL

AFL made the following representations and warranties to the
Purchaser, the DFC Purchasers and the Administrative Agent as of the Initial
Closing Date, as of the Funding Date and as of each Incremental Purchase Date
before the Effectiveness Date, and hereby makes the following representations
and warranties to the Purchaser, the DFC Purchasers and the Administrative Agent
as of the Effectiveness Date and as of each Incremental Purchase Date
thereafter, and the Purchaser and the DFC Purchasers shall rely on such
representations and warranties in purchasing the Notes and in making Incremental
Purchases.

SECTION 7.01 ORGANIZATION. AFL has been duly organized and is
validly existing and in good standing as a corporation under the laws of the
State of Minnesota, with corporate power and authority to own its properties and
to transact the business in which it is now engaged, and AFL is duly qualified
to do business (or is exempt from such qualification) and is in good standing in
each state of the United States where the nature of its business requires it to
be so qualified.

SECTION 7.02 AUTHORITY, ETC.

(a) The performance of AFL's obligations under this Note Purchase
Agreement, the Purchase Agreement, any Assignment Agreement, the Custodian
Agreement, the Sale and Servicing Agreement and the consummation of the
transactions herein and therein contemplated will not conflict with or result in
a breach of any of the terms or provisions of, or constitute a default under, or
result in the creation or imposition of any Lien, charge or encumbrance upon any
of the property or assets of AFL or any of its Affiliates pursuant to the terms
of, any indenture, mortgage, deed of trust, loan agreement or other agreement
(including this Note Purchase Agreement, the Purchase Agreement, any Assignment
Agreement, the Custodian Agreement and the Sale

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and Servicing Agreement) or instrument to which it or any of its Affiliates is
bound or to which any of its property or assets is subject, nor will such action
result in any violation of the provisions of its charter or any Governmental
Rule and no consent of any Governmental Authority is required for the
performance of the obligations contemplated by this Note Purchase Agreement, the
Purchase Agreement, any Assignment Agreement, the Custodian Agreement and the
Sale and Servicing Agreement.

(b) No Governmental Action which has not been obtained is required by
or with respect to AFL in connection with the execution and delivery of this
Note Purchase Agreement, the Purchase Agreement, any Assignment Agreement, the
Custodian Agreement and the Sale and Servicing Agreement by AFL or the
consummation by AFL of its obligations hereunder and thereunder.

(c) Each of this Note Purchase Agreement, the Purchase Agreement,
each Assignment Agreement, the Custodian Agreement and the Sale and Servicing
Agreement has been duly authorized, executed and delivered by AFL and is the
valid and legally binding obligation of AFL, enforceable against AFL in
accordance with its terms, subject as to enforcement to receivership,
conservatorship, bankruptcy, insolvency, reorganization, moratorium and other
similar laws of general applicability relating to or affecting creditors' rights
and to general principles of equity.

SECTION 7.03 LITIGATION. There is no pending or, to AFL's
knowledge, threatened action, suit or proceeding by or against AFL before any
Governmental Authority or any arbitrator with respect to this Note Purchase
Agreement or any of the transactions contemplated herein or with respect to AFL
which, in the case of any such action, suit or proceeding with respect to AFL,
if adversely determined, would have a material adverse effect on the ability of
AFL to perform its obligations hereunder, thereunder or in connection therewith.

SECTION 7.04 FULL DISCLOSURE. All written factual information
heretofore furnished by AFL or any of its representatives to the Purchaser for
purposes of or in connection with this Note Purchase Agreement, including,
without limitation, information relating to the Receivables and AFL's
businesses, was true and correct in all material respects on the date as of
which such information was stated or certified and in the case of information
relating to AFL and its businesses, except as previously disclosed to the
Purchaser and the Administrative Agent, remains true and correct in all material
respects, in the reasonable judgment of AFL, as of the Effectiveness Date, the
Funding Date or an Incremental Purchase Date, as the case may be. If any
information furnished pursuant to the preceding sentence is subsequently revised
due to a change in the methodology used to derive such information or for any
other reason, such revised information shall be promptly delivered, but in any
event no later than the next Monthly Report delivered pursuant to Section

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3.19 of the Sale and Servicing Agreement, to the Purchaser together with an
explanation of such change.

ARTICLE VIII

COVENANTS OF THE SELLER

SECTION 8.01 RATING OF PURCHASER'S COMMERCIAL PAPER NOTES. To the
extent that any rating provided with respect to the Purchaser's Commercial Paper
Notes by any rating agency is conditional upon the furnishing of documents or
the taking of any other action by the Seller, the Seller shall take all
reasonable actions to furnish such documents and take any such other action.

SECTION 8.02 INFORMATION FROM THE SELLER. So long as the Purchaser
or any DFC Purchaser shall own the Notes or any Purchase Commitment is
outstanding, the Seller will furnish to the Purchaser and the Administrative
Agent:

(a) a copy of each certificate, report, statement, notice or other
communication (other than investment instructions) furnished by or on behalf of
the Seller to the Indenture Trustee, Owner Trustee, S&P or Moody's under the
Trust Agreement, the Indenture or the Sale and Servicing Agreement, concurrently
therewith, and promptly after receipt thereof, a copy of each notice, demand or
other communication received by or on behalf of the Seller under the Trust
Agreement, the Indenture or the Sale and Servicing Agreement;

(b) such other information, documents, records or reports respecting
the Trust, the Receivables, other Indenture Collateral, the Seller or the
Servicer as the Purchaser or Administrative Agent may from time to time
reasonably request without unreasonable expense to the Seller;

(c) such publicly available information, documents, records or
reports respecting the Seller or the condition or operations, financial or
otherwise of the Seller as the Purchaser or Administrative Agent may from time
to time reasonably request;

(d) promptly following the sending or filing thereof, other than in
connection with a Securitized Offering, copies of all registration statements
which the Seller files with the Securities and Exchange Commission or any
national securities exchange in connection with the Receivables, the Trust, the
Trust Agreement, the Indenture, any Certificates issued under the Trust
Agreement or Notes issued under the Indenture;

(e) as soon as possible and in any event within five Business Days
after the occurrence thereof, notice of each Purchase Termination Event or event
which with the giving of notice or the passage of time or both would constitute
a Note Purchase Termination Event; and

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(f) by April 30 of each year, an annual report from independent
accountants containing financial information relating to each of the Trust and
ARFC II in a form reasonably acceptable to the Purchaser.

SECTION 8.03 ACCESS TO INFORMATION. So long as the Purchaser or any
DFC Purchaser shall own any Notes or any Purchase Commitment is outstanding, the
Seller will, at any time from time to time during regular business hours, on
reasonable notice to the Seller, permit the Purchaser or the Administrative
Agent, or it agents or representatives to:

(a) examine all books, records and documents (including computer
tapes and disks) in the possession or under the control of the Seller relating
to the Receivables, and

(b) visit the offices and property of the Seller for the purpose of
examining such materials described in clause (a) above.

Except as provided in Section 13.05 hereof, any information obtained by the
Purchaser or the Administrative Agent pursuant to this Section 8.03 shall be
held in confidence by the Purchaser or Administrative Agent unless such
information (i) has become available to the public, (ii) is required or
requested by any Governmental Authority or in any court proceeding, or (iii) is
required by any Governmental Rule.

SECTION 8.04 SECURITY INTERESTS; FURTHER ASSURANCES. The Seller
will take all action necessary to maintain the Indenture Trustee's first
priority perfected security interest in the Receivables, the related Financed
Vehicles and the other Indenture Collateral. The Seller agrees to take any and
all acts and to execute any and all further instruments necessary or reasonably
requested by the Purchaser to more fully effect the purposes of this Note
Purchase Agreement.

SECTION 8.05 COVENANTS. The Seller will duly observe and perform
each of its covenants set forth in the Trust Agreement, the Sale and Servicing
Agreement and the Indenture.

SECTION 8.06 AGREEMENT AMENDMENTS. The Seller will not make any
material amendment, modification or change to, or provide any waiver under,
the Trust Agreement, the Sale and Servicing Agreement or the Indenture
without the prior written consent of the Purchaser.

SECTION 8.07 RECEIVABLES FILES. The Seller shall deliver
Receivables Files to the Custodian in accordance with the Sale and Servicing
Agreement and the Custodian Agreement.

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ARTICLE IX

COVENANTS OF AFL

SECTION 9.01 RATING OF PURCHASER'S COMMERCIAL PAPER NOTES. To the
extent that any rating provided with respect to the Purchaser's Commercial Paper
Notes by any rating agency is conditional upon the furnishing of documents or
the taking of any other action by AFL, AFL shall take all reasonable actions to
furnish such documents and take any such other action.

SECTION 9.02 INFORMATION FROM AFL. So long as the Purchaser or any
DFC Purchaser shall own any Notes or any Purchase Commitment is outstanding, AFL
will furnish to the Purchaser and the Administrative Agent:

(a) such other information, documents, records or reports respecting
the Trust, the Receivables, other Indenture Collateral, the Seller, ARFC II or
AFL as the Purchaser may from time to time reasonably request without
unreasonable expense to AFL;

(b) such publicly available information, documents, records or
reports respecting AFL or ARFC II or the condition or operations, financial or
otherwise of AFL or ARFC II as the Purchaser may from time to time reasonably
request;

(c) promptly following the sending or filing thereof, other than in
connection with a Securitized Offering, copies of all registration statements
which AFL or ARFC II files with the Securities and Exchange Commission or any
national securities exchange in connection with the Receivables, the Trust, the
Trust Agreement, the Indenture or any Certificates issued under the Trust
Agreement or Notes issued under the Indenture; and

(d) as soon as possible and in any event within five Business Days
after the occurrence thereof, notice of each Note Purchase Termination Event or
event which with the giving of notice or the passage of time or both would
constitute a Note Purchase Termination Event.

SECTION 9.03 ACCESS TO INFORMATION. So long as the Purchaser or any
DFC Purchaser shall own any Notes or any Purchase Commitment is outstanding, AFL
will, at any time from time to time during regular business hours, on reasonable
notice to AFL, permit the Purchaser and the Administrative Agent, or it agents
or representatives to:

(a) examine all books, records and documents (including computer
tapes and disks) in the possession or under the control of AFL relating to the
Receivables, and

(b) visit the offices and property of AFL for the purpose of
examining such materials described in clause (a) above.

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Except as provided in Section 13.05 hereof, any information obtained by the
Purchaser or Administrative Agent pursuant to this Section 9.03 shall be held in
confidence by the Purchaser and the Administrative Agent unless such information
(i) has become available to the public, (ii) is required or requested by any
Governmental Authority or in any court proceeding, or (iii) is required by any
Governmental Rule.

SECTION 9.04 SECURITY INTERESTS; FURTHER ASSURANCES. AFL will take
all action necessary to maintain the Indenture Trustee's first priority
perfected security interest in the Receivables, the related Financed Vehicles
and the other Indenture Collateral. AFL agrees to take any and all acts and to
execute any and all further instruments necessary or reasonably requested by the
Purchaser to more fully effect the purposes of this Note Purchase Agreement.

SECTION 9.05 SALE AND SERVICING AGREEMENT AND PURCHASE AGREEMENT
COVENANTS. AFL will duly observe and perform each of its covenants set forth in
the Sale and Servicing Agreement and the Purchase Agreement.

SECTION 9.06 AMENDMENTS. AFL will not make any material amendment,
modification or change to, or provide any waiver under, the Sale and Servicing
Agreement or Purchase Agreement without the prior written consent of the
Purchaser.

SECTION 9.07. MINIMUM CAPITAL BASE.

(a) AFL will not permit its consolidated Capital Base, on the last
day of its fiscal year, to be less than the sum of (i) its consolidated Capital
Base on the last day of the immediately preceding fiscal year, PLUS (ii) to the
extent Net Income for such fiscal year is greater than zero, Net Income for such
fiscal year PLUS (iii) Capital Base Proceeds for such fiscal year; and

(b) AFL will not permit its consolidated Capital Base, on the last
day of any fiscal quarter other than the last day of its fiscal year, to be less
than the sum (i) 95% of its consolidated Capital Base on the last day of the
immediately preceding fiscal year PLUS (ii) Capital Base Proceeds since the last
day of the immediately preceding fiscal year;

PROVIDED, HOWEVER, that AFL shall not be deemed or declared to be in breach of
the covenants contained in this Section 9.07 as long as on the last day of any
fiscal quarter, AFL's consolidated Capital Base is not less than $325,000,000;

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ARTICLE X

MUTUAL COVENANTS AND AGREEMENTS

SECTION 10.01 LEGAL CONDITIONS TO CLOSING. The Purchaser, the
Administrative Agent, the Seller and AFL will take all reasonable actions
necessary to comply promptly with all legal requirements which may be imposed on
any of them with respect to the Closing (including satisfaction of the
conditions contained in this Note Purchase Agreement), and will promptly
cooperate with and furnish information to one another in connection with any
such legal requirements. The Purchaser, the Administrative Agent, the Seller
and AFL will take all reasonable action necessary to obtain (and will cooperate
with one another in obtaining) any consent, authorization, permit, license,
franchise, order or approval of, or any exemption by, any Governmental Authority
or any other Person, required to be obtained or made by it in connection with
any of the transactions contemplated by this Note Purchase Agreement.

SECTION 10.02 EXPENSES AND FEES. (a) In connection with the Initial
Closing, all costs and expenses incurred in connection with the Original Note
Purchase Agreement and the transactions contemplated thereby were paid by AFL.
Subject to Section 13.10, except as otherwise expressly provided herein, all
costs and expenses incurred in connection with the entering into of this Note
Purchase Agreement on the Effectiveness Date and the transactions contemplated
hereby shall (as between the Seller and the Purchaser) be paid by AFL.

(b) On and after the date of this Note Purchase Agreement, the Seller
and/or AFL, as applicable, shall be obligated to pay all fees payable pursuant
to the DFC Fee Letter (other than the DFC Program Rate to the extent included in
the Note Interest Rate).

SECTION 10.03 MUTUAL OBLIGATIONS. On and after the date of this Note
Purchase Agreement, the Purchaser, the Administrative Agent, the Seller and AFL
will do, execute and perform all such other acts, deeds and documents as the
other party may from time to time reasonably require in order to carry out the
intent of this Note Purchase Agreement.

SECTION 10.04 FUNDING OF PURCHASE PRICE. The Purchaser shall utilize
its best efforts to issue its Commercial Paper Notes prior to selling any
Purchased Interest to the DFC Purchasers under the DFC Asset Purchase Agreement
to fund the Purchase Price of the Notes (including the Initial Purchase Price);
PROVIDED, HOWEVER, that nothing herein shall require the Purchaser to issue
Commercial Paper Notes or limit the rights of the Purchaser to sell any
Purchased Interest to the DFC Purchasers under the DFC Asset Purchase Agreement
to fund the Purchase Price of the Notes (including the Initial Purchase Price);
PROVIDED, FURTHER, if any Purchased Interest has been purchased by a DFC
Purchaser, such Purchased Interest shall be

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funded using the Purchaser Funding Rates (as defined in the DFC Asset Purchase
Agreement) for such DFC Purchaser set forth in the DFC Asset Purchase Agreement.
In the event all or a portion of the Notes will be or have been sold to the DFC
Purchasers pursuant to the DFC Asset Purchase Agreement, the Administrative
Agent shall consult with the Seller in selecting Purchaser Funding Rates and
Tranche Periods under the DFC Asset Purchase Agreement. The Seller, the
Purchaser and the Administrative Agent agree that the minimum term for any
Commercial Paper Notes issued to fund the Purchase Price (including the Initial
Purchase Price) of the Commercial Paper Notes shall be 15 days, except that if
the Seller has notified the Purchaser and the Administrative Agent that a
Securitized Offering or a redemption of the Notes with the proceeds of sale of
Trust Property will occur, the term for such Commercial Paper Notes may be the
number of days from the date of issuance of such Commercial Paper Notes to a
date not later than five days before the estimated date of the Securitized
Offering or redemption, and thereafter the Commercial Paper Notes may be
reissued (not more than three (3) times) for periods, ending on or before the
date of the Securitized Offering or redemption of the Notes with sale proceeds.

SECTION 10.05 RESTRICTIONS ON TRANSFER. The Purchaser and the
Administrative Agent agree not to sell or assign the Notes except (i) to a DFC
Purchaser or otherwise as provided in the Program Facility or (ii) following the
occurrence of a Default Rate Event or a Note Purchase Termination Event
specified in Section 2.08(h) hereof. The Purchaser and the Administrative Agent
agree to comply with the restrictions on transfer of the Notes set forth in the
Investment Letter and to resell the Notes only in compliance with such
restrictions, and, except as provided in the following proviso, to resell or
transfer the Notes only with a letter from the buyer or transferee in
substantially the form of the Investment Letter; PROVIDED, HOWEVER, that the
Seller acknowledges that (a) each DFC Purchaser is deemed to have represented in
the DFC Asset Purchase Agreement among other things, that (i) it is an
"accredited investor" within the meaning of Regulation D of the Securities Act
of 1933, as amended (the "Securities Act") and (ii) it will comply with the
restrictions on transfer and sale of the Notes set forth in the Investment
Letter, and (b) in the event of the purchase of the Notes by any DFC Purchaser,
no such DFC Purchaser will be required to execute and deliver the Investment
Letter.

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ARTICLE XI

INDEMNIFICATION

SECTION 11.01 INDEMNIFICATION BY THE SELLER AND AFL. Each of the
Seller and AFL agrees to indemnify and hold harmless the Purchaser, the
Administrative Agent, the DFC Purchasers (including any Persons who are
participants with any such DFC Purchasers), the Collateral Agent, Morgan
Guaranty Trust Company of New York, and their officers, directors, employees,
agents, representatives, assignees and Affiliates against any and all losses,
claims, damages, liabilities or expenses (including legal and accounting fees)
(collectively, "LOSSES"), as incurred (payable promptly upon written request),
for or on account of or arising from or in connection with any breach of any
representation, warranty or covenant of the Seller or AFL, respectively, in this
Note Purchase Agreement or in any certificate or other written material
delivered pursuant hereto; PROVIDED, HOWEVER, that neither the Seller nor AFL
shall be so required to indemnify any such Person or otherwise be liable to any
such Person hereunder for any Losses arising from (i) such Person's gross
negligence, willful misconduct or bad faith or (ii) the failure of Obligors to
pay their obligations under the Receivables as they become due.

SECTION 11.02 PROCEDURE. In order for the Purchaser, the
Administrative Agent, a DFC Purchaser (including any Person who is a participant
with a DFC Purchaser), the Collateral Agent, Morgan Guaranty Trust Company of
New York, or any of their officers, directors, employees, agents,
representatives, assignees or Affiliates (each an "INDEMNIFIED PARTY") to be
entitled to any indemnification provided for under this Note Purchase Agreement
in respect of, arising out of, or involving a claim made by any Person against
the Indemnified Party (a "THIRD PARTY CLAIM"), such Indemnified Party must
notify the Seller and AFL in writing of the Third Party Claim within five
Business Days of receipt of a summons, complaint or other notice of the
commencement of litigation and within ten Business Days after receipt by such
Indemnified Party of any other written notice of the Third Party Claim.
Thereafter, the Indemnified Party shall deliver to the Seller and AFL, within a
reasonable time after the Indemnified Party's receipt thereof, copies of all
notices and documents (including court papers) received by the Indemnified Party
relating to the Third Party Claim.

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the defense of a Third Party Claim, neither the Seller nor AFL will be liable to
the Indemnified Party for any legal expenses subsequently incurred by the
Indemnified Party in connection with the defense thereof. If the Seller or AFL
elects to assume the defense of a Third Party Claim, the Indemnified Party will
(i) cooperate in all reasonable respects with the Seller and AFL in connection
with such defense and (ii) not admit any liability with respect to, or settle,
compromise or discharge, such Third Party Claim without the Seller's or AFL's
prior written consent, as the case may be. If the Seller or AFL shall assume
the defense of any Third Party Claim, the Indemnified Party shall be entitled to
participate in (but not control) such defense with its own counsel at its own
expense. If the Seller or AFL does not assume the defense of any such Third
Party Claim, the Indemnified Party may defend the same in such manner as it may
deem appropriate, including settling such claim or litigation after giving
notice to the Seller and AFL of such terms and, the Seller and AFL will promptly
reimburse the Indemnified Party upon written request. Anything contained in
this Note Purchase Agreement to the contrary notwithstanding, neither the Seller
nor AFL shall be entitled to assume the defense of any part of a Third Party
Claim that seeks an order, injunction or other equitable relief or relief for
other than money damages against the Indemnified Party.

SECTION 11.04 INDEMNITY FOR TAXES, RESERVES AND EXPENSES.

(a) If after the date hereof, the adoption of any Governmental Rule
or bank regulatory guideline or any amendment or change in the interpretation of
any existing or future Governmental Rule or bank regulatory guideline by any
Governmental Authority charged with the administration, interpretation or
application thereof, or the compliance with any directive of any Governmental
Authority (in the case of any bank regulatory guideline, whether or not having
the force of Governmental Rule):

(i) shall subject any Indemnified Party to any tax, duty,
deduction or other charge with respect to the Receivables, the Indenture,
the Notes, this Note Purchase Agreement or payments of amounts due
thereunder, or shall change the basis of taxation of payments to any
Indemnified Party of amounts payable in respect thereof (except for changes
in the rate of general corporate, franchise, net income or other income tax
imposed on such Indemnified Party by the jurisdiction in which such
Indemnified Party's principal executive office is located); or

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any Indemnified Party or on the United States market for certificates of
deposit or the London interbank market any other condition affecting the
Receivables, the Indenture, the Trust Agreement, the Notes, this Note
Purchase Agreement or payments of amounts due thereunder; or

(iii) imposes upon any Indemnified Party any other cost or expense
(including, without limitation, reasonable attorneys' fees and expenses,
and expenses of litigation or preparation therefor in contesting any of the
foregoing) with respect to the Receivables, the Indenture, the Trust
Agreement, the Notes, this Note Purchase Agreement or payments of amounts
due thereunder;

and the result of any of the foregoing is to increase the cost to such
Indemnified Party with respect to the Receivables, the Indenture, the Trust
Agreement, the Notes, this Note Purchase Agreement or payments of amounts due
thereunder or the obligations thereunder or the funding of any purchases
(including Incremental Purchases) with respect thereto by any DFC Purchaser and
the financing of such purchases by the issuance of Notes and Certificates, by an
amount deemed by such Indemnified Party to be material, then, the Seller agrees
to pay to such Indemnified Party, within 10 days after demand by such
Indemnified Party, such additional amount or amounts as will compensate such
Indemnified Party for such increased cost; PROVIDED, that the Seller shall not
be obligated to pay any such additional amounts that are attributable to the
period (the "Excluded Period") ending 30 days prior to the Seller's receipt of
such demand, except to the extent such additional amounts accrue during the
Excluded Period because of the retroactive effect of the applicable regulatory
change, in which case the foregoing limitation shall not apply.

(b) If any Indemnified Party shall have determined that, after the
date hereof, the adoption of any applicable Law or bank regulatory guideline
regarding capital adequacy, or any change therein, or any change in the
interpretation thereof by any Governmental Authority, or any directive regarding
capital adequacy (in the case of any bank regulatory guideline, whether or not
having the force of law) of any such Governmental Authority, has or would have
the effect of reducing the rate of return on capital of such Indemnified Party
(or its parent) as a consequence of such Indemnified Party's obligations
hereunder or with respect hereto to a level below that which such Indemnified
Party (or its parent) could have achieved but for such adoption, change, request
or directive (taking into consideration its policies with respect to capital
adequacy) by an amount deemed by such Indemnified Party to be material, then
from time to time, the Seller agrees to pay to such Indemnified Party, within 10
days after demand by any such Indemnified Party, such additional amount or
amounts as will compensate such Indemnified Party (or its parent) for such
reduction; PROVIDED, that the Seller shall not be obligated to pay any such
additional amounts that are attributable to the period (the "Excluded Period")
ending 30 days

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prior to the Seller's receipt of such demand, except to the extent such
additional amounts accrue during the Excluded Period because of the retroactive
effect of the applicable regulatory change, in which case the foregoing
limitation shall not apply.

(c) Any Indemnified Party who makes a demand for payment of increased
costs or capital pursuant to Section 11.04(a) or (b) shall promptly deliver to
the Seller a certificate setting forth in reasonable detail the computation of
such increased costs or capital and specifying the basis therefor. In the
absence of manifest error, such certificate shall be conclusive and binding for
all purposes. Each Indemnified Party shall use all reasonable efforts to
mitigate the effect upon the Seller of any such increased costs or capital
requirements, provided it shall not be obligated to take any action which it
determines would be materially disadvantageous to it or inconsistent with its
policies.

SECTION 11.05 COSTS, EXPENSES, TAXES, BREAKAGE PAYMENTS AND INCREASED
COSTS UNDER NOTE PURCHASE AGREEMENT AND PROGRAM FACILITY.

(a) The Seller and AFL shall, jointly and severally, be obligated to
pay on demand to (i) the Purchaser and the Administrative Agent all reasonable
costs and expenses in connection with the preparation, execution, delivery and
administration (including any requested amendments, waivers or consents) of this
Note Purchase Agreement, and the other documents to be delivered hereunder or in
connection herewith, including, without limitation, the reasonable fees and
out-of-pocket expenses of counsel for the Purchaser and the Administrative
Agent, with respect thereto and with respect to advising the Purchaser and the
Administrative Agent as to its respective rights and remedies under this Note
Purchase Agreement and the other documents delivered hereunder or in connection
herewith and (ii) the Purchaser and the Administrative Agent, all reasonable
costs and expenses, if any enforcement of this Note Purchase Agreement, and the
other documents delivered hereunder or in connection herewith.

(b) In addition, the Seller and AFL shall, jointly and severally, be
obligated to pay on demand any and all stamp and other taxes and fees payable in
connection with the execution, delivery, filing and recording of this Note
Purchase Agreement, the Notes or the other documents and agreements to be
delivered hereunder, and agrees to save the Purchaser and the Administrative
Agent harmless from and against any liabilities with respect to or resulting
from any delay by the Seller or AFL in paying or omission to pay such taxes and
fees.

(c) The Seller shall be obligated to pay to the DFC Owners (including
any Persons who are participants with the DFC Purchasers) the amount of any
Breakage Payments promptly upon request by the Administrative Agent to the
extent not paid as interest on the Notes. The Purchaser and the Administrative

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Agent agree to use reasonable efforts to reduce or eliminate any Breakage
Payments; provided, however, that nothing contained herein shall obligate the
Purchaser or the Administrative Agent to take any action that imposes additional
costs or burdens which such Person considers material.

(d) If the Purchaser becomes obligated to compensate any financial
institution under its Program Facility as a result of any event or circumstances
similar to those described in Section 11.04 or clause (c) of this Section 11.05,
to the extent such obligation is attributable to the transactions contemplated
by this Note Purchase Agreement or is allocable to the Seller under the Program
Facility, the Seller shall be obligated to immediately pay to the Purchaser such
additional amounts as may be necessary to reimburse the Purchaser for any
amounts so paid by the Purchaser.

ARTICLE XII

THE ADMINISTRATIVE AGENT

SECTION 12.01 AUTHORIZATION AND ACTION. Each DFC Owner hereby
accepts the appointment of Morgan Guaranty Trust Company of New York, as
Administrative Agent hereunder, and authorizes the Administrative Agent to take
such action as agent on its behalf and to exercise such powers as are delegated
to the Administrative Agent by the terms hereof, together with such powers as
are reasonably incidental thereto. The Administrative Agent reserves the right,
in its sole discretion, to take any actions, exercise any rights or remedies
under this Note Purchase Agreement and any related agreements and documents.
Except for actions which the Administrative Agent is expressly required to take
pursuant to this Note Purchase Agreement or the DFC Asset Purchase Agreement the
Administrative Agent shall not be required to take any action which exposes the
Administrative Agent to personal liability or which is contrary to applicable
law unless the Administrative Agent shall receive further assurances to its
satisfaction from the DFC Owners of the indemnification obligations under
Section 12.04 hereof against any and all liability and expense which may be
incurred in taking or continuing to take such action. The Administrative Agent
agrees to give to each DFC Owner prompt notice of each notice and determination
given to it by the Seller, the Servicer, ARFC II, AFL and the Indenture Trustee,
pursuant to the terms of this Note Purchase Agreement, the Sale and Servicing
Agreement or the Indenture. Subject to Section 12.06 hereof, the appointment
and authority of the Administrative Agent hereunder shall terminate upon the
payment to (a) each DFC Owner of all amounts owing to such Owner hereunder and
(b) the Administrative Agent of all amounts due hereunder.

SECTION 12.02 ADMINISTRATIVE AGENT'S RELIANCE, ETC. Neither the
Administrative Agent nor any of its directors, officers, agents or employees
shall be liable for any action

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taken or omitted to be taken by it or them as Administrative Agent under or in
connection with this Note Purchase Agreement or any related agreement or
document, except for its or their own gross negligence or willful misconduct.
Without limiting the foregoing, the Administrative Agent: (i) may consult with
legal counsel, independent public accountants and other experts selected by it
and shall not be liable for any action taken or omitted to be taken in good
faith by it in accordance with the advice of such counsel, accountants or
experts; (ii) makes no warranty or representation to any DFC Owner and shall not
be responsible to any DFC Owner for any statements, warranties or
representations made by the Seller, AFL or the Indenture Trustee in connection
with this Note Purchase Agreement; (iii) shall not have any duty to ascertain or
to inquire as to the performance or observance of any of the terms, covenants or
conditions of this Note Purchase Agreement on the part of the Seller, AFL or the
Indenture Trustee or to inspect the property (including the books and records)
of the Seller, AFL or the Indenture Trustee; (iv) shall not be responsible to
any DFC Owner for the due execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Note Purchase Agreement or any other
instrument or document furnished pursuant hereto; and (v) shall incur no
liability under or in respect of this Note Purchase Agreement by acting upon any
notice (including notice by telephone), consent, certificate or other instrument
or writing (which may be by telex) believed by it in good faith to be genuine
and signed or sent by the proper party or parties.

SECTION 12.03 ADMINISTRATIVE AGENT AND AFFILIATES. Morgan Guaranty
Trust Company of New York and its Affiliates may generally engage in any kind of
business with the Seller, ARFC II, AFL or any Obligor, any of their respective
Affiliates and any Person who may do business with or own securities of the
Seller, ARFC II, AFL or any Obligor or any of its Affiliates, all as if Morgan
Guaranty Trust Company of New York were not the Administrative Agent and without
any duty to account therefor to the DFC Owners.

SECTION 12.04 INDEMNIFICATION. Each DFC Owner severally agrees to
indemnify the Administrative Agent (to the extent not reimbursed by the Seller
or AFL), from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, or reasonable out-of-pocket
expenses or disbursements of any kind or nature whatsoever which may be imposed
on, incurred by, or asserted against the Administrative Agent in any way
relating to or arising out of this Note Purchase Agreement or any action taken
or omitted by the Administrative Agent under this Note Purchase Agreement;
provided, that (i) a DFC Owner shall not be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting or arising from the Administrative
Agent's gross negligence or willful misconduct and (ii) a DFC Owner shall not be
liable for any amount in respect of any compromise or settlement or any of the
foregoing unless such

40
<PAGE>

compromise or settlement is approved by DFC and the majority of the DFC
Purchasers (based on purchase commitments under the DFC Asset Purchase
Agreement). Without limitation of the generality of the foregoing, each DFC
Owner agrees to reimburse the Administrative Agent, promptly upon demand, for
any reasonable out-of-pocket expenses (including reasonable counsel fees)
incurred by the Administrative Agent in connection with the administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Note Purchase Agreement, provided, that no DFC
Owner shall be responsible for the costs and expenses of the Administrative
Agent in defending itself against any claim alleging the gross negligence or
willful misconduct of the Administrative Agent to the extent such gross
negligence or willful misconduct is determined by a court of competent
jurisdiction in a final and non-appealable decision.

SECTION 12.05 PURCHASE DECISION. Each DFC Owner acknowledges that it
has, independently and without reliance upon the Administrative Agent, any other
DFC Owner or any of their respective Affiliates, and based on such documents and
information as it has deemed appropriate, made its own evaluation and decision
to enter into this Note Purchase Agreement and to purchase an interest in the
Notes. Each DFC Owner also acknowledges that it will, independently and without
reliance upon the Administrative Agent, any other DFC Owner or any of their
respective Affiliates, and based on such documents and information as it shall
deem appropriate at the time, continue to make its own decisions in taking or
not taking action under this Note Purchase Agreement or any related agreement,
instrument or other document.

SECTION 12.06 SUCCESSOR ADMINISTRATIVE AGENT. (a) The Administrative
Agent may resign at any time by giving sixty days' written notice thereof to the
DFC Owners, the Seller, AFL, the Servicer, the Owner Trustee and the Indenture
Trustee. Upon any such resignation, a majority of the DFC Owners shall have the
right to appoint a successor Administrative Agent approved by AFL (which
approval will not be unreasonably withheld or delayed). If no successor
Administrative Agent shall have been so appointed by a majority of the DFC
Owners and shall have accepted such appointment, within sixty days after the
retiring Administrative Agent's giving of notice or resignation, then the
retiring Administrative Agent may, on behalf of the DFC Owners appoint a
successor Administrative Agent. If such successor Administrative Agent is not
an Affiliate of Morgan Guaranty Trust Company of New York, such successor
Administrative Agent shall be subject to AFL's prior written consent. Upon the
acceptance of any appointment as Administrative Agent hereunder by a successor
Administrative Agent, such successor Administrative Agent shall thereupon
succeed to and become vested with all of 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 Note
Purchase

41
<PAGE>

Agreement. After any retiring Administrative Agent's resignation or removal
hereunder as Administrative Agent, the provisions of this Article XII shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was an Administrative Agent under this Note Purchase Agreement.

ARTICLE XIII

MISCELLANEOUS

SECTION 13.01 AMENDMENTS. No amendment or waiver of any provision of
this Note Purchase Agreement shall in any event be effective unless the same
shall be in writing and signed by all of the parties hereto, and then such
amendment, waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given.

SECTION 13.02 NOTICES. All notices and other communications provided
for hereunder shall, unless otherwise stated herein, be in writing (including
telecopies) or delivered by overnight courier service, as to each party hereto,
at its address set forth below or at such other address as shall be designated
by such party in a written notice to the other parties hereto. All such notices
and communications shall, when telecopied or sent by overnight delivery service,
be effective when confirmed by telephone or signed receipt.

If to the Purchaser:

Delaware Funding Corporation
c/o Morgan Guaranty Trust Company of New York
500 Stanton Christiana Road
Newark, DE 19713-2107
Attention: Asset Finance Group
Telephone No. (302) 634-5492
Telecopier No. (302) 634-5490

If to the Seller:

Olympic Automobile Receivables Warehouse
Trust
c/o Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, DE 19890-0001
Attention: Corporate Trust Office
Telephone No. (302) 651-1428
Telecopier No. (302) 651-1576

42
<PAGE>

If to AFL:

Arcadia Financial Ltd.
7825 Washington Avenue South
Minneapolis, MN 55439-2435
Attention: John A. Witham
Telephone No. (612) 944-4592
Telecopier No. (612) 942-3348

If to Administrative Agent:

Morgan Guaranty Trust Company of New York
500 Stanton Christiana Road
Newark, DE 19713-2107
Attention: Asset Finance Group
Telephone No. (302) 634-5492
Telecopier No. (302) 634-5490

SECTION 13.03 NO WAIVER; REMEDIES. No failure on the part of any
party hereto to exercise, and no delay in exercising, any right hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right hereunder preclude any other or further exercise thereof or the exercise
of any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.

SECTION 13.04 BINDING EFFECT; ASSIGNABILITY. This Note Purchase
Agreement shall be binding upon and inure to the benefit of the Seller, AFL, the
Administrative Agent and the Purchaser and their respective successors and
assigns (including any subsequent holders of the Notes); PROVIDED, HOWEVER, that
neither the Seller nor AFL shall have the right to assign its rights hereunder
or any interest herein (by operation of law or otherwise) without the prior
written consent of the Purchaser. The Seller and AFL acknowledge that the
Purchaser (i) is assigning this Note Purchase Agreement and any rights the
Purchaser may have hereunder, to the Collateral Agent under the Security
Agreement for the benefit of the secured parties specified therein and (ii) may
at any time assign any and all of its rights hereunder to the DFC Owners, as the
case may be. This Note Purchase Agreement shall create and constitute the
continuing obligation of the parties hereto in accordance with its terms, and
shall remain in full force and effect until such time as all amounts payable
with respect to the Notes shall have been paid in full.

SECTION 13.05 PROVISION OF DOCUMENTS AND INFORMATION. The Seller and
AFL acknowledge and agree that the Purchaser and the Administrative Agent are
permitted to provide to the DFC Purchasers, the placement agents for the
Purchaser's Commercial Paper Notes, the rating agencies of the Purchaser's
Commercial Paper Notes and other liquidity and credit providers under the
Purchaser's Program Facility, opinions, certificates, documents and other
information relating to the Seller, ARFC II, AFL, the Indenture Trustee and the
Owner Trustee and the Receivables

43
<PAGE>

delivered to the Purchaser or Administrative Agent pursuant to this Note
Purchase Agreement. In addition, the Seller, AFL, the Indenture Trustee and the
Owner Trustee agree that any successors or assignees of the Purchaser will be
entitled to receive the same opinions, certificates, documents and other
information from the Seller, ARFC II, AFL, the Indenture Trustee, the Owner
Trustee and their respective agents and representatives as the Purchaser or
Administrative Agent under this Note Purchase Agreement. The Administrative
Agent agrees not to provide any of the foregoing materials or information to any
of the DFC Purchasers, the other liquidity and credit providers under the
Purchaser's Program Facility or the dealers or placement agents of the
Purchaser's Commercial Paper Notes unless such party has agreed to hold such
materials or information in confidence in accordance with the standard set forth
in Sections 8.03 and 9.03 hereof.

SECTION 13.06 GOVERNING LAW; JURISDICTION. THIS NOTE PURCHASE
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS.
EACH OF THE PARTIES TO THIS NOTE PURCHASE AGREEMENT HEREBY AGREES TO THE
JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF
NEW YORK AND ANY APPELLATE COURT HAVING JURISDICTION TO REVIEW THE JUDGMENTS
THEREOF. EACH OF THE PARTIES HEREBY WAIVES ANY OBJECTION BASED ON FORUM NON
CONVENIENS AND ANY OBJECTION TO VENUE OF ANY ACTION INSTITUTED HEREUNDER IN ANY
OF THE AFOREMENTIONED COURTS AND CONSENTS TO THE GRANTING OF SUCH LEGAL OR
EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT.

SECTION 13.07 NO PROCEEDINGS. Each of the Seller and AFL agree that
so long as any of the Purchaser's Commercial Paper Notes shall be outstanding or
there shall not have elapsed one year plus one day since the last day on which
any of the Purchaser's Commercial Paper Notes shall have been outstanding, it
shall not file, or join in the filing of, a petition against the Purchaser, ARFC
II or the Trust under the Federal Bankruptcy Code, or join in the commencement
of any bankruptcy, reorganization, arrangement, insolvency, liquidation or other
similar proceeding against the Purchaser, ARFC II or the Trust.

SECTION 13.08 EXECUTION IN COUNTERPARTS. This Note Purchase
Agreement may be executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed shall be deemed
to be an original and all of which when taken together shall constitute one and
the same agreement.

SECTION 13.09 NO RECOURSE. The obligations of the Purchaser or any
DFC Purchaser under this Note Purchase Agreement, or any other agreement,
instrument, document or certificate executed and delivered by or issued by the
Purchaser or any such DFC Purchaser or any officer thereof are solely the
corporate obligations of the Purchaser or any such DFC Purchaser. No recourse
shall be had for payment of any fee or other

44
<PAGE>

obligation or claim arising out of or relating to this Note Purchase Agreement
or any other agreement, instrument, document or certificate executed and
delivered or issued by the Purchaser or any DFC Purchaser or any officer thereof
in connection therewith, against any stockholder, employee, officer, director or
incorporator of the Purchaser or any such DFC Purchaser.

SECTION 13.10 LIMITED RECOURSE. The obligations of the Seller under
this Note Purchase Agreement shall be payable only out of Trust Property and the
Purchaser shall not look to any property or assets of the Seller, other than to
Trust Property. The obligations of AFL under this Note Purchase Agreement are
solely the corporate obligations of AFL. No recourse shall be had for the
payment of any fee or other obligation or claim arising out of or relating to
this Note Purchase Agreement or any other agreement, instrument, document or
certificate executed and delivered or issued by AFL or any of its officers in
connection therewith, against any stockholder, employee, officer, director or
incorporator of AFL.

SECTION 13.11 SURVIVAL. All representations, warranties, covenants,
guaranties and indemnifications (including the payment obligations in Section
11.05 hereof) contained in this Note Purchase Agreement and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the sale, transfer or repayment of the Notes.

SECTION 13.12 CONSENT TO AMENDED AND RESTATED AGREEMENTS. The
Purchaser and the Administrative Agent hereby consent, pursuant to Sections 8.06
and 9.06 of the Original Note Purchase Agreement and pursuant to Sections 9.02
and 11.20 of the Indenture, to the amendments to the Indenture, the Purchase
Agreement, the Custodian Agreement, the Sale and Servicing Agreement and the
Trust Agreement of even date herewith.

SECTION 13.13 THIRD-PARTY BENEFICIARIES. The parties hereto agree
and acknowledge that the DFC Purchasers are and shall be third-party
beneficiaries under this Note Purchase Agreement.

45
<PAGE>

IN WITNESS WHEREOF, the parties have caused this Amended and Restated
Note Purchase Agreement to be executed by their respective officers thereunto
duly authorized, as of the date first above written.

OLYMPIC AUTOMOBILE RECEIVABLES
WAREHOUSE TRUST, as Seller

By Wilmington Trust Company, not in
its individual capacity but
solely as Owner Trustee

By: /s/ D. Geran
---------------------------
Name: Denise M. Geran
Title: Financial Services Officer

ARCADIA FINANCIAL LTD., as Servicer
and in its individual capacity

By: /s/ John A. Witham
---------------------------
Name: John A. Witham
Title: Executive Vice President and
Chief Financial Officer

DELAWARE FUNDING CORPORATION,
as Purchaser

By: /s/ Richard A. Burke
---------------------------
Name: Richard A. Burke
Title: Vice President

MORGAN GUARANTY TRUST COMPANY OF
NEW YORK, as Administrative Agent

By: /s/ Richard A. Burke
---------------------------
Name: Richard A. Burke
Title: Vice President

[Signature page to Amended and Restated Note Purchase Agreement]

<PAGE>

EXECUTION COPY

- --------------------------------------------------------------------------------

AMENDED AND RESTATED
CERTIFICATE PURCHASE AGREEMENT

among

OLYMPIC AUTOMOBILE RECEIVABLES WAREHOUSE TRUST,
as Seller,

ARCADIA FINANCIAL LTD.,
as Servicer and in its individual capacity

THE PARTIES SIGNATORY HERETO,
as Purchasers,

and

MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
as Agent for the Purchasers,

dated as of July 31, 1997

- --------------------------------------------------------------------------------

<PAGE>

TABLE OF CONTENTS

Page
----

ARTICLE I

DEFINITIONS

SECTION 1.01 Certain Defined Terms. . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.02 Other Definitional Provisions. . . . . . . . . . . . . . . . 10

ARTICLE II

PURCHASE AND SALE

SECTION 2.01 Initial Purchase and Sale of the
Investor Certificates. . . . . . . . . . . . . . . . . . . . 10
SECTION 2.02 Initial Purchase Price . . . . . . . . . . . . . . . . . . . 11
SECTION 2.03 Incremental Purchases and Incremental
Purchase Conditions. . . . . . . . . . . . . . . . . . . . . 11
SECTION 2.04 Extension of Purchase Commitment
Expiration Date. . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 2.05 Reduction or Increase of Purchase
Commitments. . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 2.06 Redemption and Repayment of Investor
Certificates . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 2.07 Certificate Purchase Termination Events. . . . . . . . . . . 13
SECTION 2.08 Calculation of Certificate Rate; Payments. . . . . . . . . . 14
SECTION 2.09 Declaration of Purchase Termination Date . . . . . . . . . . 15

ARTICLE III

CLOSING AND EFFECTIVENESS

SECTION 3.01 Closing. . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 3.02 Funding Date . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 3.03 Transactions Effected at the Initial
Closing and on the Funding Date. . . . . . . . . . . . . . . 16
SECTION 3.04 Effectiveness Date . . . . . . . . . . . . . . . . . . . . . 16

ARTICLE IV

CONDITIONS PRECEDENT TO OBLIGATION OF THE
PURCHASERS ON THE INITIAL CLOSING DATE

SECTION 4.01 Performance by Parties . . . . . . . . . . . . . . . . . . . 16
SECTION 4.02 Representations and Warranties . . . . . . . . . . . . . . . 17
SECTION 4.03 Corporate Documents. . . . . . . . . . . . . . . . . . . . . 17
SECTION 4.04 Opinions of Counsel. . . . . . . . . . . . . . . . . . . . . 17
SECTION 4.05 Opinions of Counsel to the Indenture
Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . 17

<PAGE>

Page
----

SECTION 4.06 Financing Statements . . . . . . . . . . . . . . . . . . . . 18
SECTION 4.07 Documents. . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 4.08 No Actions or Proceedings. . . . . . . . . . . . . . . . . . 18
SECTION 4.09 Approvals and Consents . . . . . . . . . . . . . . . . . . . 18
SECTION 4.10 Officer's Certificate. . . . . . . . . . . . . . . . . . . . 18
SECTION 4.11 Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 4.12 Lockbox Account. . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 4.13 Other Documents. . . . . . . . . . . . . . . . . . . . . . . 19

ARTICLE IVA

CONDITIONS PRECEDENT TO EFFECTIVENESS

SECTION 4.01A Article IV Conditions. . . . . . . . . . . . . . . . . . . . 19
SECTION 4.02A Executed Agreements. . . . . . . . . . . . . . . . . . . . . 19

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF THE SELLER

SECTION 5.01 Authority, etc.. . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 5.02 Investor Certificates. . . . . . . . . . . . . . . . . . . . 21
SECTION 5.03 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 5.04 Taxes, etc.. . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 5.05 Financial Condition of the Seller. . . . . . . . . . . . . . 21
SECTION 5.06 Absence of Material Adverse Effect . . . . . . . . . . . . . 21
SECTION 5.07 Investment Company Act . . . . . . . . . . . . . . . . . . . 21
SECTION 5.08 Full Disclosure. . . . . . . . . . . . . . . . . . . . . . . 21

ARTICLE VI

REPRESENTATIONS AND WARRANTIES
OF THE PURCHASERS

SECTION 6.01 Organization . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 6.02 Authority, etc.. . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 6.03 Securities Act . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 6.04 Investment Company Act . . . . . . . . . . . . . . . . . . . 23
SECTION 6.05 Restrictions on Transfer . . . . . . . . . . . . . . . . . . 23

ARTICLE VII

REPRESENTATIONS AND WARRANTIES OF AFL

SECTION 7.01 Organization . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 7.02 Authority, etc.. . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 7.03 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 7.04 Full Disclosure. . . . . . . . . . . . . . . . . . . . . . . 25

<PAGE>

Page
----

ARTICLE VIII

COVENANTS OF THE SELLER

SECTION 8.01 Information from the Seller. . . . . . . . . . . . . . . . . 25
SECTION 8.02 Access to Information. . . . . . . . . . . . . . . . . . . . 26
SECTION 8.03 Security Interests; Further Assurances . . . . . . . . . . . 27
SECTION 8.04 Agreement Covenants. . . . . . . . . . . . . . . . . . . . . 27
SECTION 8.05 Agreement Amendments . . . . . . . . . . . . . . . . . . . . 27
SECTION 8.06 Receivables Files. . . . . . . . . . . . . . . . . . . . . . 27

ARTICLE IX

COVENANTS OF AFL

SECTION 9.01 Information from AFL . . . . . . . . . . . . . . . . . . . . 27
SECTION 9.02 Access to Information. . . . . . . . . . . . . . . . . . . . 28
SECTION 9.03 Security Interests; Further Assurances . . . . . . . . . . . 28
SECTION 9.04 Agreement Covenants. . . . . . . . . . . . . . . . . . . . . 28
SECTION 9.05 Agreement Amendments . . . . . . . . . . . . . . . . . . . . 28
SECTION 9.06 Minimum Capital Base . . . . . . . . . . . . . . . . . . . . 29
SECTION 10.01 Legal Conditions to Closing. . . . . . . . . . . . . . . . . 29
SECTION 10.02 Fees and Expenses. . . . . . . . . . . . . . . . . . . . . . 29
SECTION 10.03 Mutual Obligations . . . . . . . . . . . . . . . . . . . . . 30

ARTICLE XI

INDEMNIFICATION

SECTION 11.01 Indemnification by the Seller and AFL. . . . . . . . . . . . 30
SECTION 11.02 Procedure. . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 11.03 Defense of Claims. . . . . . . . . . . . . . . . . . . . . . 31
SECTION 11.04 Indemnity for Taxes, Reserves and Expenses . . . . . . . . . 31
SECTION 11.05 Costs, Expenses, Taxes, Breakage Payment
and Increased Costs under Certificate
Purchase Agreement . . . . . . . . . . . . . . . . . . . . . 33

ARTICLE XII

THE PURCHASERS' AGENT

SECTION 12.01 Authorization and Action . . . . . . . . . . . . . . . . . . 34
SECTION 12.02 Purchasers' Agent's Reliance, Etc. . . . . . . . . . . . . . 35
SECTION 12.03 Purchasers' Agent and Affiliates . . . . . . . . . . . . . . 35
SECTION 12.04 Indemnification. . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 12.05 Purchase Decision. . . . . . . . . . . . . . . . . . . . . . 36
SECTION 12.06 Successor Purchasers' Agent. . . . . . . . . . . . . . . . . 36

iii

<PAGE>

Page
----

ARTICLE XIII

MISCELLANEOUS

SECTION 13.01 Amendments . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 13.02 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 13.03 No Waiver; Remedies. . . . . . . . . . . . . . . . . . . . . 38
SECTION 13.04 Binding Effect; Assignability;
Participations . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 13.05 GOVERNING LAW; JURISDICTION. . . . . . . . . . . . . . . . . 39
SECTION 13.06 No Proceedings . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 13.07 Execution in Counterparts. . . . . . . . . . . . . . . . . . 39
SECTION 13.08 No Recourse. . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 13.09 Limited Recourse . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 13.10 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 13.11 Consent to Amended and Restated Agreements . . . . . . . . . 40

EXHIBITS

EXHIBIT A Assignment of Purchase Commitment
EXHIBIT B Addressees
EXHIBIT C Form of Notice of Incremental Purchase
EXHIBIT D Form of Investment Letter

<PAGE>

AMENDED AND RESTATED CERTIFICATE PURCHASE AGREEMENT ("CERTIFICATE
PURCHASE AGREEMENT") dated as of July 31, 1997, among OLYMPIC AUTOMOBILE
RECEIVABLES WAREHOUSE TRUST, a Delaware business trust (the "SELLER"), Arcadia
Financial Ltd., a Minnesota corporation, as Servicer (as defined below) and in
its individual capacity ("AFL"), each PURCHASER (as defined below), and Morgan
Guaranty Trust Company of New York, as agent for the benefit of the Purchasers
(the "PURCHASERS' AGENT").

The parties hereto agree as follows:

ARTICLE I

DEFINITIONS

SECTION 1.01 CERTAIN DEFINED TERMS. Capitalized terms used herein
without definition shall have the meanings set forth in the Sale and
Servicing Agreement (as defined below), the Trust Agreement (as defined
below) or the Indenture (as defined below), as applicable. Additionally, the
following terms shall have the following meanings:

"ACT" means the Securities Act of 1933, as amended.

"ADJUSTED LIBOR" shall mean, with respect to any Certificate Funding
Period, a rate per annum equal to the quotient obtained (rounded upwards, if
necessary, to the next higher 1/100 of 1%) by dividing (i) LIBOR for such
Certificate Funding Period (or portion thereof) by (ii) a percentage equal to
100% minus the maximum rate of all reserve requirements as specified in
Regulation D of the Board of Governors of the Federal Reserve System (or any
successor to all or any portion thereof establishing reserve requirements)
including any marginal, emergency, supplemental, special or other reserves, that
are applicable to a Purchaser during such Certificate Funding Period in respect
of eurocurrency or eurodollar funding, lending or liabilities.

"AFL" means Acardia Financial Ltd, a Minnesota corporation, and its
successors and assigns.

<PAGE>

"ARFC II" means Arcadia Receivables Financial Corp., a Delaware
corporation, and its successors and assigns.

"ASSIGNMENT AGREEMENT" means each assignment agreement between AFL and
ARFC II, pursuant to which AFL sells and assigns a specified pool of Receivables
to ARFC II.

"BASE RATE" shall mean, with respect to each day, a rate per annum
equal to the higher of (i) the prime rate announced from time to time by the
Purchasers' Agent in effect on the morning of each such day, and (ii) the rate
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, as published for each such day (or, if such day is not a Business
Day, the next succeeding Business Day) by the Federal Reserve Bank of New York,
or if such rate is not so published for any day that is a Business Day, the
average of the quotations for such day for such transactions received by the
Purchasers' Agent from three Federal funds brokers of recognized standing
selected by it plus one-half of one percent (1/2 of 1%). Each determination of
the Base Rate shall be calculated on the basis of actual days elapsed and a year
of 365 or 366 days, as the case may be.

"BREAKAGE PAYMENT" means, if (a) any Purchaser shall receive payment
of principal with respect to such Purchaser's interest in the Investor
Certificates on any day other than a Distribution Date as a result of either (i)
the redemption or repayment of the Investor Certificates in connection with a
Securitized Offering or from the sale of Trust Property or (ii) the repayment of
all or a portion of the Investor Certificates on a date other than a
Distribution Date, any resulting loss (calculated as the difference between the
interest that would have been payable on such Purchaser's interest and the
amount earned by such Purchaser in reemploying such funds) or expense incurred
by such Purchaser, but excluding losses or expenses for the period after any
such payment or (b) any Purchaser shall, at the request of the Seller, have
arranged funding of its anticipated purchase of its interest in the Investor
Certificates for a Certificate Funding Period to commence on a future date and
all or a portion of such interest in the Investor Certificates is not available
for purchase on such day (calculated as provided above), any resulting losses or
expenses incurred by such Purchaser; PROVIDED that the affected Purchasers shall
have delivered to the Purchasers' Agent and the Purchasers' Agent shall have
delivered to the Seller, the Servicer and the Owner Trustee on or prior to the
date on which such Purchasers request reimbursement for such costs a certificate
as to the amount of such loss or expense and a further certificate showing, in
reasonable detail, the calculation employed by such Purchasers to determine the
amount of such loss or expense, which certificate shall be conclusive in the
absence of manifest error.

2
<PAGE>

"CAPITAL BASE" shall mean, at any date, AFL's Tangible Net Worth at
such date.

"CERTIFICATE FUNDING PERIOD" means each period designated by the
Purchasers' Agent, during which a Funding Rate for each funding by the
Purchasers of the Purchase Price of the Investor Certificates shall be in
effect. For a Certificate Funding Period (i) based on a Base Rate, the period
shall be one (1) day or longer, and (ii) based on a Eurodollar Rate, the period
of 1, 2 or 3 months; PROVIDED, HOWEVER that if on the last day of any
Certificate Funding Period, the Seller has notified the Purchasers' Agent that a
Securitized Offering or a repayment of the Investor Certificates with the
proceeds of the sale of Trust Property is expected to occur within 30 days of
such last day, the Certificate Funding Period beginning on such last day may be
based on a 1-week, 2-week or 3-week LIBOR, with a 1-week Certificate Funding
Period selected no more than twice in connection with such Securitized Offering
or repayment of the Investor Certificates.

"CERTIFICATE PURCHASE TERMINATION EVENT" means any event described in
Section 2.07 hereof which, upon its occurrence, terminates the Purchasers'
obligation to purchase the Investor Certificates and to fund Incremental
Purchases hereunder.

"CERTIFICATE RATE" means for any day during an Interest Accrual
Period, a per annum interest rate equal to the weighted average of the Funding
Rates; PROVIDED, HOWEVER, following the occurrence of (i) a Default Rate Event,
the Certificate Rate for any Certificate Funding Period commencing after such
Default Rate Event shall be a per annum rate of 1.0% in excess of the Base Rate
and (ii) a Certificate Purchase Termination Event (other than a Default Rate
Event), the Certificate Rate for any Certificate Funding Period commencing after
such Certificate Purchase Termination Event shall be a per annum rate of 1.25%
in excess of Adjusted LIBOR.

"CHANGE OF CONTROL" shall mean the occurrence of any of the following
with respect to AFL:

(a) (i) a majority of the directors of AFL shall be Persons other than
Persons (x) for whose election proxies shall have been solicited by the board of
directors of AFL or (y) who are then serving as directors appointed by the board
of directors to fill vacancies on the board of directors caused by death or
resignation (but not by removal) or to fill newly-created directorships or (ii)
any person or group of persons (within the meaning of Section 13 or 14 of the
Securities Exchange Act of 1934, as amended) shall have acquired beneficial
ownership

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(within the meaning of Rule 13d-3 promulgated by the Securities and Exchange
Commission under said Act) of 50% or more in voting power of the outstanding
voting stock of AFL; or

(b) AFL shall fail to own, directly or indirectly, 100% of the
outstanding capital stock of ARFC II.

"CLOSING DATE" shall mean either the Initial Closing Date or the
Effectiveness Date, as applicable.

"CUSTODIAN" means AFL or other custodian named in the related
Custodian Agreement.

"CUSTODIAN AGREEMENT" means each custodian agreement between the
Seller and the Custodian named therein, as the same may be amended, modified or
supplemented.

"DEFAULT RATE EVENT" means the occurrence of any one of the following
events: (i) an Event of Default under Section 5.01(i), (ii), (v) or (vi) of the
Indenture; (ii) a Certificate Purchase Termination Event under Section 2.07(d),
(e) or (f) of this Certificate Purchase Agreement; or (iii) a Servicer
Termination Event under Section 8.1(a), (b), (c) or (d) of the Sale and
Servicing Agreement.

"EFFECTIVENESS DATE" has the meaning specified in Section 3.04 hereof.

"EURODOLLAR RATE" shall mean, with respect to any Certificate Funding
Period, a rate per annum equal to Adjusted LIBOR for such Certificate Funding
Period plus (1.0%) one percent per annum. Each determination of the Eurodollar
Rate shall be calculated on the basis of actual days elapsed and a year of 360
days.

"FEDERAL BANKRUPTCY CODE" means the bankruptcy code of the United
States of America codified in Title 11 of the United States Code.

"FUNDING DATE" has the meaning specified in Section 3.02 hereof.

"FUNDING RATE" shall mean, for each Purchaser, with respect to each
Certificate Funding Period, a rate per annum (expressed as a percentage and an
interest yield equivalent) equal to the rate of interest (or if more than one
rate, the weighted average of the rates) at which such Purchaser funds its
Purchase Percentage of the Purchase Price (or portion thereof) of the Investor
Certificates during such Certificate Funding Period, which rate or rates shall
be calculated based on the Eurodollar Rate or the Base Rate.

"GAAP" means generally accepted accounting principles set forth from
time to time in the opinions and pronouncements of the Accounting Principles
Board and the American Institute of

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Certified Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board (or agencies with similar functions of comparable
stature and authority within the U.S. accounting profession), which are
applicable to the circumstances as of the date of any determination.

"GENERAL PARTNER" means Arcadia Receivables Finance Corp. II, as
general partner of the Trust or any successor General Partner as permitted by
the Trust Agreement.

"INCREMENTAL PURCHASE" means the Purchasers' obligation to fund an
increase in the aggregate Certificate Balance of the Investor Certificates in
accordance with the provisions of Section 2.03 hereof.

"INCREMENTAL PURCHASE CONDITIONS" means the conditions to an
Incremental Purchase set forth in Section 2.03(a) hereof.

"INCREMENTAL PURCHASE DATE" means the date on which each Incremental
Purchase occurs, which date shall also be a Business Day that is a Transfer Date
under the Sale and Servicing Agreement.

"INCREMENTAL PURCHASE PRICE" for any Incremental Purchase has the
meaning specified in Section 2.03(d) hereof.

"INDEMNIFIED PARTY" has the meaning specified in Section 11.02 hereof.

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"INDENTURE" means the Amended and Restated Indenture dated as of July
31, 1997, between the Trust and the Indenture Trustee, as the same may be
amended, modified or supplemented.

"INDENTURE TRUSTEE" means Norwest Bank Minnesota, National
Association, and its successors and assigns.

"INITIAL CLOSING" has the meaning specified in Section 3.01 hereof.

"INITIAL CLOSING DATE" has the meaning specified in Section 3.01
hereof.

"INITIAL PURCHASE PRICE" has the meaning specified in Section 2.02
hereof.

"INTEREST ACCRUAL PERIOD" with respect to any Distribution Date means
the calendar month preceding the month in which such Distribution Date occurs
(or, in the case of the first Distribution Date, the period commencing on the
Funding Date and ending on the last day of the calendar month preceding the
month in which the first Distribution Date occurs); PROVIDED, HOWEVER, that (a)
with respect to each Incremental Purchase, the first Interest Accrual Period
shall begin on the date of such Incremental Purchase and (b) in the event of a
redemption of the Investor Certificates in connection with a Securitized
Offering or a repayment of the Investor Certificates with the proceeds of sale
of Trust Property, the Interest Accrual Period will end on the date of such
Securitized Offering or repayment.

"INTEREST ARREARAGE" for each Distribution Date means the aggregate of
the sum of, for each Purchaser and for each Certificate Funding Period that ends
within the related Interest Accrual Period, the interest on the interest accrued
but not paid to such Purchaser at the end of such Certificate Funding Period on
such Purchaser's Purchase Percentage of the Purchase Price, at the Funding Rate
applicable on each day remaining in such Interest Accrual Period, together with
interest on the Interest Arrearage from the end of the prior Interest Accrual
Period through the date such interest is paid at the Funding Rate applicable on
each day in such period.

"INVESTMENT LETTER" has the meaning specified in Section 6.03 hereof.

"INVESTOR CERTIFICATES" means the Variable Funding Certificates
representing fractional undivided interests in the Trust, which may be issued
under the Trust Agreement.

"LIBOR" shall mean, with respect to any Certificate Funding Period, a
rate per annum determined by the Purchasers' Agent to be the rate at which
deposits in Dollars are offered to the Purchasers' Agent by prime banks in the
London Interbank market at approximately 11:00 a.m. (London time) on the related

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LIBOR Determination Date for a period of time comparable to such Certificate
Funding Period.

"LIBOR BUSINESS DAY" shall mean any Business Day on which commercial
banks are open for dealings in Dollar deposits in London.

"LIBOR DETERMINATION DATE" shall mean, with respect to any Certificate
Funding Period based on the Eurodollar Rate or Adjusted LIBOR, the second London
Business Day preceding the first day of such Certificate Funding Period.

"LOSSES" has the meaning specified in Section 11.01 hereof.

"NOTES" means the Variable Funding Notes in the maximum aggregate
principal amount as of the date hereof of $240,000,000, to be issued by the
Seller pursuant to the Indenture.

"NOTICE OF INCREMENTAL PURCHASE" means a written notice of an
Incremental Purchase in the form of Exhibit C hereto.

"ORIGINAL CERTIFICATE PURCHASE AGREEMENT" means the Certificate
Purchase Agreement dated as of December 28, 1995, as amended and supplemented,
by and among the Trust, AFL, the Purchasers and the Purchasers' Agent, which
Original Certificate Purchase Agreement is superseded by this Certificate
Purchase Agreement.

"OWNER TRUSTEE" means Wilmington Trust Company, a Delaware
corporation, in its capacity as trustee of the Seller, and its successors and
assigns.

"PERMITTED ACQUISITION" means an Acquisition by AFL or any Subsidiary
of AFL that is a going concern that satisfies the following conditions:

(a) the Person acquired in such Acquisition is in the same or a similar
line of business as AFL is in on the Effective Date;

(b) the Purchasers' Agent shall have received from AFL in form and
substance satisfactory to it, PRO FORMA calculations

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demonstrating that as of the date of such Acquisition after giving effect
thereto such Acquisition would not cause (i) a "Purchase Termination Event" (as
defined in the Sale and Servicing Agreement) or (ii) a violation of AFL's
minimum Capital Base requirement as set forth in Section 9.06.

"PERSON" means an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust, unincorporated
association, joint venture or Governmental Authority.

"PURCHASE AVAILABILITY FEE" means the fee payable to the Purchasers by
the Seller and AFL with respect to the unused Purchase Commitment, as provided
in Section 10.02(b) hereof.

"PURCHASE COMMITMENT" of each Purchaser means the obligation of such
Purchaser to purchase and fund Incremental Purchases of the Investor
Certificates in an aggregate principal amount not to exceed the amount set forth
next to such Purchaser's name on the signature page hereto, as such amount may
be increased from time to time in accordance with Section 2.05 hereof.

"PURCHASE COMMITMENT EXPIRATION DATE" means the earliest of (i) July
30, 1998, (ii) the date on which an event which causes or might cause a
Certificate Purchase Termination Event occurs, and (iii) the date on which a
Securitized Offering occurs; provided that the Purchase Commitment Expiration
Date may be extended from time to time in accordance with Section 2.04 hereof.

"PURCHASE PERCENTAGE" of each Purchaser means the percentage which
such Purchaser's then Purchase Commitment constitutes of the aggregate Purchase
Commitments at such time.

"PURCHASE PRICE" means the Initial Purchase Price and each Incremental
Purchase Price, as applicable.

"PURCHASER" means AFL or any financial institution which has executed
a signature page to this Agreement or an Assignment of Purchase Commitment in
the form of Exhibit A hereto, or the successors or assigns of any of the above.

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"PURCHASERS' AGENT" means Morgan Guaranty Trust Company of New York,
in its capacity as agent for the Purchasers.

"SERVICER" means AFL, or if replaced, Norwest Bank Minnesota, as
backup Servicer, or any Successor Servicer appointed pursuant to Section 7.5 of
the Sale and Servicing Agreement.

"TANGIBLE NET WORTH" shall mean, at any time, AFL's Net Worth at such
time, excluding the value of goodwill (other than goodwill arising from a
Permitted Acquisition), trademarks, trade names, copyrights, patents, licenses
and similar intangibles, but specifically including all of AFL's finance income
receivable (calculated in a manner consistent with AFL's audited consolidated
balance sheet as of December 31, 1996) as at such time.

"THIRD PARTY CLAIM" has the meaning specified in Section 11.02 hereof.

"TRANSFER AGREEMENT" means each transfer agreement between ARFC II and
the Trust pursuant to which ARFC II sells and assigns a specified pool of
Receivables to the Trust.

"TRUST" means Olympic Automobile Receivables Warehouse Trust, a
Delaware business trust, and its successors and assigns.

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"TRUST AGREEMENT" means the Amended and Restated Trust Agreement dated
as of July 31, 1997, between ARFC II and the Owner Trustee, as the same may be
amended, modified or supplemented.

SECTION 1.02 OTHER DEFINITIONAL PROVISIONS.

(a) All terms defined in this Certificate Purchase Agreement shall
have the defined meanings when used in any certificate or other document made or
delivered pursuant hereto unless otherwise defined therein.

(c) The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Certificate Purchase Agreement shall refer to this
Certificate Purchase Agreement as a whole and not to any particular provision of
this Certificate Purchase Agreement; and Section, subsection, Schedule, Exhibit
and Appendix references contained in this Certificate Purchase Agreement are
references to Sections, subsections, Schedules, Exhibits and the Appendix in or
to this Certificate Purchase Agreement unless otherwise specified.

(d) The references to the documents entered into in connection with
this Certificate Purchase Agreement, namely, the Administration Agreement, the
Indenture, the Purchase Agreement, the Sale and Servicing Agreement and the
Trust Agreement shall be read to include, where appropriate, the original (as
amended and supplemented) agreement related to each such amended and restated
document.

ARTICLE II

PURCHASE AND SALE

SECTION 2.01 INITIAL PURCHASE AND SALE OF THE INVESTOR CERTIFICATES.
On the terms and subject to the conditions set forth in the Original Certificate
Purchase Agreement, and in reliance on the covenants, representations,
warranties and agreements therein set forth, the Seller instructed the Owner
Trustee to authenticate and issue to the Purchasers and to sell, transfer and
deliver to the Purchasers, and the Purchasers purchased on the Funding Date, the
Investor Certificates in the initial aggregate principal amount designated by
the Seller.

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SECTION 2.02 INITIAL PURCHASE PRICE. The Investor Certificates were
initially purchased at the price (the "INITIAL PURCHASE PRICE") of 100% of the
initial aggregate Certificate Balance of the Investor Certificates. Each
Purchaser paid its Purchase Percentage of the Purchase Price and received an
Investor Certificate(s) in a Certificate Balance equal to its share of the
Initial Purchase Price paid.

SECTION 2.03 INCREMENTAL PURCHASES AND INCREMENTAL PURCHASE
CONDITIONS.

(a) Since the Funding Date, the Purchasers have been obligated, and
from and after the Effectiveness Date, the Purchasers shall be obligated to make
the Incremental Purchases from time to time until the Purchase Commitment
Expiration Date, upon satisfaction, as of the applicable Incremental Purchase
Date, of each of the following conditions (the "Incremental Purchase
Conditions"):

(i) the Investor Certificates shall have been issued in accordance
with Section 3.2(a) of the Trust Agreement or the Certificate Balance of
the Investor Certificates shall have been increased in accordance with
Section 3.2(a) of the Trust Agreement, as applicable;

(ii) The Purchasers' Agent shall have received a completed Notice of
Incremental Purchase by 2:00 p.m., New York City time, on the third LIBOR
Business Day before such Incremental Purchase Date (if any such Notice is
received after 2:00 p.m., the related Incremental Purchase shall occur on
the fourth LIBOR Business Day following such receipt);

(iii) the Purchasers' Agent shall have received copies of all
settlement statements and all reports required to be delivered by Servicer
to the Owner Trustee pursuant to Article III of the Sale and Servicing
Agreement;

(iv) Each of the representations and warranties of the Seller, the
Owner Trustee, AFL and ARFC II, as applicable, made in the Sale and
Servicing Agreement, the Administration Agreement, the Purchase Agreement,
each Assignment Agreement, each Transfer Agreement, the Trust Agreement,
the Indenture and this Certificate Purchase Agreement shall be true and
correct in all material respects as of the applicable Incremental Purchase
Date (except to the extent they expressly relate to an earlier or later
time);

(v) All of the conditions for transferring Receivables and other
property to the Trust specified in Section 2.1(b)(1) of the Sale and
Servicing Agreement shall have been satisfied;

(vi) The Seller, the Owner Trustee, the General Partner, AFL and ARFC
II shall be in compliance with all of

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their respective covenants contained in the Trust Agreement, the Sale and
Servicing Agreement, the Purchase Agreement, each Assignment Agreement,
each Transfer Agreement, the Indenture and this Certificate Purchase
Agreement; and

(vii) No Certificate Purchase Termination Event, or event which with
the giving of notice or passage of time could become a Certificate Purchase
Termination Event, shall have occurred.

(b) Each Incremental Purchase shall be requested in the amount equal
to the aggregate of the unused Purchase Commitments hereunder and the initial
Funding Rate on the Investor Certificates purchased on each such Incremental
Purchase Date shall be based on the Eurodollar Rate.

(c) No Purchaser shall be required to make any Incremental Purchase
if, after giving effect to such funding, the Certificate Balance of the Investor
Certificate owned by such Purchaser will exceed such Purchaser's Purchase
Commitment.

(d) The purchase price of each Incremental Purchase shall be equal to
100% of the increase in the aggregate Certificate Balance of the Investor
Certificates (the "Incremental Purchase Price") and each Purchaser shall be
obligated to pay its Purchase Percentage of the Incremental Purchase Price.

SECTION 2.04 EXTENSION OF PURCHASE COMMITMENT EXPIRATION DATE.
Unless some other event causes the termination of the Purchasers' obligations to
purchase the Investor Certificates or make Incremental Purchases hereunder, the
parties to this Certificate Purchase Agreement may mutually agree in writing to
the extension of the date in clause (i) of the definition of the Purchase
Commitment Expiration Date to a date no later than 364 days following the date
of such extension.

SECTION 2.05 REDUCTION OR INCREASE OF PURCHASE COMMITMENTS.

(a) The Seller may reduce in whole or in part the aggregate of the
unused Purchase Commitments by giving the Purchasers' Agent written notice
thereof at least five Business Days before such reduction is to take place, such
reduction to be shared by the Purchasers PRO RATA on the basis of their
respective Purchase Percentages; PROVIDED, HOWEVER, that any partial reduction
shall be in a minimum amount of $1,000,000. On the date of any reduction of the
Purchase Commitments, the Seller shall pay the Purchasers any accrued and unpaid
Purchase Availability Fee with respect to the reduction amount.

(b) The Seller may request an increase in the aggregate of the
Purchase Commitments by written notice to the Purchasers' Agent at least 30 days
before the date on which such increase is requested to become effective, such
increase to be shared by the

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<PAGE>

Purchasers PRO RATA on the basis of their respective Purchase Percentages;
PROVIDED, HOWEVER, if one or more Purchasers declines its pro rata share of any
such increase, one or more of the other Purchasers may accept such increase, or
one or more additional Purchasers may agree to sign this Certificate Purchase
Agreement with a Purchase Commitment equal to or less than such increase, in
which event on the effective date of such increase, such declining Purchaser's
Purchase Percentage shall be reduced, and such accepting or additional
Purchaser's Percentage shall be increased, accordingly. No such increase will
take effect unless one or more Purchasers or additional Purchasers accepts such
increase and the Purchasers' Agent agrees thereto.

SECTION 2.06 REDEMPTION AND REPAYMENT OF INVESTOR CERTIFICATES. The
Seller shall have the right, from time to time to redeem the Investor
Certificates, in whole but not in part in accordance with the provisions of
Section 9.3 of the Trust Agreement, and the right to terminate the Trust and
repay the Investor Certificates in accordance with Sections 9.1 and 9.2 of the
Trust Agreement.

SECTION 2.07 CERTIFICATE PURCHASE TERMINATION EVENTS. The
occurrence of any one of the following events shall constitute a "Certificate
Purchase Termination Event":

(a) an Event of Default under the Indenture;

(b) a Purchase Termination Event under the Sale and Servicing
Agreement;

(c) default in the observance or performance of any covenant or
agreement by the Seller, ARFC II, or AFL (in its individual capacity) in the
Sale and Servicing Agreement, the Purchase Agreement, each Assignment Agreement
or each Transfer Agreement, as applicable, and such default shall continue for a
period of 30 days after notice thereof shall have been given by any of the
Seller, ARFC II, the Servicer, AFL, the Indenture Trustee or the Owner Trustee
to the defaulting party;

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<PAGE>

debts become due, or (viii) the taking of action by AFL or ARFC II in
furtherance of any of the foregoing;

(f) failure on the part of the Seller and AFL to pay the Purchase
Availability Fee and such failure shall continue for two (2) Business Days.

(g) a Change of Control shall have occurred without the consent of
the Purchasers' Agent, which consent shall not be unreasonably withheld.

SECTION 2.08 CALCULATION OF CERTIFICATE RATE; PAYMENTS.

(a) The Purchasers' Agent, after consultation with AFL and the
Purchasers, shall request a Funding Rate for each Certificate Funding Period.
If the Purchasers' Agent has requested a Funding Rate for any Certificate
Funding Period to be calculated based on the Eurodollar Rate, the Funding Rate
based on the Eurodollar Rate for such Certificate Funding Period shall commence
three LIBOR Business Days after notice of such requested Funding Rate and the
Funding Rate prior to such commencement shall be based on the Base Rate if
necessary. Each Purchaser shall calculate the Funding Rate based on the
Eurodollar Rate or Base Rate as requested by the Purchasers' Agent; PROVIDED
HOWEVER, that if the Purchasers' Agent has requested a Funding Rate based on the
Eurodollar Rate, and either: (a) deposits in dollars (in the applicable
amounts) are not available to the Purchasers generally in the London interbank
market for such Certificate Funding Period or portion thereof, or (b) at least
fifty percent (50%) of the Purchasers (based on the Certificate Balance of
Investor Certificates owned by each Purchaser) advise the Purchasers' Agent that
the Adjusted LIBOR Rate will not adequately and fairly reflect the cost to such
Purchasers of maintaining or funding the Investor Certificates based on the
Eurodollar Rate, until such circumstances no longer exist, the Funding Rate
shall be based on the Base Rate. Each Purchaser will establish the Funding Rate
based on the Eurodollar Rate at the Eurodollar Rate and will establish the
Funding Rate based on the Base Rate at the Base Rate.

(b) On or before the Business Day preceding each Determination Date,
the Purchasers' Agent shall (i) calculate the weighted average of the Funding
Rates, the Certificate Rate and the Interest Arrearage for the immediately
preceding Interest Accrual Period, and (ii) notify the Owner Trustee and the
Servicer of the Certificate Rate.

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(c) The Seller shall direct the Owner Trustee to make all payments
with respect to the Investor Certificates to an account established by the
Purchasers' Agent with Morgan Guaranty Trust Company of New York or such other
account from time to time designated by the Purchasers' Agent to the Seller and
the Owner Trustee. The account established at Closing by Morgan Guaranty Trust
Company of New York shall be designated the "Investors Certificate Payment
Account" (Account #600-17-148).

Moneys in the Investors Certificate Payment Account shall be invested
by the Purchasers' Agent in Eligible Investments scheduled to mature not later
than one Business Day prior to the Distribution Date on which such moneys are
required to be used to make payments to the Purchasers.

(d) On each Distribution Date, the Purchasers' Agent will pay out of
moneys available in the Investors Certificate Payment Account to each Purchaser,
for the related Interest Accrual Period, the sum of (i) with respect to each
Certificate Funding Period that ended before such Distribution Date, the
interest accrued on each day during such Certificate Funding Period that
occurred within such Interest Accrual Period, at the applicable Funding Rate on
such Purchaser's Purchase Percentage of the Certificate Balance relating to such
Certificate Funding Period; and (ii) such Purchaser's Interest Arrearage, if
any.

(e) All amounts, if any, remaining on deposit in the Investors
Certificate Payment Account immediately following the redemption or repayment in
full of the Investor Certificates in connection with a Securitized Offering or a
sale of not less than all of the Trust Property shall be distributed to ARFC II.

SECTION 2.09 DECLARATION OF PURCHASE TERMINATION DATE. At least
five (5) Business Days prior to any Purchaser requesting Morgan to declare a
Purchase Termination Date pursuant to Section 2.1(c)(2)(a) of the Sale and
Servicing Agreement, such Purchaser shall notify Arcadia Receivables Finance
Corp. II and AFL of its intention to make such a request.

ARTICLE III

CLOSING AND EFFECTIVENESS

SECTION 3.01 CLOSING. The closing (the "INITIAL CLOSING") took
place December 28, 1995 upon satisfaction of the conditions to closing set forth
in Article IV of this Certificate Purchase Agreement (the date of the Initial
Closing being referred to herein as the "INITIAL CLOSING DATE").

SECTION 3.02 FUNDING DATE. The initial "Funding Date" occurred on
the date on which the Purchasers made the initial purchase of the Investor
Certificates. The Purchasers' initial purchase of Investor Certificates was
subject to the conditions set forth in Article IV hereof, any other conditions

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which are Incremental Purchase Conditions, and the condition that at least one
director of ARFC II shall be an "Independent Director" as defined in the
Certificate of Incorporation of ARFC II.

SECTION 3.03 TRANSACTIONS EFFECTED AT THE INITIAL CLOSING AND ON THE
FUNDING DATE. (a) On the Initial Closing Date, the parties hereto executed and
delivered the Original Certificate Purchase Agreement and (b) on the Funding
Date (i) the Purchasers' Agent delivered to the Seller funds in an amount equal
to the Initial Purchase Price of the Investor Certificates (by wire transfer of
immediately available funds to a bank account designated by the Seller at least
two Business Days prior to the Funding Date); and (ii) the Seller delivered the
Investor Certificates to the Purchasers' Agent for redelivery to the Purchasers,
in satisfaction of the Seller's obligation to the Purchasers hereunder.

SECTION 3.04 EFFECTIVENESS DATE. (a) The "Effectiveness Date" of
this Certificate Purchase Agreement shall occur on the date on which the
conditions set forth in Article IVA of this Certificate Purchase Agreement shall
have been satisfied or waived by the Purchasers.

(b) This Certificate Purchase Agreement amends and restates the
Original Certificate Purchase Agreement and on the Effectiveness Date, replaces
the Original Certificate Purchase Agreement without interruption of the parties'
performance thereunder.

ARTICLE IV

CONDITIONS PRECEDENT TO OBLIGATION OF THE
PURCHASERS ON THE INITIAL CLOSING DATE

The obligation of the Purchasers to purchase and pay for the Investor
Certificates on the Funding Date were subject to the satisfaction at the time of
the Initial Closing (and, in the case of Section 4.02, on the Funding Date) of
the following conditions (any or all of which may have been waived by the
Purchasers in their sole discretion):

SECTION 4.01 PERFORMANCE BY PARTIES.

All the terms, covenants, agreements and conditions of the Sale and
Servicing Agreement, Purchase Agreement, each Assignment Agreement, each
Transfer Agreement, the Trust Agreement, the Indenture, the Administration
Agreement, the Custodian Agreement and this Certificate Purchase Agreement to be
complied with and performed by the Seller, the Owner Trustee, AFL or ARFC II, as
applicable, at or before the Closing shall have been complied with and performed
in all material respects.

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SECTION 4.02 REPRESENTATIONS AND WARRANTIES.

Each of the representations and warranties of the Seller, the Owner
Trustee, AFL and ARFC II, as applicable, made in the Purchase Agreement, each
Assignment Agreement, the Sale and Servicing Agreement, each Transfer Agreement,
the Trust Agreement, the Indenture, the Administration Agreement, the Custodian
Agreement and this Certificate Purchase Agreement shall be true and correct in
all material respects as of the time of the Closing (except to the extent they
expressly relate to an earlier or later time).

SECTION 4.03 CORPORATE DOCUMENTS.

(a) Each Purchaser shall have received copies of the (i) Articles of
Incorporation, long form good standing certificate and By-Laws of AFL, (ii)
Board of Directors resolutions of AFL with respect to the Purchase Agreement,
the Sale and Servicing Agreement, the Custodian Agreement and this Certificate
Purchase Agreement and (iii) incumbency certificate of AFL, each certified by
appropriate corporate authorities.

(b) Each Purchaser shall have received copies of the (i) Certificate
of Incorporation, long form good standing certificate and By-Laws of ARFC II,
(ii) Board of Directors resolutions of ARFC II with respect to the Sale and
Servicing Agreement, the Purchase Agreement, each Assignment Agreement, each
Transfer Agreement and the Trust Agreement, and (iii) incumbency certificate of
ARFC II, each certified by appropriate corporate authorities.

(d) Each Purchaser shall have received copies of (i) the Certificate
of Incorporation, long-form good standing certificate and By-Laws of the Owner
Trustee, (ii) Board of directors resolutions of the Owner Trustee with respect
to the Trust Agreement and (iii) an incumbency certificate of the Owner Trustee,
each certified by appropriate corporate authorities.

SECTION 4.04 OPINIONS OF COUNSEL. Counsel to each of the Seller,
Owner Trustee, AFL and ARFC II shall have delivered to the Purchasers favorable
opinions, dated as of the Closing Date and reasonably satisfactory in form and
substance to the Purchasers and their respective counsel, addressed to the
parties set forth in Exhibit B.

SECTION 4.05 OPINIONS OF COUNSEL TO THE INDENTURE TRUSTEE. Counsel
to the Indenture Trustee shall have delivered to the purchasers of the Notes a
favorable opinion, dated as of the Closing Date and reasonably satisfactory in
form and substance to the Purchasers and their respective counsel, addressed to
the parties set forth in Exhibit B.

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SECTION 4.06 FINANCING STATEMENTS. Each Purchaser shall have
received evidence satisfactory to it of the completion of all recordings,
registrations, and filings as may be necessary or, in the opinion of such
Purchaser and its counsel, desirable to perfect or evidence the assignment by
AFL to ARFC II, ARFC II to the Trust, and the Trust to the Indenture Trustee of
their respective ownership interests in the Receivables, the other Trust
Collateral, including:

SECTION 4.07 DOCUMENTS. Each Purchaser shall have received (i) a
duly executed counterpart of this Certificate Purchase Agreement and (ii) an
executed copy of each of the Purchase Agreement, each Assignment Agreement, the
Sale and Servicing Agreement, each Transfer Agreement, the Trust Agreement, the
Indenture, the Administration Agreement, the Custodian Agreement and each and
every document or certification delivered by any party in connection with any of
the above agreements.

SECTION 4.08 NO ACTIONS OR PROCEEDINGS. No action, suit,
proceeding or investigation by or before any Governmental Authority shall
have been instituted to restrain or prohibit the consummation of, or to
invalidate, the transactions contemplated by the Purchase Agreement, the
Trust Agreement, the Indenture, the Administration Agreement, this
Certificate Purchase Agreement or the documents related thereto in any
material respect.

SECTION 4.09 APPROVALS AND CONSENTS. All Governmental Actions of
all Governmental Authorities required with respect to the transactions
contemplated by this Certificate Purchase Agreement and the other documents
related thereto shall have been obtained or made.

SECTION 4.10 OFFICER'S CERTIFICATE. Each Purchaser shall have
received an Officer's Certificate from each of the Seller, the Owner Trustee,
AFL and ARFC II, each in form and substance reasonably satisfactory to the
Purchasers and their respective counsel, dated as of the Closing Date,
certifying as to the satisfaction of the conditions set forth in Sections 4.01

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and 4.02 hereof, with regard to the Seller, the Owner Trustee, AFL and ARFC II,
as applicable.

SECTION 4.11 ACCOUNTS. Each Purchaser shall have received evidence
that the Certificate Distribution Account, the Note Distribution Account, the
Principal Funding Account, the Subcollection Account and the Spread Account have
been established in accordance with the terms of the Sale and Servicing
Agreement, the Trust Agreement and the Indenture.

SECTION 4.12 LOCKBOX ACCOUNT. Each Purchaser shall have received
evidence that the Lockbox Account has been established as required by the Seller
and Servicing Agreement.

SECTION 4.13 OTHER DOCUMENTS. The Seller shall have furnished to
the Purchasers such other information, certificates and documents as the
Purchasers may reasonably request.

ARTICLE IVA

CONDITIONS PRECEDENT TO EFFECTIVENESS

This Certificate Purchase Agreement shall become effective on the
Effectiveness Date upon satisfaction of the following conditions (any or all of
which may be waived by the Purchaser in its sole discretion):

SECTION 4.01A ARTICLE IV CONDITIONS.

All of the conditions set forth in Sections 4.01 through 4.10 and 4.13
shall have been satisfied.

SECTION 4.02A EXECUTED AGREEMENTS.

The Administrative Agent shall have received duly executed
counterparts of this Certificate Purchase Agreement, the Note Purchase
Agreement, the Asset Purchase Agreement, the Trust Agreement, the Custodian
Agreement, the Sale and Servicing Agreement, the Receivables Purchase Agreement,
the Indenture, the Administration Agreement and the DFC Fee Letter.

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF THE SELLER

The Seller made the following representations and warranties to the
Purchasers, as of the Initial Closing Date, as of the Funding Date, as of each
Incremental Purchase Date before the Effectiveness Date, and hereby makes the
following representations and warranties to the Purchasers as of the
Effectiveness Date and as of each Incremental Purchase Date thereafter, and the
Purchasers shall rely on such representations

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and warranties in making each Incremental Purchase on each Incremental Purchase
Date.

SECTION 5.01 AUTHORITY, ETC.

(b) The issuance, sale, assignment and conveyance of the Investor
Certificates, the performance of the Seller's obligations under this Certificate
Purchase Agreement, and the consummation of the transactions herein contemplated
will not conflict with or result in a breach of any of the terms or provisions
of, or constitute a default under, or result in the creation or imposition of
any Lien, charge or encumbrance upon any of the property or assets of the Seller
or any of its Affiliates pursuant to the terms of, any indenture, mortgage, deed
of trust, loan agreement or other agreement (including this Certificate Purchase
Agreement) or instrument to which it or any of its Affiliates is bound or to
which any of its property or assets is subject, nor will such action result in
any violation of the provisions of its Certificate of Trust or any Governmental
Rule applicable to the Seller is required for the sale of the Investor
Certificates.

(c) No Governmental Action which has not been obtained is required by
or with respect to the Seller in connection with the execution and delivery of
the Investor Certificates, the Sale and Servicing Agreement, any Transfer
Agreement, the Trust Agreement, the Indenture, the Administration Agreement, the
Custodian Agreement or this Certificate Purchase Agreement by the Seller or the
consummation by the Seller of the transactions contemplated hereby or thereby.

(d) The Administration Agreement, the Sale and Servicing Agreement,
each Transfer Agreement, the Indenture, the Custodian Agreement and this
Certificate Purchase Agreement has been duly authorized, executed and delivered
by the Seller and the Sale and Servicing Agreement, each Transfer Agreement, the
Trust Agreement, the Indenture, the Administration Agreement, the Custodian
Agreement and this Certificate Purchase Agreement are the valid and legally
binding obligations of the Seller, enforceable against the Seller in accordance
with their respective terms, subject as to enforcement to bankruptcy,
insolvency, reorganization, moratorium and other similar laws of general
applicability relating to or affecting creditors' rights and to general
principles of equity.

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SECTION 5.02 INVESTOR CERTIFICATES. On the Purchase Date, the
Investor Certificates have been duly and validly authorized, and, when executed
and authenticated in accordance with the terms of the Trust Agreement, and
delivered to and paid for by the Purchasers in accordance with this Certificate
Purchase Agreement, will be duly and validly issued and outstanding, and will be
entitled to the benefits of the Trust Agreement.

SECTION 5.03 LITIGATION. There is no pending or, to the Seller's
knowledge, threatened action, suit or proceeding by or against the Seller before
any Governmental Authority or any arbitrator with respect to the Sale and
Servicing Agreement, any Transfer Agreement, the Indenture, the Trust, the Trust
Agreement, the Custodian Agreement, this Certificate Purchase Agreement, the
Notes, the Investor Certificates, the Administration Agreement, the Purchase
Agreement, any Assignment Agreement or any of the transactions contemplated
herein or therein, or with respect to the Seller which, in the case of any such
action, suit or proceeding with respect to the Seller, if adversely determined,
would have a material adverse effect on the ability of the Seller to perform its
obligations hereunder or thereunder.

SECTION 5.04 TAXES, ETC. Any taxes, fees and other charges of
Governmental Authorities applicable to the Seller, except for franchise or
income taxes, in connection with the execution, delivery and performance by the
Seller of the Sale and Servicing Agreement, the Administration Agreement, this
Certificate Purchase Agreement, the Custodian Agreement, the Trust Agreement and
the Indenture or otherwise applicable to the Seller in connection with the Trust
have been paid or will be paid by the Seller at or prior to the Closing Date or
Purchase Date, as applicable, to the extent then due.

SECTION 5.05 FINANCIAL CONDITION OF THE SELLER. On the date hereof
and on each Purchase Date, the Seller is not insolvent or the subject of any
voluntary or involuntary bankruptcy proceeding.

SECTION 5.07 INVESTMENT COMPANY ACT. The Trust is not an
"investment company" or is controlled by an "investment company" within the
meaning of the Investment Company Act of 1940, as amended.

SECTION 5.08 FULL DISCLOSURE. All written factual information
heretofore furnished by the Seller or any of its representatives to the
Purchasers for purposes of or in connection with this Certificate Purchase
Agreement, including, without limitation, information relating to the
Receivables and

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the Trust, was true and correct in all material respects on the date as of which
such information was stated or certified and remains true and correct in all
material respects as of the Closing Date (except with respect to the
Receivables) and the Funding Date, or as of the Incremental Purchase Date, as
the case may be. If any information furnished pursuant to the preceding
sentence is subsequently revised due to a change in the methodology used to
derive such information or for any other reason, such revised information shall
be promptly delivered, but in any event no later than the next Monthly Report
delivered pursuant to Section 3.19 of the Sale and Servicing Agreement, to the
Purchaser together with an explanation of such change.

ARTICLE VI

REPRESENTATIONS AND WARRANTIES
OF THE PURCHASERS

Each Purchaser hereby makes the following representations and
warranties to the Seller on which the Seller shall rely in entering into this
Certificate Purchase Agreement.

SECTION 6.01 ORGANIZATION. The Purchaser has been duly organized
and is validly existing and in good standing as a corporation or banking
association under the laws of the applicable jurisdiction, with power and
authority to own its properties and to transact the business in which it is now
engaged, and the Purchaser is duly qualified to do business and is in good
standing in each State of the United States where the nature of its business
requires it to be so qualified.

SECTION 6.02 AUTHORITY, ETC. The Purchaser has all requisite power
and authority to enter into and perform its obligations under this Certificate
Purchase Agreement and to consummate the transactions contemplated hereby and
thereby. The execution and delivery by the Purchaser of this Certificate
Purchase Agreement and the consummation by the Purchaser of the transactions
contemplated hereby have been duly and validly authorized by all necessary
corporate action on the part of the Purchaser. This Certificate Purchase
Agreement has been duly and validly executed and delivered by the Purchaser and
constitutes a legal, valid and binding obligation of the Purchaser, enforceable
against the Purchaser in accordance with its terms, subject as to enforcement to
bankruptcy, reorganization, insolvency, moratorium and other similar laws of
general applicability relating to or affecting creditors' rights and to general
principles of equity. Neither the execution and delivery by the Purchaser of
this Certificate Purchase Agreement nor the consummation by the Purchaser of any
of the transactions contemplated hereby, nor the fulfillment by the Purchaser of
the terms hereof, will conflict with, or violate, result in a breach of or
constitute a default under (i) any term or provision of the Articles of
Incorporation or By-laws of the Purchaser or any Governmental Rule applicable to
the Purchaser or (ii) any term or provision of any indenture

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<PAGE>

or other agreement or instrument, to which the Purchaser is a party or by which
the Purchaser or any portion of its properties are bound. No Governmental
Action which has not been obtained is required by or with respect to the
Purchaser in connection with the execution and delivery of this Certificate
Purchase Agreement by the Purchaser or the consummation by the Purchaser of the
transactions contemplated hereby or thereby.

SECTION 6.03 SECURITIES ACT. The Purchaser will acquire the
Investor Certificates pursuant to this Certificate Purchase Agreement for
investment only and not with a view to any public distribution thereof, and the
Purchaser will not offer to sell or otherwise dispose of its Investor
Certificates so acquired by it (or any interest therein) in violation of any of
the registration requirements of the Act or any applicable state or other
securities laws. The Purchaser acknowledges that it has no right to require the
Seller to register under the Act or any other securities law the Investor
Certificates to be acquired by the Purchaser pursuant to this Certificate
Purchase Agreement.

The Purchaser agreed with the Seller that: (i) the Purchaser would
execute and deliver to the Seller on or before the Initial Closing Date a
certain letter (the "INVESTMENT LETTER"), in the form attached hereto as Exhibit
D, with respect to the purchase of the Investor Certificates and (ii) all of the
statements made by the Purchaser in the Investment Letter were true and correct
in all respects as of the date made. The Purchaser understands and agrees that
receipt by the Seller of a duly executed Investment Letter is a condition
precedent to the Seller's obligations hereunder to sell the Investor
Certificates. The Purchaser also understands and agrees that it will not be
able to sell its Investor Certificates except in accordance with the
restrictions described in the Investment Letter.

SECTION 6.04 INVESTMENT COMPANY ACT. The Purchaser is not required
to register as an "investment company" and the Purchaser is not controlled by an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended.

SECTION 6.05 RESTRICTIONS ON TRANSFER. The Purchaser agrees that it
will comply with the restrictions on transfer of the Investor Certificates set
forth in the Investment Letter and that it will resell the Investor Certificates
only in compliance with such restrictions.

ARTICLE VII

REPRESENTATIONS AND WARRANTIES OF AFL

AFL hereby made the following representations and warranties to the
Purchasers, as of the Initial Closing Date, as of the Funding Date and as of
each Incremental Purchase Date before the Effectiveness Date, and hereby makes
the following representations and warranties to the Purchasers as of the

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<PAGE>

Effectiveness Date and as of each Incremental Purchase Date hereafter, and the
Purchasers shall rely on such representations and warranties in purchasing the
Investor Certificates on the Funding Date and in making each Incremental
Purchase on each Incremental Purchase Date.

SECTION 7.02 AUTHORITY, ETC.

(a) The performance of AFL's obligations under this Certificate
Purchase Agreement, the Purchase Agreement, any Assignment Agreement, the
Custodian Agreement and the Sale and Servicing Agreement and the consummation of
the transactions herein and therein contemplated will not conflict with or
result in a breach of any of the terms or provisions of, or constitute a default
under, or result in the creation or imposition of any Lien, charge or
encumbrance upon any of the property or assets of AFL or any of its Affiliates
pursuant to the terms of, any indenture, mortgage, deed of trust, loan agreement
or other agreement (including this Certificate Purchase Agreement, the Purchase
Agreement, any Assignment Agreement, the Custodian Agreement and the Sale and
Servicing Agreement) or instrument to which it or any of its Affiliates is bound
or to which any of its property or assets is subject, nor will such action
result in any violation of the provisions of its charter or any Governmental
Rule and no consent of any Governmental Authority is required for the
performance of the obligations contemplated by this Certificate Purchase
Agreement, the Purchase Agreement, any Assignment Agreement, the Custodian
Agreement and the Sale and Servicing Agreement.

(b) No Governmental Action which has not been obtained is required by
or with respect to AFL in connection with the execution and delivery of this
Certificate Purchase Agreement, the Purchase Agreement, any Assignment
Agreement, the Custodian Agreement and the Sale and Servicing Agreement by AFL
or the consummation by AFL of its obligations hereunder and thereunder.

(c) Each of this Certificate Purchase Agreement, the Purchase
Agreement, each Assignment Agreement, the Custodian Agreement and the Sale and
Servicing Agreement has been duly authorized, executed and delivered by AFL and
is the valid and legally binding obligation of AFL, enforceable against AFL in
accordance with its terms, subject as to enforcement to receivership,
conservatorship, bankruptcy, insolvency, reorganization, moratorium and other
similar laws of general

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<PAGE>

applicability relating to or affecting creditors' rights and to general
principles of equity.

SECTION 7.03 LITIGATION. There is no pending or, to AFL's
knowledge, threatened action, suit or proceeding by or against AFL before any
Governmental Authority or any arbitrator with respect to this Certificate
Purchase Agreement, or any of the transactions contemplated herein or with
respect to AFL which, in the case of any such action, suit or proceeding with
respect to AFL, if adversely determined, would have a material adverse effect on
the ability of AFL to perform its obligations hereunder, thereunder or in
connection therewith.

SECTION 7.04 FULL DISCLOSURE. All written factual information
heretofore furnished by AFL or any of its representatives to the Purchasers for
purposes of or in connection with this Certificate Purchase Agreement,
including, without limitation, information relating to the Receivables and AFL's
businesses, was true and correct in all material respects on the date as of
which such information was stated or certified and in the case of information
relating to AFL and its businesses, except as previously disclosed to the
Purchasers and the Purchasers' Agent, remains true and correct in all material
respects, in the reasonable judgment of AFL, as of the Initial Closing Date, the
Funding Date, the Effectiveness Date or an Incremental Purchase Date, as the
case may be. If any information furnished pursuant to the preceding sentence is
subsequently revised due to a change in the methodology used to derive such
information or for any other reason, such revised information shall be promptly
delivered, but in any event no later than the next Monthly Report delivered
pursuant to Section 3.19 of the Sale and Servicing Agreement, to the Purchaser
together with an explanation of such change.

ARTICLE VIII

COVENANTS OF THE SELLER

SECTION 8.01 INFORMATION FROM THE SELLER. Until the later of (i)
the Purchase Commitment Expiration Date and (ii) the date on which the
Purchasers shall no longer hold the Investor Certificates, the Seller will
furnish to the Purchasers:

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<PAGE>

(b) such other information, documents, records or reports respecting
the Trust, the Receivables, other Indenture Collateral, the Seller or the
Servicer as the Purchasers may from time to time reasonably request without
unreasonable expense to the Seller;

(e) as soon as possible and in any event within five Business Days
after the occurrence thereof, notice of each Certificate Purchase Termination
Event or event which with the giving of notice or the passage of time or both
would constitute a Certificate Purchase Termination Event; and

SECTION 8.02 ACCESS TO INFORMATION. Until the later of (i) the
Purchase Commitment Expiration Date and (ii) the date on which the Purchasers
shall no longer hold any Investor Certificates, the Seller will, at any time
from time to time during regular business hours, or reasonable notice to the
Seller, permit the Purchasers, or their agents or representatives to:

(a) examine all books, records and documents (including computer
tapes and disks) in the possession or under the control of the Seller relating
to the Receivables, and

(b) visit the offices and property of the Seller for the purpose of
examining such materials described in clause (a) above.

Prior to the occurrence of a Certificate Purchase Termination Event, only the
expenses incurred by the Purchasers' Agent pursuant to this Section 8.02 shall
be paid by AFL. After the occurrence of a Certificate Purchase Termination
Event, however, any expenses incurred by any Purchaser or the Purchasers' Agent
pursuant to this Section 8.02 shall be paid by AFL. Except as provided in
Section 13.04 hereof, any information obtained by the Purchasers pursuant to
this Section 8.02 shall be held in

26
<PAGE>

confidence by the Purchasers unless such information has become available to the
public.

SECTION 8.03 SECURITY INTERESTS; FURTHER ASSURANCES. The Seller
will take all action necessary to maintain the Trust's or the Indenture
Trustee's, as applicable, ownership interest or first priority perfected
security interest in the Receivables, the related Financed Vehicles and the
other Trust Property. The Seller agrees to take any and all acts and to execute
any and all further instruments necessary or reasonably requested by the
Purchasers to more fully effect the purposes of this Certificate Purchase
Agreement.

SECTION 8.04 AGREEMENT COVENANTS. The Seller will duly observe and
perform each of its covenants set forth in the Trust Agreement, the Sale and
Servicing Agreement and the Indenture.

SECTION 8.05 AGREEMENT AMENDMENTS. The Seller will not make any
material amendment, modification or change to, or provide any waiver under, the
Trust Agreement, the Note Purchase Agreement, the Sale and Servicing Agreement
or the Indenture without the prior written consent of a Certificate Majority.

SECTION 8.06 RECEIVABLES FILES. The Seller shall deliver
Receivables Files to the Custodian in accordance with the Sale and Servicing
Agreement and the Custodian Agreement.

ARTICLE IX

COVENANTS OF AFL

SECTION 9.01 INFORMATION FROM AFL. Until the later of (i) the
Purchase Commitment Expiration Date and (ii) the date on which the Purchasers
shall no longer hold any Investor Certificates, AFL will furnish to the
Purchasers:

(a) such other information, documents, records or reports respecting
the Trust, the Receivables, other Trust Property, the Seller, ARFC II or AFL as
the Purchasers may from time to time reasonably request without unreasonable
expense to AFL;

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<PAGE>

Agreement, the Indenture or any Certificates issued under the Trust Agreement or
Notes issued under the Indenture; and

(d) as soon as possible and in any event within five Business Days
after the occurrence thereof, notice of each Certificate Purchase Termination
Event or event which with the giving of notice or the passage of time or both
would constitute a Certificate Purchase Termination Event.

SECTION 9.02 ACCESS TO INFORMATION. Until the later of (i) the
Purchase Commitment Expiration Date and (ii) the date on which the Purchasers
shall no longer hold any Investor Certificates, AFL will, at any time from time
to time during regular business hours, or reasonable notice to AFL, permit the
Purchasers, or it agents or representatives to:

(a) examine all books, records and documents (including computer
tapes and disks) in the possession or under the control of AFL relating to the
Receivables, and

(b) visit the offices and property of AFL for the purpose of
examining such materials described in clause (a) above.

Prior to the occurrence of a Certificate Purchase Termination Event, only the
expenses incurred by the Purchasers' Agent pursuant to this Section 9.02 shall
be paid by AFL. After the occurrence of a Certificate Purchase Termination
Event, however, any expenses incurred by any Purchaser or the Purchasers' Agent
pursuant to this Section 9.02 shall be paid by AFL. Except as provided in
Section 13.04 hereof, any information obtained by the Purchasers pursuant to
this Section 9.02 shall be held in confidence by the Purchasers unless such
information has become available to the public.

SECTION 9.03 SECURITY INTERESTS; FURTHER ASSURANCES. AFL will take
all action necessary to maintain the Trust's or the Indenture Trustee's
ownership interest or first priority perfected security interest, as applicable,
in the Receivables, the related Financed Vehicles and the other Trust Property.
AFL agrees to take any and all acts and to execute any and all further
instruments necessary or reasonably requested by the Purchasers to more fully
effect the purposes of this Certificate Purchase Agreement.

SECTION 9.04 AGREEMENT COVENANTS. AFL will duly observe and perform
each of its covenants set forth in the Sale and Servicing Agreement and the
Purchase Agreement.

SECTION 9.05 AGREEMENT AMENDMENTS. AFL will not make any material
amendment, modification or change to, or provide any waiver under, the Sale and
Servicing Agreement, the Note Purchase Agreement or the Purchase Agreement
without the prior written consent of a Certificate Majority.

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<PAGE>

SECTION 9.06 MINIMUM CAPITAL BASE.

PROVIDED, HOWEVER, that AFL shall not be deemed or declared to be in breach of
the covenants contained in this Section 9.06 as long as on the last day of any
fiscal quarter, AFL's consolidated Capital Base is not less than $325,000,000.

ARTICLE X

MUTUAL COVENANTS

SECTION 10.01 LEGAL CONDITIONS TO CLOSING. The Purchasers, the
Purchasers' Agent, the Seller and AFL will take all reasonable actions necessary
to comply promptly with all legal requirements which may be imposed on it with
respect to the Closing (including satisfaction of the conditions contained in
this Certificate Purchase Agreement), and will promptly cooperate with and
furnish information to one another in connection with any such legal
requirements. The Purchasers, the Purchasers' Agent, the Seller and AFL will
take all reasonable action necessary to obtain (and will cooperate with one
another in obtaining) any consent, authorization, permit, license, franchise,
order or approval of, or any exemption by, any Governmental Authority or any
other Person, required to be obtained or made by it in connection with any of
the transactions contemplated by this Certificate Purchase Agreement.

SECTION 10.02 FEES AND EXPENSES. (a) In connection with the Initial
Closing all costs and expenses incurred in connection with the Original
Certificate Purchase Agreement and the transactions contemplated thereby were
paid by AFL. Subject to Section 13.10, except as otherwise expressly provided
herein, all costs and expenses incurred in connection with entering into
Certificate Purchase Agreement on the Effectiveness Date and the transactions
contemplated hereby shall (as between the Seller and the Purchasers) be paid by
AFL;

(b) AFL shall pay to each Purchaser a Purchase Availability Fee,
payable quarterly in arrears, on the last day

29
<PAGE>

of each calendar quarter during the period such Purchaser has a Purchase
Commitment under this Certificate Purchase Agreement and on the Purchase
Commitment Expiration Date, as the same may be extended from time to time. The
Purchase Availability Fee for each Purchaser shall be a per annum fee equal to
such Purchaser's average daily unused Purchase Commitment multiplied by 0.50%
per annum.

SECTION 10.03 MUTUAL OBLIGATIONS. On and after the date of this
Certificate Purchase Agreement, the Purchasers, the Purchasers' Agent, the
Seller and AFL will do, execute and perform all such other acts, deeds and
documents as the other party may from time to time reasonably require in order
to carry out the intent of this Certificate Purchase Agreement.

ARTICLE XI

INDEMNIFICATION

SECTION 11.01 INDEMNIFICATION BY THE SELLER AND AFL. Each of the
Seller and AFL agrees to indemnify and hold harmless the Purchasers, the
Purchasers' Agent, and their officers, directors, employees, agents,
representatives, assignees and Affiliates against any and all losses, claims,
damages, liabilities or expenses (including legal and accounting fees)
(collectively, "LOSSES"), as incurred (payable promptly upon written request),
for or on account of or arising from or in connection with any breach of any
representation, warranty or covenant of the Seller or AFL, respectively, in this
Certificate Purchase Agreement or in any certificate or other written material
delivered pursuant hereto; PROVIDED, HOWEVER, that neither the Seller nor AFL
shall be so required to indemnify any such Person or otherwise be liable to any
such Person hereunder for any Losses arising from (i) such Person's gross
negligence, willful misconduct or bad faith or (ii) the failure of Obligers to
pay their obligations as they become due.

SECTION 11.02 PROCEDURE. In order for the Purchasers, the
Purchasers' Agent, or any of their officers, directors, employees, agents,
representatives, assignees or Affiliates (each an "INDEMNIFIED PARTY") to be
entitled to any indemnification provided for under this Certificate Purchase
Agreement in respect of, arising out of, or involving a claim made by any Person
against the Indemnified Party (a "THIRD PARTY CLAIM"), such Indemnified Party
must notify the Seller and AFL in writing of the Third Party Claim within five
Business Days of receipt of a summons, complaint or other notice of the
commencement of litigation and within ten Business Days after receipt by such
Indemnified Party of any other written notice of the Third Party Claim unless
the Seller or AFL shall have previously obtained actual knowledge thereof.
Thereafter, the Indemnified Party shall deliver to the Seller and AFL, within a
reasonable time after the Indemnified Party's receipt thereof, copies of all

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notices and documents (including court papers) received by the Indemnified Party
relating to the Third Party Claim.

SECTION 11.03 DEFENSE OF CLAIMS. If a Third Party Claim is made
against an Indemnified Party, (a) the Seller or AFL, as applicable, will be
entitled to participate in the defense thereof and, (b) if it so chooses, to
assume the defense thereof with counsel selected by the Seller or AFL, provided
that in connection with such assumption (i) such counsel is not reasonably
objected to by the Indemnified Party and (ii) the Seller or AFL, subject to
Section 12.10, first admits in writing its liability to indemnify the
Indemnified Party with respect to all elements of such claim in full. Should
the Seller or AFL so elect to assume the defense of a Third Party Claim, neither
the Seller nor AFL will be liable to the Indemnified Party for any legal
expenses subsequently incurred by the Indemnified Party in connection with the
defense thereof. If the Seller or AFL elects to assume the defense of a Third
Party Claim, the Indemnified Party will (i) cooperate in all reasonable respects
with the Seller and AFL in connection with such defense and (ii) not admit any
liability with respect to, or settle, compromise or discharge, such Third Party
Claim without the Seller's or AFL's prior written consent, as the case may be.
If the Seller or AFL shall assume the defense of any Third Party Claim, the
Indemnified Party shall be entitled to participate in (but not control) such
defense with its own counsel at its own expense. If the Seller or AFL does not
assume the defense of any such Third Party Claim, the Indemnified Party may
defend the same in such manner as it may deem appropriate, including settling
such claim or litigation after giving notice to the Seller and AFL of such terms
and, subject to Section 12.10, the Seller and AFL will promptly reimburse the
Indemnified Party upon written request. Anything contained in this Certificate
Purchase Agreement to the contrary notwithstanding, neither the Seller nor AFL
shall be entitled to assume the defense of any part of a Third Party Claim that
seeks an order, injunction or other equitable relief or relief for other than
money damages against the Indemnified Party.

SECTION 11.04 INDEMNITY FOR TAXES, RESERVES AND EXPENSES.

(i) shall subject any Indemnified Party to any tax, duty,
deduction or other charge with respect to the Receivables, the Indenture,
the Investor Certificates, the

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<PAGE>

Trust Agreement, this Certificate Purchase Agreement or payments of amounts
due thereunder, or shall change the basis of taxation of payments to any
Indemnified Party of amounts payable in respect thereof (except for changes
in the rate of general corporate, franchise, net income or other income tax
imposed on such Indemnified Party by the jurisdiction in which such
Indemnified Party's principal executive office is located); or

(ii) shall impose, modify or deem applicable any reserve,
capital, special deposit or similar requirement (including, without
limitation, any such requirement imposed by the Board of Governors of the
Federal Reserve System) against assets of, deposits with or for the account
of, or credit extended by, any Indemnified Party or shall impose on any
Indemnified Party or on the United States market for certificates of
deposit or the London interbank market any other condition affecting the
Receivables, the Indenture, the Trust Agreement, the Investor Certificates,
this Certificate Purchase Agreement or payments of amounts due thereunder;
or

(iii) imposes upon any Indemnified Party any other cost or
expense (including, without limitation, reasonable attorneys' fees and
expenses, and expenses of litigation or preparation therefor in contesting
any of the foregoing) with respect to the Receivables, the Indenture, the
Trust Agreement, the Investor Certificates, this Certificate Purchase
Agreement or payments of amounts due thereunder;

and the result of any of the foregoing is to increase the cost to such
Indemnified Party with respect to the Receivables, the Indenture, the Trust
Agreement, the Investor Certificates, this Certificate Purchase Agreement or
payments of amounts due thereunder or the obligations thereunder and the
financing of such purchases by the issuance of Notes and Certificates, by an
amount deemed by such Indemnified Party to be material, then, subject to Section
12.10, the Seller agrees to pay to such Indemnified Party, within 10 days after
demand by such Indemnified Party, such additional amount or amounts as will
compensate such Indemnified Party for such increased cost, PROVIDED that the
Seller shall not be obligated to pay any such additional amounts that are
attributable to the period (the "Excluded Period") ending 30 days prior to the
Seller's receipt of such demand, except to the extent such additional amounts
accrue during the Excluded Period because of the retroactive effect of the
applicable regulatory change, in which case the foregoing limitation shall not
apply.

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<PAGE>

adequacy (in the case of any bank regulatory guideline, whether or not having
the force of law) of any such Governmental Authority, has or would have the
effect of reducing the rate of return on capital of such Indemnified Party (or
its parent) as a consequence of such Indemnified Party's obligations hereunder
or with respect hereto to a level below that which such Indemnified Party (or
its parent) could have achieved but for such adoption, change, request or
directive (taking into consideration its policies with respect to capital
adequacy) by an amount deemed by such Indemnified Party to be material, then
from time to time, the Seller agrees to pay to such Indemnified Party, within 10
days after demand by any such Indemnified Party, such additional amount or
amounts as will compensate such Indemnified Party (or its parent) for such
reduction, PROVIDED that the Seller shall not be obligated to pay any such
additional amounts that are attributable to the period (the "Excluded Period")
ending 30 days prior to the Seller's receipt of such demand, except to the
extent such additional amounts accrue during the Excluded Period because of the
retroactive effect of the applicable regulatory change, in which case the
foregoing limitation shall not apply.

(c) Any Indemnified Party who makes a demand for payment of increased
costs or capital pursuant to Section 11.04(a) or (b) shall promptly deliver to
the Seller a certificate setting forth in reasonable detail the computation of
such increased costs or capital and specifying the basis therefor. In the
absence of manifest error, such certificate shall be conclusive and binding for
all purposes. Each Indemnified Party shall use all reasonable efforts to
mitigate the effect upon the Seller of any such increased costs or capital
requirements, PROVIDED it shall not be obligated to take any action which it
determines would be materially disadvantageous to it or inconsistent with its
policies.

SECTION 11.05 COSTS, EXPENSES, TAXES, BREAKAGE PAYMENT AND INCREASED
COSTS UNDER CERTIFICATE PURCHASE AGREEMENT.

(a) The Seller and AFL shall, jointly and severally, be obligated to
pay on demand to (i) the Purchasers and the Purchasers' Agent all reasonable
costs and expenses in connection with the preparation, execution, delivery and
administration (including any requested amendments, waivers or consents) of this
Certificate Purchase Agreement, and the other documents to be delivered
hereunder or in connection herewith, including, without limitation, the
reasonable fees and out-of-pocket expenses of counsel for the Purchasers and the
Purchasers' Agent, with respect thereto and with respect to advising the
Purchasers and the Purchasers' Agent as to its respective rights and remedies
under this Certificate Purchase Agreement and the other documents delivered
hereunder or in connection herewith and (ii) to any Affected Person, all
reasonable costs and expenses, if any enforcement of this Certificate Purchase
Agreement, and the other documents delivered hereunder or in connection
herewith.

33
<PAGE>

(b) In addition, the Seller and AFL shall, jointly and severally, be
obligated to pay on demand any and all stamp and other taxes and fees payable in
connection with the execution, delivery, filing and recording of this
Certificate Purchase Agreement, the Investor Certificates or the other documents
and agreements to be delivered hereunder, and agrees to save each Affected Party
harmless from and against any liabilities with respect to or resulting from any
delay in paying or omission to pay such taxes and fees.

(c) The Seller shall be obligated to pay to the Purchasers the amount
of any Breakage Payments promptly on request by the Purchasers' Agent to the
extent not paid as interest on the Investor Certificates. The Purchasers and
the Purchasers' Agent agree to use reasonable efforts to reduce or eliminate any
Breakage Payments; provided, however, that nothing contained herein shall
obligate the Purchasers or the Purchasers' Agent to take any action that imposes
additional costs or burdens which such Person considers material.

ARTICLE XII

THE PURCHASERS' AGENT

SECTION 12.01 AUTHORIZATION AND ACTION. Each Purchaser hereby
accepts the appointment of and authorizes Morgan Guaranty Trust Company of New
York, as Purchasers' Agent hereunder, to take such action as agent on its behalf
and to exercise such powers as are delegated to the Purchasers' Agent by the
terms hereof, together with such powers as are reasonably incidental thereto.
The Purchasers' Agent reserves the right, in its sole discretion, to take any
actions, exercise any rights or remedies under this Certificate Purchase
Agreement and any related agreements and documents. Except for actions which
the Purchasers' Agent is expressly required to take pursuant to this Certificate
Purchase Agreement, the Purchasers' Agent shall not be required to take any
action which exposes the Purchasers' Agent to personal liability or which is
contrary to applicable law unless the Purchasers' Agent shall receive further
assurances to its satisfaction from the Purchasers of the indemnification
obligations under Section 12.04 hereof against any and all liability and expense
which may be incurred in taking or continuing to take such action. The
Purchasers' Agent agrees to give to each Purchaser prompt notice of each notice
and determination given to it by the Seller, the Servicer, ARFC II, AFL, the
Owner Trustee or the Indenture Trustee, pursuant to the terms of this
Certificate Purchase Agreement, the Trust Agreement or the Sale and Servicing
Agreement. Subject to Section 12.06 hereof, the appointment and authority of
the Purchasers' Agent hereunder shall terminate upon the later of (i) the
payment to (a) each Purchaser of all amounts owing to such Purchaser hereunder
and (b) the Purchasers' Agent of all amounts due hereunder and (ii) the Purchase
Commitment Expiration Date.

34
<PAGE>

SECTION 12.02 PURCHASERS' AGENT'S RELIANCE, ETC.. Neither the
Purchasers' Agent nor any of its directors, officers, agents or employees shall
be liable for any action taken or omitted to be taken by it or them as
Purchasers' Agent under or in connection with this Certificate Purchase
Agreement or any related agreement or document, except for its or their own
gross negligence or willful misconduct. Without limiting the foregoing, the
Purchasers' Agent: (i) may consult with legal counsel, independent public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted to be taken in good faith by it in accordance with the
advice of such counsel, accountants or experts; (ii) makes no warranty or
representation to any Purchaser and shall not be responsible to any Purchaser
for any statements, warranties or representations made by the Seller, ARFC II,
AFL, the Servicer or the Owner Trustee in connection with this Certificate
Purchase Agreement; (iii) shall not have any duty to ascertain or to inquire as
to the performance or observance of any of the terms, covenants or conditions of
this Certificate Purchase Agreement on the part of the Seller or AFL or to
inspect the property (including the books and records) of the Seller, ARFC II,
AFL, the Servicer or the Owner Trustee; (iv) shall not be responsible to any
Purchaser for the due execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Certificate Purchase Agreement or any
other instrument or document furnished pursuant hereto; and (v) shall incur no
liability under or in respect of this Certificate Purchase Agreement by acting
upon any notice (including notice by telephone), consent, certificate or other
instrument or writing (which may be by telex) believed by it in good faith to be
genuine and signed or sent by the proper party or parties.

SECTION 12.03 PURCHASERS' AGENT AND AFFILIATES. Morgan Guaranty
Trust Company of New York and its Affiliates may generally engage in any kind of
business with the Seller, ARFC II, AFL or any Obligor, any of their respective
Affiliates and any Person who may do business with or own securities of the
Seller, ARFC II, AFL or any Obligor or any of their respective Affiliates, all
as if Morgan Guaranty Trust Company of New York were not the Purchasers' Agent
and without any duty to account therefor to the Purchasers.

SECTION 12.04 INDEMNIFICATION. Each Purchaser severally agrees to
indemnify the Purchasers' Agent (to the extent not reimbursed by the Seller or
AFL), from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever which may be imposed on, incurred by, or asserted
against the Purchasers' Agent in any way relating to or arising out of this
Certificate Purchase Agreement or any action taken or omitted by the Purchasers'
Agent under this Certificate Purchase Agreement; provided, that (i) a Purchaser
shall not be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting or arising from

35
<PAGE>

the Purchasers' Agent's gross negligence or willful misconduct and (ii) a
Purchaser shall not be liable for any amount in respect of any compromise or
settlement or any of the foregoing unless such compromise or settlement is
approved by a majority of the Purchasers (based on Purchase Commitment).
Without limitation of the generality of the foregoing, each Purchaser agrees to
reimburse the Purchasers' Agent, promptly upon demand, for any reasonable
out-of-pocket expenses (including reasonable counsel fees) incurred by the
Purchasers' Agent in connection with the administration, modification, amendment
or enforcement (whether through negotiations, legal proceedings or otherwise)
of, or legal advice in respect of rights or responsibilities under, this
Certificate Purchase Agreement, provided, that a Purchaser shall not be
responsible for the costs and expenses of the Purchasers' Agent in defending
itself against any claim alleging the gross negligence or willful misconduct of
the Purchasers' Agent to the extent such gross negligence or willful misconduct
is determined by a court of competent jurisdiction in a final and non-appealable
decision.

SECTION 12.05 PURCHASE DECISION. Each Purchaser acknowledges that it
has, independently and without reliance upon the Purchasers' Agent any other
Purchaser or any of their respective Affiliates, and based on such documents and
information as it has deemed appropriate, made its own evaluation and decision
to enter into this Certificate Purchase Agreement and to purchase an interest in
the Investor Certificates. Each Purchaser also acknowledges that it will,
independently and without reliance upon the Purchasers' Agent any other
Purchaser or any of their respective Affiliates, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
decisions in taking or not taking action under this Certificate Purchase
Agreement or any related agreement, instrument or other document.

SECTION 12.06 SUCCESSOR PURCHASERS' AGENT. (a) The Purchasers' Agent
may resign at any time by giving sixty days' written notice thereof to the
Purchasers, the Seller, AFL, the Servicer and the Owner Trustee. Upon any such
resignation, a majority of the Purchasers shall have the right to appoint a
successor Purchasers' Agent approved by AFL (which approval will not be
unreasonably withheld or delayed). If no successor Purchasers' Agent shall have
been so appointed by a majority of the Purchasers and shall have accepted such
appointment, within sixty days after the retiring Purchasers' Agent's giving of
notice or resignation, then the retiring Purchasers' Agent may, on behalf of
Purchasers, appoint a successor Purchasers' Agent approved by AFL (which
approval will not be unreasonably withheld or delayed), which successor
Purchasers' Agent shall be (a) either (i) a commercial bank having a combined
capital and surplus of at least $250,000,000, (ii) an Affiliate of such bank, or
(iii) an Affiliate of Morgan Guaranty Trust Company of New York and (b)
experienced in the types of transactions contemplated by this Certificate
Purchase Agreement. Upon the acceptance of any appointment as Purchasers' Agent
hereunder by a

36
<PAGE>

successor Purchasers' Agent, such successor Purchasers' Agent shall thereupon
succeed to and become vested with all of the rights, powers, privileges and
duties of the retiring Purchasers' Agent, and the retiring Purchasers' Agent
shall be discharged from its duties and obligations under this Certificate
Purchase Agreement. After any retiring Purchasers' Agent's resignation or
removal hereunder as Purchasers' Agent, the provisions of this Article XII shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was an Purchasers' Agent under this Certificate Purchase Agreement.

ARTICLE XIII

MISCELLANEOUS

SECTION 13.01 AMENDMENTS. No amendment or waiver of any provision of
this Certificate Purchase Agreement shall in any event be effective unless the
same shall be in writing and signed by all of the parties hereto, and then such
amendment, waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given.

SECTION 13.02 NOTICES. All notices and other communications provided
for hereunder shall, unless otherwise stated herein, be in writing (including
telecopies, telegraphic, telex or cable communication) and mailed, telecopied,
telegraphed, cabled or delivered, as to each party hereto, at its address set
forth below or at such other address as shall be designated by such party in a
written notice to the other party hereto. All such notices and communications
shall, when mailed, telecopied, telegraphed or cabled, be effective when
deposited in the mails, confirmed by telephone, delivered to the telegraph
company or delivered to the cable company, respectively.

If to the Purchasers:

To the addresses listed on each signature page

If to the Seller:

Olympic Automobile Receivables Warehouse
Trust
c/o Wilmington Trust Company
Attn: Corporate Trust Administration
Rodney Square North
1100 North Market Street
Wilmington, DE 19890-0001
Attention: Corporate Trust Office
Telephone No. (302) 651-1000
Telecopier No. (302) 651-8882

37
<PAGE>

If to AFL:

Arcadia Financial Ltd.
7825 Washington Avenue South
Minneapolis, MN 55439-2435
Attention: John A. Witham
Telephone No. (612) 944-4592
Telecopier No. (612) 942-3348

If to Purchasers' Agent:

Morgan Guaranty Trust Company of New York
500 Stanton Christiana Road
Newark, DE 19713-2107
Attention: Asset Finance Group
Telephone No. (302) 634-5492
Telecopier No. (302) 634-5490

SECTION 13.04 BINDING EFFECT; ASSIGNABILITY; PARTICIPATIONS. This
Certificate Purchase Agreement shall be binding upon and inure to the benefit of
the Seller, AFL, the Purchasers' Agent, the Purchasers and their respective
successors and assigns (including any subsequent holders of the Investor
Certificates); PROVIDED, HOWEVER, that neither the Seller nor AFL shall have the
right to assign its rights hereunder or any interest herein (by operation of law
or otherwise) without the prior written consent of each Purchaser. Each
Purchaser may assign to one or more banks or other entities all or a portion of
its rights and obligation under this Certificate Purchase Agreement with the
prior consent of AFL, which consent shall not be unreasonably withheld, but
subject to the restrictions set forth in the Indenture and described in the
Investment Letter. Each Purchaser may sell participations to one or more banks
or other entities (each, a "PARTICIPANT") (which Participant, unless it is an
investment bank or a full service commercial bank, is not a competitor of AFL or
any of its Affiliates) in or to all or a portion of its rights and obligations
under this Certificate Purchase Agreement. Any Purchaser may, in connection
with any assignment or participation or proposed assignment or participation,
disclose to the assignee or participant or proposed assignee or participant any
information relating to the Trust, AFL, ARFC II or the Servicer furnished to
such Purchaser by or on behalf of the Trust, AFL, ARFC II or the Servicer or by
the Purchasers' Agent; PROVIDED, that prior to any such disclosure, the assignee
or participant or proposed assignee or participant agrees to preserve the
confidentiality of any confidential information relating to the Trust, AFL, ARFC
II or

38
<PAGE>

the Servicer received by it from any of the foregoing entities. This
Certificate Purchase Agreement shall create and constitute the continuing
obligation of the parties hereto in accordance with its terms, and shall remain
in full force and effect until such time as all amounts payable with respect to
the Investor Certificate shall have been paid in full.

SECTION 13.05 GOVERNING LAW; JURISDICTION. THIS CERTIFICATE PURCHASE
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS.
EACH OF THE PARTIES TO THIS CERTIFICATE PURCHASE AGREEMENT HEREBY AGREES TO THE
JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF
NEW YORK AND ANY APPELLATE COURT HAVING JURISDICTION TO REVIEW THE JUDGMENTS
THEREOF. EACH OF THE PARTIES HEREBY WAIVES ANY OBJECTION BASED ON FORUM NON
CONVENIENS AND ANY OBJECTION TO VENUE OF ANY ACTION INSTITUTED HEREUNDER IN ANY
OF THE AFOREMENTIONED COURTS AND CONSENTS TO THE GRANTING OF SUCH LEGAL OR
EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT.

SECTION 13.06 NO PROCEEDINGS. Each of the Seller and AFL agree that
so long as any of the Seller's Notes and Certificates shall be outstanding or
there shall not have elapsed one year plus one day since the last day on which
any of the Seller's Notes and Certificates shall have been outstanding, it shall
not file, or join in the filing of, a petition against ARFC II or the Trust
under the Federal Bankruptcy Code, or join in the commencement of any
bankruptcy, reorganization, arrangement, insolvency, liquidation or other
similar proceeding against ARFC II or the Trust.

SECTION 13.07 EXECUTION IN COUNTERPARTS. This Certificate Purchase
Agreement may be executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed shall be deemed
to be an original and all of which when taken together shall constitute one and
the same agreement.

SECTION 13.08 NO RECOURSE. The obligations of the Purchasers under
this Certificate Purchase Agreement, or any other agreement, instrument,
document or certificate executed and delivered by or issued by the Purchasers or
any officer thereof are solely the corporate obligations of the Purchasers. No
recourse shall be had for payment of any fee or other obligation or claim
arising out of or relating to this Certificate Purchase Agreement or any other
agreement, instrument, document or certificate executed and delivered or issued
by the Purchasers or any officer thereof in connection therewith, against any
stockholder, employee, officer, director or incorporator of the Purchasers.

SECTION 13.09 LIMITED RECOURSE. The obligations of the Seller under
this Certificate Purchase Agreement shall be payable only out of Trust Property
and the Purchasers shall not

39
<PAGE>

look to any property or assets of the Seller, other than to Trust Property. The
obligations of AFL under this Certificate Purchase Agreement are solely the
corporate obligations of AFL. No recourse shall be had for the payment of any
fee or other obligation or claim arising out of or relating to this Certificate
Purchase Agreement or any other agreement, instrument, document or certificate
executed and delivered or issued by AFL or any of its officers in connection
therewith, against any stockholder, employee, officer, director or incorporator
of AFL.

SECTION 13.10 SURVIVAL. All representations, warranties, covenants,
guaranties and indemnifications contained in this Certificate Purchase Agreement
and in any document, certificate or statement delivered pursuant hereto or in
connection herewith shall survive the sale, transfer or repayment of the
Investor Certificates.

SECTION 13.11 CONSENT TO AMENDED AND RESTATED AGREEMENTS. The
Purchasers hereby consent, pursuant to Sections 8.05 and 9.05 of the Original
Certificate Purchase Agreement, to the amendments to the Indenture, the Purchase
Agreement, the Custodian Agreement, the Sale and Servicing Agreement and the
Trust Agreement of date herewith.

40
<PAGE>

IN WITNESS WHEREOF, the parties have caused this Amended and Restated
Certificate Purchase Agreement to be executed by their respective officers
thereunto duly authorized, as of the date first above written.

OLYMPIC AUTOMOBILE RECEIVABLES
WAREHOUSE TRUST, as Seller

By Wilmington Trust Company, not in
its individual capacity but
solely as Owner Trustee

By: /s/ D. Geran
---------------------------
Name: DENISE M. GERAN
Title: Financial Services Officer

ARCADIA FINANCIAL LTD., as Servicer
and in its individual capacity

By: /s/ John A. Witham
---------------------------
Name: John A. Witham
Title: EVP CFO

MORGAN GUARANTY TRUST COMPANY
OF NEW YORK,
as Purchasers' Agent

By: /s/ Richard A. Burke
---------------------------
Name: Richard A. Burke
Title: Vice President

[Signature page to Amended and Restated
Certificate Purchase Agreement]

<PAGE>

Signature Page
with respect to
Olympic Automobile Receivables Warehouse Trust
Variable Funding Certificates
Certificate Purchase Agreement

Dated: July 31, 1997

Initial Purchase Percentage: 45.83329%
Maximum Purchase Commitment: $15,000,000

NATEXIS BANQUE BFCE

By: /s/ [ILLEGIBLE]
--------------------
Authorized Signature

--------------------
Title: First VP

By: /s/ [ILLEGIBLE]
--------------------
Authorized Signature

--------------------
Title: Asst. Treasurer

<PAGE>

Signature Page
with respect to
Olympic Automobile Receivables Warehouse Trust
Variable Funding Certificates
Certificate Purchase Agreement

Dated: July 31, 1997

Initial Purchase Percentage: 54.16671%
Maximum Purchase Commitment: $17,727,300

ARCADIA FINANCIAL LTD.

By: /s/ John A. Witham
------------------------
Authorized Signature

------------------------
Title: Executive Vice President

<PAGE>

EXECUTION COPY

ASSET PURCHASE AGREEMENT

Dated as of July 31, 1997

Morgan Guaranty Trust Company of New York, as agent for each of the
APA Purchasers (defined below) (in such capacity, the "AGENT"), and as agent for
Delaware Funding Corporation and the APA Purchasers, as the purchasers from time
to time of the Purchased Note (defined below) (in such capacity, the
"ADMINISTRATIVE AGENT"), and each of the parties (each an "APA PURCHASER") who
has executed a signature page to this Asset Purchase Agreement (this "ASSET
PURCHASE AGREEMENT") or an Assignment of Purchase Commitment in the form of
Exhibit A hereto agree as follows:

RECITALS

WHEREAS, the Agent and certain APA Purchasers are parties to an Asset
Purchase Agreement dated as of December 28, 1995, as previously amended (the
"Original Asset Purchase Agreement");

WHEREAS, the parties to the Original Asset Purchase Agreement desire
to further amend the Original Asset Purchase Agreement in connection with
amendments being made to the documents contemplated by the Original Asset
Purchase Agreement;

WHEREAS Arcadia Financial Ltd. ("AFL"), as seller, and Arcadia
Receivables Financial Corp. II ("ARFC II"), as buyer, are, on the date hereof,
entering into an Amended and Restated Receivables Purchase Agreement and
Assignment, dated as of July 31, 1997 (the "PURCHASE AGREEMENT"), and will from
time to time enter into assignment agreements providing for the sale and
assignment by AFL to ARFC II of a pool of specified Receivables;

WHEREAS ARFC II, as seller, and Olympic Automobile Receivables
Warehouse Trust (the "TRUST"), as buyer, are, on the date hereof, entering into
an Amended and Restated Sale and Servicing Agreement, dated as of July 31, 1997
(the "SALE AND SERVICING AGREEMENT"), with AFL, in its individual capacity and
as Servicer, and Norwest Bank Minnesota, National Association, as Backup
Servicer, and will from time to time enter into transfer agreements providing
for the sale and assignment by ARFC II to the Trust of a pool of Specified
Receivables;

WHEREAS the Trust is, on the date hereof, entering into an Amended and
Restated Indenture, dated as of July 31, 1997 (the "INDENTURE"), with Norwest
Bank Minnesota, National Association, as trustee (the "INDENTURE TRUSTEE"),
providing for the issuance of the Variable Funding Notes (the "NOTES");

<PAGE>

WHEREAS the Administrative Agent, Delaware Funding Corporation
("DFC"), AFL, in its individual capacity and as Servicer, and the Trust are, on
the date hereof, entering into an Amended and Restated Note Purchase Agreement,
dated as of July 31, 1997 (the "NOTE PURCHASE AGREEMENT"), pursuant to which DFC
through the Administrative Agent, as agent for DFC, has purchased the Notes and
has agreed to fund, from time to time, increases in the principal balance (the
"OUTSTANDING AMOUNT") of the Notes (each, an "INCREMENTAL PURCHASE") (the
"PURCHASED NOTE" or "PURCHASED INTEREST");

WHEREAS DFC may from time to time sell undivided percentage interests
in the Purchased Note ("PERCENTAGE INTERESTS") to the APA Purchasers;

WHEREAS each APA Purchaser has agreed to purchase Percentage Interests
that from time to time may be offered for sale by the Administrative Agent on
behalf of DFC during the term of its Purchase Commitment (as defined below)
under this Asset Purchase Agreement; and

WHEREAS, the Agent and the APA Purchasers are entering into this Asset
Purchase Agreement, which on the Effectiveness Date (defined below in Section
18) will supersede the Original Asset Purchase Agreement, to make certain
amendments to the Original Asset Purchase Agreement and to govern the
obligations of the parties hereunder from and after the date hereof.

NOW, THEREFORE, in consideration of the mutual agreements herein
contained, the parties hereto agree as follows:

1. DEFINITIONS. Unless otherwise defined herein, the terms defined
in the Indenture, the Trust Agreement or Note Purchase Agreement, as applicable,
are used herein as therein defined.

2. PURCHASE OF PERCENTAGE INTERESTS.

(a) An APA Purchaser shall become a party hereto (i) by executing and
delivering to the Agent a counterpart of the signature page to this Asset
Purchase Agreement or (ii) in accordance with the procedures set forth in
Section 9 hereof. Thereupon, upon approval of such proposed APA Purchaser by
the Transferor in accordance with the provisions of Section 9(b)(2) and
acceptance and recording by the Agent in the Register (defined below), such APA
Purchaser shall become a party to this Asset Purchase Agreement from and after
the effective date set forth on such signature page. APA Purchasers may become
parties hereto at different times and from time to time in accordance with the
foregoing procedure. The signature page shall set forth the initial undivided
percentage (such initial percentage, as it may be changed from time to time, the
"PERCENTAGE") interest in the Purchased Note that an APA Purchaser has agreed to
purchase hereunder, the maximum Outstanding Amount of the Percentage Interest in
the Purchased Note that an APA Purchaser is obligated

2
<PAGE>

to purchase hereunder plus accrued and unpaid interest on the Purchased Note
(the "MAXIMUM PURCHASE"), the effective date of the purchase commitment and the
expiration date of the purchase commitment (the "PURCHASE TERMINATION DATE").
No Downgraded Purchaser (as defined below) shall be permitted to extend its
Purchase Termination Date. In the event that any APA Purchaser desires to
extend its Purchase Termination Date for a Maximum Purchase amount that is less
than the amount of its Maximum Purchase prior to DFC's request for an extension
of the Purchase Termination Date, DFC, in its sole and absolute discretion, may
accept such extension; PROVIDED, HOWEVER, that such APA Purchaser shall be
deemed to be a Reducing Purchaser (as defined below) for purposes of Section
13(g) to the extent of such APA Purchaser's Reduced Amount (as defined below).

For the purposes of this Asset Purchase Agreement, "DOWNGRADED
PURCHASER" means any APA Purchaser that has its commercial paper or short-term
deposit rating lowered below (a) P-1 by Moody's or (b) A-1+ by S&P and
"NON-EXTENDING PURCHASER" shall mean an APA Purchaser that has not consented to
the extension of its Purchase Termination Date.

(b) From time to time upon notice from the Agent to each APA
Purchaser, each of the APA Purchasers severally and not jointly shall purchase,
on the terms and conditions herein set forth, in accordance with their
respective Percentages, Percentage Interests that the Administrative Agent, as
agent for DFC, offers for sale, up to such Purchaser's Maximum Purchase. In
addition, the Administrative Agent, as agent for DFC, shall offer for sale to
each APA Purchaser, and each APA Purchaser shall purchase severally and not
jointly, on the terms and conditions herein set forth, PRO RATA in accordance
with their respective Percentages, a 100% Percentage Interest in the Outstanding
Amount of the Purchased Note, up to each such APA Purchaser's Maximum Purchase,
if any of the following events occurs (each, a "Put Event"): (i) an Event of
Default specified in Section 5.01(v) or (vi) of the Indenture, (ii) a Note
Purchase Termination Event specified in Section 2.08(d) or (h) of the Note
Purchase Agreement, or (iii) a Purchase Termination Event specified in Section
2.1(c)(2)(ix)(C) and (D) of the Sale and Servicing Agreement. Upon the
occurrence of a Put Event, the Administrative Agent shall notify the Collateral
Agent to instruct Morgan Guaranty Trust Company of New York, as depositary and
issuing and paying agent for DFC's Commercial Paper Notes, to stop the issuance
and delivery of Commercial Paper Notes relating to the Seller.

(c) Each such notice of purchase referred to in Section 2(b) shall be
given no later than 11:00 a.m. (New York City time) on the Business Day of such
purchase (each, a "PURCHASE DATE"), shall be irrevocable, shall be sent by
telecopier, telex or cable to all APA Purchasers concurrently, and shall specify
the date of such purchase and the Outstanding Amount of Notes to be purchased
and the accrued and unpaid interest thereon. The Agent, after consultation with
AFL, shall

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request a rate (the "PURCHASER FUNDING RATE") for each period designated by the
Agent (each, a "TRANCHE PERIOD") during which a Percentage Interest in a
Purchased Note will be held by an APA Purchaser, which Purchaser Funding Rate
shall be calculated based on the Eurodollar Rate set pursuant to the procedures
set forth in the definition of "LIBOR" or Base Rate (each as defined below and
collectively, the "RATE"). Each Tranche Period based on a Eurodollar Rate shall
be a period of 1, 2 or 3 months; provided, however, that if on the last day of
any Tranche Period, the Seller has notified the Administrative Agent that a
Securitized Offering or a redemption of the Notes with the proceeds of the sale
of Trust Property is expected to occur within 30 days of such last day, the
Tranche Period beginning on such last day may be based on a 1-week, 2-week or
3-week LIBOR, with a 1-week Tranche Period selected no more than twice in
connection with such Securitized Offering or redemption of the Notes. If the
Agent has requested a Purchaser Funding Rate for any Tranche Period to be
calculated based on the Eurodollar Rate, the Purchaser Funding Rate for such
Tranche Period shall commence three LIBOR Business Days after notice of such
requested Purchaser Funding Rate (and prior to such commencement, shall be set
at the applicable Purchaser Funding Rate for the prior Tranche Period, if
applicable, or otherwise shall be calculated based on the Base Rate). Each APA
Purchaser will calculate the Purchaser Funding Rate based on the Rate requested
by the Agent and for the Tranche Period designated by the Agent; PROVIDED,
HOWEVER, that if the Agent has requested a Purchaser Funding Rate based on the
Eurodollar Rate, and either: (a) deposits in United States dollars (in the
applicable amounts) are not available to the APA Purchasers generally in the
London interbank market for such Tranche Period, or (b) the Majority Purchasers
advise the Agent that the Adjusted LIBOR Rate (as defined below) will not
adequately and fairly reflect the cost to such APA Purchasers of maintaining or
funding the Outstanding Amount of the Notes based on the Eurodollar Rate, the
Agent shall so notify the Administrative Agent, whereupon until the Agent
notifies the Administrative Agent that such circumstances no longer exist, the
obligation of the APA Purchasers to accept a Purchaser Funding Rate based on the
Eurodollar Rate shall be suspended; and PROVIDED FURTHER, that for any Tranche
Period commencing on or after the occurrence of (1) any Default Rate Event or
within five Business Days of the Expiry Date (as defined in Section 13(i)
hereof), the Purchaser Funding Rate shall equal the Base Rate plus one (1)
percent per annum or (2) any Note Purchase Termination Event (other than a
Default Rate Event), the Purchaser Funding Rate shall equal the Adjusted LIBOR
for such Tranche Period plus one (1) percent per annum. Each APA Purchaser will
notify the Agent by 12:00 noon (New York City time) on the date two LIBOR
Business Days prior to the first day of the Tranche Period during which the
Purchaser Funding Rate is to be based on the Eurodollar Rate if, in its
judgment, the requested Purchaser Funding Rate based on the Eurodollar Rate is
not going to adequately reflect its cost. Each APA Purchaser will establish the
Purchaser Funding Rate based on the Eurodollar Rate at the Eurodollar Rate and
will establish the Rate based on

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<PAGE>

the Base Rate at the Base Rate. Prior to 2:00 p.m. (New York City time) on each
Purchase Date, each APA Purchaser shall pay the Agent for the account of DFC in
immediately available funds in United States dollars, by depositing to an
account designated by the Agent in New York City, an amount (such APA
Purchaser's "PURCHASE PRICE") equal to such APA Purchaser's Percentage of the
lesser of (x) the Outstanding Amount of Notes being purchased on such Purchase
Date plus accrued and unpaid interest thereon, if any (less any funds on deposit
with Morgan Guaranty Trust Company of New York, as Collateral Agent, for DFC and
the other specified parties, held in respect of such interest), and (y) (I) the
sum of (A) the aggregate Principal Balance of Receivables that are not
Liquidated Receivables as of the earlier of the Purchase Date or the date on
which the Put Event, if any, occurred, and (B) all Collected Funds received by
the Servicer that have not been deposited into the Collection Account and
applied in accordance with the provisions of the Sale and Servicing Agreement
divided by (II) a subordination reserve adjustment, computed by adding to the
number 1 an amount (expressed as a fraction) equal to 50% of 12%.

For the purpose of determining the Purchaser Funding Rate hereunder,
the following terms shall have the following meanings:

"BASE RATE" shall mean, with respect to each purchase of the Purchased
Note (or portion thereof), and with respect to each day during a Tranche Period,
commencing on the first Business Day of such Tranche Period, a rate per annum
equal to the higher of (i) the prime rate announced from time to time by the
Agent and in effect on the morning of each day and (ii) the rate 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, as
published for each day (or, if such day is not a Business Day, the next
succeeding Business Day) by the Federal Reserve Bank of New York, or if such
rate is not so published for any such day, the average of the quotations for
such day for such transactions received by the Agent from three Federal funds
brokers of recognized standing selected by it plus one-half of one percent (1/2
of 1%). Each determination of the Base Rate shall be calculated on the basis of
actual days elapsed and a year of 365 or 366 days, as the case may be.

"EURODOLLAR RATE" shall mean, with respect to each purchase of the
Purchased Note (or portion thereof), and with respect to any Tranche Period, a
rate per annum equal to Adjusted LIBOR for such Tranche Period plus .45% per
annum; PROVIDED, HOWEVER, if the applicable Warehousing Period (as defined in
the Sale and Servicing Agreement) exceeds ninety (90) days, the Eurodollar Rate
for any Tranche Period shall be a rate per annum equal to Adjusted LIBOR for
such Tranche Period plus .55% per annum. Each determination of the Eurodollar
Rate shall be calculated on the basis of actual days elapsed and a year of 360
days.

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<PAGE>

"ADJUSTED LIBOR" shall mean, with respect to each purchase of the
Purchased Note (or portion thereof), and with respect to any Tranche Period, a
rate per annum equal to the quotient obtained (rounded upwards, if necessary, to
the next higher 1/100 of 1%) by dividing (i) LIBOR for such Tranche Period by
(ii) a percentage equal to 100% minus the maximum rate of all reserve
requirements as specified in Regulation D of the Board of Governors of the
Federal Reserve System (or any successor to all or any portion thereof
establishing reserve requirements) including any marginal, emergency,
supplemental, special or other reserves, that are applicable to an APA Purchaser
during such Tranche Period in respect of eurocurrency or eurodollar funding,
lending or liabilities.

"LIBOR" shall mean, with respect to each purchase of the Purchased
Note (or portion thereof), and with respect to any Tranche Period, a rate per
annum determined by the Agent to be the rate at which deposits in Dollars are
offered to the Agent by prime banks in the London Interbank market at
approximately 11:00 a.m. (London time) two LIBOR Business Days before the first
day of such Tranche Period, for a period of time comparable to such Tranche
Period.

"LIBOR BUSINESS DAY" shall mean any Business Day on which commercial
banks are open for dealings in Dollar deposits in London.

(d) Notwithstanding Section 2(c), an APA Purchaser shall not be
obligated to make purchases under such Section at any time in an amount that
would exceed such APA Purchaser's Maximum Purchase. Each APA Purchaser's
obligation shall be several, such that the failure of any APA Purchaser to make
payment to the Agent in connection with any purchase hereunder shall not relieve
any other APA Purchaser of its obligation hereunder to make payment for the
purchase by such other APA Purchaser up to such other APA Purchaser's Maximum
Purchase. If the Agent shall have been notified by any APA Purchaser that such
APA Purchaser will not (or if any APA Purchaser does not) make available the
amount that would represent such APA Purchaser's Percentage of any purchase
(other than a Non-Pro Rata Purchase (as defined below)) requested by the Agent
or DFC, each other APA Purchaser agrees, subject to the first sentence of this
Section 2(d), to make available to the Agent a ratable share of such amount
(calculated on the basis of the Percentages of the APA Purchasers that the Agent
has determined will make such purchase). The defaulting APA Purchaser agrees to
purchase from each APA Purchaser that shall have purchased a portion of such
defaulting APA Purchaser's Percentage (each such portion, a "DEFAULTED
PORTION"), forthwith upon demand, the Defaulted Portion so purchased, together
with interest at the applicable Purchaser Funding Rate on that portion of the
Outstanding Amount of the Purchased Note funded by such APA Purchaser, for each
day that an APA Purchaser is required to fund a portion of the defaulting APA
Purchaser's Percentage; PROVIDED, if such defaulting APA Purchaser has not
purchased such Defaulted Portion

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<PAGE>

within three Business Days following such demand, such defaulting APA Purchaser
shall thereafter be required to pay interest with respect to such Defaulted
Portion at the Base Rate plus 2% per annum.

(e) Each APA Purchaser shall be obligated to purchase Percentage
Interests under this Asset Purchase Agreement (its "PURCHASE COMMITMENT") until
the earliest of (i) the Purchase Termination Date of such APA Purchaser's
Purchase Commitment, (ii) the date on which the Agent notifies the APA Purchaser
that the Indenture has been discharged and satisfied and the Outstanding Amount
of the Notes and all accrued and unpaid interest thereon have been paid in full
and (iii) (A) the date DFC voluntarily commences any proceeding or files any
petition under any bankruptcy, insolvency or similar law seeking the
dissolution, liquidation or reorganization of DFC, or (B) if involuntary
proceedings or any involuntary petition shall have been commenced or filed
against DFC by any Person under any bankruptcy, insolvency or similar law
seeking the dissolution, liquidation or reorganization of DFC, the earlier of
(y) the date 60 days following the commencement or filing of such proceeding or
petition, if such proceeding or petition has not been dismissed on or before
such date or (z) the date on which an order of relief has been entered against
DFC.

(f) The Administrative Agent will hold the Purchased Note for the
account and benefit of each APA Purchaser to the extent of each such APA
Purchaser's Percentage Interest in the Purchased Note, and will be the
registered holder of the Purchased Note for all purposes under the Note Purchase
Agreement and the Indenture. Within 10 Business Days of each purchase pursuant
to Section 2(b) hereof, the Agent will deliver to each APA Purchaser a
certificate in the form of Exhibit B attached hereto reflecting each APA
Purchaser's ownership of the Percentage Interest so purchased.

(g) Notwithstanding that APA Purchasers may have purchased Percentage
Interests hereunder and may have received payments from Collected Funds with
respect to Receivables sufficient to repay such Percentage Interests in whole or
in part, each APA Purchaser may be called upon to purchase additional Percentage
Interests (not to exceed the Maximum Purchase for each such APA Purchaser) until
the expiration of such APA Purchaser's Purchase Commitment pursuant to Section
2(e) hereof.

(h) In the event that DFC assigns any portion of the Purchased Note
to another Person (which is managed by the Agent and which in the ordinary
course of its business issues commercial paper or other securities to fund its
acquisition and maintenance of asset-backed certificates, receivables or
interests therein), sales of the Purchased Note by such other Person may be made
under this Asset Purchase Agreement on the same terms and conditions as sales or
assignments by DFC.

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<PAGE>

3. REGISTER. The Agent shall maintain at its address, 500 Stanton
Christiana Road, Newark, Delaware 19713-2107, Attention: Asset Finance Group,
a copy of this Asset Purchase Agreement and each signature page hereto and each
Assignment of Purchase Commitment approved by the Trust in accordance with the
provisions of Section 9(b) and delivered to and accepted by the Agent and a
register for the recordation of the names and addresses of the APA Purchasers,
their Percentage Interests, effective dates and Purchase Termination Dates, the
Outstanding Amount of the Purchased Note owned by each APA Purchaser from time
to time and the Purchase Price relating thereto (the "REGISTER"). The entries
in the Register shall be conclusive and binding for all purposes, absent
manifest error, and the Trust, AFL, the Servicer, the Agent and the APA
Purchasers may treat each Person whose name is recorded in the Register as an
APA Purchaser hereunder for all purposes of this Asset Purchase Agreement. The
Register shall be available for inspection by the Trustee, the Trust, AFL, the
Servicer, or any APA Purchaser at any reasonable time and from time to time
during normal business hours upon reasonable prior notice.

4. DISTRIBUTION OF PAYMENTS.

(a) Whenever any amount of principal or interest is paid in respect
of the Purchased Note and any APA Purchaser owns a Percentage Interest in the
Purchased Note which Percentage Interest has not been repurchased by DFC
pursuant to Section 10 hereof, the Administrative Agent will promptly pay, or
cause to be paid, out of funds received by it as a Noteholder under the
Indenture, to such APA Purchaser, in United States dollars, its Percentage of
such amount (adjusted for differences in the Purchaser Funding Rates to which
such APA Purchaser and DFC are entitled and further adjusted to reflect the fact
that, except as set forth below, such APA Purchaser is only entitled to the
applicable Purchaser Funding Rate on its Purchase Price) accrued from and after
the last date on which interest was paid in respect of such Percentage Interest
through the date on which such payment is made or the last day on which such
Percentage Interest was owned by such APA Purchaser, as the case may be.

(b) If, after the Agent has paid an APA Purchaser its Percentage of
any amount received by an APA Purchaser pursuant to paragraph (a) above, such
amount must be returned for any reason (including bankruptcy), such APA
Purchaser will repay to the Agent promptly the amount the Agent paid to such APA
Purchaser, whereupon such APA Purchaser's Percentage Interest in the Purchased
Note, together with accrued interest thereon, shall be deemed increased or
reinstated, as applicable, as if such amount had not been received by such APA
Purchaser. After an APA Purchaser has been paid (excluding any repayment
referred to in the immediately preceding sentence) its Percentage of the
Outstanding Amount of the Purchased Note plus accrued interest thereon (based on
the Purchaser Funding Rate to which such APA Purchaser is entitled and further
adjusted to reflect the fact that, except as set forth below, the APA Purchaser
is only

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<PAGE>

entitled to the applicable Purchaser Funding Rate on its Purchase Price), such
APA Purchaser acknowledges that any remaining amounts of principal or interest
paid in connection with the Purchased Note to which such APA Purchaser would
otherwise be entitled by reason of its Percentage Interest shall be paid to DFC
for its own account.

(c) Each APA Purchaser's rights as a purchaser of Percentage
Interests in the Purchased Note shall be as set forth herein, but shall not
include any right to receive any fees set forth in the DFC Fee Letter, except as
set forth in Section 16.

5. REPRESENTATIONS AND WARRANTIES.

(a) Neither the Agent nor DFC makes any representation or warranty or
assumes any responsibility with respect to (i) any statements, warranties or
representations made in or in connection with the Purchase Agreement, any
Assignment Agreement, the Trust Agreement, the Indenture, the Sale and Servicing
Agreement, any Transfer Agreement, the Note Purchase Agreement, the Custodian
Agreement or other agreement or the execution, legality, validity,
enforceability, genuineness or sufficiency of the Purchase Agreement, any
Assignment Agreement, the Trust Agreement, the Indenture, the Note Purchase
Agreement, the Sale and Servicing Agreement, any Transfer Agreement, the Trust
Agreement, the Indenture, the Custodian Agreement or other agreement or any
instrument or document furnished pursuant thereto or in connection therewith,
(ii) the value or collectibility of any Receivable, (iii) the value of the
Purchased Note or (iv) the financial condition of the Trust, AFL, ARFC II, the
Servicer or any Affiliate thereof or the performance or observance by the Trust,
AFL, ARFC II, the Servicer or any Affiliate thereof of any of their respective
obligations under the Sale and Servicing Agreement, any Transfer Agreement, the
Purchase Agreement, any Assignment Agreement, the Note Purchase Agreement, the
Trust Agreement, the Indenture or other agreement or any instrument or document
furnished pursuant thereto or in connection therewith. Each of the Agent, the
Administrative Agent and DFC does represent to each APA Purchaser, however, that
the Percentage Interest which is sold to each APA Purchaser hereunder pursuant
to Section 2(b) is, at the time of sale, free and clear of any adverse claims
created by or arising as a result of claims against the Agent, the
Administrative Agent or DFC.

(b) Each APA Purchaser represents that this Asset Purchase Agreement
has been duly authorized, executed and delivered by such APA Purchaser pursuant
to its corporate powers and constitutes the legal, valid and binding obligation
of such APA Purchaser.

(c) Each APA Purchaser confirms that such APA Purchaser has received
such documents and information as such APA Purchaser has deemed appropriate to
make its own credit analysis and decision, independently and without reliance on
the Agent or DFC, to enter into this Asset Purchase Agreement and will,

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<PAGE>

independently and without reliance on the Agent or DFC and based on such
documents and information as such APA Purchaser shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
hereunder. The Administrative Agent will furnish to each APA Purchaser copies
of any financial or other documents that the Administrative Agent receives from
time to time under the Note Purchase Agreement, but the Administrative Agent
assumes no responsibility for the authenticity, validity, accuracy or
completeness thereof.

(d) Each APA Purchaser shall be deemed to have represented and
warranted at the time of any purchase of a Percentage Interest hereunder that it
is an "accredited investor" as defined in Rule 501, promulgated by the
Securities and Exchange Commission (the "COMMISSION") under the Securities Act
of 1933, as amended; such APA Purchaser understands that the offering and sale
of its Percentage Interest in the Purchased Note and the Notes have not been and
will not be registered under the Securities Act of 1933, as amended, and have
not and will not be registered or qualified under any applicable "blue sky" law,
and that the offering and sale of the Percentage Interests and the Notes have
not been reviewed by, passed on or submitted to any Federal or state agency or
commission, securities exchange or other regulatory body; and such APA
Purchaser, through the Administrative Agent, as agent for DFC, is acquiring its
Percentage Interest without a view to any distribution, resale or other transfer
thereof; such APA Purchaser will not resell or otherwise transfer its Percentage
Interest or any portion thereof, except (i) pursuant to an effective
registration statement under the Securities Act of 1933, as amended; (ii) in a
transaction exempt from the registration requirements of the Securities Act of
1933, as amended, and applicable state securities or "blue sky" laws; (iii) to a
person who the APA Purchaser reasonably believes is a qualified institutional
buyer (within the meaning thereof in Rule 144A under the Securities Act of 1933,
as amended) that is aware that the resale or other transfer is being made in
reliance upon Rule 144A; or (iv) pursuant to Regulation S under the Securities
Act of 1933, as amended. In connection therewith, such APA Purchaser hereby
agrees that it will not resell or otherwise transfer its Percentage Interest or
any portion thereof except as provided herein unless the purchaser thereof
provides to the Administrative Agent an opinion of counsel to the effect that
such purchase is in compliance with the registration provisions of the federal
securities laws and any applicable provisions under state securities law or
pursuant to an available exemption from such provisions.

6. LIABILITY OF THE AGENT, ETC. None of the Agent, the
Administrative Agent, DFC or Morgan Guaranty Trust Company of New York, as the
Referral Agent for DFC (in such capacity, the "Referral Agent") shall be liable
to any APA Purchaser in connection with (i) the administration of the Agreement
or (ii) this Asset Purchase Agreement or any purchases hereunder (except
pursuant to the Agent's representation in Section 5(a) hereof),

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<PAGE>

in either case except for its own gross negligence or willful misconduct.
Without limiting the foregoing, the Agent, DFC and the Referral Agent (i) may
consult with legal counsel (including counsel for the Trust, AFL or the
Servicer), independent public accountants or other experts and shall not be
liable for any action taken or omitted to be taken in good faith in accordance
with the advice of such counsel, accountants or other experts, (ii) shall not be
responsible for the performance or observance by the Trust, AFL, the Servicer or
any Affiliate or agent thereof of any of the terms, covenants or conditions of
the Sale and Servicing Agreement, the Purchase Agreement, the Note Purchase
Agreement, the Trust Agreement, the Indenture or other agreement or any
instrument or document furnished pursuant thereto or in connection therewith,
(iii) shall incur no liability by acting upon any notice, consent, certificate
or other instrument or writing believed to be genuine and signed or sent by the
proper party and (iv) shall not be deemed to be acting as any APA Purchaser's
trustee or otherwise in a fiduciary capacity hereunder or under or in connection
with the Indenture or the Purchased Note.

7. RIGHTS OF THE AGENT. The Agent reserves the right, in its sole
discretion (subject to the next sentence), to, and at the request of the
Majority Purchasers will, exercise any rights and remedies available to it, as
the Administrative Agent, under the Sale and Servicing Agreement, the Purchase
Agreement, the Note Purchase Agreement, the Trust Agreement, the Indenture or
other agreement or pursuant to applicable law, and also reserves the right, in
its sole discretion, subject to the next sentence, to agree to any amendment,
modification or waiver of the Sale and Servicing Agreement, the Purchase
Agreement, the Note Purchase Agreement, the Trust Agreement, the Indenture or
other agreement or any instrument or document delivered pursuant thereto or in
connection therewith, in each case only to the extent its consent is required as
"Administrative Agent," "Morgan" or "Noteholder" pursuant to the relevant
document. Notwithstanding the foregoing, the Agent, when acting either in its
capacity as Agent or as Administrative Agent on behalf of DFC, agrees that it
shall not,

(a) without the prior written consent of each APA Purchaser,

(i) consent to any amendment, modification or waiver of any
provision of the Indenture or the Note Purchase Agreement or enter
into any agreement pursuant to Section 11.06 of the Indenture in any
way that would reduce the amount or priority of principal or interest
that is payable on account of the Notes or delay any scheduled date
for payment thereof;

(ii) agree to a different Purchaser Funding Rate from the Rate
set forth herein;

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<PAGE>

(iii) amend or waive the Note Purchase Termination Event relating
to the bankruptcy of the Trust, AFL or ARFC II; or

(iv) amend any provision of the Note Purchase Agreement or the
Indenture which amendment would have the effect of increasing or
changing the nature of any liabilities assumed by the APA Purchasers
as contemplated in Section 8 below; or

(b) without the prior written consent of the "Majority Purchasers"
(defined below),

(i) consent to any amendment of the definitions of "Delinquent
Receivable,""Liquidated Receivable," Purchased Receivable,"
"Noteholders' Percentage," "Outstanding Amount," "Excess Spread,"
"Excess Yield Condition," "Net Portfolio Losses," "Portfolio Loss
Ratio," "Delinquency Ratio," "Warehousing Loss Ratio," "Requisite
Amount," "Average Net Excess Spread Percentage," "Net Excess Spread
Percentage," "Net Loss Percentage," or "Trigger Event" contained in
the Sale and Servicing Agreement;

(ii) amend or not declare to be a "Purchase Termination Event"
the Purchase Termination Event specified in Section 2.1(c)(2)(ix) of
the Sale and Servicing Agreement;

(iii) amend or waive a Note Purchase Termination Event specified
in Section 2.08(e), (f) or (g) of the Note Purchase Agreement; or

(iv) consent to a Change of Control with respect to AFL which
consent shall not be unreasonably withheld.

"MAJORITY PURCHASERS" shall mean Persons owning undivided Percentage Interests
in the Purchased Note that aggregate more than 50% of the total outstanding
principal amount of the Purchased Note; PROVIDED, that solely for purposes of
each such computation, (1) APA Purchasers shall be deemed (whether or not they
shall have made purchases hereunder) to own undivided interests equal to their
respective Percentages of the Outstanding Amount of the Purchased Note, (2) the
portion of the Outstanding Amount of the Purchased Note owned by DFC shall be
deemed to be reduced by the amounts set forth in clause (1) and also by the
amount of any undivided interests in the Purchased Note owned by Persons other
than APA Purchasers and (3) defaulting APA Purchasers shall be deemed not to own
undivided interests in the Purchased Note; or

(c) Subject to Sections 7(a) and (b) above, amend, modify or waive
any provision of the Sale and Servicing Agreement or the Indenture that
requires the approval or

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<PAGE>

consent of a specified percentage of Noteholders without the consent of APA
Purchasers owning undivided Percentage Interests in the Purchased Note
(determined as set forth in the definition of "Majority Purchasers" above)
equal to such specified percentage.

Notwithstanding anything to the contrary contained in this Section 7,
nothing herein shall affect any obligation under the Sale and Servicing
Agreement, the Purchase Agreement, the Trust Agreement or the Indenture, if any,
to give notice to, or seek the consent of, Moody's and S&P to any amendment or
waiver of any provision of the Sale and Servicing Agreement, the Purchase
Agreement, the Trust Agreement or the Indenture.

8. OBLIGATIONS OF THE APA PURCHASERS, INCLUDING CONFIDENTIALITY.
Each APA Purchaser agrees to abide by, and be liable for, any obligations set
forth in the Note Purchase Agreement on its part as a DFC Owner (as defined
therein) (other than the provisions therein relating to DFC's Commercial Paper
Notes). Furthermore, each APA Purchaser understands that the Sale and Servicing
Agreement, the Purchase Agreement, the Note Purchase Agreement, the Trust
Agreement and the Indenture are confidential documents and no APA Purchaser will
disclose them to any other Person except with the Agent's prior written consent
or to APA Purchaser's legal counsel or accountants if such counsel or
accountants agree to hold them confidential, or upon request, to any regulatory
authority having jurisdiction over such APA Purchaser, or as required by law, or
by subpoena or other legal process or in connection with any litigation to which
any APA Purchaser is a party, or as required or requested by any Governmental
Authority. Notwithstanding the foregoing, any APA Purchaser may, in connection
with any assignment or participation or proposed assignment or participation
pursuant to Section 9 or 10 hereof, disclose to the assignee or participant or
proposed assignee or participant any confidential information relating to the
Trust, AFL, ARFC II or the Servicer furnished to such APA Purchaser by or on
behalf of the Trust, AFL, ARFC II or the Servicer or by the Agent; PROVIDED,
that prior to any such disclosure, the assignee or participant or proposed
assignee or participant agrees to preserve the confidentiality of any
confidential information relating to the Trust, AFL, ARFC II or the Servicer
received by it from any of the foregoing entities.

9. ASSIGNABILITY.

(a) Each APA Purchaser may assign to any Eligible Assignee (defined
below) or to any other existing APA Purchaser all or a portion of its rights and
obligations under this Asset Purchase Agreement (including, without limitation,
all or a portion of its Purchase Commitment and any Percentage Interests owned
by it); PROVIDED, HOWEVER, that

(i) each such assignment shall be of a constant, and not a varying,
percentage of all of such APA Purchaser's rights and obligations under this
Asset Purchase Agreement,

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<PAGE>

(ii) the amount of unused Maximum Purchase and/or Percentage Interest
in the Purchased Note being assigned pursuant to each assignment shall in
no event be less than the lesser of $10,000,000 and the assigning APA
Purchaser's Maximum Purchase, and

(iii) the parties to each such assignment shall execute and deliver to
the Agent, for its acceptance and recording in the Register, an Assignment
of Purchase Commitment in the form of Exhibit A attached hereto, together
with a processing and recordation fee of $2,500.

Upon such execution, delivery, acceptance and recording, from and
after the effective date specified in the Assignment of Purchase Commitment,
(x) the assignee thereunder shall be a party hereto and, to the extent that
rights and obligations hereunder have been assigned to it pursuant to this Asset
Purchase Agreement, have the rights and obligations of an APA Purchaser
hereunder and (y) the assignor thereunder shall, to the extent that rights and
obligations hereunder have been assigned by it pursuant to this Asset Purchase
Agreement, relinquish its rights and be released from its obligations under this
Asset Purchase Agreement (and, in the case of an assignment covering all or the
remaining portion of an assigning APA Purchaser's rights and obligations under
this Asset Purchase Agreement, such APA Purchaser shall cease to be a party
hereto). Notwithstanding the foregoing, no assignment hereunder shall be
effective unless (i) the documents evidencing such assignment are satisfactory
to Moody's and S&P and (ii) the assignee has delivered to Moody's and S&P an
opinion of counsel to the assignee satisfactory to each of Moody's and S&P
stating that the obligations of the assignee under this Asset Purchase Agreement
are the legal, valid and binding obligations of the assignee, enforceable
against the assignee in accordance with their terms.

(b) For purposes of this Asset Purchase Agreement, the term
"ELIGIBLE ASSIGNEE" shall mean any Person which (A) is reasonably acceptable to
the Agent, (B) is approved by AFL which approval shall not be unreasonably
withheld, (C) either (x) has short-term debt rated at least "P-1" by Moody's and
"A-1+" by S&P or (y) is acceptable to Moody's and S&P and (D) executes an
Assignment of Purchase Commitment.

(c) Upon its receipt of an Assignment of Purchase Commitment executed
by an assigning APA Purchaser and by an assignee who is an Eligible Assignee or
who is an existing APA Purchaser, the Agent shall (i) accept such Assignment of
Purchase Commitment, (ii) record the information contained therein in the
Register and (iii) give prompt notice thereof to AFL.

10. REPURCHASE BY DFC.

(a) DFC may, upon one Business Day's prior written notice to S&P and
Moody's and the Agent (which shall notify the APA Purchasers on the day that it
receives such notice),

14
<PAGE>

repurchase Percentage Interests (the "REPURCHASED INTERESTS") from an APA
Purchaser at a repurchase price equal to such APA Purchaser's Percentage
Interest in the Outstanding Amount of the Purchased Note related to such
Repurchased Interest plus accrued and unpaid interest, if any, at the applicable
Purchaser Funding Rate for such Repurchased Interest (the "REPURCHASE AMOUNT");
PROVIDED, that the repurchase of any Repurchased Interest shall only occur (a)
during a Tranche Period during which the Purchaser Funding Rate is based on the
Base Rate and (b) on the last day of a Tranche Period during which the Purchaser
Funding Rate is based on the Eurodollar Rate, unless the Seller requests, and
the Agent in its sole discretion agrees to, an earlier repurchase date. Prior
to 2:00 p.m. (New York City time) on the date of such repurchase, DFC shall pay
the Agent for the account of each applicable APA Purchaser in immediately
available funds in Dollars, by depositing to an account designated by the Agent
in New York City, the Repurchase Amount, plus any applicable Breakage Payments,
for each Repurchased Interest. The Agent shall promptly pay each APA Purchaser
in immediately available funds in United States dollars its respective share of
the Repurchase Amount.

(b) Within 10 Business Days of each repurchase pursuant to Section
10(a) hereof, each APA Purchaser will deliver to DFC the certificate delivered
to such APA Purchaser pursuant to Section 2(f) reflecting DFC's ownership of the
Repurchased Interest repurchased.

11. PARTICIPATIONS. Each APA Purchaser may sell participations to
one or more banks or other entities (each, a "PARTICIPANT") (which Participant,
unless it is an investment bank or a full service commercial bank, is not a
competitor of AFL or any of its Affiliates) in or to all or a portion of its
rights and obligations under this Asset Purchase Agreement (including, without
limitation, all or a portion of its Purchase Commitment and the Percentage
Interests owned by it); PROVIDED, HOWEVER, that (i) such APA Purchaser's
obligations under this Asset Purchase Agreement (including, without limitation,
its Purchase Commitment hereunder) shall remain unchanged and (ii) such APA
Purchaser shall remain solely responsible to the other parties hereto for the
performance of such obligations, (iii) the Agent shall continue to deal solely
and directly with such APA Purchaser in connection with such APA Purchaser's
rights and obligations under this Asset Purchase Agreement and (iv) no
Participant shall have any greater right to any compensation or indemnification
from the Agent, the Administrative Agent, the Trust or AFL under this Asset
Purchase Agreement, the Note Purchase Agreement, the Sale and Servicing
Agreement or the Indenture than the APA Purchaser would be entitled to receive
hereunder or thereunder. The Trust, the Agent, the Administrative Agent, AFL
and the other APA Purchasers shall continue to deal solely and directly with
such APA Purchaser in connection with such APA Purchaser's rights and
obligations under this Asset Purchase Agreement.

15
<PAGE>

12. CHANGE IN FACILITY LIMIT AND DFC'S PURCHASE COMMITMENT.

(a) If, pursuant to Section 2.05 of the Note Purchase Agreement, the
Trust shall request an increase in the Facility Limit (as defined in the Sale
and Servicing Agreement) and/or DFC's Purchase Commitment (as defined in the
Note Purchase Agreement), then (i) the Agent shall promptly notify each APA
Purchaser of the requested increase in DFC's Purchase Commitment and (ii) if one
or more additional APA Purchasers have agreed to sign this Asset Purchase
Agreement with an aggregate Maximum Purchase equal to all or a portion of the
requested increase in DFC's Purchase Commitment, then on the effective date of
such increase, each other APA Purchaser's Percentage under its Purchase
Commitment shall be proportionately reduced and each APA Purchaser's Maximum
Purchase amount shall remain the same; PROVIDED, HOWEVER, that if the Agent has
not notified the APA Purchasers in the notification provided pursuant to clause
(i) above that an additional APA Purchaser or Purchasers have agreed to sign
this Asset Purchase Agreement with an aggregate Maximum Purchase equal to the
requested increase in DFC's Purchase Commitment, each APA Purchaser may elect to
maintain its Percentage under its Purchase Commitment by executing and
delivering, within ten days after receipt of notice of such increase, a new
signature page to this Asset Purchase Agreement reaffirming its Percentage and
indicating its new Maximum Purchase amount; and PROVIDED FURTHER that in no
event shall the increase in DFC's Purchase Commitment exceed the increase in the
aggregate Maximum Purchases (after taking into account any additional APA
Purchasers and existing APA Purchasers who are increasing their Maximum
Purchases).

(b) If, pursuant to Section 2.05 of the Note Purchase Agreement, the
Facility Limit and/or DFC's Purchase Commitment shall be decreased, then (i) the
Agent shall promptly notify each APA Purchaser of the decrease in DFC's Purchase
Commitment and (ii) on the effective date of such decrease, each APA Purchaser's
Percentage under its Purchase Commitment shall remain the same and each APA
Purchaser's Maximum Purchase amount shall be proportionately decreased;
PROVIDED, HOWEVER, that if the Agent shall notify the APA Purchasers in the
notification provided pursuant to clause (i) above that DFC's Purchase
Commitment will be reduced by an amount equal to a Downgraded Purchaser's
Maximum Purchase, then each non-Downgraded Purchaser may elect to increase its
APA Purchaser's Percentage and maintain its Maximum Purchase at the same amount
as was in effect immediately prior to the reduction in DFC's Purchase Commitment
by executing and delivering, within ten days after receipt of notice of such
decrease, a new signature page to this Asset Purchase Agreement reaffirming its
Maximum Purchase amount and indicating its new Percentage.

16
<PAGE>

13. MISCELLANEOUS.

(a) Each APA Purchaser will on demand reimburse the Agent its
Percentage share of any and all reasonable out-of-pocket costs and expenses
(including, without limitation, reasonable fees and disbursements of counsel),
which may be incurred in connection with collecting any principal or interest
with respect to the Purchased Note in which an APA Purchaser purchases
Percentage Interests hereunder, for which the Agent is not promptly reimbursed
by the Trust.

(b) The Agent and its Affiliates may accept deposits from, lend money
or otherwise extend credit to, act as trustee under indentures of, and generally
engage in any kind of business with, the Trust, AFL, ARFC II, the Servicer and
any of their Affiliates and any Person who may do business with or own
securities of the Trust, AFL, ARFC II, the Servicer or any Affiliate, all as
though this Asset Purchase Agreement had not been entered into and without any
duty to account therefor to any APA Purchaser.

(c) Subject to Section 11.04 of the Note Purchase Agreement, any
taxes due and payable on any payments to be made to any APA Purchaser hereunder
shall be such APA Purchaser's sole responsibility. Each APA Purchaser warrants
that it is not subject to any taxes, charges, levies or withholdings with
respect to payments under the Asset Purchase Agreement that are imposed by means
of withholding by any applicable taxing authority ("WITHHOLDING TAX"). Each APA
Purchaser agrees to provide the Agent, from time to time upon the Agent's
request, completed and signed copies of any documents that may be required by an
applicable taxing authority to certify such APA Purchaser's exemption from
Withholding Tax with respect to payments to be made to such APA Purchaser under
this Asset Purchase Agreement; and each APA Purchaser agrees to hold the Agent
harmless from any Withholding Tax imposed due to such APA Purchaser's failure to
establish that it is not subject to Withholding Tax.

(d) The Agent shall furnish to each APA Purchaser upon request, until
the later of (i) such APA Purchaser's Purchase Termination Date and (ii) the
date on which such APA Purchaser's Percentage Interest in the Purchased Note and
all other amounts payable to such APA Purchaser hereunder have been paid in
full, a copy of the annual audited financial statements of DFC, promptly upon
the same becoming available, and, as requested by such APA Purchaser, copies of
such other financial information that the Agent may have received from the
Servicer or AFL.

(e) Each APA Purchaser shall promptly notify the Agent of any
downgrading in the ratings of the short-term unsecured debt securities or
deposits of such APA Purchaser below (i) P-1 by Moody's or (ii) A-1+ by S&P
(such APA Purchaser, a "DOWNGRADED PURCHASER"). The Agent shall have the right,
in its sole discretion, to terminate the right and obligation of any Downgraded
Purchaser to purchase a Percentage Interest in the

17
<PAGE>

Purchased Note; PROVIDED, that the Agent shall not terminate the right and
obligation of any Downgraded Purchaser hereunder unless either (i) one or more
Eligible Assignees or other APA Purchasers have agreed to accept, in the
aggregate, effective as of the date of termination, such terminated APA
Purchaser's Maximum Purchase, (ii) DFC's Purchase Commitment has been reduced by
an amount equal to the terminated Downgraded Purchaser's Maximum Purchase, and
each non-terminated APA Purchaser has agreed to increase its APA Purchaser's
Percentage and maintain its Maximum Purchase at the same amount as was in effect
immediately prior to the reduction in DFC's Purchase Commitment or (iii) DFC
obtains liquidity support satisfactory to Moody's and S&P and, solely with
respect to how such liquidity support affects this Asset Purchase Agreement
only, AFL, in an amount not less than such terminated Downgraded Purchaser's
Maximum Purchase. Such termination shall be effective upon written notice to
such effect delivered by the Agent to such Downgraded Purchaser, whereupon all
of the rights and obligations hereunder of such Downgraded Purchaser shall
terminate; PROVIDED, that upon such termination, the Downgraded Purchaser shall
continue to have the rights and obligations of an APA Purchaser with respect to
the outstanding Percentage Interest in the Purchased Note purchased by it
pursuant to the terms of this Asset Purchase Agreement prior to such
termination.

(f) Each APA Purchaser shall promptly notify the Agent of any event
of which it has knowledge which will entitle such APA Purchaser to compensation
pursuant to Section 11.05 of the Note Purchase Agreement (an "AFFECTED
PURCHASER"). The Agent shall have the right to terminate the rights and
obligations of any Affected Purchaser and to purchase a portion of such Affected
Purchaser's Percentage Interest in the Purchased Note hereunder and, in the
event AFL requests that the Agent terminate such rights and obligations of the
Affected Purchaser, the Agent shall use its best efforts to find a replacement
APA Purchaser (or Eligible Assignee) or to cause the other APA Purchasers to
accept the Affected Purchaser's rights and obligations hereunder; PROVIDED, that
the Agent shall not terminate such rights and obligations of any Affected
Purchaser unless either: (i) (A) one or more Eligible Assignees or other APA
Purchasers have agreed to accept, in the aggregate, effective as of the date of
termination, such Affected Purchaser's Maximum Purchase, and (B) such Eligible
Assignee(s) or APA Purchaser(s) shall have purchased the Percentage Interest, if
any, of the terminated Affected Purchaser by paying the unpaid Purchase Price or
(ii) DFC's Purchase Commitment has been reduced by an amount at least equal to
the Affected Purchaser's Maximum Purchase, and each remaining APA Purchaser has
agreed, notwithstanding Section 12(b) hereof, to increase its APA Purchaser's
Percentage and maintain its Maximum Purchase at the same amount as was in effect
immediately prior to the reduction in DFC's Purchase Commitment. Such
termination shall be effective upon written notice to such effect delivered by
the Agent to such Affected Purchaser, whereupon the Purchase Termination Date of
such Affected Purchaser shall be deemed to have occurred. Upon such

18
<PAGE>

termination, the Affected Purchaser shall cease to have any rights or
obligations with respect to future purchases of interests in the Purchased Note
under this Asset Purchase Agreement but shall continue to have the rights and
obligations of an APA Purchaser with respect to the portion of the Percentage
Interest in the Purchased Note purchased by it, together with all other rights
due and owing to it, pursuant to the terms of this Asset Purchase Agreement
immediately prior to such termination. The Agent shall use its best efforts to
find Eligible Assignee(s) or APA Purchaser(s) to replace an Affected Purchaser.

(g) On the fifth Business Day prior to any Non-Extending Purchaser's
Expiry Date (defined below), such Non-Extending Purchaser shall, upon the
request of the Agent, and subject to the limitations imposed by Section 2(c)
hereof, make a Non-Pro Rata Purchase (defined below) in an amount up to such APA
Purchaser's Maximum Purchase or, if such Non-Extending Purchaser has extended
its Purchase Termination Date for a Purchase Commitment that is less than the
amount of its Maximum Purchase (a "REDUCING PURCHASER") prior to such extension,
such Non-Pro Rata Purchase shall be in an amount equal to the difference between
such APA Purchaser's Maximum Purchase prior to such extension and such APA
Purchaser's Purchase Commitment amount as extended (such amount is hereinafter
referred to as the "REDUCED AMOUNT"). The amount of such Non-Pro Rata Purchase
to be made by a Non-Extending Purchaser or Reducing Purchaser shall be an amount
equal to the product of (i) the difference between (A) DFC's Purchase Commitment
MINUS the aggregate outstanding APA Purchasers' Percentage Interests in the
Purchased Note (excluding such Non-Pro Rata Purchase) and (B) an amount equal to
the difference between (x) the aggregate of the Maximum Purchase of the APA
Purchasers whose obligations to purchase Purchased Interests hereunder do not
expire on such Expiry Date (including the reduced Maximum Purchase of all the
Reducing Purchasers) and (y) the aggregate outstanding Percentage Interests of
all APA Purchasers whose obligations to purchase Purchased Interests hereunder
do not expire on such Expiry Date (including the Percentage Interests of all
Reducing Purchasers that do not constitute the Reduced Amount for such APA
Purchaser) and (ii) a fraction the numerator of which is such Non-Extending
Purchaser's Maximum Purchase, or Reduced Amount, as the case may be, and the
denominator of which is the aggregate of the Maximum Purchases or Reduced
Amounts of all of the Non-Extending Purchasers whose obligations to purchase
Purchased Interests hereunder expire on such Expiry Date; PROVIDED, HOWEVER,
that upon receipt of notice that an APA Purchaser will become a Non-Extending
Purchaser or a Reducing Purchaser, DFC shall promptly request a determination
from each of Moody's and S&P of whether failure to request such a purchase will
result in the reduction or withdrawal of its then current rating, if any, of the
Commercial Paper, and if DFC shall have received written confirmation from each
of S&P and Moody's prior to the fifth Business Day immediately preceding such
Expiry Date that such failure will not result in a rating reduction or
withdrawal of DFC's Commercial Paper Notes, DFC shall not request and such
Non-Extending Purchaser or Reducing Purchaser shall not

19
<PAGE>

be required to make, such purchase. The Non-Pro Rata Purchase amount shall be
held in the Non-Pro Rata Funding Account as provided in Section 13(i) hereof and
shall be returned to the Non-Extending Purchaser or Reducing Purchaser, as the
case may be, on such APA Purchaser's Expiry Date if and to the extent that the
aggregate of the Maximum Purchase of all APA Purchasers whose obligations to
purchase Percentage Interests in the Purchased Note do not expire on such Expiry
Date is at least equal to the greater of (A) the aggregate Outstanding Amount of
all Notes on such Expiry Date and (B) DFC's Purchase Commitment (after giving
effect to any reduction thereof pursuant to Section 2.05 of the Note Purchase
Agreement) on such Expiry Date. Notwithstanding any provision in the Agreement
or the Note Purchase Agreement to the contrary, following the Expiry Date of any
Non-Extending Purchaser and the related Non-Pro Rata Purchase, if any, such
Non-Extending Purchaser shall have no further obligation to purchase Percentage
Interests under this Asset Purchase Agreement or to make any Incremental
Purchase under the Note Purchase Agreement or the Indenture. A Non-Extending
Purchaser's Non-Pro Rata Purchase shall be deemed to constitute such Purchaser's
Percentage Interest in the Purchased Note hereunder on and after such APA
Purchaser's Expiry Date and payments of principal of and interest on the
Purchased Note shall be distributed to a Non-Extending Purchaser in respect of
its Percentage Interest in accordance with Section 4(a) hereof. A Non-Extending
Purchaser's deemed Percentage Interest in the Purchased Note shall be in
addition to any Percentage Interest in the Purchased Note previously purchased
by such Non-Extending Purchaser.

(h) On the 30th day (or if such day is not a Business Day, the next
succeeding Business Day) after any APA Purchaser becomes a Downgraded Purchaser,
unless DFC shall have replaced such Downgraded Purchaser pursuant to Section
13(e) hereof, the Agent, as agent for DFC, shall request such Downgraded
Purchaser to make, and if such request is made such Downgraded Purchaser shall
make in accordance with the provisions hereof, subject to the limitations
imposed by Section 2(c) hereof, a purchase in an amount equal to the Maximum
Purchase MINUS the outstanding Percentage Interests of such APA Purchaser;
PROVIDED, HOWEVER, that if DFC shall have requested at least 15 Business Days
prior to such 30th day from each of Moody's and S&P written confirmation that
the failure to request such a purchase or assignment will not result in the
reduction or withdrawal of its then current rating, if any, of the Commercial
Paper, and if such written confirmation is received by DFC prior to such 30th
day, the Agent shall not request, and such Downgraded Purchaser shall not make,
such purchase or accept such assignment. A Downgraded Purchaser's Non-Pro Rata
Purchase shall be the functional equivalent of such APA Purchaser's Maximum
Purchase and if and to the extent the Agent notifies such Downgraded Purchaser
of its obligation to purchase a Percentage Interest, moneys in the Non-Pro Rata
Funding Account shall be used to fund such Downgraded Purchaser's Percentage of
the Percentage Interest and shall thereafter constitute such APA Purchaser's
Purchased Interest.

20
<PAGE>

(i) The Agent will promptly give each Non-Extending Purchaser or
Downgraded Purchaser, as applicable, telephonic notice (confirmed in writing
promptly thereafter) of the aggregate amount of the Non-Pro Rata Purchases
required pursuant to Section 13(g) or Section 13(h) hereof. If such telephonic
notice is received by an APA Purchaser prior to 12:00 noon (New York City time)
on any such Business Day, the requested Non-Pro Rata Purchase shall be made by
the Non-Extending Purchaser or Downgraded Purchaser, as applicable, by 2:00 p.m.
(New York City time) on such Business Day. If such telephonic notice is not
received prior to 12:00 noon (New York City time) on such Business Day, the
requested Non-Pro Rata Purchase shall be made by the Non-Extending Purchaser or
Downgraded Purchaser, as applicable, by 2:00 p.m. (New York City time) on the
Business Day next succeeding the Business Day on which such telephonic notice is
given. A Non-Pro Rata Purchase shall be made by the Non-Extending Purchaser or
Downgraded Purchaser, as applicable, by a payment to the Agent of the amount of
such Non-Pro Rata Purchase. Such amount shall be deposited by the Agent into a
Non-Pro Rata Funding Account established by the Agent in connection with each
Non-Pro Rata Purchase (each, a "NON-PRO RATA FUNDING ACCOUNT"). Moneys in a
Non-Pro Rata Funding Account shall be invested by the Agent in obligations that
are rated A-1+ by S&P and P-1 by Moody's. Earnings on such investments (after
deducting any losses), if any, shall be paid by the Agent to the Downgraded
Purchaser or Non-Extending Purchaser, as the case may be, whose deposit funded
such Non-Pro Rata Funding Account on such Downgraded or Non-Extending
Purchaser's Expiry Date (or such earlier date on which such Downgraded or
Non-Extending Purchaser is replaced).

For purposes of this Asset Purchase Agreement, "EXPIRY DATE" shall
mean, the later of (i) July 30, 1998, or if said day is not a Business Day, the
Business Day next preceding said day, and (ii) such later date agreed to by the
Agent and an APA Purchaser.

(j) THIS ASSET PURCHASE AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

(k) This Asset Purchase Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original
and all of which when taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Asset Purchase Agreement by telecopier shall be as effective as delivery of a
manually executed counterpart of this Asset Purchase Agreement.

(l) The APA Purchasers and DFC may, from time to time, enter into
agreements amending, modifying or supplementing this Asset Purchase Agreement
with the prior written consent of AFL. Any such agreement must be in writing
and shall be effective only to the extent specifically set forth in such
writing; provided that DFC shall not amend any provision of this Asset Purchase

21
<PAGE>

Agreement without having given prior notice thereof to Moody's and S&P and
without the prior written confirmation from each of Moody's and S&P that such
amendment would not result in the reduction or withdrawal of the then current
rating, if any, of the Commercial Paper.

(m) This Asset Purchase Agreement constitutes the entire agreement
between the parties hereto with respect to the matters covered hereby and
supersedes all prior agreements and understandings between the parties. This
Asset Purchase Agreement will inure to the benefit of and be binding upon the
parties hereto and their respective successors and permitted assigns, and no
other person will have any right or obligation hereunder.

14. BANKRUPTCY PETITION AGAINST DFC. Each APA Purchaser and the
Agent hereby covenants and agrees that, prior to the date which is one year and
one day after the later of (i) the payment in full of all outstanding Commercial
Paper and (ii) the payment in full of all outstanding Commercial Paper of any
subsidiary of DFC, it will not institute against, or join any other Person in
instituting against DFC any bankruptcy, reorganization, arrangement, insolvency
or liquidation proceeding or other similar proceeding under the laws of the
United States or any state of the United States.

15. LIMITED RECOURSE TO DFC. Notwithstanding anything to the
contrary contained herein, all obligations of DFC shall be payable by DFC only
to the extent of assets available therefor and, to the extent assets are not
available or are insufficient for the payment thereof, shall not constitute a
claim against DFC.

16. FEES. DFC shall pay to each APA Purchaser a liquidity fee (the
"LIQUIDITY FEE"), payable quarterly in arrears, on the last day of each calendar
quarter during the period such APA Purchaser has a Purchase Commitment under
this Asset Purchase Agreement and on the earlier of the Expiration Date or such
Purchaser's Purchase Termination Date, as the same may be extended from time to
time. The Liquidity Fee for each APA Purchaser shall be a per annum fee equal
to, for each day, such APA Purchaser's unused Maximum Purchase multiplied by
either (i) .20% per annum or (ii) if and for so long as any Warehousing Period
(as defined in the Sale and Servicing Agreement) exceeds 90 days, .30% per
annum. On the date hereof, DFC shall pay each APA Purchaser a participation fee
in accordance with Schedule I hereto.

17. CONSENT TO AMENDMENTS TO OTHER AGREEMENTS. In accordance with the
provisions of Section 7(b) of the Agreement, all of the Purchasers who execute
the attached signature pages hereby consent to (i) the Amended and Restated Note
Purchase Agreement and (ii) the Amended and Restated Sale and Servicing
Agreement, each dated the date hereof.

22
<PAGE>

18. EFFECTIVENESS DATE. This Amended and Restated Asset Purchase
Agreement shall become effective on the date (the "Effectiveness Date") on which
the Agent has received (i) counterparts of this Asset Purchase Agreement duly
executed by each party hereto and (ii) notice that the conditions of
effectiveness to the Note Purchase Agreement have been satisfied.

23
<PAGE>

Signature Page
with respect to
the Olympic Automobile Receivables Warehouse Trust
Variable Funding Notes
Amended and Restated Asset Purchase Agreement

Dated as of July 31, 1997

Morgan Guaranty Trust Company of
New York,
as Agent and as
Administrative Agent

By: /s/ Richard A. Burke
------------------------
Authorized Signature
Title: Richard A. Burke
Vice President

<PAGE>

Signature Page
with respect to
the Olympic Automobile Receivables Warehouse Trust
Variable Funding Notes
Amended and Restated Asset Purchase Agreement

Dated July 31, 1997

SECTION 1.

Initial Percentage: 52.0833333%

SECTION 2.

Maximum Purchase: $125,000,000

SECTION 3.

Effective Date of Purchase Commitment: July 31, 1997

SECTION 4.

Purchase Termination Date: July 30, 1998

Morgan Guaranty Trust Company of
New York
500 Stanton Christiana Road
Newark, Delaware 19713-2107

By: /s/ Richard A. Burke
------------------------
Authorized Signature

Richard A. Burke
Vice President
------------------------
Title

<PAGE>

Signature Page
with respect to
the Olympic Automobile Receivables Warehouse Trust
Variable Funding Notes
Amended and Restated Asset Purchase Agreement

Dated July 31, 1997

SECTION 1.

Initial Percentage: 20.8333333%

SECTION 2.

Maximum Purchase: $50,000,000

SECTION 3.

Effective Date of Purchase Commitment: July 31, 1997

SECTION 4.

Purchase Termination Date: July 30, 1998

HARRIS TRUST AND SAVINGS BANK
111 West Monroe Street
P.O. Box 755
Chicago, Illinois 60690

By: /s/ [ILLEGIBLE]
------------------------
Title: Vice President

------------------------
By: Title:

<PAGE>

Signature Page
with respect to
the Olympic Automobile Receivables Warehouse Trust
Variable Funding Notes
Amended and Restated Asset Purchase Agreement

Dated July 31, 1997

SECTION 1.

Initial Percentage: 16.6666667%

SECTION 2.

Maximum Purchase: $40,000,000

SECTION 3.

Effective Date of Purchase Commitment: July 31, 1997

SECTION 4.

Purchase Termination Date: July 30, 1998

BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
231 South LaSalle Street
16th Floor - Mail Code 1611
Chicago, Illinois 60697

By: /s/ Albert K. Yoshimura
--------------------------
Title: ALBERT K. YOSHIMURA,
as Attorney-in-Fact

By:
------------------------
Title:

<PAGE>

Signature Page
with respect to
the Olympic Automobile Receivables Warehouse Trust
Variable Funding Notes
Amended and Restated Asset Purchase Agreement

Dated July 31, 1997

SECTION 1.

Initial Percentage: 10.4166667%

SECTION 2.

Maximum Purchase: $25,000,000

SECTION 3.

Effective Date of Purchase Commitment: July 31, 1997

SECTION 4.

Purchase Termination Date: July 30, 1998

NORWEST BANK MINNESOTA, N.A.
625 Marquette
Minneapolis, Minnesota 55479-0089

By: /s/ Joseph D. Sweet
------------------------
Title: Vice President

By: Joseph D. Sweet
------------------------
Title:

<PAGE>

The undersigned hereby consents to the sale from time to time by
Morgan Guaranty Trust Company of New York, as Agent for the undersigned, of
undivided interests in the Purchased Note owned by the undersigned, pursuant to
the Amended and Restated Asset Purchase Agreement to which this is attached.

DELAWARE FUNDING CORPORATION

By: Morgan Guaranty Trust Company
of New York,
as attorney-in-fact for
Delaware Funding Corporation

By:
------------------------
Authorized Signature

------------------------
Title:

<PAGE>

EXECUTION COPY

SERIES 1997-C SUPPLEMENT

dated as of September 18, 1997

SPREAD ACCOUNT AGREEMENT

dated as of March 25, 1993,

as amended and restated

as of June 1, 1997

among

ARCADIA FINANCIAL LTD.

ARCADIA RECEIVABLES FINANCE CORP.

FINANCIAL SECURITY ASSURANCE INC.

THE CHASE MANHATTAN BANK

and

NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,

<PAGE>

TABLE OF CONTENTS

Page
Article I.

DEFINITIONS

Section 1.1 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.2 Rules of Interpretation. . . . . . . . . . . . . . . . . . . . 5

Article II.

CREDIT ENHANCEMENT FEE; SERIES SUPPLEMENTS; THE COLLATERAL

Section 2.1 Series 1997-C Credit Enhancement Fee . . . . . . . . . . . . . 5
Section 2.2 Series Supplements . . . . . . . . . . . . . . . . . . . . . . 6
Section 2.3 Grant of Security Interest by Arcadia Financial and the Seller.6

Article III.

SPREAD ACCOUNT

Section 3.1 Establishment of Series 1997-C Spread Account; Initial Deposit
into Series 1997-C Spread Account. . . . . . . . . . . . . . . 7
Section 3.2 Spread Account Additional Deposits . . . . . . . . . . . . . . 7

Article IV.

MISCELLANEOUS

Section 4.1 Further Assurances . . . . . . . . . . . . . . . . . . . . . . 7
Section 4.2 Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 4.3 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 4.4 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Schedule I

<PAGE>

SERIES 1997-C SUPPLEMENT

SERIES 1997-C SUPPLEMENT, dated as of September 18, 1997 (the "Series
1997-C Supplement"), by and among ARCADIA FINANCIAL LTD., a Minnesota
corporation ("Arcadia Financial"), ARCADIA RECEIVABLES FINANCE CORP., a Delaware
corporation (the "Seller"), FINANCIAL SECURITY ASSURANCE INC., a New York stock
insurance company ("Financial Security"), THE CHASE MANHATTAN BANK, a national
banking association, in its capacity as Indenture Trustee under the Indenture
and NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION as Collateral Agent hereunder.

RECITALS

1. The parties hereto have previously entered into a Spread Account
Agreement, dated as of March 25, 1993, as amended and restated as of June 1,
1997 (the "Spread Account Agreement"), and, as contemplated by Section 2.02 of
the Spread Account Agreement, this Series 1997-C Supplement constitutes a Series
Supplement to the Spread Account Agreement so that hereafter this Series 1997-C
Supplement shall form a part of the Spread Account Agreement for all purposes
thereof, and all references herein and hereafter to the Spread Account Agreement
shall mean the Spread Account Agreement, as supplemented hereby.

2. Arcadia Automobile Receivables Trust, 1997-C (the "Series 1997-C
Trust") is being formed contemporaneously herewith pursuant to the Series 1997-C
Trust Agreement (as defined herein).

3. Pursuant to the Series 1997-C Sale and Servicing Agreement, the Seller
is selling to the Series 1997-C Trust all of its right, title and interest in
and to the Initial Receivables (as defined in the Series 1997-C Sale and
Servicing Agreement) and certain other Trust Property (as defined in the Series
1997-C Trust Agreement).

4. Pursuant to the Series 1997-C Indenture, the Series 1997-C Trust is
issuing the Series 1997-C Notes (as defined herein).

5. The Seller has requested that Financial Security issue the Series
1997-C Note Policy to the Trustee to guarantee payment of the Scheduled Payments
(as deemed in such Policy) on each Payment Date in respect of the Series 1997-C
Notes.

6. In partial consideration of the issuance of the Series 1997-C Note
Policy, the Seller has agreed that Financial Security shall have certain rights
as Controlling Party, to the extent set forth in the Spread Account Agreement
and the Series 1997-C Indenture.

7. The Seller is a wholly owned special purpose subsidiary of Arcadia
Financial. The Series 1997-C Trust has agreed to pay the Series 1997-C Credit
Enhancement Fee to the Seller in

<PAGE>

consideration of the obligations of the Seller and Arcadia Financial pursuant
hereto and in consideration of the obligations of Arcadia Financial pursuant to
the Series 1997-C Insurance Agreement (such obligations forming part of the
Series 1997-C Insurer Secured Obligations as referred to herein). The Series
1997-C Insurer Secured Obligations form part of the consideration to Financial
Security for its issuance of the Series 1997-C Policies.

8. In order to secure the performance of the Series 1997-C Secured
Obligations, to further effect and enforce the subordination provisions to which
the Series 1997-C Credit Enhancement Fee is subject, and in consideration of the
receipt of the Series 1997-C Credit Enhancement Fee, Arcadia Financial and the
Seller have agreed to pledge the Series 1997-C Collateral as Collateral to the
Collateral Agent for the benefit of Financial Security and for the benefit of
the Trustee on behalf of the Trust, upon the terms and conditions set forth
herein.

AGREEMENTS

In consideration of the premises, and for other good and valuable
consideration, the adequacy, receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

ARTICLE I.

DEFINITIONS

Section 1.1 DEFINITIONS. ALL TERMS DEFINED IN SECTION 1.1 OF THE
SERIES 1997-C SALE AND SERVICING AGREEMENT SHALL HAVE THE SAME MEANING WITH
RESPECT TO THIS SERIES 1997-C SUPPLEMENT. THE FOLLOWING TERMS SHALL HAVE THE
FOLLOWING MEANINGS:

"COLLECTION ACCOUNT SHORTFALL" means, with respect to Series 1997-C and any
Distribution Date, the Deficiency Claim Amount, as defined in the Series 1997-C
Sale and Servicing Agreement, with respect to such Distribution Date.

"DEEMED CURED" means with respect to Series 1997-C, (a) with respect to an
event that has occurred pursuant to clause (A)(i) of the definition of Trigger
Event, as of a Determination Date with respect to Series 1997-C, that no event
as specified in clause (A)(i) of the definition thereof with respect to such
Series shall have occurred as of such Determination Date or as of any of the
five consecutively preceding Determination Dates, and (b) with respect to an
event that has occurred pursuant to clause (A)(ii) or clause (A)(iii) of the
definition of Trigger Event, as of the next Determination Date which occurs in a
calendar month which is a multiple of three months succeeding the Series 1997-C
Closing Date, that no event specified in clause (A)(ii) or clause (A)(iii) of
the definition of Trigger Event with respect to such Series shall have occurred
as of such Determination Date.

"INITIAL PRINCIPAL AMOUNT" means $775,000,000 with respect to Series
1997-C.

2
<PAGE>

"INITIAL SPREAD ACCOUNT DEPOSIT" means $0 for Series 1997-C.

"INITIAL SPREAD ACCOUNT MAXIMUM AMOUNT" means, with respect to Series
1997-C and any Distribution Date, an amount equal to the greater of (i) 7% of
the Series 1997-C Balance as of the close of business on such Distribution Date
and (ii) the Spread Account Minimum Amount as of the close of business on such
Distribution Date.

"SERIES 1997-C BALANCE" means, with respect to Series 1997-C and any
Distribution Date, the aggregate principal amount of the Series 1997-C Notes as
of such Distribution Date (after giving effect to the distributions in respect
of principal on the Notes made on such Distribution Date).

"SERIES 1997-C COLLATERAL" has the meaning specified in Section 2.3(a)
hereof.

"SERIES 1997-C CREDIT ENHANCEMENT FEE" means the amount distributable on
each Distribution Date pursuant to Section 4.6(viii) and (ix) of the Series
1997-C Sale and Servicing Agreement.

"SERIES 1997-C INDENTURE" means the Indenture, dated as of September 1,
1997, among the Series 1997-C Trust, the Trustee and the Indenture Collateral
Agent.

"SERIES 1997-C NOTE POLICY" means the financial guaranty insurance policy
issued by Financial Security with respect to the Series 1997-C Notes.

"SERIES 1997-C NOTES" means the Class A-1, Class A-2, Class A-3, Class A-4
and Class A-5 Notes issued pursuant to the Series 1997-C Indenture.

"SERIES 1997-C OWNER TRUSTEE" means Wilmington Trust Company, not in its
individual capacity but solely as Owner Trustee, or its successor in interest,
and any successor Owner Trustee appointed as provided in the Series 1997-C Trust
Agreement.

"SERIES 1997-C RECEIVABLE" means each Receivable referenced on the Schedule
of Receivables attached to the Series 1997-C Sale and Servicing Agreement, as
supplemented from time to time during the Funding Period by one or more
Subsequent Transfer Agreements.

"SERIES 1997-C RESERVE ACCOUNT" means the Reserve Account established
pursuant to Section 4.1(d) of the Series 1997-C Sale and Servicing Agreement.

"SERIES 1997-C SALE AND SERVICING AGREEMENT" means the Sale and Servicing
Agreement, dated as of September 1, 1997, among the Series 1997-C Trust, Arcadia
Financial, in its individual capacity and as Servicer, the Seller and the Backup
Servicer, as such agreement may be supplemented, amended or modified from time
to time.

"SERIES 1997-C SECURED OBLIGATIONS" means the Insurer Secured Obligations
and the Trustee Secured Obligations with respect to Series 1997-C.

3
<PAGE>

"SERIES 1997-C SPREAD ACCOUNT" means the Spread Account established
pursuant to Section 3.1(a) hereof.

"SERIES 1997-C SUPPLEMENT" means this Series 1997-C Supplement which
constitutes a Series Supplement to the Spread Account Agreement.

"SERIES 1997-C TRUST AGREEMENT" means the Trust Agreement, dated as of
September 1, 1997, among the Seller, Financial Security and the Series 1997-C
Owner Trustee.

"SPREAD ACCOUNT ADDITIONAL DEPOSIT" means, with respect to Series 1997-C
and any Subsequent Transfer Date, an amount equal to 0.00% of the aggregate
Principal Balance (as of the related Subsequent Cutoff Date) of the Subsequent
Receivables being transferred to the Series 1997-C Trust on such Subsequent
Transfer Date or such greater amount as required by the Rating Agencies to
confirm that the rating assigned to the Series 1997-C Notes will be in the
highest category by such Rating Agencies.

"SPREAD ACCOUNT MAXIMUM AMOUNT" means, with respect to Series 1997-C and
any Distribution Date:

(i) if no Insurance Agreement Event of Default with respect to
Series 1997-C has occurred and is continuing, no Capture Event has occurred
and is continuing, no Trigger Event has occurred on the related
Determination Date, and if any Trigger Event with respect to Series 1997-C
has occurred as of a prior Determination Date, such Trigger Event is Deemed
Cured as of the related Determination Date, the Initial Spread Account
Maximum Amount with respect to Series 1997-C and such Distribution Date;

(ii) if an event specified in clause (A) of the definition of
Trigger Event with respect to Series 1997-C has occurred as of the
Determination Date or has occurred as of a prior Distribution Date (and
whether or not a Trigger Event shall occur or shall have occurred in
connection with such event), and such event is not Deemed Cured as of the
related Determination Date and no Insurance Agreement Event of Default with
respect to Series 1997-C has occurred and is continuing and no Capture
Event has occurred and is continuing, the Spread Account Maximum Amount
shall be equal to the greater of (i) 10% of the Series 1997-C Balance as of
the close of business on such Distribution Date and (ii) the Spread Account
Minimum Amount as of the close of business on such Distribution Date; or

(iii) if (A) an Insurance Agreement Event of Default with respect to
Series 1997-C has occurred and is continuing or (B) a Capture Event has
occurred and is continuing as of the related Determination Date, the Spread
Account Maximum Amount shall be equal to the greater of (i) 25% of the
Series 1997-C Balance as of the close of business on such Distribution Date
and (ii) the Spread Account Minimum Amount as of the close of business on
such Distribution Date.

"SPREAD ACCOUNT MINIMUM AMOUNT" means, with respect to Series 1997-C and
any Distribution Date, an amount equal to the greater of:

4
<PAGE>

(i) $100,000, and

(ii) the lesser of:

(A) 1.5% of the Initial Principal Amount of Series 1997-C,
and
(B) the Series 1997-C Balance.

"TRIGGER EVENT" means, with respect to Series 1997-C and as of a
Determination Date, the occurrence of any of the events specified in clause (A)
together with the occurrence of the event specified in clause (B):

(A) (i) the Average Delinquency Ratio for such Determination Date shall
be 6.53% or greater;

(ii) with respect to any Determination Date, the Cumulative Default
Rate shall be equal to or greater than the percentage set forth
in Column A of Schedule I attached hereto corresponding to such
Determination Date;

(iii) with respect to any Determination Date, the Cumulative Net Loss
Rate shall be equal to or greater than the percentage set forth
in Column B of Schedule I attached hereto corresponding to such
Determination Date;

(B) The amount specified with respect to such Series in the last sentence
of Section 2.09(d) of the Spread Account Agreement is positive on such
Determination Date, and such amount has not been deposited in the
related Tag Account on such Determination Date.

Section 1.2 RULES OF INTERPRETATION. The terms "hereof," "herein,"
"hereto" or "hereunder," unless otherwise modified by more specific reference,
shall refer to this Series 1997-C supplement. unless otherwise indicated in
context, the terms "Article," "Section" or "Exhibit" shall refer to an Article
or Section of, or Exhibit to, this Series 1997-C Supplement. The definition of a
term shall include the singular, the plural, the past, the present, the future,
the active and the passive forms of such term. A term defined herein and used
herein preceded by a Series designation, shall mean such term as it relates to
the Series designated.

ARTICLE II.

CREDIT ENHANCEMENT FEE; SERIES SUPPLEMENTS; THE COLLATERAL

Section 2.1 SERIES 1997-C CREDIT ENHANCEMENT FEE. The Series
1997-C Sale and Servicing Agreement provides for the payment to the Seller of
the Series 1997-C Credit Enhancement Fee, to be paid to the Seller by
distribution of such amounts to the Collateral Agent for deposit and
distribution pursuant to this Agreement. The Seller and Arcadia Financial hereby
agree that payment of the Series 1997-C Credit Enhancement Fee in the manner and
subject to the conditions set forth herein and in the Series 1997-C Sale and
Servicing Agreement is

5
<PAGE>

adequate consideration and the exclusive consideration to be received by the
Seller or Arcadia Financial for the obligations of the Seller pursuant hereto
and the obligations of Arcadia Financial pursuant hereto (including, without
limitation, the transfer by the Seller to the Collateral Agent of the Initial
Spread Account Deposit with respect to Series 1997-C) and pursuant to the Series
1997-C Insurance Agreement. The Seller and Arcadia Financial hereby agree with
the Trustee and with Financial Security that payment of the Series 1997-C Credit
Enhancement Fee to the Seller is expressly conditioned on subordination of the
Series 1997-C Credit Enhancement Fee to payments on the Notes (if any) and
Certificates of any Series, payments of amounts due to Financial Security and
the other obligations of the Trusts, in each case to the extent provided in
Section 4.6 of the Standard Terms and Conditions or Section 4.6 of the related
Sale and Servicing Agreement, as applicable, and Section 3.03 of the Spread
Account Agreement, and the Security Interest of the Secured Parties in the
Series 1997-C Collateral is intended to effect and enforce such subordination
and to provide security for the Series 1997-C Secured Obligations and subject to
the terms hereof the Secured Obligations with respect to other Series.

Section 2.2 SERIES SUPPLEMENTS. As provided in and subject to the
conditions specified in Section 2.02 of the Spread Account Agreement, the
parties hereto are entering into this Series 1997-C Supplement with respect to
the Series 1997-C Securities.

SECTION 2.3 GRANT OF SECURITY INTEREST BY ARCADIA FINANCIAL AND THE
SELLER.

(a) In order to secure the performance of the Secured Obligations
with respect to each Series, the Seller (and Arcadia Financial, to the extent it
may have any rights therein) hereby pledges, assigns, grants, transfers and
conveys to the Collateral Agent, on behalf of and for the benefit of the Secured
Parties to secure the Secured Obligations, a lien on and security interest in
(which lien and security interest is intended to be prior to all other liens,
security interests or other encumbrances), all of its right, title and interest
in and to the following (all being collectively referred to herein as the
"Series 1997-C Collateral"):

(i) the Series 1997-C Credit Enhancement Fee and all rights and
remedies that the Seller may have to enforce payment of the Series 1997-C
Credit Enhancement Fee whether under the Series 1997-C Sale and Servicing
Agreement or otherwise;

(ii) the Series 1997-C Spread Account established pursuant to
Section 3.1 of this Series 1997-C Supplement and Section 3.01 of the Spread
Account Agreement, and each other account owned by the Seller and
maintained by the Collateral Agent (including, without limitation, all
monies, checks, securities, investments and other documents from time to
time held in or evidencing any such accounts);

(iii) all of the Seller's right, title and interest in and to
investments made with proceeds of the property described in clauses (i) and
(ii) above, or made with amounts on deposit in the Series 1997-C Spread
Account; and

(iv) all distributions, revenues, products, substitutions,
benefits, profits and proceeds, in whatever form, of any of the foregoing.

6
<PAGE>

(b) In order to effectuate the provisions and purposes of this Series
1997-C Supplement, including for the purpose of perfecting the security
interests granted hereunder, the Seller represents and warrants that it has,
prior to the execution of this Series 1997-C Supplement, executed and filed an
appropriate Uniform Commercial Code financing statement in Minnesota sufficient
to ensure that the Collateral Agent, as agent for the Secured Parties, has a
first priority perfected security interest in all Series 1997-C Collateral which
can be perfected by the filing of a financing statement.

ARTICLE III.

SPREAD ACCOUNT

Section 3.1 ESTABLISHMENT OF SERIES 1997-C SPREAD ACCOUNT; INITIAL
DEPOSIT INTO SERIES 1997-C SPREAD ACCOUNT.

(a) On or prior to the Closing Date, the Collateral Agent shall
establish with respect to Series 1997-C, at its office or at another depository
institution or trust company, an Eligible Account, designated "Spread
Account-Series 1997-C-Norwest Bank Minnesota, National Association, as
Collateral Agent for Financial Security Assurance Inc. and another Secured
Party" (the "Series 1997-C Spread Account").

(b) On the Closing Date relating to Series 1997-C, the Collateral
Agent shall deposit the Initial Spread Account Deposit with respect to Series
1997-C received from the Seller into the Series 1997-C Spread Account.

Section 3.2 SPREAD ACCOUNT ADDITIONAL DEPOSITS. ON EACH SUBSEQUENT
TRANSFER DATE, THE SERIES 1997-C TRUST WILL, PURSUANT TO SECTION 2.4 OF THE
SERIES 1997-C SALE AND SERVICING AGREEMENT, DELIVER ON BEHALF OF THE SELLER THE
SPREAD ACCOUNT ADDITIONAL DEPOSIT FOR SUCH SUBSEQUENT TRANSFER DATE TO THE
COLLATERAL AGENT. THE COLLATERAL AGENT SHALL DEPOSIT EACH SUCH SPREAD ACCOUNT
ADDITIONAL DEPOSIT RECEIVED FROM THE SERIES 1997-C TRUST INTO THE SERIES 1997-C
SPREAD ACCOUNT.

ARTICLE IV.

MISCELLANEOUS

Section 4.1 FURTHER ASSURANCES. Each party hereto shall take such
action and deliver such instruments to any other party hereto, in addition to
the actions and instruments specifically provided for herein, as may be
reasonably requested or required to effectuate the purpose or provisions of this
Series 1997-C Supplement or to confirm or perfect any transaction described or
contemplated herein.

Section 4.2 GOVERNING LAW. This Series 1997-C Supplement shall be
governed by and construed, and the obligations, rights and remedies of the
parties hereunder shall be determined, in accordance with the laws of the State
of New York.

7
<PAGE>

Section 4.3 COUNTERPARTS. This Series 1997-C Supplement may be
executed in two or more counterparts by the parties hereto, and each such
counterpart shall be considered an original and all such counterparts shall
constitute one and the same instrument.

Section 4.4 HEADINGS. The headings of sections and paragraphs and
the table of contents contained in this Series 1997-C Supplement are provided
for convenience only. they form no part of this Series 1997-C Supplement and
shall not affect its construction or interpretation.

8
<PAGE>

IN WITNESS WHEREOF, THE PARTIES HERETO HAVE EXECUTED THIS SERIES 1997-C
SUPPLEMENT AS OF THE DATE SET FORTH ON THE FIRST PAGE HEREOF.

ARCADIA FINANCIAL LTD.

BY /s/ John A. Witham
-------------------------------------
Name: John A. Witham
Title: Executive Vice President and Chief
Financial Officer

ARCADIA RECEIVABLES FINANCE CORP.

By /s/ John A. Witham
-------------------------------------
Name: John A. Witham
Title: Senior Vice President and Chief
Financial Officer

FINANCIAL SECURITY ASSURANCE INC.

By /s/ Bruce Stern
-------------------------------------
Authorized Officer

THE CHASE MANHATTAN BANK, as Trustee

By /s/ Marcus Gustafsan
-------------------------------------
Name: Marcus Gustafsan
Title: Vice President

NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION, as Collateral Agent

By /s/ Thomas D. Wraalstad
-------------------------------------
Name: Thomas D. Wraalstad
Title: Corporate Trust Officer

<PAGE>

SCHEDULE I

Determination Date* Cumulative Default Rate Cumulative Net Loss Rate
(month) (Column A) (Column B)

<S> <C> <C>
0 to 3 2.60% 1.37%
3 to 6 4.82% 2.39%
6 to 9 6.80% 3.23%
9 to 12 8.47% 3.83%
12 to 15 9.29% 4.20%
15 to 18 10.41% 4.54%
18 to 21 11.42% 4.79%
21 to 24 12.15% 4.98%
24 to 27 12.82% 5.12%
27 to 30 13.37% 5.26%
30 to 33 13.81% 5.36%
33 to 36 14.14% 5.46%
36 to 39 14.44% 5.54%
39 to 42 14.61% 5.62%
42 to 45 14.78% 5.70%
45 to 48 14.91% 5.74%
48 to 51 14.99% 5.78%
51 to 54 15.06% 5.82%
54 to 57 15.09% 5.85%
57 to 60 15.13% 5.87%
60 to 63 15.14% 5.89%
63 to 66 15.16% 5.91%
66 to 69 15.17% 5.92%
69 to 72 15.19% 5.94%

</TABLE>

- --------------------------
* Such Determination Date occurring after the designated calendar months
succeeding the Series 1997-C Closing Date appearing first in the column below,
and prior to or during the designated calendar months succeeding the Series
1997-C Distribution Date appearing second in the column below.

<PAGE>

EXECUTION COPY

- --------------------------------------------------------------------------------

INSURANCE AND INDEMNITY AGREEMENT

among

FINANCIAL SECURITY ASSURANCE INC.,

ARCADIA AUTOMOBILE RECEIVABLES TRUST, 1997-C,

ARCADIA RECEIVABLES FINANCE CORP.

and

ARCADIA FINANCIAL LTD.

Dated as of September 18, 1997

- --------------------------------------------------------------------------------

Arcadia Automobile Receivables Trust, 1997-C

$82,150,000 5.65% Class A-1 Automobile Receivables-Backed Notes

$263,000,000 6.05% Class A-2 Automobile Receivables-Backed Notes

$144,000,000 6.25% Class A-3 Automobile Receivables-Backed Notes

$186,000,000 6.375% Class A-4 Automobile Receivables-Backed Notes

$99,850,000 6.55% Class A-5 Automobile Receivables-Backed Notes

- --------------------------------------------------------------------------------

<PAGE>

TABLE OF CONTENTS

Page

ARTICLE I. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . 2

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

ARTICLE II. REPRESENTATIONS, WARRANTIES AND COVENANTS. . . . . . . . . . . 7

Section 2.01 Representations and Warranties of the Trust . . . . . . . 7
Section 2.02 Affirmative Covenants of the Trust. . . . . . . . . . . . 10
Section 2.03 Negative Covenants of the Trust . . . . . . . . . . . . . 15
Section 2.04 Representations and Warranties of
Arcadia Financial and the Seller . . . . . . . . . . . . 17
Section 2.05 Affirmative Covenants of Arcadia Financial
and the Seller . . . . . . . . . . . . . . . . . . . . . 21
Section 2.06 Negative Covenants of Arcadia Financial and the Seller. . 26
Section 2.07 Representations and Warranties of Arcadia Financial . . . 28
Section 2.08 Affirmative Covenants of Arcadia Financial. . . . . . . . 30
Section 2.09 Negative Covenants of Arcadia Financial . . . . . . . . . 33

ARTICLE III. THE NOTE POLICY; REIMBURSEMENT; INDEMNIFICATION . . . . . . . 35

Section 3.01 Conditions Precedent to Issuance of the Note Policy . . . 35
Section 3.02 Payment of Fees and Premium.. . . . . . . . . . . . . . . 40
Section 3.03 Reimbursement and Additional Payment Obligation . . . . . 41
Section 3.04 Certain Obligations Not Recourse to Arcadia Financial;
Recourse to Trust Property. . . . . . . . . . . . . . . . 42
Section 3.05 Indemnification.. . . . . . . . . . . . . . . . . . . . . 42
Section 3.06 Payment Procedure . . . . . . . . . . . . . . . . . . . . 44
Section 3.07 Subrogation . . . . . . . . . . . . . . . . . . . . . . . 44

ARTICLE IV. FURTHER AGREEMENTS; MISCELLANEOUS. . . . . . . . . . . . . . . 45

Section 4.01 Effective Date: Term of Agreement . . . . . . . . . . . . 45
Section 4.02 Further Assurances and Corrective Instruments . . . . . . 45
Section 4.03 Obligations Absolute. . . . . . . . . . . . . . . . . . . 45
Section 4.04 Assignments; Reinsurance; Third-Party Rights. . . . . . . 46
Section 4.05 Liability of Financial Security . . . . . . . . . . . . . 47

ARTICLE V. EVENTS OF DEFAULT; REMEDIES . . . . . . . . . . . . . . . . . . 47

Section 5.01 Events of Default . . . . . . . . . . . . . . . . . . . . 47
Section 5.02 Remedies; Waivers.. . . . . . . . . . . . . . . . . . . . 50

ARTICLE VI. MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . 51

Section 6.01 Amendments, Etc.. . . . . . . . . . . . . . . . . . . . . 51
Section 6.02 Notices . . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 6.03 Severability. . . . . . . . . . . . . . . . . . . . . . . 52
Section 6.04 Governing Law . . . . . . . . . . . . . . . . . . . . . . 52
Section 6.05 Consent to Jurisdiction.. . . . . . . . . . . . . . . . . 52
Section 6.06 Consent of Financial Security . . . . . . . . . . . . . . 53
Section 6.07 Counterparts. . . . . . . . . . . . . . . . . . . . . . . 53

<PAGE>

Section 6.08 Headings. . . . . . . . . . . . . . . . . . . . . . . . .53
Section 6.09 Trial by Jury Waived. . . . . . . . . . . . . . . . . . .54
Section 6.10 Limited Liability . . . . . . . . . . . . . . . . . . . .54
Section 6.11 Limited Liability of Wilmington Trust Company . . . . . .54
Section 6.12 Entire Agreement. . . . . . . . . . . . . . . . . . . . .54

Schedule 1

<PAGE>

INSURANCE AND INDEMNITY AGREEMENT

INSURANCE AND INDEMNITY AGREEMENT dated as of September 18, 1997,
among FINANCIAL SECURITY ASSURANCE INC., a New York stock insurance company
("Financial Security"), ARCADIA AUTOMOBILE RECEIVABLES TRUST, 1997-C, a Delaware
business trust (the "Trust"), ARCADIA RECEIVABLES FINANCE CORP., a Delaware
corporation (the "Seller"), and ARCADIA FINANCIAL LTD., a Minnesota corporation
(when referred to individually hereunder, "Arcadia Financial", when referred to
as servicer under the Sale and Servicing Agreement referred to below, the
"Servicer").

INTRODUCTORY STATEMENTS

1. The Seller is the owner of the Receivables. The Seller proposes
to sell to the Trust all of its right, title and interest in and to the
Receivables and certain other property pursuant to the Sale and Servicing
Agreement. The Trust will issue Notes pursuant to the Indenture.

2. Each Note will be secured by the Indenture Property. The Trust
has requested that Financial Security issue a financial guaranty insurance
policy guarantying respectively certain distributions of interest and principal
on the Notes on each Distribution Date (including any such distributions
subsequently avoided as a preference under applicable bankruptcy law) upon the
terms, and subject to the conditions, provided herein.

3. Arcadia Financial and the Seller have previously entered into and
may in the future enter into one or more pooling and servicing agreements or
sale and servicing agreements with a trust and Seller has previously entered
into a Repurchase Agreement dated as of December 3, 1996 among the Seller and
Arcadia Receivables Conduit Corp., in each case, pursuant to which the Seller
sold or will sell all of its right, title and interest in and to receivables and
the other trust property and in connection therewith Financial Security has and
may in the future issue additional policies with respect to certain guaranteed
distributions on the corresponding certificates, the corresponding notes or
both.

4. The parties hereto desire to specify the conditions precedent to
the issuance of the Note Policy by Financial Security, the payment of premium in
respect of the Note Policy, the indemnity and reimbursement to be provided to
Financial Security in respect of amounts paid by Financial Security under the
Note Policy or otherwise and certain other matters.

In consideration of the premises and of the agreements herein
contained, Financial Security, the Trust, Arcadia Financial, individually and as
Servicer, and the Seller hereby agree as follows:

<PAGE>

ARTICLE I.

DEFINITIONS

Section 1.01 DEFINITIONS. All words and phrases defined in the
Trust Agreement, the Sale and Servicing Agreement or in the Spread Account
Agreement shall have the same meanings in this Agreement. Unless otherwise
specified, if a word or phrase defined in the Trust Agreement, the Sale and
Servicing Agreement or in the Spread Account Agreement can be applied with
respect to one or more Series, such a word or phrase shall be used herein as
applied to Series 1997-C. In addition, the following words and phrases shall
have the following respective meanings:

"ACCUMULATED FUNDING DEFICIENCY" shall have the meaning provided in
Section 412 of the Code and Section 302 of ERISA, whether or not waived.

"AGREEMENT" means this Insurance and Indemnity Agreement, as the same
may be amended, modified or supplemented from time to time.

"AUTHORIZED OFFICER" means, with respect to a corporation, the
president, the chief financial officer or any vice president.

"CODE" means the Internal Revenue Code of 1986, including, unless the
context otherwise requires, the rules and regulations thereunder, as amended
from time to time.

"COMMISSION" means the Securities and Exchange Commission.

"COMMONLY CONTROLLED ENTITY" means with respect to the Trust, the
Seller or Arcadia Financial, as the case may be, each entity, whether or not
incorporated, which is affiliated with the Trust, the Seller or Arcadia
Financial, as the case may be, pursuant to Section 414(b), (c), (m) or (o) of
the Code.

"DEFAULT" means any event which results, or which with the giving of
notice or the lapse of time or both would result, in an Event of Default.

"ERISA" means the Employee Retirement Income Security Act of 1974,
including, unless the context otherwise requires, the rules and regulations
thereunder, as amended from time to time.

"EVENT OF DEFAULT" means any event of default specified in Section
5.01 of this Agreement.

"EXPIRATION DATE" means, with respect to the Note Policy, the final
date of the Term of such Note Policy, as specified therein.

"FINANCIAL SECURITY" means Financial Security Assurance Inc., a New
York stock insurance company, its successors and assigns.

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"FINANCIAL STATEMENTS" means with respect to Arcadia Financial the
audited consolidated balance sheets as of December 31, 1996, December 31, 1995
and December 31, 1994 and the related audited consolidated statements of income,
retained earnings and cash flows for the 12-month periods then ended and the
notes thereto and the unaudited balance sheets as of June 30, 1997 and June 30,
1996 and the statements of income, retained earnings and cash flows for the
fiscal quarter then ended.

"FISCAL AGENT" means the Fiscal Agent, if any, designated pursuant to
the terms of the Note Policy.

"INDENTURE COLLATERAL AGENT" means initially, The Chase Manhattan
Bank, in its capacity as collateral agent on behalf of Financial Security and
the Indenture Trustee on behalf of the Noteholders pursuant to the Indenture,
its successor in interest and any successor Indenture Collateral Agent under the
Indenture.

"INDENTURE PROPERTY" means the property pledged to the Indenture
Collateral Agent on behalf of Financial Security and the Indenture Trustee on
behalf of the Noteholders pursuant to the Indenture.

"INSURANCE AGREEMENT INDENTURE CROSS DEFAULT" means an Event of
Default specified in clause (a), (f), (g), (h) or (i) of Section 5.01.

"INVESTMENT COMPANY ACT" means the Investment Company Act of 1940,
including, unless the context otherwise requires, the rules and regulations
thereunder, as amended from time to time.

"IRS" means the Internal Revenue Service.

"LATE PAYMENT RATE" means the greater of (i) a per annum rate equal
to 3 percent in excess of Financial Security's cost of funds, determined on a
monthly basis, or (ii) a per annum rate equal to 3 percent in excess of the
arithmetic average of the prime or base lending rates publicly announced by The
Chase Manhattan Bank, N.A. (New York, New York) and Citibank, N.A. (New York,
New York), as in effect on the last day of the month for which interest is being
computed, but, in either case, in no event greater than the maximum rate
permitted by law.

"LIEN" means, as applied to the property or assets (or the income or
profits therefrom) of any Person, in each case whether the same is consensual or
nonconsensual or arises by contract, operation of law, legal process or
otherwise: (a) any mortgage, lien, pledge, attachment, charge, lease,
conditional sale or other title retention agreement, or other security interest
or encumbrance of any kind; or (b) any arrangement, express or implied, under
which such property or assets are transferred, sequestered or otherwise
identified for the purpose of subjecting or making available the same for the
payment of debt or performance of any other obligation in priority to the
payment of the general, unsecured creditors of such Person.

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"MATERIAL ADVERSE CHANGE" means, in respect of any Person, a material
adverse change in (i) the business, financial condition, results of operations,
or properties of such Person and its Subsidiaries taken as a whole, (ii) the
ability of such Person to perform its obligations under any of the Transaction
Documents to which it is a party or (iii) the ability of Financial Security or
the Trust to realize the benefits or security afforded under the Transaction
Documents.

"MULTIEMPLOYER PLAN" means a multiemployer plan (within the meaning of
Section 4001(a)(3) of ERISA) in respect of which a Commonly Controlled Entity
makes contributions or has liability.

"NOTE POLICY" means the financial guaranty insurance policy, including
any endorsements thereto, issued by Financial Security with respect to the
Notes, substantially in the form attached as Exhibit A hereto.

"NOTICE OF CLAIM" means the Notice of Claim and Certificate in the
form attached as Exhibit A to Endorsement No. 1 to the Note Policy.

"OTHER TRUST PROPERTY" means the property conveyed by the Seller to
the Trust pursuant to the Sale and Servicing Agreement and any Subsequent
Transfer Agreement.

"PBGC" means the Pension Benefit Guaranty Corporation or any successor
agency, corporation or instrumentality of the United States to which the duties
and powers of the Pension Benefit Guaranty Corporation are transferred.

"PLAN" means any pension plan (other than a Multiemployer Plan)
covered by Title IV of ERISA, which is maintained by a Commonly Controlled
Entity or in respect of which a Commonly Controlled Entity has liability.

"PORTFOLIO PERFORMANCE EVENT OF DEFAULT" means an Event of Default
specified in clause (j), (k), or (1) of Section 5.01.

"PREMIUM" means the premium payable in accordance with Section 3.02 of
this Agreement.

"PREMIUM LETTER" means the side letter between Financial Security and
Arcadia Financial dated the date hereof in respect of the premium payable by
Arcadia Financial in consideration of the issuance of the Note Policy.

"PREMIUM SUPPLEMENT" means a non-refundable premium, in addition to
the premium payable in accordance with Section 3.02 of this Agreement, payable
by Arcadia Financial to Financial Security in monthly installments commencing on
the first Distribution Date following the Premium Supplement Commencement Date
and on each Distribution Date thereafter, payable in accordance with the terms
of the Premium Letter.

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"PREMIUM SUPPLEMENT COMMENCEMENT DATE" means the date of occurrence of
an Event of Default in respect of which the Premium Supplement shall have been
declared due and payable in accordance with Section 5.02 of this Agreement.

"PREVIOUS SERIES TRANSACTION DOCUMENTS" means the transaction
documents as defined in each of the insurance and indemnity agreements related
to Olympic Automobile Receivables Trust, 1993-A, Olympic Automobile Receivables
Trust, 1993-B, Olympic Automobile Receivables Trust, 1993-C, Olympic Automobile
Receivables Trust, 1993-D, Olympic Automobile Receivables Trust, 1994-A, Olympic
Automobile Receivables Trust, 1994-B, Olympic Automobile Receivables Trust,
1995-A, Olympic Automobile Receivables Trust, 1995-B, Olympic Automobile
Receivables Trust, 1995-C, Olympic Automobile Receivables Trust, 1995-D, Olympic
Automobile Receivables Trust, 1995-E, Olympic Automobile Receivables Trust,
1996-A, Olympic Automobile Receivables Trust, 1996-B, Olympic Automobile
Receivables Trust, 1996-C, Olympic Automobile Receivables Trust, 1996-D, Olympic
Automobile Receivables Trust, 1997-A, Arcadia Automobile Receivables Trust,
1997-B and the Warehousing Notes.

"PROSPECTUS" has the meaning set forth in Section 2.04(o) of this
Agreement.

"RELATED DOCUMENTS" means the Transaction Documents except for the
Sale and Servicing Agreement.

"REGISTRATION STATEMENT" has the meaning set forth in Section 2.04(o)
of this Agreement.

"REPORTABLE EVENT" means any of the events set forth in Section
4043(b) of ERISA or the regulations thereunder.

"RESTRICTIONS ON TRANSFERABILITY" means, as applied to the property or
assets (or the income or profits therefrom) of any Person, in each case whether
the same is consensual or nonconsensual or arises by contract, operation of law,
legal process or otherwise, any material condition to, or restriction on, the
ability of such Person or any transferee therefrom to sell, assign, transfer or
otherwise liquidate such property or assets in a commercially reasonable time
and manner or which would otherwise materially deprive such Person or any
transferee therefrom of the benefits of ownership of such property or assets.

"SALE AND SERVICING AGREEMENT" means the Sale and Servicing Agreement
dated as of September 1, 1997 among the Seller, Arcadia Financial, in its
individual capacity and as Servicer, the Back-up Servicer and the Trust pursuant
to which the Initial Receivables are to be sold, serviced and administered, as
the same may be amended from time to time.

"SECURITIES ACT" means the Securities Act of 1933, including, unless
the context otherwise requires, the rules and regulations thereunder, as amended
from time to time.

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"SECURITIES EXCHANGE ACT" means the Securities Exchange Act of 1934,
including, unless the context otherwise requires, the rules and regulations
thereunder, as amended from time to time.

"SENIOR NOTE INDENTURE" means the Indenture dated as of March 12, 1997
between Olympic Financial Ltd. ("OFL") and Norwest Bank Minnesota, National
Association, as amended or supplemented, relating to OFL's $300,000,000 11 1/2%
Senior Notes due 2007.

"SERIES 1997-C" means the Series of Notes issued on the date hereof
pursuant to the Trust Agreement and the Indenture, respectively.

"SERIES OF NOTES" or "SERIES" means Series 1997-C or any, or as the
context may require, all, additional series of notes issued as described in
paragraph 3 of the Introductory Statements hereto.

"SERVICER TERMINATION SIDE LETTER" means the letter from Financial
Security to the Servicer dated as of September 18, 1997, with regard to the
renewal of the term of the Servicer.

"SPREAD ACCOUNT AGREEMENT" means the Spread Account Agreement, dated
as of March 25, 1993, as amended and restated as of June 1, 1997 as supplemented
in accordance with the terms thereof, among Arcadia Financial, the Seller,
Financial Security, the Indenture Trustee and the Collateral Agent.

"STOCK PLEDGE AGREEMENT" means the Third Amended and Restated Stock
Pledge Agreement, as amended and restated, dated as of December 3, 1996, among
Financial Security, Arcadia Financial, and the Collateral Agent, as the same may
be amended from time to time.

"SUBSIDIARY" means, with respect to any Person, any corporation of
which a majority of the outstanding shares of capital stock having ordinary
voting power for the election of directors is at the time owned by such Person
directly or through one or more Subsidiaries.

"TERM OF THE NOTE POLICY" means, with respect to the Note Policy, the
meaning provided therein.

"TERM OF THIS AGREEMENT" shall be determined as provided in Section
4.01 of this Agreement.

"TRANSACTION" means the transactions contemplated by the Transaction
Documents, including the transactions described in the Registration Statement.

"TRANSACTION DOCUMENTS" means this Agreement, the Sale and Servicing
Agreement, the Trust Agreement, the Certificate of Trust, the Indenture, the
Underwriting Agreement, the Purchase Agreement, the Premium Letter, the Stock
Pledge Agreement, the Lockbox Agreement, the Depository Agreements, the
Custodian Agreement, the Servicer Termination Side Letter, the Spread Account
Agreement and the Administration Agreement.

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"TRUST AGREEMENT" means the Trust Agreement, dated as of September 1,
1997, among the Seller, Financial Security and Wilmington Trust Company, as
Owner Trustee.

"TRUST INDENTURE ACT" means the Trust Indenture Act of 1939,
including, unless the context otherwise requires, the rules and regulations
thereunder, as amended from time to time.

"UNDERFUNDED PLAN" means any Plan that has an Underfunding.

"UNDERFUNDING" means, with respect to any Plan, the excess, if any, of
(a) the present value of all benefits under the Plan (based on the assumptions
used to fund the Plan pursuant to Section 412 of the Code) as of the most recent
valuation date over (b) the fair market value of the assets of such Plan as of
such valuation date.

"UNDERWRITERS" means Donaldson, Lufkin & Jenrette Securities
Corporation, J.P. Morgan Securities Inc., BancAmerica Securities, Inc. and Bear,
Stearns & Co. Inc.

"UNDERWRITING AGREEMENT" means the Pricing Agreement, dated September
10, 1997, among Arcadia Financial and the Seller and the Underwriters.

"WAREHOUSING NOTES" means the Notes issued pursuant to the Warehousing
Series Indenture dated as of December 3, 1996 between Arcadia Receivables
Conduit Corp., as the issuer, and Norwest Bank Minnesota, National Association,
as trustee.

ARTICLE II.

REPRESENTATIONS, WARRANTIES AND COVENANTS

Section 2.01 REPRESENTATIONS AND WARRANTIES OF THE TRUST. The Trust
represents, warrants and covenants, as of the date hereof and as of the Closing
Date, as follows:

(a) DUE ORGANIZATION AND QUALIFICATION. The Trust is duly formed and
validly existing as a Delaware statutory business trust and is in good standing
under the laws of the State of Delaware, with power and authority to own its
properties and to conduct its business. The Trust is duly qualified to do
business, is in good standing and has obtained all necessary licenses, permits,
charters, registrations and approvals (together, "approvals") necessary for the
conduct of its business as described in the Prospectus and the performance of
its obligations under the Transaction Documents, in each jurisdiction in which
the failure to be so qualified or to obtain such approvals would render the
Receivables in such jurisdiction or any Transaction Document unenforceable in
any respect or would otherwise have a material adverse effect upon the
Transaction.

(b) POWER AND AUTHORITY. The Trust has all necessary trust power and
authority to conduct its business as described in the Prospectus, to execute,
deliver and perform its obligations under this Agreement and each other
Transaction Document to which the Trust is a party and to carry out the terms of
each such agreement, and has full power and authority to issue

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<PAGE>

the Notes and pledge and assign its assets pursuant to the Indenture and has
duly authorized the issuance of the Notes and the assignment of its assets by
all necessary trust proceedings.

(c) DUE AUTHORIZATION. The execution, delivery and performance of
this Agreement and each other Transaction Document to which the Trust is a party
has been duly authorized by all necessary action on the part of the Trust and
does not require any additional approvals or consents or other action by or any
notice to or filing with any Person by or on behalf of the Trust, including,
without limitation, any governmental entity.

(d) NONCONTRAVENTION. Neither the execution and delivery of this
Agreement and each other Transaction Document to which the Trust is a party, the
consummation of the Transaction nor the satisfaction of the terms and conditions
of this Agreement and each other Transaction Document to which the Trust is a
party,

(i) conflicts with or results in any breach or violation of any
provision of the Certificate of Trust or the Trust Agreement or any law,
rule, regulation, order, writ, judgment, injunction, decree, determination
or award currently in effect having applicability to the Trust or any of
its properties, including regulations issued by an administrative agency or
other governmental authority having supervisory powers over the Trust,

(ii) constitutes a default by the Trust under or a breach of any
provision of any loan agreement, mortgage, indenture or other agreement or
instrument to which the Trust is a party or by which it or any of its
properties is or may be bound or affected, or

(iii) results in or requires the creation of any Lien upon or in
respect of any of the Trust's assets except as otherwise expressly
contemplated by the Transaction Documents.

(e) PENDING LITIGATION OR OTHER PROCEEDING. There is no action,
proceeding or investigation pending, or, to the Trust's best knowledge,
threatened, before any court, regulatory body, administrative agency, arbitrator
or governmental agency or instrumentality having jurisdiction over the Trust or
its properties: (A) asserting the invalidity of this Agreement or any other
Transaction Document to which the Trust is a party, (B) seeking to prevent the
issuance the Notes or the consummation of the Transaction, (C) seeking any
determination or ruling that might materially and adversely affect the validity
or enforceability of this Agreement or any other Transaction Document to which
the Trust is a party, (D) which might result in a Material Adverse Change with
respect to the Trust or (E) which might adversely affect the federal or state
tax attributes of the Notes or the Trust.

(f) VALID AND BINDING OBLIGATIONS. Each of the Transaction Documents
to which the Trust is a party, when executed and delivered by the Trust, and
assuming due authorization, execution and delivery by the other parties thereto,
will constitute the legal, valid and binding obligation of the Trust enforceable
in accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally and general equitable principles. The
Notes,

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<PAGE>

when executed, authenticated and delivered in accordance with the Indenture,
will be entitled to the benefits of the Indenture and will constitute legal,
valid and binding obligations of the Trust, enforceable in accordance with their
terms.

(g) NO CONSENTS. No consent, license, approval or authorization
from, or registration, filing or declaration with, any regulatory body,
administrative agency, or other governmental instrumentality, nor any consent,
approval, waiver or notification of any creditor, lessor or other
non-governmental person, is required in connection with the execution, delivery
and performance by the Trust of this Agreement or of any other Transaction
Document to which the Trust is a party, except (in each case) such as have been
obtained and are in full force and effect.

(h) COMPLIANCE WITH LAW, ETC. No practice, procedure or policy
employed or proposed to be employed by the Trust in the conduct of its business
violates any law, regulation, judgment, agreement, order or decree applicable to
the Trust which, if enforced, would result in a Material Adverse Change with
respect to the Trust.

(i) ERISA. The Trust does not maintain or contribute to, or have any
obligation to maintain or contribute to, any Plan. The Trust is not subject to
any of the provisions of ERISA.

(j) COLLATERAL. On the Closing Date, and on each Subsequent Transfer
Date, the Trust will have good and marketable title to each item of Other Trust
Property conveyed on such date and will own each such item free and clear of any
Lien (other than Liens contemplated under the Indenture) or any equity or
participation interest of any other Person.

(k) PERFECTION OF LIENS AND SECURITY INTEREST. On the Closing Date,
the Lien and security interest in favor of the Indenture Collateral Agent with
respect to Indenture Property will be perfected by the filing of financing
statements on Form WCC-1 in each jurisdiction where such recording or filing is
necessary for the perfection thereof, the delivery of the Receivable Files for
the Receivables to the Custodian, and the establishment of the Collection
Account, the Subcollection Account, the Lockbox Account, the Pre-Funding
Account, the Reserve Account and the Note Distribution Account in accordance
with the provisions of the Transaction Documents, and no other filings in any
jurisdiction or any other actions (except as expressly provided herein) are
necessary to perfect the Collateral Agent's Lien on and security interest in the
Collateral as against any third parties.

(l) SECURITY INTEREST IN FUNDS AND INVESTMENTS. Assuming the
retention of funds in the Accounts and the acquisition of Eligible Investments
in accordance with the Transaction Documents, such funds and Eligible
Investments will be subject to a valid and perfected, first priority security
interest in favor of the Collateral Agent on behalf of the Indenture Trustee (on
behalf of the Noteholders) and Financial Security.

(m) COMPLIANCE WITH INVESTMENT COMPANY ACT. The Trust is not
required to be registered as an "investment company" under the Investment
Company Act.

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(n) INCORPORATION OF CERTAIN REPRESENTATIONS AND WARRANTIES. The
representations and warranties of the Trust set forth in each Transaction
Document are (in each case) true and correct as if set forth herein.

(o) SPECIAL PURPOSE ENTITY.

(i) The capital of the Trust is adequate for the business and
undertakings of the Trust.

(ii) Except as contemplated by the Transaction Documents, the Trust is
not engaged in any business transactions with Arcadia Financial, the Seller
or any Affiliate of either of them.

(iii) The Trust's funds and assets are not, and will not be, commingled
with the funds of any other Person, except as provided in the Transaction
Documents.

(p) SOLVENCY; FRAUDULENT CONVEYANCE. The Trust is solvent and will
not be rendered insolvent by the Transaction or by the performance of its
obligations under the Transaction Documents and, after giving effect to such
Transaction, the Trust will not be left with an unreasonably small amount of
capital with which to engage in its business. The Trust does not intend to
incur, or believes that it has incurred, debts beyond its ability to pay such
debts as they mature. The Trust does not contemplate the commencement of
insolvency, bankruptcy, liquidation or consolidation proceedings or the
appointment of a receiver, liquidator, conservator, trustee or similar official
in respect of the Trust or any of its assets.

Section 2.02 AFFIRMATIVE COVENANTS OF THE TRUST. The Trust hereby
agrees that during the Term of the Agreement, unless Financial Security shall
otherwise expressly consent in writing:

(a) COMPLIANCE WITH AGREEMENTS AND APPLICABLE LAWS. The Trust will
comply with all terms and conditions of this Agreement and each other
Transaction Document to which it is a party and with all material requirements
of any law, rule or regulation applicable to it. The Trust will not cause or
permit to become effective any amendment to or modification of any of the
Transaction Documents to which it is a party unless (i) (so long as no Insurer
Default shall have occurred and be continuing) Financial Security shall have
previously approved in writing the form of such amendment or modification or
(ii) if an Insurer Default shall have occurred and be continuing, such
amendment would not adversely affect the interests of Financial Security. The
Trust shall not take any action or fail to take any action that would interfere
with the enforcement of any rights under this Agreement or the other Transaction
Documents.

(b) FINANCIAL STATEMENTS; ACCOUNTANTS' REPORTS; OTHER INFORMATION.
The Trust shall keep or cause to be kept in reasonable detail books and records
of account of the Trust's assets and business, which shall be furnished to
Financial Security upon request. The Trust shall furnish to Financial Security,
simultaneously with the delivery of such documents to the Indenture Trustee or
the Noteholders, as the case may be, copies of all reports, certificates,

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<PAGE>

statements, financial statements or notices furnished to the Indenture Trustee
or the Noteholders, as the case may be, pursuant to the Transaction Documents.

(i) ANNUAL FINANCIAL STATEMENTS. As soon as available, and in
any event within 90 days after the close of each fiscal year of the Trust,
the audited balance sheets of the Trust as of the end of such fiscal year
and the audited statements of income, changes in equityowners' equity and
cash flows of the Trust for such fiscal year, all in reasonable detail and
stating in comparative form the respective figures for the corresponding
date and period in the preceding fiscal year, prepared in accordance with
generally accepted accounting principles, consistently applied, and
accompanied by the certificate of the Trust's independent accountants (who
shall be acceptable to Financial Security) and by the certificate specified
in Section 2.02(c) hereof.

(ii) QUARTERLY FINANCIAL STATEMENTS. As soon as available, and
in any event within 45 days after the close of each of the first three
quarters of each fiscal year of the Trust, the unaudited balance sheets of
the Trust as of the end of such quarter and the unaudited statements of
income, changes in equityowners' equity and cash flows of the Trust for the
portion of the fiscal year then ended, all in reasonable detail and stating
in comparative form the respective figures for the corresponding date and
period in the preceding fiscal year, prepared in accordance with generally
accepted accounting principles consistently applied (subject to normal
year-end adjustments), and accompanied by the certificate specified in
Section 2.02(c) hereof.

(iii) ACCOUNTANTS' REPORTS. Promptly upon receipt thereof, copies
of any reports or comment letters submitted to the Trust by its independent
accountants in connection with any examination of the financial statements
of the Trust.

(iv) CERTAIN INFORMATION. Not less than ten days prior to the
date of filing with the IRS of any tax return or amendment thereto, copies
of the proposed form of such return or amendment and, promptly after the
filing or sending thereof, (i) copies of each tax return and amendment
thereto that the Trust files with the IRS and (ii) copies of all financial
statements, reports, and registration statements which the Trust files
with, or delivers to, any federal government agency, authority or body
which supervises the issuance of securities by the Trust.

(v) OTHER INFORMATION. Promptly upon the request of Financial
Security, copies of all schedules, financial statements or other similar
reports delivered to or by the Trust pursuant to the terms of this
Agreement and the other Transaction Documents and such other data as
Financial Security may reasonably request.

(c) COMPLIANCE CERTIFICATE. The Trust shall deliver to
Financial Security and, upon request, any Noteholder, concurrently with the
delivery of the financial statements required pursuant to Section 2.02(b)(i)
and (ii) hereof, a certificate signed by an Authorized Officer of the
Administrator stating that:

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<PAGE>

(i) a review of the Trust's performance under the Transaction
Documents during such period has been made under such officer's
supervision;

(ii) to the best of such individual's knowledge following
reasonable inquiry, no Default or Event of Default has occurred and is
continuing or, if a Default or Event of Default has occurred and is
continuing, specifying the nature thereof and, if the Trust has a right to
cure pursuant to Section 5.01, stating in reasonable detail the steps, if
any, being taken by the Trust to cure such Default or Event of Default or
to otherwise comply with the terms of the agreement or agreements to which
such Default or Event of Default relates; and

(iii) The financial reports submitted in accordance with Section
2.02(b)(i) or (ii) hereof, as applicable, are complete and correct in all
material respects and present fairly the financial condition and results of
operations of the Trust as of the dates and for the periods indicated, in
accordance with generally accepted accounting principles consistently
applied (subject as to interim statements to normal year-end adjustments).

(d) ACCESS TO RECORDS; DISCUSSIONS WITH OFFICERS AND
ACCOUNTANTS. The Trust shall, upon the request of Financial Security, permit
Financial Security or its authorized agents (i) to inspect the books and
records of the Trust as they may relate to the Notes, the Receivables and the
Other Trust Property, the obligations of the Trust under the Transaction
Documents, the Trust's business and the Transaction and (ii) to discuss the
affairs, finances and accounts of the Trust with any of its personnel and
representatives, including its Independent Accountants. Such inspections and
discussions shall be conducted during normal business hours and shall not
unreasonably disrupt the business of the Trust. The books and records of the
Trust will be maintained at the address of the Trust designated herein for
receipt of notices, unless the Trust shall otherwise advise the parties hereto
in writing.

(e) NOTICE OF MATERIAL EVENTS. The Trust shall promptly
inform Financial Security in writing of the occurrence of any of the following:

(i) the submission of any claim or the initiation of any legal
process, litigation or administrative or judicial investigation against the
Trust involving potential damages or penalties in an uninsured amount in
excess of $100,000 in any one instance or $500,000 in the aggregate;

(ii) any change in the location of Trust's principal office or
any change in the location of the Trust's books and records;

(iii) the occurrence of any Default or Event of Default;

(iv) the commencement or threat of any rule making or
disciplinary proceedings or any proceedings instituted by or against the
Trust in any federal, state or local court or before any governmental body
or agency, or before any arbitration board, or the promulgation of any
proceeding or any proposed or final rule which, if adversely determined,
would result in a Material Adverse Change with respect to the Trust;

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<PAGE>

(v) the commencement of any proceedings by or against the Trust
under any applicable bankruptcy, reorganization, liquidation,
rehabilitation, insolvency or other similar law now or hereafter in effect
or of any proceeding in which a receiver, liquidator, conservator, trustee
or similar official shall have been, or may be, appointed or requested for
the Trust or any of its assets;

(vi) the receipt of notice that (A) the Trust is being placed
under regulatory supervision, (B) any license, permit, charter,
registration or approval necessary for the conduct of the Trust's business
is to be, or may be, suspended or revoked, or (C) the Trust is to cease and
desist any practice, procedure or policy employed by the Trust in the
conduct of its business, and such cessation may result in a Material
Adverse Change with respect to the Trust; or

(vii) any other event, circumstance or condition that has
resulted, or has a material possibility of resulting, in a Material Adverse
Change in respect of the Trust.

(f) FURTHER ASSURANCES. The Trust will file all necessary
financing statements, assignments or other instruments, and any amendments or
continuation statements relating thereto, necessary to be kept and filed in such
manner and in such places as may be required by law to preserve and protect
fully the Lien and security interest in, and all rights of the Indenture
Collateral Agent with respect to the Indenture Property, under the Indenture.
In addition, the Trust shall, upon the request of Financial Security (so long as
no Insurer Default has occurred and is continuing), from time to time, execute,
acknowledge and deliver and, if necessary, file such further instruments and
take such further action as may be reasonably necessary to effectuate the
intention, performance and provisions of the Transaction Documents to which the
Trust is a party or to protect the interest of the Indenture Collateral Agent in
the Indenture Property under the Indenture. The Trust agrees to cooperate with
the Rating Agencies in connection with any review of the Transaction which may
be undertaken by the Rating Agencies after the date hereof.

(g) MAINTENANCE OF LICENSES. The Trust shall maintain all
licenses, permits, charters and registrations which are material to the
performance by the Trust of its obligations under this Agreement and each other
Transaction Document to which the Trust is a party or by which the Trust is
bound.

(h) RETIREMENT OF NOTES. The Trust shall, upon retirement of
the Notes furnish to Financial Security a notice of such retirement, and, upon
such retirement and the expiration of the term of the Note Policy, surrender the
Note Policy to Financial Security for cancellation.

(i) DISCLOSURE DOCUMENT. Each Prospectus delivered with respect
to the Notes shall clearly disclose that the Note Policy is not covered by the
property/casualty insurance security fund specified in Article 76 of the New
York Insurance Law. In addition, each Prospectus delivered with respect to the
Notes which include financial statements of Financial Security prepared in
accordance with generally accepted accounting principles (other than a
Prospectus that only incorporates such financial statements by reference) shall
include the following statement immediately preceding such financial statements:

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The New York State Insurance Department recognizes only
statutory accounting practices for determining and reporting
the financial condition and results of operations of an
insurance company, for determining its solvency under the
New York Insurance Law, and for determining whether its
financial condition warrants the payment of a dividend to
its stockholders. No consideration is given by the New York
State Insurance Department to financial statements prepared
in accordance with generally accepted accounting principles
in making such determinations.

(j) SPECIAL PURPOSE ENTITY.

(i) The Trust shall conduct its business solely in its own name
through its duly authorized officers or agents so as not to mislead others as to
the identity of the entity with which those others are concerned, and
particularly will use its best efforts to avoid the appearance of conducting
business on behalf of Arcadia Financial, the Seller, or any other Affiliates
thereof or that the assets of the Trust are available to pay the creditors of
Arcadia Financial, the Seller, or any other Affiliates thereof. Without limiting
the generality of the foregoing, all oral and written communications, including,
without limitation, letters, invoices, purchase orders, contracts, statements
and loan applications, will be made solely in the name of the Trust.

(ii) The Trust shall maintain trust records and books of account
separate from those of Arcadia Financial, the Seller and Affiliates of any of
them.

(iii) The Trust shall obtain proper authorization from its equity
owners of all trust action requiring such authorization, and copies of each such
authorization and the minutes or other written summary of each such meeting
shall be delivered to Financial Security within two weeks of such authorization
or meeting as the case may be.

(iv) Although the organizational expenses of the Trust have been paid
by Arcadia Financial, operating expenses and liabilities of the Trust shall be
paid from its own funds.

(v) The annual financial statements of the Trust shall disclose the
effects of the Trust's transactions in accordance with generally accepted
accounting principles and shall disclose that the assets of the Trust are not
available to pay creditors of Arcadia Financial, the Seller or any Affiliate of
any of them.

(vi) The resolutions, agreements and other instruments of the Trust
underlying the transactions described in this Agreement and in the other
Transaction Documents shall be continuously maintained by the Trust as official
records of the Trust separately identified and held apart from the records of
Arcadia Financial, the Seller and each Affiliate of any of them.

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(vii) The Trust shall maintain an arm's-length relationship with
Arcadia Financial, the Seller and each Affiliate of any of them and will not
hold itself out as being liable for the debts of any such Person.

(viii) The Trust shall keep its assets and its liabilities wholly
separate from those of all other entities, including, but not limited to,
Arcadia Financial, the Seller and each Affiliate of any of them except, in each
case, as contemplated by the Transaction Documents.

(k) CLOSING DOCUMENTS. The Trust shall provide or cause to be
provided to Financial Security an executed original copy of each document
executed in connection with the Transaction within 10 days after the Closing
Date, except that the Seller shall cause a copy of the Trust Agreement, the Sale
and Servicing Agreement, the Series 1997-C Supplement, the Indenture, the
Administration Agreement and each Transaction Document to which Financial
Security is a party to be provided to Financial Security on the Closing Date.

(l) TAX MATTERS. The Trust will take all actions necessary to ensure
that, for federal and state income tax purposes, the Trust is not taxable as an
association (or publicly traded partnership) or taxable as a corporation.

(m) SECURITIES LAWS. The Trust shall comply in all material respects
with all applicable provisions of state and federal securities laws, including
blue sky laws and the Securities Act, the Exchange Act and the Investment
Company Act and all rules and regulations promulgated thereunder for which
non-compliance would result in a Material Adverse Change with respect to the
Trust.

(n) INCORPORATION OF COVENANTS. The Trust agrees to comply with each
of the covenants of the Trust set forth in the Transaction Documents and hereby
incorporates such covenants by reference as if each were set forth herein.

Section 2.03 NEGATIVE COVENANTS OF THE TRUST. The Trust hereby
agrees that during the Term of this Agreement, unless Financial Security shall
otherwise give its prior express written consent:

(a) WAIVER; AMENDMENTS; ETC. The Trust shall not waive, modify,
amend, supplement or consent to any waiver, modification, amendment of or
supplement to, any of the provisions of the Certificate of Trust, the Trust
Agreement or any of the other Transaction Documents unless, if no Insurer
Default shall have occurred and be continuing, Financial Security shall have
consented thereto in writing.

(b) CREATION OF INDEBTEDNESS; GUARANTEES. The Trust shall not
create, incur, assume or suffer to exist any indebtedness or assume, guarantee,
endorse or otherwise be or become directly or contingently liable for the
obligations of any Person by, among other things, agreeing to purchase any
obligation of another Person, agreeing to advance funds to such Person or
causing or assisting such Person to maintain any amount of capital, except as
contemplated by the Transaction Documents.

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(d) NO LIENS. The Trust shall not, except as contemplated by the
Transaction Documents create, incur, assume or suffer to exist any Lien of any
nature upon or with respect to any of its properties or assets, now owned or
hereafter acquired, or sign or file under the Uniform Commercial Code of any
jurisdiction any financing statement that names the Trust as debtor, or sign any
security agreement authorizing any secured party thereunder to file such a
financing statement.

(e) IMPAIRMENT OF RIGHTS. The Trust shall not take any action, or
fail to take any action, if such action or failure to take action may interfere
with the enforcement of any rights under the Transaction Documents that are
material to the rights, benefits or obligations of the Indenture Trustee, the
Noteholders or Financial Security.

(f) NO MERGERS. The Trust shall not consolidate with or merge into
any Person or transfer all or any material amount of its assets to any Person
(except as contemplated by the Transaction Documents) or liquidate or dissolve.

(g) ERISA. The Trust shall not contribute or incur any obligation to
contribute to, or incur any liability in respect of, any Plan or Multiemployer
Plan.

(h) OTHER ACTIVITIES. The Trust shall not:

(i) sell, pledge, transfer, exchange or otherwise dispose of any of
its assets except as permitted under the Transaction Documents; or

(ii) engage in any business or activity except as contemplated by the
Transaction Documents and as permitted by its Certificate of Trust.

(i) INSOLVENCY. The Trust shall not commence any case, proceeding or
other action (A) under any existing or future law of any jurisdiction, domestic
or foreign, relating to bankruptcy, insolvency, reorganization or relief of
debtors, seeking to have an order for relief entered with respect to it, or
seeking reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, consolidation or other relief with respect to it or (B) seeking
appointment of a receiver, trustee, custodian or other similar official for it
or for all or any substantial part of its assets or make a general assignment
for the benefit of its creditors. The Trust shall not take any action in
furtherance of, or indicating the consent to, approval of, or acquiescence in
any of the acts set forth above. The Trust shall not admit in writing its
inability to pay its debts.

(j) SUCCESSOR PARTIES. The Trust will not remove or replace, or
cause to be removed or replaced, the Servicer, the Indenture Trustee, the Owner
Trustee or the Administrator.

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Section 2.04 REPRESENTATIONS AND WARRANTIES OF ARCADIA FINANCIAL AND
THE SELLER. Each of Arcadia Financial and the Seller represent and warrant as
of the date hereof and as of the Closing Date, as follows:

(a) DUE ORGANIZATION AND QUALIFICATION. The Seller is a corporation
duly organized and validly existing and in good standing under the laws of the
State of Delaware, with power and authority to own its properties and to conduct
its business. The Seller is duly qualified to do business, is in good standing
and has obtained all necessary licenses, permits, charters, registrations and
approvals (together, "approvals") necessary for the conduct of its business as
currently conducted and as described in the Prospectus and the performance of
its obligations under the Transaction Documents, in each jurisdiction in which
the failure to be so qualified or to obtain such approvals would render the
Receivables in such jurisdiction or any Transaction Document unenforceable in
any respect or would otherwise have a material adverse effect upon the
Transaction.

(b) POWER AND AUTHORITY. The Seller has all necessary corporate
power and authority to conduct its business as currently conducted and as
described in the Prospectus, to execute, deliver and perform its obligations
under this Agreement and each other Transaction Document to which the Seller is
a party and to carry out the terms of each such agreement, and has full power
and authority to sell and assign the Receivables and the Other Trust Property to
the Trust and has duly authorized such sale and assignment to the Trust by all
necessary corporate action.

(c) DUE AUTHORIZATION. The execution, delivery and performance of
this Agreement and each other Transaction Document to which the Seller is a
party has been duly authorized by all necessary corporate action on the part of
the Seller and does not require any additional approvals or consents or other
action by or any notice to or filing with any Person by or on behalf of the
Seller, including, without limitation, any governmental entity or the Seller's
stockholder.

(d) NONCONTRAVENTION. Neither the execution and delivery of this
Agreement and each other Transaction Document to which the Seller is a party,
the consummation of the Transaction nor the satisfaction of the terms and
conditions of this Agreement and each other Transaction Document to which the
Seller is a party,

(i) conflicts with or results in any breach or violation of any
provision of the charter or bylaws of the Seller or any law, rule,
regulation, order, writ, judgment, injunction, decree, determination or
award currently in effect having applicability to the Seller or any of its
properties, including regulations issued by an administrative agency or
other governmental authority having supervisory powers over the Seller,

(ii) constitutes a default by the Seller under or a breach of any
provision of any loan agreement, mortgage, indenture or other agreement or
instrument to which the Seller is a party or by which it or any of its
properties is or may be bound or affected, or

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<PAGE>

(iii) results in or requires the creation of any Lien upon or in
respect of any of the Seller's assets except as otherwise expressly
contemplated by the Transaction Documents.

(e) PENDING LITIGATION OR OTHER PROCEEDING. There is no action,
proceeding or investigation pending, or, to the Seller's or Arcadia Financial's
best knowledge, threatened, before any court, regulatory body, administrative
agency, arbitrator or governmental agency or instrumentality having jurisdiction
over the Seller or its properties: (A) asserting the invalidity of this
Agreement or any other Transaction Document to which the Seller is a party,
(B) seeking to prevent the issuance of the Notes or the consummation of the
Transaction, (C) seeking any determination or ruling that might materially and
adversely affect the validity or enforceability of this Agreement or any other
Transaction Document to which the Seller is a party, (D) which might result in a
Material Adverse Change with respect to the Seller or (E) which might adversely
affect the federal or state tax attributes of the Notes or the Trust.

(f) VALID AND BINDING OBLIGATIONS. Each of the Transaction
Documents to which the Seller is a party, when executed and delivered by the
Seller, and assuming due authorization, execution and delivery by the other
parties thereto, will constitute the legal, valid and binding obligation of the
Seller enforceable in accordance with its terms, except as such enforceability
may be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting creditors' rights generally and general equitable
principles. The Notes, when executed, authenticated and delivered in accordance
with the Indenture, will be entitled to the benefits of the Indenture and will
constitute legal, valid and binding obligations of the Trust, enforceable in
accordance with their terms.

(g) NO CONSENTS. No consent, license, approval or authorization
from, or registration, filing or declaration with, any regulatory body,
administrative agency, or other governmental instrumentality, nor any consent,
approval, waiver or notification of any creditor, lessor or other
non-governmental person, is required in connection with the execution, delivery
and performance by the Seller of this Agreement or of any other Transaction
Document to which the Seller is a party, except (in each case) such as have been
obtained and are in full force and effect.

(h) COMPLIANCE WITH LAW, ETC. No practice, procedure or policy
employed or proposed to be employed by the Seller in the conduct of its business
violates any law, regulation, judgment, agreement, order or decree applicable to
the Seller which, if enforced, would result in a Material Adverse Change with
respect to the Seller.

(i) GOOD TITLE; VALID TRANSFER; ABSENCE OF LIENS; SECURITY
INTEREST. Immediately prior to the sale of the Initial Receivables and related
Other Trust Property to the Trust pursuant to the Sale and Servicing Agreement,
the Seller was the owner of, and had good and marketable title to, such property
free and clear of all Liens and Restrictions on Transferability, and had full
right, corporate power and lawful authority to assign, transfer and pledge the
Initial Receivables and the related Other Trust Property. The Sale and
Servicing Agreement constitutes a valid sale, transfer and assignment of the
Other Trust Property to the

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Trust enforceable against creditors of and purchasers of the Seller. In the
event that, in contravention of the intention of the parties, the transfer of
the Other Trust Property by the Seller to the Trust is characterized as other
than a sale, such transfer shall be characterized as a secured financing, and
the Trust shall have a valid and perfected first priority security interest in
the Other Trust Property free and clear of all Liens and Restrictions on
Transferability.

(j) ACCURACY OF INFORMATION. Neither the Transaction Documents
nor any documents, agreements, instruments, schedules, certificates, statements,
cash flow schedules, number runs or other writings or data (collectively, the
"Documents") furnished to Financial Security by the Seller or Arcadia Financial
with respect to either of them, their Subsidiaries, the Receivables or the
Transaction contain any statement of a material fact which was untrue or
misleading in any material respect when made (except insofar as any Document was
corrected or superseded by a subsequent Document and Financial Security has not
detrimentally relied on the original Document). There is no fact known to the
Seller or Arcadia Financial which has a material possibility of causing a
Material Adverse Change with respect to the Seller or Arcadia Financial, or
which has a material possibility of impairing the value or marketability of the
Receivables, taken as a whole, or decreasing the probability that amounts due in
respect of the Receivables will be collected as due. Since the furnishing of
the Transaction Documents, there has been no change or any development or event
involving a prospective change known to the Seller or Arcadia Financial which
would render any representation or warranty or other statement made by either of
them in any of the Transaction Documents untrue or misleading in a material
respect.

(k) COMPLIANCE WITH INVESTMENT COMPANY ACT. The Seller is not
required to be registered as an "investment company" under the Investment
Company Act.

(l) INCORPORATION OF CERTAIN REPRESENTATIONS AND WARRANTIES. The
representations and warranties of the Seller set forth in the Transaction
Documents are (in each case) true and correct as if set forth herein.

(m) SPECIAL PURPOSE ENTITY.

(i) The capital of the Seller is adequate for the business and
undertakings of the Seller.

(ii) Other than with respect to the ownership by Arcadia Financial of
the stock of the Seller and as provided in the Previous Series Transaction
Documents, the Purchase Agreement, the Sale and Servicing Agreement, and
the Spread Account Agreement, the Seller is not engaged in any business
transactions with Arcadia Financial or any Affiliate of Arcadia Financial.

(iii) At least one director of the Seller shall be a person who is not,
and will not be, a director, officer, employee or holder of any equity
securities of Arcadia Financial or any of its Affiliates or Subsidiaries.

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(iv) The Seller's funds and assets are not, and will not be,
commingled with the funds of any other Person, except as provided in the
Transaction Documents.

(v) The by-laws of the Seller require it to maintain (A) correct and
complete minute books and records of account, and (B) minutes of the
meetings and other proceedings of its shareholders and board of directors.

(n) SOLVENCY; FRAUDULENT CONVEYANCE. The Seller is solvent and will
not be rendered insolvent by the Transaction and, after giving effect to such
Transaction, the Seller will not be left with an unreasonably small amount of
capital with which to engage in its business. The Seller does not intend to
incur, or believe that it has incurred, debts beyond its ability to pay such
debts as they mature. The Seller does not contemplate the commencement of
insolvency, bankruptcy, liquidation or consolidation proceedings or the
appointment of a receiver, liquidator, conservator, trustee or similar official
in respect of the Seller or any of its assets. The amount of consideration
being received by the Seller upon the sale of the Initial Receivables and
related Other Trust Property and contemplated to be received upon the Sale of
the Subsequent Receivables and related Other Trust Property constitutes
reasonably equivalent value and fair consideration for interest in such
Receivables and such Other Trust Property. The Seller is not transferring the
Other Trust Property to the Trust, as provided in the Transaction Documents,
with any intent to hinder, delay or defraud any of the Seller's creditors.

(O) REGISTRATION STATEMENT; PROSPECTUS. The Seller has filed with
the Securities and Exchange Commission (the "Commission") a registration
statement on Form S-3 (No. 333-18021), including a preliminary prospectus and
prospectus supplement for the registration of the Notes under the Securities
Act, has filed such amendments thereto, and such amended preliminary
prospectuses and prospectus supplements as may have been required to the date
hereof, and will file such additional amendments thereto and such amended
prospectuses and prospectus supplements as may hereafter be required. Such
registration statement (as amended, if applicable) and the prospectus, together
with the prospectus supplement relating to the Notes, constituting a part
thereof (including in each case all documents, if any, incorporated by reference
therein and the information, if any, deemed to be part thereof pursuant to the
rules and regulations of the Commission under the Securities Act (the "Rules and
Regulations"), as from time to time amended or supplemented pursuant to the
Securities Act or otherwise, are hereinafter referred to as the "Registration
Statement" and the "Prospectus," respectively, except that if any revised
prospectus or prospectus supplement shall be provided by the Seller for use in
connection with the offering of the Notes which differs from the Prospectus
filed with the Commission pursuant to Rule 424 of the Rules and Regulations
(whether or not such revised prospectus is required to be filed by the Seller
pursuant to Rule 424 of the Rules and Regulations), the term "Prospectus" shall
refer to such revised prospectus and prospectus supplement from and after the
time it is first provided to the Underwriters for such use. The Registration
Statement at the time they became effective complied, and at each time that the
Prospectus is provided to the Underwriters for use in connection with the
offering or sale of any Note will comply, in all material respects with the
requirements of the Securities Act and the Rules and Regulations. The
Registration Statement and the Prospectus at the time the Registration Statement
became effective did not and on the date hereof does not, contain an

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<PAGE>

untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading and
the Prospectus at the time it was first provided to the Underwriters for use in
connection with the offering of the Notes did not, and on the date hereof does
not, contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein in light of the circumstances
under which they were made not misleading, except that the representations and
warranties in this subparagraph shall not apply to statements in or omissions
from the Registration Statements or the Prospectus or any preliminary prospectus
made in reliance upon information furnished to the Seller in writing by
Financial Security expressly for use therein or the financial statements
(including the related notes thereto) of Financial Security.

(p) ERISA. The Seller is in compliance with ERISA and has not
incurred and does not reasonably expect to incur any liabilities to the PBGC
under ERISA in connection with any Plan or Multiemployer Plan or to contribute
now or in the future in respect of any Plan or Multiemployer Plan.

(q) PLEDGE OF SHARES. The shares of stock of the Seller which have
been pledged pursuant to the Stock Pledge Agreement constitute all of the issued
and outstanding shares of the Seller.

(r) PERFECTION OF LIENS AND SECURITY INTEREST. On the Closing Date,
the Lien and security interest in favor of the Indenture Collateral Agent with
respect to Indenture Property will be perfected by the filing of financing
statements on Form UCC-1 in each jurisdiction where such recording or filing is
necessary for the perfection thereof, the delivery of the Receivable Files for
the Receivables to the Custodian, and the establishment of the Collection
Account, the Subcollection Account, the Lockbox Account, the Pre-Funding
Account, the Reserve Account and the Note Distribution Account in accordance
with the provisions of the Transaction Documents, and no other filings in any
jurisdiction or any other actions (except as expressly provided herein) are
necessary to perfect the Collateral Agent's Lien on and security interest in the
Collateral as against any third parties.

(s) SECURITY INTEREST IN FUNDS AND INVESTMENTS. Assuming the
retention of funds in the Accounts and the acquisition of Eligible Investments
in accordance with the Transaction Documents, such funds and Eligible
Investments will be subject to a valid and perfected, first priority security
interest in favor of the Collateral Agent on behalf of the Indenture Trustee (on
behalf of the Noteholders) and Financial Security.

Section 2.05 AFFIRMATIVE COVENANTS OF ARCADIA FINANCIAL AND THE
SELLER. Each of Arcadia Financial and the Seller hereby agree that during the
Term of the Agreement, unless Financial Security shall otherwise expressly
consent in writing:

(a) COMPLIANCE WITH AGREEMENTS AND APPLICABLE LAWS. The Seller will
comply with all terms and conditions of this Agreement and each other
Transaction Document to which it is a party and with all material requirements
of any law, rule or regulation applicable to it. The Seller will not cause or
permit to become effective any amendment to or modification of any of the
Transaction Documents to which it is a party unless (i) (so long as no Insurer
Default shall

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have occurred and be continuing) Financial Security shall have previously
approved in writing the form of such amendment or modification or (ii) if an
Insurer Default shall have occurred and be continuing, such amendment would not
adversely affect the interests of Financial Security. The Seller shall not take
any action or fail to take any action that would interfere with the enforcement
of any rights under this Agreement or the other Transaction Documents.

(b) CORPORATE EXISTENCE. The Seller shall maintain its corporate
existence and shall at all times continue to be duly organized under the laws of
Delaware and duly qualified and duly authorized (as described in Sections
2.04(a), (b) and (c) hereof) and shall conduct its business in accordance with
the terms of its corporate charter and bylaws.

(c) FINANCIAL STATEMENTS; ACCOUNTANTS' REPORTS; OTHER INFORMATION.
The Seller shall keep or cause to be kept in reasonable detail books and records
of account of the Seller's assets and business, and shall clearly reflect
therein the transfer of the Receivables and the Other Trust Property to the
Trust and the sale of the Receivables as a sale to the Trust of the Seller's
interest in the Receivables and the Other Trust Property. The Seller shall
furnish to Financial Security, simultaneously with the delivery of such
documents to the Trustee or the Noteholders, as the case may be, copies of all
reports, certificates, statements, financial statements or notices furnished to
the Trustee or the Noteholders, as the case may be, pursuant to the Transaction
Documents. The Seller shall furnish to Financial Security as soon as available,
and in any event within 90 days after the close of each fiscal year of the
Seller, the unaudited balance sheet of the Seller as of the end of such fiscal
year and the unaudited statements of income, changes in shareholders' equity and
cash flows of the Seller for such fiscal year, all in reasonable detail and
stating in comparative form the respective figures for the preceding fiscal
year, prepared in accordance with generally accepted accounting principles,
consistently applied.

(d) COMPLIANCE CERTIFICATE. The Seller shall deliver to Financial
Security, within 90 days after the close of each fiscal year of the Seller, a
certificate signed by an Authorized Officer of the Seller stating that:

(i) a review of the Seller's performance under the Transaction
Documents during such period has been made under such officer's
supervision; and

(ii) to the best of such individual's knowledge following reasonable
inquiry, no Default or Event of Default has occurred, or if a Default or
Event of Default has occurred, specifying the nature thereof and, if the
Seller has or had a right to cure pursuant to Section 5.01, stating in
reasonable detail the steps, if any, taken or being taken by the Seller to
cure such Default or Event of Default or to otherwise comply with the terms
of the Transaction Document to which such Default or Event of Default
relates.

(iii) the financial reports submitted in accordance with Section
2.05(c) hereof, are complete and correct in all material respects and
present fairly the financial condition and results of operations of the
Seller as of the dates and for the periods indicated, in accordance with
generally accepted accounting principles consistently applied.

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<PAGE>

(e) ACCESS TO RECORDS; DISCUSSIONS WITH OFFICERS AND ACCOUNTANTS.
The Seller shall, upon the request of Financial Security, permit Financial
Security or its authorized agents (i) to inspect the books and records of the
Seller as they may relate to the Notes, the Receivables and the Other Trust
Property, the obligations of the Seller under the Transaction Documents, the
Seller's business and the Transaction and (ii) to discuss the affairs, finances
and accounts of the Seller with any of its officers, directors and
representatives, including its Independent Accountants. Such inspections and
discussions shall be conducted during normal business hours and shall not
unreasonably disrupt the business of the Seller. The books and records of the
Seller will be maintained at the address of the Seller designated herein for
receipt of notices, unless the Seller shall otherwise advise the parties hereto
in writing.

(f) NOTICE OF MATERIAL EVENTS. The Seller shall promptly inform
Financial Security in writing of the occurrence of any of the following:

(i) the submission of any claim or the initiation of any legal
process, litigation or administrative or judicial investigation against the
Seller involving potential damages or penalties in an uninsured amount in
excess of $5,000 in any one instance or $25,000 in the aggregate;

(ii) any change in the location of Seller's principal office or any
change in the location of the Seller's books and records;

(iii) the occurrence of any Default or Event of Default;

(iv) the commencement or threat of any rule making or disciplinary
proceedings or any proceedings instituted by or against the Seller in any
federal, state or local court or before any governmental body or agency, or
before any arbitration board, or the promulgation of any proceeding or any
proposed or final rule which, if adversely determined, would result in a
Material Adverse Change with respect to the Seller or the Trust;

(v) the commencement of any proceedings by or against the Seller
under any applicable bankruptcy, reorganization, liquidation,
rehabilitation, insolvency or other similar law now or hereafter in effect
or of any proceeding in which a receiver, liquidator, conservator, trustee
or similar official shall have been, or may be, appointed or requested for
the Seller or any of its assets;

(vi) the receipt of notice that (A) the Seller is being placed under
regulatory supervision, (B) any license, permit, charter, registration or
approval necessary for the conduct of the Seller's business is to be, or
may be, suspended or revoked, or (C) the Seller is to cease and desist any
practice, procedure or policy, employed by the Seller in the conduct of its
business, and such cessation may result in a Material Adverse Change with
respect to the Seller or the Trust; or

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(vii) any other event, circumstance or condition that has resulted, or
has a material possibility of resulting, in a Material Adverse Change in
respect of the Seller, or the Trust.

(g) FURTHER ASSURANCES. The Seller will file all necessary financing
statements, assignments or other instruments, and any amendments or continuation
statements relating thereto, necessary to be kept and filed in such manner and
in such places as may be required by law to preserve and protect fully the Lien
and security interest in, and all rights of the Trust with respect to Other
Trust Property, under the Sale and Servicing Agreement. In addition, the Seller
shall, upon the request of Financial Security (so long as no Insurer Default has
occurred and is continuing), from time to time, execute, acknowledge and deliver
and, if necessary, file such further instruments and take such further action as
may be reasonably necessary to effectuate the intention, performance and
provisions of the Transaction Documents to which the Seller is a party or to
protect the interest of the Trust in the Receivables under the Sale and
Servicing Agreement. The Seller agrees to cooperate with the Rating Agencies in
connection with any review of the Transaction which may be undertaken by the
Rating Agencies after the date hereof.

(h) MAINTENANCE OF LICENSES. The Seller shall maintain all licenses,
permits, charters and registrations which are material to the performance by the
Seller of its obligations under this Agreement and each other Transaction
Document to which the Seller is a party or by which the Seller is bound.

(i) DISCLOSURE DOCUMENT. Each Prospectus delivered with respect to
the Notes shall clearly disclose that the Note Policy is not covered by the
property/casualty insurance security fund specified in Article 76 of the New
York Insurance Law. In addition, each Prospectus delivered with respect to the
Notes which includes financial statements of Financial Security prepared in
accordance with generally accepted accounting principles (other than a
Prospectus that only incorporates such financial statements by reference) shall
include the following statement immediately preceding such financial statements:

(j) SPECIAL PURPOSE ENTITY.

(i) The Seller shall conduct its business solely in its own name
through its duly authorized officers or agents so as not to mislead others
as to the identity of the entity with which those others are concerned, and
particularly will use its best efforts to

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<PAGE>

avoid the appearance of conducting business on behalf of Arcadia Financial
or any other Affiliate thereof or that the assets of the Seller are
available to pay the creditors of Arcadia Financial or any Affiliate
thereof. Without limiting the generality of the foregoing, all oral and
written communications, including, without limitation, letters, invoices,
purchase orders, contracts, statements and loan applications, will be made
solely in the name of the Seller.

(ii) The Seller shall maintain corporate records and books of
account separate from those of Arcadia Financial and the other Affiliates
thereof.

(iii) The Seller shall obtain proper authorization from its board
of directors of all corporate action requiring such authorization, meetings
of the board of directors of the Seller shall be held not less frequently
than three times per annum and copies of the minutes of each such board
meeting shall be delivered to Financial Security within two weeks of such
meeting.

(iv) The Seller shall obtain proper authorization from its
shareholders of all corporate action requiring shareholder approval,
meetings of the shareholders of the Seller shall be held not less
frequently than one time per annum and copies of each such authorization
and the minutes of each such shareholder meeting shall be delivered to
Financial Security within two weeks of such authorization or meeting, as
the case may be.

(v) Although the organizational expenses of the Seller have been
paid by Arcadia Financial, operating expenses and liabilities of the Seller
shall be paid from its own funds.

(vi) The annual financial statements of the Seller shall disclose
the effects of the Seller's transactions in accordance with generally
accepted accounting principles and shall disclose that the assets of the
Seller are not available to pay creditors of Arcadia Financial or any other
Affiliate thereof.

(vii) The resolutions, agreements and other instruments of the
Seller underlying the transactions described in this Agreement and in the
other Transaction Documents shall be continuously maintained by the Seller
as official records of the Seller separately identified and held apart from
the records of Arcadia Financial and each other Affiliate thereof.

(viii) The Seller shall maintain an arm's-length relationship with
Arcadia Financial and the other Affiliates thereof and will not hold itself
out as being liable for the debts of Arcadia Financial or any Affiliate
thereof.

(ix) The Seller shall keep its assets and its liabilities wholly
separate from those of all other entities, including, but not limited to
Arcadia Financial and the other Affiliates thereof except, in each case, as
contemplated by the Transaction Documents.

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(k) CLOSING DOCUMENTS. The Seller shall provide or cause to be
provided to Financial Security an executed original copy of each document
executed in connection with the Transaction within 10 days after the Closing
Date, except that the Seller shall cause a copy of the Trust Agreement, the Sale
and Servicing Agreement, the Series 1997-C Supplement, the Indenture, the
Administration Agreement and each Transaction Document to which Financial
Security is a party to be provided to Financial Security on the Closing Date.

(l) SUBSEQUENT RECEIVABLES; GOOD TITLE; VALID TRANSFER; ABSENCE OF
LIENS; SECURITY INTEREST. Immediately prior to the sale to the Trust pursuant
to a Subsequent Transfer Agreement, the Seller will be the owner of, and shall
have good and marketable title to, the Subsequent Receivables transferred
thereby and the related Other Trust Property free and clear of all Liens and
Restrictions on Transferability, and shall have full right, corporate power and
lawful authority to assign, transfer and pledge such property.

(m) INCORPORATION OF COVENANTS. The Seller agrees to comply with
each of the Seller's covenants set forth in the Transaction Documents and hereby
incorporates such covenants by reference as if each were set forth herein.

Section 2.06 NEGATIVE COVENANTS OF ARCADIA FINANCIAL AND THE SELLER.
Each of Arcadia Financial and the Seller hereby agrees that during the Term of
this Agreement, unless Financial Security shall otherwise give its prior express
written consent:

(a) WAIVER; AMENDMENTS, ETC. The Seller shall not waive, modify,
amend, supplement or consent to any waiver, modification, amendment of or
supplement to, any of the provisions of any of the Transaction Documents or
Previous Series Transaction Documents or of its certificate of incorporation or
by-laws (i) unless, if no Insurer Default shall have occurred and be
continuing, Financial Security shall have consented thereto in writing or (ii)
if an Insurer Default shall have occurred and be continuing, which would
adversely affect the interests of Financial Security.

(b) CREATION OF INDEBTEDNESS; GUARANTEES. The Seller shall not
create, incur, assume or suffer to exist any indebtedness or assume, guarantee,
endorse or otherwise be or become directly or contingently liable for the
obligations of any Person by, among other things, agreeing to purchase any
obligation of another Person, agreeing to advance funds to such Person or
causing or assisting such Person to maintain any amount of capital, except as
contemplated by the Transaction Documents or as contemplated by the documents
relating to a Series of Notes.

(d) NO LIENS. The Seller shall not, except as contemplated by the
Transaction Documents or as contemplated by the documents relating to a Series
of Notes, create, incur, assume or suffer to exist any Lien of any nature upon
or with respect to any of its properties or assets, now owned or hereafter
acquired, or sign or file under the Uniform Commercial Code of any jurisdiction
any financing statement that names the Seller as debtor, or sign any security
agreement authorizing any secured party thereunder to file such a financing
statement.

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(e) ISSUANCE OF STOCK. The Seller shall not issue any shares of
capital stock or rights, warrants or options in respect of its capital stock or
securities convertible into or exchangeable for its capital stock, other than
the shares of common stock which have been pledged to Financial Security under
the Seller Stock Pledge Agreement.

(f) IMPAIRMENT OF RIGHTS. The Seller shall not take any action, or
fail to take any action, if such action or failure to take action may interfere
with the enforcement of any rights under the Transaction Documents that are
material to the rights, benefits or obligations of the Trust, the Indenture
Trustee, the Noteholders or Financial Security.

(g) NO MERGERS. The Seller shall not consolidate with or merge into
any Person or transfer all or any material amount of its assets to any Person
(except as contemplated by the Transaction Documents or the documents relating
to a Series of Notes).

(h) ERISA. The Seller shall not contribute or incur any obligation
to contribute to, or incur any liability in respect of, any Plan or
Multiemployer Plan.

(i) OTHER ACTIVITIES. The Seller shall not:

(i) sell, pledge, transfer, exchange or otherwise dispose of any of
its assets except as permitted under the Transaction Documents or the
documents relating to a Series of Notes; or

(ii) engage in any business or activity except as contemplated by the
Transaction Documents or as contemplated by the documents relating to a
Series of Notes and as permitted by its certificate of incorporation.

(j) INSOLVENCY. The Seller shall not commence any case, proceeding
or other action (A) under any existing or future law of any jurisdiction,
domestic or foreign, relating to bankruptcy, insolvency, reorganization or
relief of debtors, seeking to have an order for relief entered with respect to
it, or seeking reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, consolidation or other relief with respect to it or the Trust or
(B) seeking appointment of a receiver, trustee, custodian or other similar
official for it or for the Trust or for all or any substantial part of its
assets or the Collateral related to any or all Series, or make a general
assignment for the benefit of its creditors. The Seller shall not take any
action in furtherance of, or indicating the consent to, approval of, or
acquiescence in any of the acts set forth above. The Seller shall not admit in
writing its inability to pay its debts.

(k) DIVIDENDS. The Seller shall not declare or make payment of (i)
any dividend or other distribution on any shares of its capital stock, or (ii)
any payment on account of the purchase, redemption, retirement or acquisition of
any option, warrant or other right to acquire shares of its capital stock,
unless (in each case) at the time of such declaration or payment (and after
giving effect thereto) no amount payable by the Seller under any Transaction
Document with respect to any Series is then due and owing but unpaid.

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Section 2.07 REPRESENTATIONS AND WARRANTIES OF ARCADIA FINANCIAL.
Arcadia Financial represents and warrants, as of the date hereof and as of the
Closing Date, as follows:

(a) DUE ORGANIZATION AND QUALIFICATION. Arcadia Financial and each
of its Subsidiaries is a corporation, duly organized, validly existing and in
good standing under the laws of the State of its respective incorporation with
power and authority to own its properties and conduct its business. Arcadia
Financial and each of its Subsidiaries is duly qualified to do business and is
in good standing in each jurisdiction in which the failure to be so qualified
would render any of the Receivables unenforceable in any respect or would
otherwise have a material adverse effect upon the Transaction. Arcadia
Financial and each of its Subsidiaries has obtained all licenses, permits,
charters, registrations and approvals necessary for the conduct of its business
as currently conducted and as described in the Prospectus and for the
performance of its obligations under the Transaction Documents.

(b) POWER AND AUTHORITY. Arcadia Financial has all necessary
corporate power and authority to conduct its business as currently conducted and
as described in the Prospectus, to execute, deliver and perform its obligations
under this Agreement and each other Transaction Document to which it is a party
and to carry out the terms of each such agreement.

(c) DUE AUTHORIZATION. The execution, delivery and performance of
this Agreement and each other Transaction Document to which Arcadia Financial is
a party has been duly authorized by all necessary corporate action and does not
require any additional approvals or consents or other action by or any notice to
or filing with any Person, including, without limitation, any governmental
entity or Arcadia Financial's stockholders.

(d) NONCONTRAVENTION. Neither the execution and delivery of this
Agreement and each other Transaction Document to which Arcadia Financial is a
party, the consummation of the Transaction, nor the satisfaction of the terms
and conditions of this Agreement and each other Transaction Document to which
Arcadia Financial is a party,

(i) conflicts with or results in any breach or violation of any
provision of the corporate charter or bylaws of Arcadia Financial or any
law, rule, regulation, order, writ, judgment, injunction, decree,
determination or award currently in effect having applicability to Arcadia
Financial or any of its properties, including regulations issued by an
administrative agency or other governmental authority having supervisory
powers over Arcadia Financial,

(ii) constitutes a default by Arcadia Financial under or a breach of
any provision of any loan agreement, mortgage, indenture or other agreement
or instrument to which Arcadia Financial or any of its Subsidiaries is a
party or by which it or any of its or their properties is or may be bound
or affected, or

(iii) results in or requires the creation of any Lien upon or in
respect of any of Arcadia Financial's assets, except as otherwise expressly
contemplated by the Transaction Documents.

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(e) PENDING LITIGATION OR OTHER PROCEEDING. There is no action,
proceeding or investigation pending, or, to Arcadia Financial's best knowledge,
threatened, before any court, regulatory body, administrative agency, or other
governmental instrumentality having jurisdiction over Arcadia Financial or its
properties: (A) asserting the invalidity of this Agreement or any other
Transaction Document to which Arcadia Financial is a party, (B) seeking to
prevent the issuance of the Notes, or the consummation of the Transaction,
(C) seeking any determination or ruling that might materially and adversely
affect the validity or enforceability of, this Agreement or any other
Transaction Document to which Arcadia Financial is a party, (D) which might
result in a Material Adverse Change with respect to Arcadia Financial or
(E) which might adversely affect the federal or state tax attributes of the
Notes or the Trust.

(f) VALID AND BINDING OBLIGATIONS. The Purchase Agreement
constitutes a valid sale, transfer, and assignment of the Receivables and Other
Trust Property to the Seller, enforceable against creditors of and purchasers
from Arcadia Financial. Each of the other Transaction Documents to which
Arcadia Financial is a party when executed and delivered by Arcadia Financial,
and assuming the due authorization, execution and delivery by the other parties
thereto, will constitute the legal, valid and binding obligation of Arcadia
Financial enforceable in accordance with its respective terms, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors' rights generally and
general equitable principles.

(g) NO CONSENTS. No consent, license, approval or authorization
from, or registration, filing or declaration with, any regulatory body,
administrative agency, or other governmental instrumentality, nor any consent,
approval, waiver or notification of any creditor, lessor or other
non-governmental person, is required in connection with the execution, delivery
and performance by Arcadia Financial of this Agreement or of any other
Transaction Document to which Arcadia Financial is a party, except (in each
case) such as have been obtained and are in full force and effect.

(h) FINANCIAL STATEMENTS. The Financial Statements of Arcadia
Financial, copies of which have been furnished to Financial Security, (i) are,
as of the dates and for the periods referred to therein, complete and correct in
all material respects, (ii) present fairly the financial condition and results
of operations of Arcadia Financial as of the dates and for the periods indicated
and (iii) have been prepared in accordance with generally accepted accounting
principles consistently applied, except as noted therein (subject as to interim
statements to normal year-end adjustments and the absence of notes). Since the
date of the most recent Financial Statements, there has been no material adverse
change in such financial condition or results of operations. Except as
disclosed in the Financial Statements, Arcadia Financial is not subject to any
contingent liabilities or commitments that, individually or in the aggregate,
have a reasonable likelihood of causing a Material Adverse Change in respect of
Arcadia Financial.

(i) COMPLIANCE WITH LAW, ETC. No practice, procedure or policy
employee or proposed to be employed by Arcadia Financial in the conduct of its
business violates any law, regulation, judgment, agreement, order or decree
applicable to Arcadia Financial which, if enforced, would result in a Material
Adverse Change with respect to Arcadia Financial.

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(j) TAXES. Arcadia Financial has, and each of its Subsidiaries have,
filed all federal and state tax returns and paid all taxes to the extent that
such taxes have become due. Any taxes, fees and other governmental charges
payable by Arcadia Financial in connection with the Transaction, the execution
and delivery of the Transaction Documents and the issuance of the Notes have
been paid or shall have been paid at or prior to the Closing Date.

(k) ERISA. Arcadia Financial is in compliance with ERISA and has not
incurred and does not reasonably expect to incur any liabilities to the PBGC
under ERISA in connection with any Plan or Multiemployer Plan or to contribute
now or in the future in respect of any Plan or Multiemployer Plan except in
accordance with the provisions of Section 2.9(e) hereof.

(l) INCORPORATION OF CERTAIN REPRESENTATIONS AND WARRANTIES. Arcadia
Financial represents and warrants to Financial Security that the representations
and warranties of Arcadia Financial set forth in the Transaction Documents are
(in each case) true and correct as if set forth herein.

Section 2.08 AFFIRMATIVE COVENANTS OF ARCADIA FINANCIAL. Arcadia
Financial hereby agrees that during the Term of the Agreement, unless Financial
Security shall otherwise expressly consent in writing:

(a) COMPLIANCE WITH AGREEMENTS AND APPLICABLE LAWS. Arcadia
Financial will comply with all terms and conditions of this Agreement and each
other Transaction Document to which it is a party and all material requirements
of any law, rule or regulation applicable to it. Arcadia Financial will not
cause or permit to become effective any amendment to or modification of any
Transaction Document to which it is a party (i) unless, so long as no Insurer
Default shall have occurred and be continuing, Financial Security shall have
previously approved in writing the form of such amendment or modification or
(ii) if an Insurer Default shall have occurred and be continuing, such
amendment would not adversely affect the interests of Financial Security.
Arcadia Financial shall not take any action or fail to take any action that
would interfere with the enforcement of any rights under this Agreement or the
other Transaction Documents.

(b) CORPORATE EXISTENCE. Arcadia Financial shall maintain its
corporate existence and shall at all times continue to be duly organized under
the laws of Minnesota and duly qualified and duly authorized (as described in
Sections 2.07(a), (b) and (c) hereof) and shall conduct its business in
accordance with the terms of its corporate charter and bylaws.

(c) FINANCIAL STATEMENTS; ACCOUNTANTS' REPORTS; OTHER INFORMATION.
Arcadia Financial shall keep or cause to be kept in reasonable detail books and
records of account of Arcadia Financial's assets and business. Arcadia
Financial, so long as it shall be the Servicer, shall furnish to Financial
Security, simultaneously with the delivery of such documents to the Owner
Trustee, Indenture Trustee or the Noteholders, as the case may be, copies of all
reports, certificates, statements or notices furnished to the Owner Trustee,
Indenture Trustee or the Noteholders, as the case may be, pursuant to the
Transaction Documents. Arcadia Financial shall also furnish or cause to be
furnished to Financial Security:

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(i) ANNUAL FINANCIAL STATEMENTS. As soon as available, and in
any event within 90 days after the close of each fiscal year of Arcadia
Financial, the audited balance sheets of Arcadia Financial and its
subsidiaries as of the end of such fiscal year and the audited consolidated
statements of income, changes in shareholders' equity and cash flows of
Arcadia Financial for such fiscal year, all in reasonable detail and
stating in comparative form the respective figures for the corresponding
date and period in the preceding fiscal year, prepared in accordance with
generally accepted accounting principles, consistently applied, and
accompanied by the certificate of Arcadia Financial's independent
accountants (which, so long as no Insurer Default shall have occurred and
be continuing, shall be acceptable to Financial Security) and by the
certificate specified in Section 2.08(d) hereof.

(ii) QUARTERLY FINANCIAL STATEMENTS. As soon as available, and
in any event within 45 days after the close of each of the first three
quarters of each fiscal year of Arcadia Financial, the unaudited
consolidated balance sheets of Arcadia Financial as of the end of such
quarter and the unaudited consolidated statements of income, changes in
shareholders' equity and cash flows of Arcadia Financial for the portion of
the fiscal year then ended, all in reasonable detail and stating in
comparative form the respective figures for the corresponding date and
period in the preceding fiscal year, prepared in accordance with generally
accepted accounting principles consistently applied (subject to normal
year-end adjustments), and accompanied by the certificate specified in
Section 2.08(d) hereof.

(iii) ACCOUNTANTS' REPORTS. Promptly upon receipt thereof, copies
of any reports submitted to Arcadia Financial by its independent
accountants in connection with any examination of the financial statements
of Arcadia Financial.

(iv) CERTAIN INFORMATION. Promptly after the filing or sending
thereof, copies of all proxy statements, financial statements, reports and
registration statements which Arcadia Financial files, or delivers to, the
IRS, the Commission, or any other federal government agency, authority or
body which supervises the issuance of securities by Arcadia Financial or
any national securities exchange.

(d) COMPLIANCE CERTIFICATE. Arcadia Financial shall deliver to
Financial Security within 90 days after the close of each fiscal year of Arcadia
Financial, a certificate signed by an Authorized Officer of Arcadia Financial
stating that:

(i) a review of Arcadia Financial's performance under the
Transaction Documents during such period has been made under such officer's
supervision;

(ii) to the best of such individual's knowledge following
reasonable inquiry, no Default or Event of Default has occurred, or if a
Default or Event of Default has occurred, specifying the nature thereof
and, if Arcadia Financial has or had a right to cure pursuant to Section
5.01 hereof, stating in reasonable detail the steps, if any, taken or being
taken by Arcadia Financial to cure such Default or Event of Default or to
otherwise comply

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with the terms of the Transaction Document to which such Default or Event of
Default relates; and

(iii) the financial statements submitted in accordance with Section
2.08(c) hereof, as applicable, are complete and correct in all material
respects and present fairly the financial condition and results of
operations of Arcadia Financial as of the dates and for the periods
indicated, in accordance with generally accepted accounting principles
consistently applied (subject as to interim statements to normal year-end
adjustments and the absence of notes).

(e) ACCESS TO RECORDS; DISCUSSIONS WITH OFFICERS AND ACCOUNTANTS.
Arcadia Financial shall, upon the request of Financial Security, permit
Financial Security or its authorized agents (i) to inspect the books and
records of Arcadia Financial as they may relate to the Notes, the Receivables,
the obligations of Arcadia Financial as Servicer under the Transaction
Documents, its business and the Transaction and (ii) to discuss the affairs,
finances and accounts of Arcadia Financial with any of its officers, directors
and representatives, including its Independent Accountants. Such inspections and
discussions shall be conducted during normal business hours and shall not
unreasonably disrupt the business of Arcadia Financial. The books and records
of Arcadia Financial will be maintained at the address of Arcadia Financial
designated herein for receipt of notices, unless Arcadia Financial shall
otherwise advise the parties hereto in writing.

(f) NOTICE OF MATERIAL EVENTS. Arcadia Financial shall promptly
inform Financial Security in writing of the occurrence of any of the following:

(i) the submission of any claim or the initiation of any legal
process, litigation or administrative or judicial investigation against
Arcadia Financial involving potential damages or penalties in an uninsured
amount in excess of $10,000 in any one instance or $25,000 in the
aggregate;

(ii) any change in the location of Arcadia Financial's principal
office or any change in the location of the Arcadia Financial's books and
records;

(iii) the occurrence of any Default or Event of Default;

(iv) the commencement or threat of any rule making or disciplinary
proceedings or any proceedings instituted by or against Arcadia Financial
in any federal, state or local court or before any governmental body or
agency, or before any arbitration board, or the promulgation of any
proceeding or any proposed or final rule which, if adversely determined,
would result in a Material Adverse Change with respect to Arcadia
Financial;

(v) the commencement of any proceedings by or against Arcadia
Financial under any applicable bankruptcy, reorganization, liquidation,
rehabilitation, insolvency or other similar law now or hereafter in effect
or of any proceeding in which a receiver,

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liquidator, conservator, trustee or similar official shall have been, or
may be, appointed or requested for Arcadia Financial or any of its assets;

(vi) the receipt of notice that (A) Arcadia Financial is being placed
under regulatory supervision, (B) any license, permit, charter,
registration or approval necessary for the conduct of Arcadia Financial's
business is to be, or may be, suspended or revoked, or (C) Arcadia
Financial is to cease and desist any practice, procedure or policy employed
by Arcadia Financial in the conduct of its business, and such cessation may
result in a Material Adverse Change with respect to Arcadia Financial; or

(vii) any other event, circumstance or condition that has resulted, or
has a material possibility of resulting, in a Material Adverse Change in
respect of Arcadia Financial.

(g) MAINTENANCE OF LICENSES. Arcadia Financial shall maintain all
licenses, permits, charters and registrations which are material to the
performance by Arcadia Financial of its obligations under this Agreement and
each other Transaction Document to which Arcadia Financial is a party or by
which Arcadia Financial is bound.

(h) ERISA. Arcadia Financial shall give Financial Security prompt
notice of each of the following events (but in no event more than 30 days after
the occurrence of the event): (i) an Accumulated Funding Deficiency, (ii) the
failure to make a required contribution to a Plan or Multiemployer Plan, (iii)
a Reportable Event, (iv) any action by a Commonly Controlled Entity to
terminate any Plan or withdraw from any Multiemployer Plan, (v) any action by
the PBGC to terminate or appoint a trustee to administer a Plan, (vi) the
reorganization or insolvency of any Multiemployer Plan and (vii) an aggregate
Underfunding for all Underfunded Plans in excess of $100,000. In addition,
Arcadia Financial shall promptly (but in no case more than 30 days following
issuance or receipt by the Commonly Controlled Entity) provide to Financial
Security a copy of all correspondence between a Commonly Controlled Entity and
the PBGC, IRS, Department of Labor or the administrators of a Multiemployer Plan
relating to any of the events described in the preceding sentence or the
underfunded status, termination or possible termination of a Plan or a
Multiemployer Plan.

(i) THIRD-PARTY BENEFICIARY. Arcadia Financial agrees that Financial
Security shall have all rights of a third-party beneficiary in respect of the
Sale and Servicing Agreement, it being understood that the remedies of Financial
Security with respect to the representations and warranties set forth in Section
2.4(b) thereof and the covenants set forth in Section 3.6(a) thereof shall be
limited to the remedies set forth in the Sale and Servicing Agreement.

(j) INCORPORATION OF COVENANTS. Arcadia Financial agrees to comply
with each of Arcadia Financial's covenants set forth in the Transaction
Documents and hereby incorporates such covenants by reference as if each were
set forth herein.

Section 2.09 NEGATIVE COVENANTS OF ARCADIA FINANCIAL. Arcadia
Financial hereby agrees that during the Term of this Agreement, unless Financial
Security shall otherwise give its express written consent:

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(a) RESTRICTIONS ON LIENS. Arcadia Financial shall not create, incur
or suffer to exist, or agree to create, incur or suffer to exist, or consent to
cause or permit in the future (upon the happening of a contingency or otherwise)
the creation, incurrence or existence of any Lien or Restriction on
Transferability on the Receivables and the Other Trust Property except for the
Liens in favor of the Seller, the Trust and the Indenture Collateral Agent for
the benefit of the Indenture Trustee and Financial Security contemplated by the
Transaction Documents and the Restrictions on Transferability imposed by the
Purchase Agreement and the Sale and Servicing Agreement.

(b) IMPAIRMENT OF RIGHTS. Arcadia Financial shall not take any
action, or fail to take any action, if such action or failure to take action may
interfere with the enforcement of any rights under the Transaction Documents
that are material to the rights, benefits or obligations of the Seller, the
Trust, the Indenture Trustee, the Noteholders or Financial Security.

(c) LIMITATION ON MERGERS. Arcadia Financial shall not consolidate
with or merge with or into any Person or transfer all or any material part of
its assets to any Person (except as contemplated by the Transaction Documents)
or liquidate or dissolve, provided that Arcadia Financial may consolidate with,
merge with or into, or transfer all or a material part of its assets to, another
corporation if (i) the acquiror of its assets, or the corporation surviving
such merger or consolidation, shall be organized and existing under the laws of
any state and shall be qualified to transact business in each jurisdiction in
which failure to qualify would render any Transaction Document unenforceable or
would result in a Material Adverse Change in respect of Arcadia Financial or the
Trust Property; (ii) after giving effect to such consolidation, merger or
transfer of assets, no Default or Event of Default shall have occurred or be
continuing; (iii) such acquiring or surviving entity can lawfully perform the
obligations of Arcadia Financial under the Transaction Documents and shall
expressly assume in writing all of the obligations of Arcadia Financial,
including, without limitation, its obligations under the Transaction Documents;
and (iv) such acquiring or surviving entity and the consolidated group of which
it is a part shall each have a net worth immediately subsequent to such
consolidation, merger or transfer of assets at least equal to the net worth of
Arcadia Financial immediately prior to such consolidation, merger or transfer of
assets; and Arcadia Financial shall give Financial Security written notice of
any such consolidation, merger or transfer of assets on the earlier of: (A) the
date upon which any publicly available filing or release is made with respect to
such action or (B) 10 Business Days prior to the date of consummation of such
action. Arcadia Financial shall furnish to Financial Security all information
requested by it that is reasonably necessary to determine compliance with this
paragraph.

(d) WAIVER; AMENDMENTS, ETC. Arcadia Financial shall not waive,
modify, amend, supplement or consent to any waiver, modification, amendment of
or supplement to, any of the provisions of any of the Transaction Documents
without the prior written consent of Financial Security (i) unless, so long as
no Insurer Default shall have occurred and be continuing, Financial Security
shall have consented thereto in writing or (ii) if an Insurer Default shall
have occurred and be continuing, which would adversely affect the interests of
Financial Security.

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(e) ERISA. Arcadia Financial shall not contribute or incur any
obligation to contribute to, or incur any liability in respect of, any Plan or
Multiemployer Plan, except that Arcadia Financial may make such a contribution
or incur such a liability provided that neither Arcadia Financial nor any
Commonly Controlled Entity will:

(i) terminate any Plan so as to incur any material liability to the
PBGC;

(ii) knowingly participate in any "prohibited transaction" (as defined
in ERISA) involving any Plan or Multiemployer Plan or any trust created
thereunder which would subject any of them to a material tax or penalty on
prohibited transactions imposed under Section 4975 of the Code or ERISA;

(iii) fail to pay to any Plan or Multiemployer Plan any contribution
which it is obligated to pay under the terms of such Plan or Multiemployer
Plan, if such failure would cause such Plan to have any material
Accumulated Funding Deficiency, whether or not waived; or

(iv) allow or suffer to exist any occurrence of a Reportable Event, or
any other event or condition, which presents a material risk of termination
by the PBGC of any Plan or Multiemployer Plan, to the extent that the
occurrence or nonoccurrence of such Reportable Event or other event or
condition is within the control of it or any Commonly Controlled Entity.

(f) INSOLVENCY. Arcadia Financial shall not commence any case,
proceeding or other action (A) under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking reorganization, arrangement,
adjustment, winding-up, liquidation, dissolution, consolidation or other relief
with respect to the Seller or (B) seeking appointment of a receiver, trustee,
custodian or other similar official for the Seller. Arcadia Financial shall not
take any action in furtherance of, or indicating the consent to, approval of, or
acquiescence in any of the acts set forth above.

ARTICLE III.

THE NOTE POLICY; REIMBURSEMENT; INDEMNIFICATION

Section 3.01 CONDITIONS PRECEDENT TO ISSUANCE OF THE NOTE POLICY.
Financial Security agrees to issue the Note Policy subject to satisfaction of
the conditions set forth below.

(a) The obligation of Financial Security to issue the Note Policy is
subject to the following having occurred or being true (as the case may be):
(i) Financial Security shall have received evidence satisfactory to it that the
Seller shall have assigned, conveyed and transferred, or caused to be assigned,
conveyed and transferred, the Initial Receivables to the Trust, (ii) the Seller
shall have created a valid security interest in, and Lien on, the Receivables in
favor of the Trust, (iii) the Trust shall have created a valid security
interest in, and Lien on, the Indenture Property in favor of the Indenture
Collateral Agent on behalf of the Indenture Trustee (on behalf

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of the Noteholders) and Financial Security, (iv) the initial Premium shall have
been paid in accordance with Section 3.02 hereof, (v) the representations and
warranties of the Trust, the Seller and of Arcadia Financial and the Servicer
set forth or incorporated by reference in this Agreement shall be true and
correct on and as of the Closing Date, and (vi) each Transaction Document shall
be in full force and effect and no Default thereunder shall have occurred and be
continuing.

(b) The obligation of Financial Security to issue the Note Policy is
further subject to the condition precedent that Financial Security shall have
received on the Closing Date, or, in its sole and absolute discretion, received
the opportunity to review prior to and on the Closing Date, the following, each
dated the Closing Date and in full force and effect on such date, except as
otherwise provided herein, in form and substance satisfactory to Financial
Security and its counsel:

(i) a certificate of an Authorized Officer of each of the Seller and
Arcadia Financial stating that nothing has come to the attention of such
entity to indicate that the Registration Statement or the Prospectus, on
the date the Registration Statement became effective, contained an untrue
statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading, or that the Prospectus on any date on which it was forwarded to
the Underwriter for use in connection with the offering of the Notes
contained, or on the Closing Date contains, any untrue statement of a
material fact or omits to state a material fact necessary in order to make
the statements made therein, in light of the circumstances under which they
were made, not misleading;

(ii) copies, certified to be true copies by an Authorized Officer of
the Owner Trustee, of (i) the resolutions of the board of directors of the
Owner Trustee authorizing the execution, delivery and performance by the
Owner Trustee of this Agreement and each other Transaction Document to
which the Owner Trustee is a party and all transactions and documents
contemplated hereby and thereby, and of all other documents evidencing any
other necessary action of the Owner Trustee (which certification shall
state that such resolutions have not been modified, are in full force and
effect and constitute the only resolutions adopted by the Owner Trustee's
board of directors or any committee thereof with respect thereto and (ii)
the Certificate of Trust, certified by the Secretary of State or other
appropriate official of the State of Delaware;

(iii) copies, certified to be true copies by an Authorized Officer of
the Seller, of (i) the resolutions of the board of directors of the Seller
authorizing the execution, delivery and performance of this Agreement and
each other Transaction Document to which the Seller is a party and all
transactions and documents contemplated hereby and thereby, and of all
other documents evidencing any other necessary action of the Seller (which
certification shall state that such resolutions have not been modified, are
in full force and effect and constitute the only resolutions adopted by the
Seller's board of directors or any committee thereof with respect thereto),
(ii) the corporate charter of the Seller and (iii) the by-laws, as
amended, of the Seller;

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(iv) copies, certified to be true copies by an Authorized Officer of
Arcadia Financial, of (i) the resolutions of the board of directors of
Arcadia Financial authorizing the execution, delivery and performance of
this Agreement and each other Transaction Document to which Arcadia
Financial is a party and all other transactions and documents contemplated
hereby and thereby, and of all documents evidencing any other necessary
action of Arcadia Financial (which certification shall state that such
resolutions have not been modified, are in full force and effect and
constitute the only resolutions adopted by Arcadia Financial's board of
directors or any committee thereof with respect thereto), (ii) the
corporate charter of Arcadia Financial and (iii) the by-laws, as amended,
of Arcadia Financial;

(v) a certificate of an Authorized Officer of the Owner Trustee
stating that (i) all consents, licenses and approvals necessary for the
Owner Trustee to execute, deliver and perform this Agreement, the other
Transaction Documents to which the Owner Trustee is a party and all other
documents and instruments on the part of the Owner Trustee to be delivered
pursuant hereto or thereto have been obtained, and (ii) all such consents,
licenses and approvals are in full force and effect, the Owner Trustee has
not received any notice of any proceeding for the revocation of any such
license, charter, permit or approval, and, to the Owner Trustee's
knowledge, there is no threatened action or proceeding or any basis
therefor;

(vi) a certificate of an Authorized Officer of the Seller stating that
(i) all consents, licenses and approvals necessary for the Seller to
execute, deliver and perform this Agreement, the other Transaction
Documents to which the Seller is a party and all other documents and
instruments on the part of the Seller to be delivered pursuant hereto or
thereto have been obtained, and (ii) all such consents, licenses and
approvals are in full force and effect, the Seller has not received any
notice of any proceeding for the revocation of any such license, charter,
permit or approval, and, to the Seller's knowledge, there is no threatened
action or proceeding or any basis therefor;

(vii) a certificate of an Authorized Officer of Arcadia Financial
stating that (i) all consents, licenses and approvals necessary for
Arcadia Financial to execute, deliver and perform this Agreement, the other
Transaction Documents to which Arcadia Financial is a party and all other
documents and instruments on the part of Arcadia Financial to be delivered
pursuant hereto or thereto have been obtained, and (ii) all such consents,
licenses and approvals are in full force and effect, Arcadia Financial has
not received any notice of any proceeding for the revocation of any such
license, charter, permit or approval, and, to Arcadia Financial's
knowledge, there is no threatened action or proceeding or any basis
therefor;

(viii) a certificate of an Authorized Officer of the Owner Trustee
certifying (i) the names and true signatures of the officers of the Owner
Trustee executing and delivering this Agreement, the other Transaction
Documents to which the Owner Trustee is a party and the other documents to
be executed and delivered by the Owner Trustee hereunder and thereunder,
(ii) that approval by the Owner Trustee's equity holders of the

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execution and delivery of this Agreement, the other Transaction Documents and
all other such documents to be executed and delivered, by the Owner Trustee
hereunder, has been obtained or is not required, and (iii) that no action for
the dissolution of the Owner Trustee has been adopted or contemplated and that
no such proceedings have been commenced or are contemplated;

(ix) a certificate of an Authorized Officer of the Seller certifying
(i) the names and true signatures of the officers of the Seller executing and
delivering this Agreement, the other Transaction Documents to which the Seller
is a party and the other documents to be executed and delivered by the Seller
hereunder and thereunder, (ii) that approval by the Seller's stockholder of the
execution and delivery of this Agreement, the other Transaction Documents and
all other such documents to be executed and delivered, by the Seller hereunder,
has been obtained or is not required, and (iii) that no resolution for the
dissolution of the Seller has been adopted or contemplated and that no such
proceedings have been commenced or are contemplated;

(x) a certificate of an Authorized Officer of Arcadia Financial
certifying (i) the names and true signatures of the officers of Arcadia
Financial executing and delivering this Agreement, the other Transaction
Documents to which Arcadia Financial is a party and the other documents to be
executed and delivered by Arcadia Financial hereunder and thereunder, (ii) that
approval by Arcadia Financial's stockholders of the execution and delivery of
this Agreement, the other Transaction Documents and all other such documents to
be executed and delivered, by Arcadia Financial hereunder, has been obtained or
is not required, and (iii) that no resolution for the dissolution of Arcadia
Financial has been adopted or contemplated and that no such proceedings have
been commenced or are contemplated;

(xi) a certificate of an Authorized Officer of the Trust to the effect
that (x) the representations and warranties of the Trust set forth or
incorporated by reference in this Agreement are true and correct on and as of
the Closing Date and (y) confirming that the conditions precedent set forth
herein with respect to the Trust are satisfied;

(xii) a certificate of an Authorized Officer of the Seller to the
effect that (x) the representations and warranties of the Seller set forth or
incorporated by reference in this Agreement are true and correct on and as of
the Closing Date and (y) confirming that the conditions precedent set forth
herein with respect to the Seller are satisfied;

(xiii) a certificate of an Authorized Officer of Arcadia Financial to
the effect that (x) the representations and warranties of Arcadia Financial set
forth or incorporated by reference in this Agreement are true and correct on and
as of the Closing Date, and (y) confirming that the conditions precedent set
forth herein with respect to Arcadia Financial are satisfied;

(xiv) favorable opinions of counsel and special Texas counsel to the
Seller and Arcadia Financial in form and substance satisfactory to Financial
Security and its counsel;

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(xv) a favorable opinion of counsel to each of the Trust, the
Owner Trustee, the Indenture Trustee and the Collateral Agent and the
Indenture Collateral Agent, in form and substance satisfactory to Financial
Security and its counsel;

(xvi) evidence that amounts due and payable Financial Security
under Section 3.02 of this Agreement have been paid or that acceptable
provisions therefor have been made;

(xvii) a fully executed copy of each of the Transaction Documents;

(xviii) evidence that all actions necessary or, in the opinion of
Financial Security, desirable to perfect and protect the interests
transferred by the Sale and Servicing Agreement, the liens and security
interests created with respect to the Spread Account, the Liens and
security interest created in favor of the Indenture Collateral Agent with
respect to the Indenture Property pursuant to the Indenture, including,
without limitation, the filing of any financing statements required by
Financial Security or its counsel, have been taken;

(xix) a certificate or opinion of Independent Accountants
addressed to Financial Security in form and substance satisfactory to
Financial Security;

(xx) evidence that the Seller shall have deposited, or caused to
have been deposited, the deposits required under the Sale and Servicing
Agreement and the Spread Account Agreement, and any other deposits required
to be made on the Closing Date under the Transaction Documents to which the
Seller is a party; and

(xxi) such other documents, instruments, approvals (and, if
requested by Financial Security, certified duplicates of executed copies
thereof) or opinions as Financial Security may reasonably request.

(c) ISSUANCE OF RATINGS. Financial Security shall have received
confirmation that the risk secured by the Note Policy constitutes an investment
grade risk by Standard and Poor's Corporation ("S&P") and an insurable risk by
Moody's Investors Service, Inc. ("Moody's") and that the Class A-1 Notes, when
issued, will be rated "A-1+" by S&P and "P-1" by Moody's, and that the Class A-2
Notes, the Class A-3 Notes, the Class A-4 Notes and the Class A-5 Notes, when
issued, will be rated "AAA" by S&P and "Aaa" by Moody's.

(d) DELIVERY OF DOCUMENTS. Financial Security shall have
received evidence satisfactory to it that delivery has been made to the Trust or
to a Custodian of the Receivable Files required to be so delivered pursuant to
Section 2.2 of the Sale and Servicing Agreement.

(e) NO DEFAULT. No Default or Event of Default shall have
occurred and be continuing.

(f) NO LITIGATION, ETC. No suit, action or other proceeding,
investigation, or injunction or final judgment relating thereto, shall be
pending or threatened before any court or

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governmental agency in which it is sought to restrain or prohibit or to obtain
damages or other relief in connection with any of the Transaction Documents or
the consummation of the Transaction.

(f) LEGALITY. No statute, rule, regulation or order shall have been
enacted, entered or deemed applicable by any government or governmental or
administrative agency or court which would make the transactions contemplated by
any of the Transaction Documents illegal or otherwise prevent the consummation
thereof.

(h) SATISFACTION OF CONDITIONS OF UNDERWRITING AGREEMENT. All
conditions in the Underwriting Agreement to the Underwriter's obligation to
purchase the Notes (other than the issuance of the Note Policy) shall have been
concurrently satisfied.

Section 3.02 PAYMENT OF FEES AND PREMIUM.

(a) LEGAL FEES. On the Closing Date, Arcadia Financial shall pay or
cause to be paid legal fees and disbursements incurred by Financial Security in
connection with the issuance of the Note Policy up to an amount not to exceed
$20,000.00, plus disbursements.

(b) RATING AGENCY FEES. The initial fees of S&P and Moody's with
respect to the Notes and the Transaction shall be paid by Arcadia Financial in
full on the Closing Date. All periodic and subsequent fees of S&P or Moody's
with respect to, and directly allocable to, the Notes shall be for the account
of, shall be billed to, and shall be paid by Arcadia Financial. The fees for
any other rating agency shall be paid by the party requesting such other
agency's rating, unless such other agency is a substitute for S&P or Moody's in
the event that S&P or Moody's is no longer rating the Notes, in which case the
cost for such agency shall be paid by Arcadia Financial.

(c) AUDITORS' FEES. In the event that Financial Security's auditors
are required to provide information or any consent in connection with the
Registration Statement fees therefor shall be paid by Arcadia Financial. Any
additional fees incurred by Financial Security after the Closing Date in respect
of any additional consents shall be paid by Arcadia Financial on demand.

(d) PREMIUM. In consideration of the issuance by Financial Security
of the Note Policy, Arcadia Financial shall pay Financial Security the Premium
and Premium Supplement, if any, as and when due in accordance with the terms of
the Premium Letter. The Premium and Premium Supplement, if any, paid hereunder
or under the Sale and Servicing Agreement shall be nonrefundable without regard
to whether Financial Security makes any payment under the Note Policy or any
other circumstances relating to the Notes or provision being made for payment of
the Notes prior to maturity. Although the Premium is fully earned by Financial
Security as of the Closing Date, the Premium shall be payable in periodic
installments as provided in the Premium Letter. Anything herein or in any of
the Transaction Documents notwithstanding, upon the occurrence of an Event of
Default, the entire outstanding balance of further installments of the Premium
and Premium Supplement shall be immediately due and payable. All payments of
Premium and Premium Supplement, if any, shall be made by wire transfer to an
account

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designated from time to time by Financial Security by written notice to the
Seller and Arcadia Financial.

Section 3.03 REIMBURSEMENT AND ADDITIONAL PAYMENT OBLIGATION. Each
of Arcadia Financial and the Trust agrees to pay to Financial Security as
follows:

(a) a sum equal to the total of all amounts paid by Financial
Security under the Note Policy;

(b) any and all charges, fees, costs and expenses which Financial
Security may reasonably pay or incur, including, but not limited to, attorneys'
and accountants' fees and expenses, in connection with (i) any accounts
established to facilitate payments under the Note Policy to the extent Financial
Security has not been immediately reimbursed on the date that any amount is paid
by Financial Security under the Note Policy, (ii) the administration,
enforcement, defense or preservation of any rights in respect of any of the
Transaction Documents, including defending, monitoring or participating in any
litigation, proceeding (including any insolvency or bankruptcy proceeding in
respect of any Transaction participant or any Affiliate thereof), restructuring
or engaging in any protective measures or monitoring activities relating to any
of the Transaction Documents, any party to any of the Transaction Documents or
the Transaction, (iii) the foreclosure against, sale or other disposition of
any collateral securing any obligations under any of the Transaction Documents
or otherwise in the discretion of Financial Security, or pursuit of any other
remedies under any of the Transaction Documents, to the extent such costs and
expenses are not recovered from such foreclosure, sale or other disposition,
(iv) any amendment, waiver or other action with respect to, or related to, any
Transaction Document whether or not executed or completed, (v) preparation of
bound volumes of the Transaction Documents, (vi) any review or investigation
made by Financial Security in those circumstances where its approval or consent
is sought under any of the Transaction Documents, (vii) any federal, state or
local tax (other than taxes payable in respect of the gross income of Financial
Security) or other governmental charge imposed in connection with the issuance
of the Note Policy, and (viii) Financial Security reserves the right to charge
a reasonable fee as a condition to executing any amendment, waiver or consent
proposed in respect of any of the Transaction Documents (for the purpose of this
paragraph (b), costs and expenses shall include a reasonable allocation of
compensation and overhead attributable to time of employees of Financial
Security spent in connection with the actions described in the foregoing clauses
(ii) and (iii));

(c) interest on any and all amounts described in this Section 3.03
from the date payable to or paid by Financial Security until payment thereof in
full, and interest on any and all amounts described in Section 3.02, in each
case payable to Financial Security at the Late Payment Rate per annum; and

(d) any payments made by Financial Security on behalf of, or advanced
to, the Seller, Arcadia Financial, the Indenture Trustee, the Owner Trustee or
the Trust including, without limitation, any amounts payable by Arcadia
Financial in its capacity as Servicer or by the Trust, in respect of the Notes
and any other amounts owed pursuant to any Transaction Documents; and any
payments made by Financial Security as, or in lieu of, any servicing,

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administration, management, trustee, custodial, collateral agency or
administrative fees payable, in the sole discretion of Financial Security to
third parties in connection with the Transaction.

All such amounts are to be immediately due and payable without demand.
Financial Security shall notify Arcadia Financial of amounts due hereunder.

Section 3.04 CERTAIN OBLIGATIONS NOT RECOURSE TO ARCADIA FINANCIAL;
RECOURSE TO TRUST PROPERTY.

(a) Notwithstanding any provision of Section 3.03 to the contrary,
the payment obligations provided in Section 3.03(a), b(iii) and (d) (to the
extent of advances to the Trust or to the Indenture Trustee in respect of
payments on the Notes), in each case, to the extent that such payment
obligations do not arise from any failure or default in the performance by
Arcadia Financial or the Seller of any of its obligations under the Transaction
Documents, and any interest on the foregoing in accordance with Section 3.03(c),
shall not be recourse to Arcadia Financial, but shall be payable in the manner
and in accordance with priorities provided in the Sale and Servicing Agreement.

(b) Financial Security covenants and agrees that it shall not be
entitled to any payment from the Trust Property with respect to amounts owed
under this Agreement other than as set forth in Section 4.6 and Section 9.1 of
the Sale and Servicing Agreement and Section 5.06 of the Indenture.

Section 3.05 INDEMNIFICATION.

(a) INDEMNIFICATION BY ARCADIA FINANCIAL. In addition to any and
all rights of reimbursement, indemnification, subrogation and any other rights
pursuant hereto or under law or in equity, Arcadia Financial agrees to pay, and
to protect, indemnify and save harmless, Financial Security and its officers,
directors, shareholders, employees, agents and each Person, if any, who controls
Financial Security within the meaning of either Section 15 of the Securities Act
or Section 20 of the Exchange Act from and against any and all claims, losses,
liabilities (including penalties), actions, suits, judgments, demands, damages,
costs or expenses (including, without limitation, fees and expenses of
attorneys, consultants and auditors and reasonable costs of investigations) of
any nature arising out of or relating to the Transaction by reason of:

(i) any statement, omission or action (other than of or by Financial
Security) in connection with the offering, issuance, sale or delivery of
the Notes;

(ii) the negligence, bad faith, willful misconduct, misfeasance
malfeasance or theft committed by any director, officer, employee or agent
of the Trust the Seller or Arcadia Financial in connection with the
Transaction;

(iii) the violation by the Trust, the Seller or Arcadia Financial of
an, federal, state or foreign law, rule or regulation, or any judgment,
order or decree applicable to it;

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(iv) the breach by the Trust, the Seller or Arcadia Financial of any
representation, warranty or covenant under any of the Transaction Documents
or the occurrence, in respect of the Trust, the Seller or Arcadia
Financial, under any of the Transaction Documents of any event of default
or any event which, with the giving of notice or the lapse of time or both,
would constitute any event of default; or

(v) any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement or the Prospectus or in any
amendment or supplement thereto or any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, except insofar as such claims
arise out of or are based upon any untrue statement or omission
(A) included in the Registration Statement or the Prospectus and furnished
by Financial Security in writing expressly for use therein (all such
information so furnished being referred to herein as "Financial Security
Information"), it being understood that the Financial Security Information
is limited to the information included under the caption "Financial
Security Assurance Inc.," and the financial statements of Financial
Security included in the Registration Statements or the Prospectus or
(B) included in the information set forth under the caption "Underwriting"
in the Prospectus.

(b) CONDUCT OF ACTIONS OR PROCEEDINGS. If any action or proceeding
(including any governmental investigation) shall be brought or asserted against
Financial Security, any officer, director, shareholder, employee or agent of
Financial Security or any Person controlling Financial Security (individually,
an "Indemnified Party" and, collectively, the "Indemnified Parties") in respect
of which indemnity may be sought from Arcadia Financial hereunder, Financial
Security shall promptly notify Arcadia Financial in writing, and Arcadia
Financial shall assume the defense thereof, including the employment of counsel
satisfactory to Financial Security and the payment of all expenses. The
Indemnified Party shall have the right to employ separate counsel in any such
action and to participate in the defense thereof at the expense of the
Indemnified Party; PROVIDED, HOWEVER, that the fees and expenses of such
separate counsel shall be at the expense of Arcadia Financial if (i) Arcadia
Financial has agreed to pay such fees and expenses, (ii) Arcadia Financial
shall have failed to assume the defense of such action or proceeding and employ
counsel satisfactory to Financial Security in any such action or proceeding or
(iii) the named parties to any such action or proceeding (including any
impleaded parties) include both the Indemnified Party and the Trust, the Seller
or Arcadia Financial, and the Indemnified Party shall have been advised by
counsel that there may be one or more legal defenses available to it which are
different from or additional to those available to the Trust, the Seller or
Arcadia Financial (in which case, if the Indemnified Party notifies Arcadia
Financial in writing that it elects to employ separate counsel at the expense of
Arcadia Financial, Arcadia Financial shall not have the right to assume the
defense of such action or proceeding on behalf of such Indemnified Party, it
being understood, however, that Arcadia Financial shall not, in connection with
any one such action or proceeding or separate but substantially similar or
related actions or proceedings in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the reasonable fees and
expenses of more than one separate form of attorneys at any time for the
Indemnified Parties, which firm shall be designated in writing by Financial
Security). Arcadia Financial shall not be liable for any settlement of any such
action or

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proceeding effected without its written consent to the extent that any such
settlement shall be prejudicial to it, but, if settled with its written consent,
or if there be a final judgment for the plaintiff in any such action or
proceeding with respect to which Arcadia Financial shall have received notice in
accordance with this subsection (c) Arcadia Financial agrees to indemnify and
hold the Indemnified Parties harmless from and against any loss or liability by
reason of such settlement or judgment.

(c) CONTRIBUTION. To provide for just and equitable contribution if
the indemnification provided by Arcadia Financial is determined to be
unavailable for any Indemnified Party (other than due to application of this
Section), Arcadia Financial shall contribute to the losses incurred by the
Indemnified Party on the basis of the relative fault of Arcadia Financial, on
the one hand, and the Indemnified Party, on the other hand.

Section 3.06 PAYMENT PROCEDURE. In the event of the incurrence by
Financial Security of any cost or expense or any payment by Financial Security
for which it is entitled to be reimbursed or indemnified as provided above
Arcadia Financial agrees to accept the voucher or other evidence of payment as
prima facie evidence of the propriety thereof and the liability therefor to
Financial Security. All payments to be made to Financial Security under this
Agreement shall be made to Financial Security in lawful currency of the United
States of America in immediately available funds to the account number provided
in the Premium Letter before 1:00 p.m. (New York, New York time) on the date
when due or as Financial Security shall otherwise direct by written notice to
Arcadia Financial. In the event that the date of any payment to Financial
Security or the expiration of any time period hereunder occurs on a day which is
not a Business Day, then such payment or expiration of time period shall be made
or occur on the next succeeding Business Day with the same force and effect as
if such payment was made or time period expired on the scheduled date of payment
or expiration date. Payments to be made to Financial Security under this
Agreement shall bear interest at the Late Payment Rate from the date when due to
the date paid.

Section 3.07 SUBROGATION. Subject only to the priority of payment
provisions of the Sale and Servicing Agreement, each of the Trust, the Indenture
Trustee, the Seller and Arcadia Financial acknowledges that, to the extent of
any payment made by Financial Security pursuant to the Note Policy, Financial
Security is to be fully subrogated to the extent of such payment and any
additional interest due on any late payment, to the rights of the Noteholders to
any moneys paid or payable in respect of the Notes under the Transaction
Documents or otherwise. Each of the Trust, the Indenture Trustee, the Seller
and Arcadia Financial agrees to such subrogation and, further, agrees to execute
such instruments and to take such actions as, in the sole judgment of Financial
Security, are necessary to evidence such subrogation and to perfect the rights
of Financial Security to receive any such moneys paid or payable in respect of
the Notes under the Transaction Documents or otherwise.

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ARTICLE IV.

FURTHER AGREEMENTS; MISCELLANEOUS

Section 4.01 EFFECTIVE DATE: TERM OF AGREEMENT. This Agreement
shall take effect on the Closing Date and shall remain in effect until the later
of (a) such time as Financial Security is no longer subject to a claim under the
Note Policy and the Note Policy shall have been surrendered to Financial
Security for cancellation and (b) all amounts payable to Financial Security and
the Noteholders under the Transaction Documents and under the Notes have been
paid in full; PROVIDED, HOWEVER, that the provisions of Sections 3.02, 3.03,
3.04, 3.05, 3.06 and 4.03 hereof shall survive any termination of this
Agreement.

Section 4.02 FURTHER ASSURANCES AND CORRECTIVE INSTRUMENTS. To the
extent permitted by law, each of the Trust, the Seller and Arcadia Financial
agree that it will, from time to time, execute, acknowledge and deliver, or
cause to be executed, acknowledged and delivered, such supplements hereto and
such further instruments as Financial Security may request and as may be
required in Financial Security's judgment to effectuate the intention of or
facilitate the performance of this Agreement.

Section 4.03 OBLIGATIONS ABSOLUTE.

(a) The obligations of the Trust, the Seller and Arcadia Financial
hereunder shall be absolute and unconditional, and shall be paid or performed
strictly in accordance with this Agreement under all circumstances irrespective
of:

(i) any lack of validity or enforceability of, or any amendment or
other modifications of, or waiver with respect to any of the Transaction
Documents, the Notes or the Note Policy; PROVIDED, that Financial Security
shall not have consented to any such amendment, modification or waiver;

(ii) any exchange or release of any other obligations hereunder;

(iii) the existence of any claim, setoff, defense, reduction, abatement
or other right which the Trust, the Seller or Arcadia Financial may have at
any time against Financial Security or any other Person;

(iv) any document presented in connection with the Note Policy proving
to be forged, fraudulent, invalid or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect;

(v) any payment by Financial Security under the Note Policy against
presentation of a certificate or other document which does not strictly
comply with terms of the Note Policy;

(vi) any failure of the Seller or the Trust to receive the proceeds
from the Sale of the Notes;

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(vii) any breach by the Trust, the Seller or Arcadia Financial of any
representation, warranty or covenant contained in any of the Transaction
Documents; or

(viii) any other circumstances, other than payment in full, which might
otherwise constitute a defense available to, or discharge of, the Trust,
the Seller or Arcadia Financial in respect of any Transaction Document.

(b) The Trust, the Seller and Arcadia Financial and any and all
others who are now or may become liable for all or part of the obligations of
any of them under this Agreement agree to be bound by this Agreement and (i) to
the extent permitted by law, waive and renounce any and all redemption and
exemption rights and the benefit of all valuation and appraisement privileges
against the indebtedness and obligations evidenced by any Transaction Document
or by any extension or renewal thereof; (ii) waive presentment and demand for
payment, notices of nonpayment and of dishonor, protest of dishonor and notice
of protest; (iii) waive all notices in connection with the delivery and
acceptance hereof and all other notices in connection with the performance,
default or enforcement of any payment hereunder except as required by the
Transaction Documents other than this Agreement; (iv) waive all rights of
abatement, diminution, postponement or deduction, or to any defense other than
payment, or to any right of setoff or recoupment arising out of any breach under
any of the Transaction Documents, by any party thereto or any beneficiary
thereof, or out of any obligation at any time owing to the Trust, the Seller or
Arcadia Financial; (v) agree that its liabilities hereunder shall, except as
otherwise expressly provided in this Section 4.03, be unconditional and without
regard to any setoff, counterclaim or the liability of any other Person for the
payment hereof; (vi) agree that any consent, waiver or forbearance hereunder
with respect to an event shall operate only for such event and not for any
subsequent event; (vii) consent to any and all extensions of time that may be
granted by Financial Security with respect to any payment hereunder or other
provisions hereof and to the release of any security at any time given for any
payment hereunder, or any part thereof, with or without substitution, and to the
release of any Person or entity liable for any such payment; and (viii) consent
to the addition of any and all other makers, endorsers, guarantors and other
obligors for any payment hereunder, and to the acceptance of any and all other
security for any payment hereunder, and agree that the addition of any such
obligors or security shall not affect the liability of the parties hereto for
any payment hereunder.

(c) Nothing herein shall be construed as prohibiting the Trust,
Seller or Arcadia Financial from pursuing any rights or remedies it may have
against any other Person in a separate legal proceeding.

Section 4.04 ASSIGNMENTS; REINSURANCE; THIRD-PARTY RIGHTS.

(a) This Agreement shall be a continuing obligation of the parties
hereto and shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and permitted assigns. Neither the Trust, the
Seller nor Arcadia Financial may assign its rights under this Agreement, or
delegate any of its duties hereunder, without the prior written consent of
Financial Security. Any assignment made in violation of this Agreement shall be
null and void.

46
<PAGE>

(b) Financial Security shall have the right to give participations in
its rights under this Agreement and to enter into contracts of reinsurance with
respect to the Note Policy upon such terms and conditions as Financial Security
may in its discretion determine; PROVIDED, HOWEVER, that no such participation
or reinsurance agreement or arrangement shall relieve Financial Security of any
of its obligations hereunder or under the Note Policy.

(c) In addition, Financial Security shall be entitled to assign or
pledge to any bank or other lender providing liquidity or credit with respect to
the Transaction or the obligations of Financial Security in connection therewith
any rights of Financial Security under the Transaction Documents or with respect
to any real or personal property or other interests pledged to Financial
Security, or in which Financial Security has a security interest, in connection
with the Transaction.

(d) Except as provided herein with respect to participants and
reinsurers, nothing in this Agreement shall confer any right, remedy or claim,
express or implied, upon any Person, including, particularly, any Noteholder
(except to the extent provided herein and without limitation of their rights to
receive payments with respect to the Trust Property, including without
limitation payments under the Note Policy), other than Financial Security,
against the Trust, the Seller, Arcadia Financial or the Servicer, and all the
terms, covenants, conditions, promises and agreements contained herein shall be
for the sole and exclusive benefit of the parties hereto and their successors
and permitted assigns. Neither the Trustee, the Owner Trustee nor any Noteholder
shall have any right to payment from any premiums paid or payable hereunder or
from any other amounts paid by the Seller or Arcadia Financial pursuant to
Section 3.02, 3.03 or 3.04 hereof (without limitation to the rights of the
Noteholders to receive payments with respect to the Trust Property, as provided
in the Indenture and the Trust Agreement).

Section 4.05 LIABILITY OF FINANCIAL SECURITY. Neither Financial
Security nor any of its officers, directors or employees shall be liable or
responsible for: (a) the use which may be made of the Note Policy by the Owner
Trustee or the Indenture Trustee or for any acts or omissions of the Owner
Trustee or the Indenture Trustee in connection therewith; or (b) the validity,
sufficiency, accuracy or genuineness of documents delivered to Financial
Security (or its Fiscal Agent) in connection with any claim under the Note
Policy, or of any signatures thereon, even if such documents or signatures
should in fact prove to be in any or all respects invalid, insufficient,
fraudulent or forged (unless Financial Security shall have actual knowledge
thereof). In furtherance and not in limitation of the foregoing, Financial
Security (or its Fiscal Agent) may accept documents that appear on their face to
be in order, without responsibility for further investigation.

ARTICLE V.

EVENTS OF DEFAULT; REMEDIES

Section 5.01 EVENTS OF DEFAULT. The occurrence of any of the
following event shall constitute an Event of Default hereunder:

47
<PAGE>

(a) any demand for payment shall be made under the Note Policy;

(b) any representation or warranty made by the Trust, the Seller,
Arcadia Financial or the Servicer under any of the Related Documents, or in any
certificate or report furnished under any of the Related Documents, shall prove
to be untrue or incorrect in an, material respect;

(c) (i) the Trust, the Seller, Arcadia Financial or the Servicer
shall fail to pay, when due, any amount payable by the Seller, Arcadia Financial
or the Servicer under any of the Related Documents (other than payments of
principal and interest on the Notes); (ii) the Trust, the Seller, Arcadia
Financial or the Servicer shall have asserted that any of the Transaction
Documents to which it is a party is not valid and binding on the parties
thereto; or (iii) any court, governmental authority or agency having
jurisdiction over any of the parties to any of the Transaction Documents or
property thereof shall find or rule that any material provision of any of the
Transaction Documents is not valid and binding on the parties thereto;

(d) the Trust, the Seller, Arcadia Financial or the Servicer shall
fail to perform or observe any other covenant or agreement contained in any of
the Related Documents (except for the obligations described under clause (b) or
(c) above) and such failure shall continue for a period of 30 days after written
notice given to the Trust, the Seller, Arcadia Financial or the Servicer (as
applicable); PROVIDED that, if such failure shall be of a nature that it cannot
be cured within 30 days, such failure shall not constitute an Event of Default
hereunder if within such 30 day period such party shall have given notice to
Financial Security of corrective action it proposes to take, which corrective
action is agreed in writing by Financial Security to be satisfactory and such
party shall thereafter pursue such corrective action diligently until such
default is cured;

(e) there shall have occurred an "Event of Default" as specified in
Section 6.01(i) or 6.01(ii) of the Senior Note Indenture or the unpaid
principal amount of, premium, if any, and accrued and unpaid interest on the
Securities (as defined in the Senior Note Indenture) shall have, upon the
declaration of the holders of the Securities, as specified in Section 6.02 of
the Senior Note Indenture, become immediately due and payable;

(f) the Trust shall adopt a voluntary plan of liquidation or shall
fail to pay its debts generally as they come due, or shall admit in writing its
inability to pay its debts generally, or shall make a general assignment for the
benefit of creditors, or shall institute any proceeding seeking to adjudicate
the Trust insolvent or seeking a liquidation, or shall take advantage of any
insolvency act, or shall commence a case or other proceeding naming the Trust as
debtor under the United States Bankruptcy Code or similar law, domestic or
foreign, or a case or other proceeding shall be commenced against the Trust
under the United States Bankruptcy Code or similar law, domestic or foreign, or
any proceeding shall be instituted against the Trust seeking liquidation of its
assets and the Trust shall fail to take appropriate action resulting in the
withdrawal or dismissal of such proceeding within 30 days or there shall be
appointed or the Trust consent to, or acquiesce in, the appointment of a
receiver, liquidator, conservator, trustee or similar official in respect of the
Trust or the whole or any substantial part of its properties or

48
<PAGE>

assets, or the Trust shall take any corporate action in furtherance of any of
the foregoing or the Trust terminates pursuant to Section 9.1 of the Trust
Agreement;

(g) the Trust becomes taxable as an association (or publicly traded
partnership) taxable as a corporation for federal or state income tax purposes;

(h) on any Distribution Date, the sum of Available Funds with respect
to such Distribution Date and the amounts available in the Series 1997-C Spread
Account (prior to any deposits into such Spread Account from Spread Accounts
related to any other Series) and the amount that may be withdrawn from the
Reserve Account pursuant to Section 5.1 of the Sale and Servicing Agreement is
less than the sum of the amounts payable on such Distribution Date pursuant to
clauses (i) through (viii) of Section 4.6 of the Sale and Servicing Agreement;

(i) any default in the observance or performance of any covenant or
agreement of the Trust made in the Indenture (other than a default in the
payment of the interest or principal on any Note when due) or any representation
or warranty of the Trust made in the Indenture or in any certificate or other
writing delivered pursuant thereto or in connection therewith proving to have
been incorrect in any material respect as of the time when the same shall have
been made, and such default shall continue or not be cured, or the circumstance
or condition in respect of which such misrepresentation or warranty was
incorrect shall not have been eliminated or otherwise cured, for a period of 30
days after there shall have been given, by registered or certified mail, to the
Trust and the Indenture Trustee by Financial Security, a written notice
specifying such default or incorrect representation or warranty and requiring it
to be remedied;

(j) the Average Delinquency Ratio with respect to any Determination
Date shall have been equal to or greater than 8.11%;

(k) with respect to any Determination Date, the Cumulative Default
Rate shall be equal to or greater than the percentage set forth in Column A of
Schedule I attached hereto corresponding to such Determination Date;

(l) with respect to any Determination Date, the Cumulative Net Loss
Rate shall be equal to or greater than the percentage set forth in Column B of
Schedule I attached hereto corresponding to such Determination Date;

(m) the occurrence of an Event of Servicing Termination under the
Sale and Servicing Agreement; or

(n) the occurrence of an "Event of Default" under and as defined in
any Insurance and Indemnity Agreement among Financial Security, Arcadia
Financial, the Seller and any other parties thereto, which "Event of Default" is
not defined as a "Portfolio Performance Event of Default" in such Insurance and
Indemnity Agreement.

49
<PAGE>

Section 5.02 REMEDIES; WAIVERS.

(a) Upon the occurrence of an Event of Default, Financial Security
may exercise any one or more of the rights and remedies set forth below:

(i) declare the Premium Supplement to be immediately due and payable,
and the same shall thereupon be immediately due and payable, whether or not
Financial Security shall have declared an "Event of Default" or shall have
exercised, or be entitled to exercise, any other rights or remedies
hereunder;

(ii) exercise any rights and remedies available under the Transaction
Documents in its own capacity or in its capacity as the Person entitled to
exercise the rights of Controlling Party under the Transaction Documents;
or

(iii) take whatever action at law or in equity as may appear necessary
or desirable in its judgment to enforce performance of any obligation of
the Trust, the Seller or Arcadia Financial under the Transaction Documents;
PROVIDED, HOWEVER, that Financial Security shall not be entitled hereunder
to file any petition with respect to the Trust or the Trust Property under
any bankruptcy or insolvency law.

(b) Unless otherwise expressly provided, no remedy herein conferred
upon or reserved is intended to be exclusive of any other available remedy, but
each remedy shall be cumulative and shall be in addition to other remedies given
under the Transaction Documents or existing at law or in equity. No delay or
failure to exercise any right or power accruing under any Transaction Document
upon the occurrence of any Event of Default or otherwise shall impair any such
right or power or shall be construed to be a waiver thereof, but any such right
and power may be exercised from time to time and as often as may be deemed
expedient. In order to entitle Financial Security to exercise any remedy
reserved to Financial Security in this Article, it shall not be necessary to
give any notice.

(c) If any proceeding has been commenced to enforce any right or
remedy under this Agreement, and such proceeding has been discontinued or
abandoned for any reason, or has been determined adversely to Financial
Security, then and in every such case the parties hereto shall, subject to any
determination in such proceeding, be restored to their respective former
positions hereunder, and, thereafter, all rights and remedies of Financial
Security shall continue as though no such proceeding had been instituted.

(d) Financial Security shall have the right, to be exercised in its
complete discretion, to waive any covenant, Default or Event of Default by a
writing setting forth the terms, conditions and extent of such waiver signed by
Financial Security and delivered to the Seller and Arcadia Financial. Any such
waiver may only be effected in writing duly executed by Financial Security, and
no other course of conduct shall constitute a waiver of any provision hereof.
Unless such writing expressly provides to the contrary, any waiver so granted
shall extend only to the specific event or occurrence so waived and not to any
other similar event or occurrence which occurs subsequent to the date of such
waiver.

50
<PAGE>

ARTICLE VI.

MISCELLANEOUS

Section 6.01 AMENDMENTS, ETC.. This Agreement may be amended,
modified or terminated only by written instrument or written instruments signed
by the parties hereto. No act or course of dealing shall be deemed to
constitute an amendment, modification or termination hereof.

Section 6.02 NOTICES. All demands, notices and other communications
to be given hereunder shall be in writing (except as otherwise specifically
provided herein) and shall be mailed by registered mail or overnight carrier,
personally delivered or telecopied (with confirmation by registered mail) to the
recipient as follows:

(a) To Financial Security:

Financial Security Assurance Inc.
350 Park Avenue
New York, New York 10022
Attention: Surveillance Department
Confirmation: (212) 826-0100
Telecopy Nos.: (212) 339-3518
(212) 339-3529

(in each case in which notice or other communication to Financial
Security refers to an Event of Default, a claim on the Note
Policy or with respect to which failure on the part of Financial
Security to respond shall be deemed to constitute consent or
acceptance, then a copy of such notice or other communication
should also be sent to the attention of each of the General
Counsel and the Head--Financial Guaranty Group and shall be
marked to indicate "URGENT MATERIAL ENCLOSED").

(b) To the Seller:

Arcadia Receivables Finance Corp.
7825 Washington Avenue South, Suite 410
Minneapolis, Minnesota 55439-2435
Telephone: (612) 942-9888
Telecopier: (612) 942-6730

51
<PAGE>

Arcadia Financial Ltd.
7825 Washington Avenue South
Minneapolis, Minnesota 55439-2435
Telephone: (612) 942-9880
Telecopier: (612) 942-6730

(d) To the Trust:

Arcadia Automobile Receivables Trust, 1997-C
c/o Wilmington Trust Company,
as Owner Trustee
Rodney Square North, 1100 North Market Street
Wilmington, Delaware 19890
Attention: Corporate Trust Administration
Telephone: (302) 651-1000
Telecopier: (302) 651-8882

with a copy to:

Wilmington Trust Company, as Owner Trustee
Rodney Square North, 1100 North Market Street
Wilmington, Delaware 19890

A party may specify an additional or different address or addresses by
writing mailed or delivered to the other party as aforesaid. All such notices
and other communications shall be effective upon receipt.

Section 6.03 SEVERABILITY. In the event that any provision of this
Agreement shall be held invalid or unenforceable by any court of competent
jurisdiction, the parties hereto agree that such holding shall not invalidate or
render unenforceable any other provision hereof. The parties hereto further
agree that the holding by any court of competent jurisdiction that any remedy
pursued by any party hereto is unavailable or unenforceable shall not affect in
any way the ability of such party to pursue any other remedy available to it.

Section 6.04 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

Section 6.05 CONSENT TO JURISDICTION.

(a) TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE PARTIES
THERETO HEREBY IRREVOCABLY SUBMIT TO THE JURISDICTION OF THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND ANY COURT IN THE STATE
OF NEW YORK LOCATED IN THE CITY AND

52
<PAGE>

COUNTY OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION,
SUIT OR PROCEEDING BROUGHT AGAINST IT AND TO OR IN CONNECTION WITH ANY OF THE
TRANSACTION DOCUMENTS OR THE TRANSACTION OR FOR RECOGNITION OR ENFORCEMENT OF
ANY JUDGMENT, AND THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY
AGREE THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD
OR DETERMINED IN SUCH NEW YORK STATE COURT OR IN SUCH FEDERAL COURT. THE PARTIES
HERETO AGREE THAT A FINAL JUDGMENT IN ANY SUCH ACTION, SUIT OR PROCEEDING SHALL
BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT
OR IN ANY OTHER MANNER PROVIDED BY LAW. TO THE EXTENT PERMITTED BY APPLICABLE
LAW, THE PARTIES HERETO HEREBY WAIVE AND AGREE 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 PERSONALLY SUBJECT TO THE JURISDICTION OF SUCH COURTS, 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 THE RELATED DOCUMENTS OR THE
SUBJECT MATTER THEREOF MAY NOT BE LITIGATED IN OR BY SUCH COURTS.

(b) To the extent permitted by applicable law, the parties hereto
shall not seek and hereby waive the right to any review of the judgment of any
such court by any court of any other nation or jurisdiction which may be called
upon to grant an enforcement of such judgment.

(c) Arcadia Financial and the Seller hereby irrevocably appoints and
designates CT Corporation System, whose address is 1633 Broadway, New York, New
York 10019, as its true and lawful attorney and duly authorized agent for
acceptance of service of legal process. The Seller and Arcadia Financial agrees
that service of such process upon such Person shall constitute personal service
of such process upon it.

(d) Nothing contained in the Agreement shall limit or affect
Financial Security's right to serve process in any other manner permitted by law
or to start legal proceedings relating to any of the Transaction Documents
against the Seller or Arcadia Financial or its property in the courts of any
jurisdiction.

Section 6.06 CONSENT OF FINANCIAL SECURITY. In the event that
Financial Security's consent is required under any of the Transaction Documents,
the determination whether to grant or withhold such consent shall be made by
Financial Security in its sole discretion without any implied duty towards any
other Person, except as otherwise expressly provided therein.

Section 6.07 COUNTERPARTS. This Agreement may be executed in
counterparts by the parties hereto, and all such counterparts shall constitute
one and the same instrument.

Section 6.08 HEADINGS. The headings of articles and sections and
the table of contents contained in this Agreement are provided for convenience
only. They form no part of

53
<PAGE>

this Agreement and shall not affect its construction or interpretation. Unless
otherwise indicated, all references to articles and sections in this Agreement
refer to the corresponding articles and sections of this Agreement.

Section 6.09 TRIAL BY JURY WAIVED. EACH PARTY HERETO HEREBY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT TO A TRIAL BY JURY IN RESPECT
OF ANY LITIGATION ARISING DIRECTLY OR INDIRECTLY OUT OF, UNDER OR IN CONNECTION
WITH ANY OF THE TRANSACTION DOCUMENTS OR THE TRANSACTION. EACH PARTY HERETO
(A) CERTIFIES THAI NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY PARTY HERETO HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT IT WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
HAS BEEN INDUCED TO ENTER INTO THE TRANSACTION DOCUMENTS TO WHICH IT IS A PARTY
BY, AMONG OTHER THINGS, THIS WAIVER.

Section 6.10 LIMITED LIABILITY. No recourse under any Transaction
Document shall be had against, and no personal liability shall attach to, any
officer, employee, director, affiliate or shareholder of any party hereto, as
such, by the enforcement of any assessment or by any legal or equitable
proceeding, by virtue of any statute or otherwise in respect of any of the
Transaction Documents, the Notes or the Note Policy, it being expressly agreed
and understood that each Transaction Document is solely a corporate obligation
of each party hereto, and that any and all personal liability, either at common
law or in equity, or by statute or constitution, of every such officer,
employee, director, affiliate or shareholder for breaches by any party hereto of
any obligations under any Transaction Document is hereby expressly waived as a
condition of and in consideration for the execution and delivery of this
Agreement.

Section 6.11 LIMITED LIABILITY OF WILMINGTON TRUST COMPANY. It is
expressly understood and agreed by the parties hereto that (a) this Agreement is
executed and delivered by Wilmington Trust Company, not individually or
personally but solely as Owner Trustee on behalf of the Trust, (b) each of the
representations, undertakings and agreements herein made on the part of the
Trust is made and intended not as personal representations, undertakings and
agreements by Wilmington Trust Company, but are made and intended for the
purpose of binding only the Trust Estate, (c) nothing herein contained shall be
construed as creating any liability on Wilmington Trust Company, individually or
personally, to perform any covenant of the Trust either expressed or implied
contained herein, all such liability, if any, being expressly waived by the
parties hereto and by any person claiming by, through or under such parties and
(d) under no circumstances shall Wilmington Trust Company be personally liable
for the payment of any indebtedness or expenses of the Trust or be liable for
the breach or failure of any obligation, representation, warranty or covenant
made or undertaken by the Trust under this Agreement.

Section 6.12 ENTIRE AGREEMENT. This Agreement and the Note Policy
set forth the entire agreement between the parties with respect to the subject
matter thereof, and this

54
<PAGE>

Agreement supersedes and replaces any agreement or understanding that may have
existed between the parties prior to the date hereof in respect of such subject
matter.

55
<PAGE>

IN WITNESS WHEREOF, the parties hereto have duly executed and
delivered this Insurance and Indemnity Agreement, all as of the day and year
first above written.

FINANCIAL SECURITY ASSURANCE INC.

By: /s/ Bruce Stern
------------------------------------------
Authorized Officer

ARCADIA AUTOMOBILE RECEIVABLES TRUST, 1997-C

By: Wilmington Trust Company, not in its
individual capacity, but solely in its
capacity as Owner Trustee under the Trust
Agreement

By: /s/ Patricia A. Evans
------------------------------------------
Patricia A. Evans
Finacial Service Officer

ARCADIA FINANCIAL LTD.

By: /s/ John A. Witham
------------------------------------------
John A. Witham
Executive Vice President and
Chief Financial Officer

ARCADIA RECEIVABLES FINANCE CORP.

By: /s/ John A. Witham
------------------------------------------
John A. Witham
Senior Vice President and
Chief Financial Officer

<PAGE>

SCHEDULE I

Determination Date* Cumulative Default Rate Cumulative Net Loss Rate
(month) (Column) (Column B)
<S> <C> <C>
0 to 3 3.77% 1.94%
3 to 6 7.22% 3.50%
6 to 9 10.21% 4.84%
9 to 12 12.71% 5.75%
12 to 15 13.93% 6.30%
15 to 18 15.62% 6.81%
18 to 21 17.14% 7.18%
21 to 24 18.22% 7.47%
24 to 27 19.23% 7.68%
27 to 30 20.06% 7.90%
30 to 33 20.72% 8.05%
33 to 36 21.21% 8.20%
36 to 39 21.67% 8.31%
39 to 42 21.92% 8.43%
42 to 45 22.17% 8.55%
45 to 48 22.37% 8.61%
48 to 51 22.48% 8.67%
51 to 54 22.59% 8.73%
54 to 57 22.63% 8.78%
57 to 60 22.67% 8.80%
60 to 63 22.70% 8.83%
63 to 66 22.72% 8.86%
66 to 69 22.73% 8.87%
69 to 72 22.76% 8.89%
</TABLE>

- -------------------------------
* Such Determination Date occurring after the designated calendar months
succeeding the Series 1997-C Closing Date appearing first in the column below,
and prior to or during the designated calendar months succeeding
the Series 1997-C Distribution Date appearing second in the column below.

<PAGE>

INDEMNIFICATION AGREEMENT

THIS INDEMNIFICATION AGREEMENT ("Agreement"), dated as of ____________,
1996, between OLYMPIC FINANCIAL LTD., a Minnesota corporation (the "Company"),
and ____________ ("Indemnitee"), an officer and/or member of the Board of
Directors of the Company.

WHEREAS, the Company desires the benefits of having Indemnitee serve as an
officer and/or director secure in the knowledge that expenses, liabilities and
losses incurred by him in his food faith service to the Company will be borne by
the company or its successors and assigns in accordance with applicable law; and

WHEREAS, the Company desires that Indemnitee resist and defend against
what Indemnitee may consider to be unjustified investigations, claims, actions,
suits and proceedings which have arisen or may arise in the future as a result
of Indemnitee's service to the Company;

WHEREAS, the Certificate of Incorporation and Bylaws of the company provide
that the Company shall indemnify and advance expenses to all directors and
officers of the Company int he manner set forth therein; and

WHEREAS, the parties believe it appropriate to memorialize and reaffirm the
Company's indemnification obligations to Indemnitee and, in addition, set forth
the indemnification agreements contained herein;

NOW, THEREFORE, in consideration of the mutual agreements herein contained,
the parties agree as follows:

1. INDEMNIFICATION. Indemnitee shall be indemnified and held harmless by
the Company to the fullest extent permitted by the Minnesota Business
Corporation Act (the "MBCA") in effect on the date hereof, and to such greater
extent as applicable law may thereafter permit, against all judgments,
penalties, fines, including, without limitation, excise taxes assessed against
the Indemnitee with respect to an employee benefit plan, settlements, and
reasonable expenses, including attorneys' fees and disbursements, incurred or
suffered by Indemnitee in connection with any present or future threatened,
pending or contemplated Proceeding, as such term is defined in Section 302A.521
of the MBCA, to which Indemnitee is or was a party or is threatened to be made a
party (i) by reason of any action or inaction in Indemnitee's capacity as a
director or officer of the company, or (ii) with respect to which Indemnitee is
otherwise involved by reason of the fact that Indemnitee is or was serving as a
director, officer, employee or agent of the Company, or of any subsidiary or
division, or is or was serving at the request of the Company as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise.

<PAGE>

2. ADVANCEMENT OF EXPENSES. In the event of any threatened or pending
Proceeding in which Indemnitee is or may in the future be a party or is or may
in the future be involved and that may give rise to a right of indemnification
under this Agreement, following written request to the Company by Indemnitee
pursuant to Section 302A.521, Subdivision 3, of the MBCA, the Company shall
promptly pay to Indemnitee amounts to cover reasonable expenses, including
attorneys' fees, retainers, court costs, transcript costs, fees of experts,
witness fees, travel expenses, duplicating costs, printing and binding costs,
telephone charges, postage, delivery service fees, and all other disbursements
or expenses of the types customarily incurred in connection with prosecuting,
defending, preparing to prosecute or defend, investigating, or being or
preparing to be a witness in a Proceeding, incurred by Indemnitee in such
Proceeding in advance of its final disposition upon the receipt by the Company
of (i) a written undertaking (a copy of which is attached hereto as an exhibit)
executed by or on behalf of Indemnitee providing that Indemnitee will repay the
advance if it shall ultimately be determined by a final, non-appealable order of
a court of competent jurisdiction that Indemnitee is not entitled to be
indemnified by the Company as provided in this Agreement and (ii) reasonable
evidence as to the amount of such expenses and, (iii) pursuant to Section
302A.521, Subdivision 3(b) of the MBCA, after a determination by the Board of
Directors of the Company that the facts then known to those making the
determination would not preclude indemnification under Section 302A.521 of the
MBCA.

3. NON-EXCLUSIVITY OF RIGHTS. the rights of indemnification and
advancement of Expenses provided by this Agreement shall not be deemed exclusive
of or excluded by any other rights to which Indemnitee may at any time be
entitled to under applicable law, the Company's Certificate of Incorporation,
the Company's Bylaws, any agreement, a vote of stockholders or a resolution of
directors or otherwise. No amendment, alteration or repeal of this Agreement or
any provision hereof shall be effective as to any Indemnitee for acts, events
and circumstances that occurred, in whole or in part, before such amendment,
alteration or repeal. The provisions of this Agreement shall continue as to an
Indemnitee whose employment by the Company has ceased for any reason and shall
inure to the benefit of his heirs, executors and administrators.

4. GOVERNING LAW. This Agreement shall be construed in accordance with
and governed by the laws of the State of Minnesota, without giving effect to
conflicts of laws principles thereof.

5. ASSIGNMENT. This Agreement shall inure to the benefit of and be
binding upon the successors and assigns of the parties hereto.

-2-
<PAGE>

6. AMENDMENT. This Agreement may be amended, and the observance of any
term of this Agreement may be waived, only by a written instrument duly executed
by the parties hereto.

7. ENTIRE AGREEMENT. This Agreement contains the entire agreement of the
parties with respect to its subject matter.

8. COUNTERPARTS. This Agreement may be executed simultaneously in two
more identical counterparts, each of which shall be deemed an original, but all
of which shall constitute one and the same instrument.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.

INDEMNITOR: INDEMNITEE

OLYMPIC FINANCIAL LTD.

By:
--------------------------- --------------------------------
Name:
Title:

-3-
<PAGE>

EXHIBIT A

UNDERTAKING AGREEMENT

This UNDERTAKING AGREEMENT, is made on ___________, 19__, between
OLYMPIC FINANCIAL LTD., a Minnesota corporation (the "Company"), or its
successor or assignee in the event of a change of control of the Company, and
____________ ("Indemnitee"), an officer and/or member of the Board of Directors
of the Company.

WHEREAS, Indemnitee may become involved in investigations, claims,
actions, suits or proceedings which have arisen or may arise in the future as a
result of Indemnitee's service to the Company; and

WHEREAS, Indemnitee desires that the Company pay any and all expenses
(including, but not limited to, attorney's fees and court costs) actually and
reasonably incurred by Indemnitee or on Indemnitee's behalf in defending or
investigating any such suits or claims and that such payment be made in advance
of the final disposition of such investigations, claims, actions, suits or
proceedings to the extent that Indemnitee has not been previously reimburse by
insurance; and

WHEREAS, the Company is willing to take such payments but, in
accordance with 302A.521 of the Business Company Act of the State of Minnesota,
the Company may make such payments only if it receives an undertaking to repay
from the Indemnitee; and

WHEREAS, Indemnitee is willing to give such an undertaking;

NOW, THEREFORE, in consideration of the mutual promises contained
herein, the parties agree as follows:

1. In regard to any payments made by the Company to Indemnitee
pursuant to the terms of the Indemnification Agreement dated _________, 1996,
between the Company and Indemnitee, Indemnitee hereby undertakes and agrees to
repay to the Company any and all amounts so paid promptly and in any event
within thirty (30) days after the disposition, including any appeals, of any
litigation or threatened litigation on account of which payments were made, but
only to the extent that Indemnitee is ultimately found not entitled to be
indemnified by the

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<PAGE>

Company under the Bylaws of the Company and Section 302A.521 of the Business
Company Act of the State of Minnesota (the "MBCA"), or other applicable law.

2. In accordance with Section 302A.521, Subdivision 3(a), of the
MBCA, Indemnitee hereby expressly affirms that in its good faith belief the
criteria for indemnification set forth in Section 302A.521, Subdivision 2, of
the MBCA have been satisfied.

3. This agreement shall not affect in any manner rights which
Indemnitee may have against the Company, any insurer or any other person to seek
indemnification for or reimbursement of any expenses referred to herein or any
judgment which may be rendered in any litigation or proceeding.

IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed on the date first written above.

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<PAGE>

Exhibit 23.1

CONSENT OF INDEPENDENT AUDITORS

We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3) and related Prospectus of Arcadia Financial
Ltd. (formerly Olympic Financial Ltd.) for the Registration of $500,000,000 of
debt and equity securities and to the incorporation by reference therein of our
report dated January 21, 1997, with respect to the consolidated financial
statements of Olympic Financial Ltd. included in its Annual Report (Form 10-K)
for the year ended December 31, 1996, filed with the Securities and Exchange
Commission and to the reference to our firm under the caption "Experts" and to
the use of our report dated January 21, 1997, incorporated by reference in the
Prospectus Supplement of Arcadia Financial Ltd. for the registration of
$50,000,000 of Senior Notes.

/s/ ERNST & YOUNG LLP

Minneapolis, Minnesota
October 1, 1997

<PAGE>

Exhibit 23.2

CONSENT

We hereby consent to the use of our name under the caption "Certain
Federal Income Tax Consequences" in the Prospectus Supplement dated October
1, 1997 (the "Prospectus Supplement"), to a Prospectus dated March 7, 1997
(the "Prospectus"), relating to Arcadia Financial Ltd.'s registration
statement on Form S-3 (File No. 333-18027). In giving such consent, we do
not thereby admit that we are in the category of persons whose consent is
required under Section 7 of the Securities Act of 1933, as amended.

Very truly yours,

/s/ Dorsey & Whitney LLP

Dated: October 1, 1997