OLYMPIC FINANCIAL LTD, 10-Q, 1997-04-24

OLYMPIC FINANCIAL LTD
10-Q, 1997-04-24
SHORT-TERM BUSINESS CREDIT INSTITUTIONS

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<PAGE>

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarter ended March 31, 1997 Commission file number 0-20526

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

Minnesota 41-1664848
--------- ----------
(State or other jurisdiction I.R.S. Employer
of incorporation or organization) Identification Number)

7825 Washington Avenue South, Minneapolis, MN 55439-2435
- --------------------------------------------------------------------------------
(Address of principal executive office)

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

Indicate by checkmark whether the Registrant (1) has filed all reports required
to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO
----------------- -----------------

The number of shares of the Common Stock of the registrant outstanding as of
April 18, 1997 was 38,060,023.

<PAGE>

FORM 10-Q INDEX

PART I FINANCIAL INFORMATION PAGE

Item 1. Consolidated Financial Statements . . . . . . . . . . . . . 3

Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations . . . . . . . . . . . . . . . . . 11

PART II OTHER INFORMATION

Item 1. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . 24

Item 2. Changes in Securities . . . . . . . . . . . . . . . . . . . 24

Item 3. Defaults Upon Senior Securities . . . . . . . . . . . . . . 24

Item 4. Submission of Matters to a Vote of Security Holders . . . . 24

Item 5. Other Information . . . . . . . . . . . . . . . . . . . . . 24

Item 6. Exhibits and Reports on Form 8-K. . . . . . . . . . . . . . 24

SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

EXHIBIT INDEX. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

The financial information for the interim periods presented herein is unaudited.
In the opinion of management, all adjustments necessary (which are of a normal
recurring nature) have been included for a fair presentation of the results of
operations. The results of operations for an interim period are not necessarily
indicative of the results that may be expected for a full year or any other
interim period.

SAFE HARBOR STATEMENT UNDER THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

This Form 10-Q for quarter ended March 31, 1997 contains certain forward-looking
statements as defined in the Private Securities Litigation Reform Act of 1995,
which can be identified by the use of forward-looking terminology such as "may,"
"will," "expect," "anticipate," "estimate," "should" or "continue" or the
negative thereof or other variations thereon or comparable terminology. The
matters set forth under the captions "Management's Discussion and Analysis of
Financial condition and Results of Operations - Cautionary Statements" herein
and "Cautionary Statements" in Exhibit 99.I to the 1996 Annual Report on Form
10-K constitute cautionary statements identifying important factors with respect
to such forward-looking statements, including certain risks and uncertainties,
that could cause actual results to differ materially from those in such forward-
looking statements.

<PAGE>

OLYMPIC FINANCIAL LTD.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>

(DOLLARS IN THOUSANDS, EXCEPT SHARE AMOUNTS) (UNAUDITED)
MARCH 31, 1997 DECEMBER 31, 1996
-------------- -----------------

ASSETS
<S> <C> <C>
Cash and cash equivalents. . . . . . . . . . . . . . . . . . . . $ 23,596 $ 16,057
Due from securitization trust. . . . . . . . . . . . . . . . . . 157,694 177,076
Auto loans held for sale . . . . . . . . . . . . . . . . . . . . 40,037 36,285
Finance income receivable. . . . . . . . . . . . . . . . . . . . 301,045 362,916
Restricted cash in spread accounts . . . . . . . . . . . . . . . 164,091 142,977
Furniture, fixtures and equipment. . . . . . . . . . . . . . . . 16,215 13,630
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . 35,871 29,289
---------- ----------
Total assets. . . . . . . . . . . . . . . . . . . . . . . . $ 738,549 $ 778,230
---------- ----------
---------- ----------

LIABILITIES AND SHAREHOLDERS' EQUITY

Amounts due under warehouse facilities . . . . . . . . . . . . . $ 30,927 $ 111,140
Senior notes . . . . . . . . . . . . . . . . . . . . . . . . . . 291,457 145,000
Subordinated notes . . . . . . . . . . . . . . . . . . . . . . . 52,804 53,689
Capital lease obligations. . . . . . . . . . . . . . . . . . . . 7,218 7,729
Deferred income taxes. . . . . . . . . . . . . . . . . . . . . . 8,100 54,387
Accounts payable and accrued liabilities . . . . . . . . . . . . 18,940 13,192
---------- ----------
Total liabilities . . . . . . . . . . . . . . . . . . . . . 409,446 385,137

Commitments and contingencies

Shareholders' equity:
Capital stock, $.01 par value, 100,000,000
shares authorized:
Common stock 38,060,023 and 36,416,802
shares issued and outstanding, respectively . . . . . . . . 381 364
Additional paid-in capital . . . . . . . . . . . . . . . . . . . 321,519 310,187
Retained earnings. . . . . . . . . . . . . . . . . . . . . . . . 7,203 82,542
---------- ----------
Total shareholders' equity. . . . . . . . . . . . . . . . . 329,103 393,093
---------- ----------
Total liabilities and shareholders' equity. . . . . . . . . $ 738,549 $ 778,230
---------- ----------
---------- ----------
</TABLE>

See notes to unaudited consolidated financial statements.

<PAGE>

OLYMPIC FINANCIAL LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
------------------------------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) 1997 1996
---------- ----------
<S> <C> <C>
REVENUES:
Net interest margin. . . . . . . . . . . . . . . . . . . . . . . $ 18,365 $ 12,300
Gain on sale of loans, net of $98 million special charge in 1997 (77,887) 25,229
Servicing fee income . . . . . . . . . . . . . . . . . . . . . . 9,478 5,743
Other non-interest income. . . . . . . . . . . . . . . . . . . . 2,181 724
---------- ----------
Total revenues. . . . . . . . . . . . . . . . . . . . . . . (47,863) 43,996
EXPENSES:
Salaries and benefits. . . . . . . . . . . . . . . . . . . . . . 14,478 9,097
General and administrative and other operating expense . . . . . 26,165 10,919
---------- ----------
Total operating expenses. . . . . . . . . . . . . . . . . . 40,643 20,016
Long-term debt and other interest expense. . . . . . . . . . . . 7,591 5,516
---------- ----------
Total expenses. . . . . . . . . . . . . . . . . . . . . . . 48,234 25,532
---------- ----------
Operating income (loss) before income tax and
extraordinary item . . . . . . . . . . . . . . . . . . . . . . (96,097) 18,464
Income tax expense (benefit) . . . . . . . . . . . . . . . . . . (36,586) 7,386
---------- ----------
Income (loss) before extraordinary item. . . . . . . . . . . . . (59,511) 11,078
Extraordinary item . . . . . . . . . . . . . . . . . . . . . . . (15,828) ----
---------- ----------
Net income (loss) . . . . . . . . . . . . . . . . . . . . . $ (75,339) $ 11,078
---------- ----------
---------- ----------
PRIMARY EARNINGS PER SHARE:
Net income (loss) per common share before extraordinary item . . $ (1.52) $ 0.41
Extraordinary item per common share. . . . . . . . . . . . . . . (0.41) ----
---------- ----------
Net income (loss) per common share. . . . . . . . . . . . . $ (1.93) $ 0.41
---------- ----------
---------- ----------
FULLY DILUTED EARNINGS PER SHARE:
Net income (loss) per share before extraordinary item. . . . . . $ (1.52) $ 0.37
Extraordinary item per share . . . . . . . . . . . . . . . . . . (0.41) ----
---------- ----------
Net income (loss) per share . . . . . . . . . . . . . . . . $ (1.93) $ 0.37
---------- ----------
---------- ----------

Weighted average common and common
equivalent shares outstanding:
Primary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39,028,087 25,741,672
Fully diluted. . . . . . . . . . . . . . . . . . . . . . . . . . 39,197,539 30,218,329
</TABLE>

See notes to unaudited consolidated financial statements.

<PAGE>

OLYMPIC FINANCIAL LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>

(DOLLARS IN THOUSANDS) THREE MONTHS ENDED
MARCH 31,
-------------------------------
1997 1996
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss). . . . . . . . . . . . . . . . . . . . . . . . $ (75,339) $ 11,078
Adjustments to reconcile net income to net cash used
in operating activities:
Depreciation and amortization . . . . . . . . . . . . . . . 1,437 832
Loss on sale of furniture, fixtures and equipment . . . . . ---- 1
(Increase) decrease in assets:
Automobile loans held for sale:
Purchases of automobile loans . . . . . . . . . . . . . (781,872) (633,506)
Sales of automobile loans . . . . . . . . . . . . . . . 774,744 655,845
Repayments of automobile loans. . . . . . . . . . . . . 3,376 13,360
Finance income receivable . . . . . . . . . . . . . . . . 61,871 (46,005)
Restricted cash in spread accounts. . . . . . . . . . . . (21,114) (16,199)
Due from securitization trusts. . . . . . . . . . . . . . 19,382 (115,000)
Advances due to servicer. . . . . . . . . . . . . . . . . 2,609 611
Servicing fee receivable. . . . . . . . . . . . . . . . . (324) (260)
Prepaid expenses. . . . . . . . . . . . . . . . . . . . . 268 (294)
Other assets. . . . . . . . . . . . . . . . . . . . . . . (3,956) (968)
Increase (decrease) in liabilities:
Deferred income taxes . . . . . . . . . . . . . . . . . . (46,287) 7,385
Accounts payable and accrued liabilities. . . . . . . . . 5,749 11,810
---------- ----------
Total cash used in operating activities. . . . . (59,456) (111,310)
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sales of furniture, fixtures and equipment . . . . ---- 2
Purchase of furniture, fixtures and equipment. . . . . . . . . . (3,569) (546)
Purchase of subordinated certificates. . . . . . . . . . . . . . ---- (537)
Collections on subordinated certificates . . . . . . . . . . . . 248 300
---------- ----------
Total cash used in investing activities. . . . . (3,321) (781)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from issuance of Common Stock . . . . . . . . . . . 2,485 876
Payment of dividends on 8% Convertible Preferred Stock . . . . . ---- (444)
Proceeds from borrowings under warehouse facilities. . . . . . . 500,513 595,686
Repayment of borrowings under warehouse facilities . . . . . . . (580,726) (494,992)
Subordinated notes, net proceeds (repayments). . . . . . . . . . (885) 33,590
Repayments of long-term debt . . . . . . . . . . . . . . . . . . (145,000) ----
Proceeds from issuance of Senior Notes . . . . . . . . . . . . . 300,000 ----
Deferred debt issuance cost, net . . . . . . . . . . . . . . . . (5,428) (836)
Reduction of capital lease obligations . . . . . . . . . . . . . (643) (577)
---------- ----------
Total cash provided by financing activities. . . 70,316 133,303
---------- ----------
Net increase in cash and cash equivalents. . . . . . . . . . . . 7,539 21,212
Cash and cash equivalents at beginning of period . . . . . . . . 16,057 1,340
---------- ----------
Cash and cash equivalents at end of period . . . . . . . . . . . $ 23,596 $ 22,552
---------- ----------
---------- ----------
Supplemental disclosures of cash flow information:
Non cash activities:
Additions to capital leases . . . . . . . . . . . . . . $ 132 $ 3,288
Cash paid for:
Interest. . . . . . . . . . . . . . . . . . . . . . . . $ 10,693 $ 3,457
Taxes . . . . . . . . . . . . . . . . . . . . . . . . . ---- ----
</TABLE>

See notes to unaudited consolidated financial statements.

<PAGE>

OLYMPIC FINANCIAL LTD.
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
(UNAUDITED)
<TABLE>
<CAPTION>
-----------------------------------------------------------------------
NUMBER OF ADDITIONAL
COMMON COMMON PAID IN RETAINED
SHARES PAR VALUE CAPITAL EARNINGS TOTAL
---------- --------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
(DOLLARS IN THOUSANDS, EXCEPT
SHARE AMOUNTS)

BALANCE, DECEMBER 31, 1996 . . . . . . . . . . . . 36,416,802 $ 364 $ 310,187 $ 82,542 $ 393,093
Issuance of warrants . . . . . . . . . . . . . . . ---- ---- 8,590 ---- 8,590
Exercise of options and warrants . . . . . . . . . 1,476,539 15 2,342 ---- 2,357
Issuance of Common Stock:
Benefit plans . . . . . . . . . . . . . . . . 166,682 2 400 ---- 402
Net income (loss). . . . . . . . . . . . . . . . . ---- ---- ---- (75,339) (75,339)
---------- ---------- ---------- ---------- ----------
BALANCE, MARCH 31, 1997. . . . . . . . . . . . . . 38,060,023 $ 381 $ 321,519 $ 7,203 $ 329,103
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
</TABLE>

See notes to unaudited consolidated financial statements.

<PAGE>

OLYMPIC FINANCIAL LTD.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE QUARTER ENDED MARCH 31, 1997

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION. The interim financial statements have been prepared
by the Company pursuant to the rules and regulations of the Securities and
Exchange Commission applicable to quarterly reports on Form 10-Q. Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations, although management
believes that the disclosures present fairly the financial position of the
Company and its subsidiaries for the periods presented. These financial
statements should be read in conjunction with the audited consolidated financial
statements and related notes and schedules included in the Company's 1996 Annual
Report filed on Form 10-K filed February 10, 1997.

The consolidated financial statements include the accounts of the Company
and its wholly-owned subsidiaries. All significant intercompany accounts and
transactions have been eliminated.

Certain reclassifications have been made to the March 31, 1996 balances to
conform to current period presentation.

FINANCE INCOME RECEIVABLE. In April 1997, the Company changed its
accounting policy with respect to valuation of repossessed vehicles. This
policy requires the Company to record the estimated realizable value of
repossessed vehicles at amounts which approximate that which is expected to be
achieved through wholesale disposition. The Company has applied this policy in
its valuation of finance income receivable at March 31, 1997. See Management
Discussion and Analysis - RESULTS OF OPERATIONS for additional discussion.

Effective January 1, 1997 the Company is required to account for gains on
sale of loans in accordance with Statement of Financial Accounting Standards No.
125, "Accounting for Transfers and Servicing of Financial Assets and
Extinguishment of Liabilities" ("SFAS 125"). The Company's implementation of
SFAS 125 incorporates the change in accounting policy discussed above in
determining the fair value of assets retained by the Company. In addition, the
Company has applied a discount rate in determining the present value of
estimated future cash flows that reflects its revised estimates of the yields
required by purchasers of similar financial instruments. Exclusive of the
effect of the change in accounting policy discussed above, the implementation of
SFAS 125 did not have a significant effect on the Company's accounting for gains
on sale of loans.

EARNINGS PER SHARE. In February 1997, the Financial Accounting Standards
board issued Statement No. 128, "Earnings per Share," ("SFAS 128") which is
required to be adopted on December 31, 1997. At that time, the Company will be
required to change the method currently used to compute earnings per share and
to restate all prior periods. Under the new requirements for calculating
primary earnings per share, the dilutive effect of common stock equivalents will
be excluded. The impact would result in a decrease in primary earnings per
share for the first quarter ended March 31, 1997 of $0.03 per share and an
increase of $0.05 per share for the first quarter ended March 31, 1996. The
Company has not yet determined what the impact of SFAS 128 will be on the
calculation of fully diluted earnings per share.

<PAGE>

2. FINANCE INCOME RECEIVABLE

The following table sets forth the components of finance income receivable.

<TABLE>
<CAPTION>
AT AT
MARCH 31,1997 DECEMBER 31,1996
(DOLLARS IN THOUSANDS) 1997 1996
------------- ----------------
<S> <C> <C>
Estimated cash flows on loans sold, net of estimated prepayments . . . . . $ 597,584 $ 549,876
Deferred servicing income. . . . . . . . . . . . . . . . . . . . . . . . . (68,664) (59,473)
Reserve for loan losses. . . . . . . . . . . . . . . . . . . . . . . . . . (197,102) (95,005)
---------- ----------
Undiscounted cash flows on loans sold, net of
estimated prepayments. . . . . . . . . . . . . . . . . . . . . . . . . 331,818 395,398
Discount to present value. . . . . . . . . . . . . . . . . . . . . . . . . (30,773) (32,482)
---------- ----------
$ 301,045 $ 362,916
---------- ----------
---------- ----------

Reserve for loan losses as a percentage of servicing portfolio 4.70% 2.51%
</TABLE>

The following represents the roll-forward of the finance income receivable
balance:

(DOLLARS IN THOUSANDS)
<S> <C>
BALANCE, DECEMBER 31, 1996. . . . . . . . . . . . . . . . . . . . $ 362,916
Excess cash flows on loans sold, net of estimated
prepayments . . . . . . . . . . . . . . . . . . . . . . 45,003
Return of excess cash flows (1). . . . . . . . . . . . . . . (15,070)
Recognition of present value effect of cash flows. . . . . . 6,196
Change in estimate of future recovery rates. . . . . . . . . (98,000)
----------
BALANCE, MARCH 31, 1997 . . . . . . . . . . . . . . . . . . . . . $ 301,045
----------
----------
</TABLE>

(1) Includes approximately $1.3 million of cash released to the Company
from remaining spread account balances associated with two securitization
transactions initiated in 1993 and closed out during the first quarter of 1997.

<TABLE>
<CAPTION>
3. OTHER ASSETS
AT AT
MARCH 31, 1997 DECEMBER 31, 1996
(DOLLARS IN THOUSANDS) -------------- -----------------
<S> <C> <C>
Advances due to servicer . . . . . . . . . . . . . . . $ 5,531 $ 8,140
Deferred debt issuance costs . . . . . . . . . . . . . 9,875 4,438
Investment in subordinated certificates. . . . . . . . 4,081 4,329
Servicing fee receivable . . . . . . . . . . . . . . . 3,444 3,121
Prepaid expenses . . . . . . . . . . . . . . . . . . . 2,487 2,755
Servicing assets . . . . . . . . . . . . . . . . . . . 1,363 ---
Other assets . . . . . . . . . . . . . . . . . . . . . 9,090 6,506
---------- ----------
$ 35,871 $ 29,289
---------- ----------
---------- ----------
</TABLE>

<PAGE>

4. SUBORDINATED NOTES
AT AT
(DOLLARS IN THOUSANDS) MARCH 31, 1997 DECEMBER 31, 1996
-------------- -----------------
<S> <C> <C>
Senior subordinated notes, Series 1996-A . . . . . $ 30,000 $ 30,000
Junior subordinated notes. . . . . . . . . . . . . 22,804 23,689
---------- ----------
$ 52,804 $ 53,689
---------- ----------
---------- ----------
</TABLE>

5. SENIOR NOTES

In March 1997, the Company sold to the public $300.0 million aggregate
principal amount of 11.50% Senior Notes, due 2007 (the "Senior Notes") and
received net proceeds of approximately $291.2 million. Each note includes a
detachable Warrant, which when exercised entitles the holders to acquire an
aggregate of 2,052,000 shares of the Company's common stock. Interest on the
Senior Notes is payable semi-annually on March 15 and September 15 of each year,
beginning September 15, 1997. The Notes may not be redeemed prior to March 15,
2002. At any time on such date or thereafter, the Company may at its option
elect to redeem the Senior Notes, in whole or in part, at a premium ranging from
105.75% to 101.92% of the principal amount of Senior Notes redeemed between the
years 2002-2004, respectively, or 100% thereof on or after March 15, 2005, plus
accrued interest to and including the redemption date. The Notes are general,
unsecured obligations of the Company and will rank Senior in right of payment to
all existing and future Senior Debt (as defined in the indenture governing the
Senior Notes). Approximately $173.5 million of the net proceeds from the
issuance of the Senior Notes was used to retire the Company's 13% Senior Term
Notes (including a prepayment premium and accrued interest) and the remainder is
available for working capital. The premium paid for the early extinguishment of
debt (approximately $20.3 million) and the charge-off of remaining capitalized
debt financing costs (approximately $3.2 million) were recognized and accounted
for as an extraordinary item.

6. SHAREHOLDERS' EQUITY

As discussed in Note No. 5 above, the Company issued Warrants to purchase
an aggregate of 2,052,000 shares of the Company's common stock in connection
with its issuance of Senior Notes. The fair value of the Warrants on the date
of issue, as determined by the Company, has been recognized as a component of
additional paid-in capital.

7. EMPLOYEE BENEFITS AND STOCK INCENTIVE PLANS

The Company applies APB No. 25 "Accounting for Stock Issued to Employees,"
in accounting for its stock incentive plans. Accordingly, no compensation cost
has been recognized for such plans during the periods reported. Had
compensation costs for the Company's stock incentive plans been determined as
prescribed by Statement of Financial Accounting Standards No. 123, "Accounting
for Stock-Based Compensation," the Company's net income and earnings per share
would have been equal to the amounts listed below.

<PAGE>

THREE MONTHS ENDED
MARCH 31,
------------------------------
1997 1996
------------- -------------
<S> <C> <C>
Pro-forma net income (loss). . . . . . . . . . . $ (75,476) $ 10,841

Pro-forma earnings per share:
Primary. . . . . . . . . . . . . . . . . . . . . $ (1.93) $ 0.40
Fully diluted. . . . . . . . . . . . . . . . . . $ (1.93) $ 0.36
</TABLE>

The fair value of the options was estimated at date of grant using a black-
scholes option pricing model with a weighted average risk free interest rate of
6.7% for 1997 and 1996, volatility factor of the expected market price of the
Company's common stock of .68 and an option life of five or ten years.

<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

OVERVIEW

Substantially all of the Company's earnings are derived from the purchase,
securitization and servicing of consumer automobile loans originated primarily
by new car dealers affiliated with major foreign and domestic manufacturers. At
March 31, 1997, the Company had purchased loans from more than 8,300 dealers in
42 states, a substantial majority of which sell loans to the Company on a
regular basis. Loans are purchased through 18 regional buying centers serving
as "hubs," supplemented by a network of dealer development representatives
("DDRs"). DDRs generate loans in their assigned market, or "spokes," while
credit approval and loan processing, are generally performed at the "hub" or at
the Company's headquarters in Minneapolis, Minnesota. The Company services
loans through its regional buying centers and four regional servicing and
collection centers.

THREE MONTHS ENDED MARCH 31, 1997 AND 1996

RESULTS OF OPERATIONS

SPECIAL CHARGES. For the three months ended March 31, 1997, the Company
reported a net loss of $75.3 million, or $1.93 per share on a fully-diluted
basis resulting from two special charges. These charges include a non-cash
after-tax charge of approximately $63.9 million, due to a change in accounting
estimate and modifications to the Company's retail disposition strategy, and an
extraordinary charge of approximately $15.8 million, net of tax, due to the
early extinguishment of the Company's 13% Senior Term Notes, due 2000 (see
Management's Discussion and Analysis - EXTRAORDINARY ITEM).

Approximately $60.8 million of the $63.9 million after-tax charge is due to
(i) a change in estimated recovery rates on current repossessed inventory and
anticipated future inventory arising from existing securitization transactions,
and (ii) a change in the Company's accounting policy with respect to the
estimated recovery rate realized upon disposition of repossessed inventory. The
remaining $3.1 million after-tax charge relates to various litigation and
severance charges (see Management's Discussion and Analysis - OPERATING
EXPENSES).

The recovery rate on repossessed inventory is measured by the liquidation
amount realized on the repossessed vehicles as a percentage of the outstanding
principal balance of the charged-off loan associated with the repossessed
vehicles. The Company's change in estimated recovery rates is based, in part,
on a decline in the weighted average recovery rate experienced by the Company
during the first three months of 1997. During the first quarter of 1997, the
weighted average recovery rate on repossessed vehicles declined to approximately
70% from approximately 83% for the year ended December 31, 1996. This reduction
in recovery rates primarily reflects increased liquidation of repossessed
inventory through wholesale auctions. The Company increased its use of auctions
after a review by the Company's new chief executive officer and other members of
management conducted in mid-march 1997 indicated that based on the number of
retail dispositions during the first half of March 1997 the Company's current
retail distribution channels were not sufficient to liquidate vehicles at a pace
satisfactory to management and would not, in the foreseeable future, be adequate
to exceed the number of additional repossessions expected each month. In order
to reduce the Company's repossessed

<PAGE>

inventory to a level more acceptable to management, the Company sold a
significantly increased number of repossessed vehicles at wholesale auctions
during the last half of March 1997. As a result, the Company sold approximately
35% of current quarter sales of repossessed vehicles through wholesale auctions
in the first quarter of 1997, as compared with 30% during the calendar year
1996. The Company's recovery rates were also reduced during the first quarter
of 1997 due to lower pricing of repossessed vehicles sold through the Company's
retail distribution channels in an attempt to accelerate the liquidation of
repossessed vehicles while maintaining consistent credit quality.

The estimated recovery rates are also determined by an analysis of
estimated recovery rates in future periods. Based on its evaluation of certain
events occurring in 1997, the Company believes that recovery rates are not
likely to increase above the level experienced during the first quarter of 1997
and certain events may cause a further decline in these rates in future periods.
As explained above, the Company does not believe that it has sufficient capacity
to sell an increasing number of repossessed vehicles through its current network
of retail consignment dealers. Accordingly, the company expects to control the
size of its repossessed inventory by continuing to increase the use of wholesale
auctions to dispose of repossessed vehicles. In April 1997, the Company's new
chief executive officer completed a review of the Company's retail disposition
strategy. Consequently, based on the recommendation of the new chief executive
officer, the Company adopted modifications to its retail disposition strategy
that are intended to reduce liquidity requirements of this strategy and
establish more efficient operating procedures. The Company's retail disposition
strategy generally requires it to hold a repossessed vehicle in inventory for a
longer period of time than would a wholesale disposition strategy, and as a
consequence delays the receipt of excess cash flows from securitization trusts
following default of a loan. In light of this, the Company has established a
policy that limits the length of time a repossessed vehicle may be held for
resale through retail channels. The limitation on the length of time a
repossessed vehicle is held for sale is intended to reduce delays in cash flow,
but may reduce overall recovery rates due to an increased use of wholesale
auctions. Under the modified retail disposition strategy, the Company intends
to measure the effectiveness of the strategy by the program's profitability as
compared to a wholesale disposition strategy. Management of the retail
disposition program will be accountable for optimizing the recovery rates on the
repossessed inventory and achieving acceptable profitability levels. As a
result, it is expected that managers responsible for the modified retail
disposition program will increase the use of wholesale auctions to control
inventory size and the costs associated with the operation of the program. The
Company's retail disposition strategy, as modified, is relatively new and
evolving, and therefore , the Company's management has concluded that recoveries
under the program are uncertain and may be subject to further change.

In addition, the Company anticipates a continued softening of the used car
market and therefore lower retail and wholesale prices. Factors contributing to
this market softening include the recent start-up of superstore competition and
forecasted levels of used lease vehicles that will be available in the market.
Further, higher interest rates are expected, as evidenced by recent increases in
the federal funds rate and prime rate on March 23, 1997, which have a direct
impact on pricing of vehicles. The Company has concluded that, for the reasons
described above, future recovery rates (after giving effect to related costs)
will be lower for the foreseeable future than those reflected in the Company's
prior accounting estimates. In light of these items, the Company has elected to
record an after-tax charge of approximately $45.3 million as of March 31, 1997
which reflects an adjustment of current inventory and estimated reduction to
future cash flows due to lower expected recovery rates on future inventory
arising from existing securitization trusts.

<PAGE>

At the same time as the Company changed its estimated recovery rates, the
Company also deemed it appropriate to review its accounting policy concerning
the valuation of repossessed vehicles in light of the modifications to its
retail disposition strategy and other factors. As a result of this review, the
Company has decided to change its accounting policy concerning the valuation of
repossessed vehicles. This change in policy will require the Company to record
all current and expected repossessed vehicles at recovery rates that reflect
expected values to be achieved through wholesale auctions (currently
approximately 60% of principal balance outstanding), regardless of the specific
asset disposition strategy to be employed. To the extent actual results are
more favorable than wholesale estimates, greater recoveries will be reflected in
current period earnings when the vehicles are liquidated. As a consequence of
this policy change, the Company's results of operations will depend, in part, on
sales prices for used vehicles in wholesale auctions. Decline in wholesale
recovery rates may adversely effect the Company's results unless offset by
higher retail recovery rates during the period. The Company believes that the
revised accounting policy will better reflect its modified retail disposition
strategy and, accommodate a better understanding by users of the Company's
financial statements. Moreover, the Company believes this change in accounting
policy provides a financial presentation that is more comparable to other
consumer finance companies and responds to recent events in the consumer finance
industry which events, the Company believes, provides further evidence that
lower estimated recovery rates are appropriate. For these reasons, the Company
believes the change in accounting policy at this time reflects a preferable
application of generally accepted accounting principles. Because the change in
policy is inseparable from the estimation process referred to above, it is
appropriate to reflect the effect of the change in accounting policy of
approximately $15.5 million after-tax, as a reduction to current period
earnings.

NET INTEREST MARGIN. The components of net interest margin for each of
the three month periods ended March 31 were:

<TABLE>
<CAPTION>
1997 1996
---------- -----------
<S> <C> <C>
Interest income on loans, net of interest expense on warehouse
facilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 8,170 $ 5,206
Interest income on short-term investments, spread accounts and
other cash accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,657 3,446
Recognition of present value discount. . . . . . . . . . . . . . . . . . . . . . 6,196 3,741
Provision for credit losses on loans held for sale . . . . . . . . . . . . . . . (658) (93)
---------- ----------
Net interest margin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 18,365 $ 12,300
---------- ----------
---------- ----------
</TABLE>

Net interest margin increased 49% during the three months ended March 31,
1997, compared with the same period a year ago. The rise in net interest margin
is primarily due to (i) growth in the average balances of loans held for sale
pending securitization, (ii) increased net interest rates earned on loans held
for sale pending securitization and (iii) increases in the volume of the
Company's securitization transactions.

Increased purchasing volume is primarily due to the Company's continued
geographic expansion and improved market penetration through growth in its
dealer network. As of March 31, 1997, the Company had 18 regional buying
centers, up from 16 at March 31, 1996 and had increased its dealer network to
8,303 dealers at March 31, 1997 from 5,874 at March 31, 1996. The Company's
loan purchasing volume for each of the three months ended March 31 are set forth
in the table below.

<PAGE>

(DOLLARS IN THOUSANDS) 1997 1996
---------- ----------
Premier. . . . . . . . . . . . . . . . . . . . . . $ 403,195 $ 493,188
Classic. . . . . . . . . . . . . . . . . . . . . . 378,677 140,318
---------- ----------
Total loans purchased . . . . . . . . . . . . . $ 781,872 $ 633,506
---------- ----------
---------- ----------

The rise in loan purchasing volume resulted in an increase in the average
monthly balance of loans held for sale to $288.2 million, up from $199.7 million
during the quarter ended March 31, 1997 and 1996, respectively, on which the
Company earns a net interest rate spread until such loans are securitized. The
weighted average net interest rate spread rose to 7.43% during the first quarter
of 1997 compared with 6.01% in the same period a year ago. The rise in net
interest spread is principally due to higher average annual percentage rates
("APR") paid by obligors resulting from expansion of the Company's Classic loan
program.

Interest income on short-term investments, spread accounts and other cash
accounts established in connection with securitization transactions increased
35% for the three months ended March 31, 1997 compared with the same period
during 1996. This increase is primarily due to growth in the average balances
of spread accounts and other securitzation related cash accounts resulting from
higher securitization volume. Income from the recognition of present value
discount also grew due to the increased volume of securitizations.

GAIN ON SALE OF LOANS. During the three months ended March 31, 1997, the
Company recognized a non-recurring pre-tax charge to gain on sale of loans of
$98.0 million resulting in a year-to-date loss on sale of loans of $77.9 million
(See Management Discussion and Analysis - RESULTS OF OPERATIONS). The Company
securitized $774.7 million of loans held for sale during the first quarter of
1997 compared with $655.8 million in the same period a year ago realizing a gain
on sale of approximately $20.1 million, before the non-recurring charge. The
reduction in gain on sale during the first quarter of 1997, before the non-
recurring charge, compared with $25.2 million realized during the first quarter
of 1996 is primarily due to increased loss rate, servicing cost and discount
factor assumptions utilized in the Company's computation of gain on sale. Refer
to Management Discussion and Analysis - RESULTS OF OPERATIONS for discussion of
change in estimates.

The Company benefited from improved gross interest rate spreads during the
three months ended March 31, 1997. The increase in the gross interest rate
spread earned on securitized loans is primarily due to an increase in the
Company's weighted average coupon rate reflecting a shift to the higher yielding
Classic loans partially off-set by an increase in the weighted average
securitization rate on loans purchased and subsequently securitized.

The following table summarizes the Company's gross interest rate spreads
for each of the three month periods ended March 31:

1997 1996
------- -------

Weighted average APR of loans securitized. . . . . 15.48 % 13.81 %
Weighted average securitization rate . . . . . . . 6.52 5.82
------- -------
Gross interest rate spread (1) . . . . . . . . . . 8.96 % 7.99 %
------- -------
------- -------

- ----------------------------------
(1) Before gains/losses on hedging transactions.

<PAGE>

Gain on sale of loans reflects $1.4 million of realized gains on hedging
transactions during the first quarter of 1997 compared with $1.9 million of
realized gains on hedging transactions during the same period in 1996. There
were no realized losses during the period ended March 31, 1997 and 1996.

SERVICING FEE INCOME. The Company increased its servicing fee income to
$9.5 million during the three months ended March 31, 1997 from $5.7 million in
the first three months of 1996. This increase was directly related to an
increase in the Company's servicing portfolio outstanding. The following table
reflects the growth in the Company's servicing portfolio from March 31, 1996 to
March 31, 1997.

<TABLE>
<CAPTION>
(DOLLARS IN THOUSANDS, EXCEPT AS NOTED) AT MARCH 31,
--------------------------------
1997 1996
------------ -------------
<S> <C> <C>
Principal balance of automobile loans held for sale. . . . . . . $ 41,605 $ 81,552
Principal balance of loans serviced under securitizations. . . . 4,152,993 2,563,588
------------ ------------

Servicing portfolio. . . . . . . . . . . . . . . . . . . . . . . $ 4,194,598 $ 2,645,140
------------ ------------
------------ ------------
Average unpaid principal balance (actual dollars). . . . . . . . $ 12,479 $ 12,407
Number of loans serviced . . . . . . . . . . . . . . . . . . . . 336,129 213,193
</TABLE>

OTHER NON-INTEREST INCOME. Other non-interest income rose to $2.2 million
during the three months ended March 31, 1997 from $0.7 million during the same
period in 1996. This increase is primarily due to late fee and insufficient
funds charges to borrowers.

OPERATING EXPENSES. Salaries and benefits expense increased to
$14.5 million in the first quarter of 1997, up 59% from $9.1 million during the
same period in 1996. The increase in salaries and benefits is primarily
attributable to an increase in the number of employees to 1,490 at March 31,
1997 from 751 at March 31, 1996. Increased staffing has been necessary to
accommodate the rise in loan purchasing volume and the subsequent servicing of
such loans and reflects additional associates hired to staff four new regional
collection centers opened from October through December of 1996. Further,
salaries and benefit expenses have increased due to costs associated with
managing the Company's retail liquidation strategy for repossessed vehicles.
The Company anticipates that such costs will begin to level off or decline in
future periods due to recently adopted changes to its liquidation strategy (see
discussion in Management's Discussion and Analysis - RESULTS OF OPERATIONS).

Other operating costs including, occupancy, depreciation and amortization,
servicing and collection expenses, also increased during the first quarter of
1997 to $26.2 million, up 140% from $10.9 million in the same period of 1996.
The rise in other operating costs is primarily due to the addition of the
regional servicing and collection centers, continued expansion of the regional
buying centers and growth in loan purchasing. As loan purchasing volume
increases, the Company incurs incremental increases in costs associated with
underwriting, servicing and collecting of such loans. Also included in
operating costs during the first quarter of 1997 is a one-time pre-tax charge of
approximately $5.0 million. This special charge is primarily due to legal costs
associated with defending recently filed litigation against the Company as well
as costs associated with resolving legal issues involving improper practices at
certain of the Company's initial consignment dealers. The Company has since
terminated its business relationship with such dealers. Also, included in the
special charge are severance expenses for certain former executives of the
Company.

<PAGE>

LONG-TERM DEBT AND OTHER INTEREST EXPENSE. Long-term debt and other
interest expense increased 38% to $7.6 million during the first quarter of 1997
compared to $5.5 million during the same period in 1996. This increase is
primarily due to the issuance of $300.0 million of Senior Notes in March 1997
partially off-set by the concurrent extinguishment of a $145 million of 13%
Senior Term Notes.

EXTRAORDINARY ITEM. In March 1997, the Company issued $300.0 million
11.25% Senior Notes and utilized approximately $173.5 million to retire the
Company's $145.0 million 13% Senior Term Notes, including accrued interest of
$7.9 million and a premium of approximately $20.3 million. These charges and
additional professional fees incurred to retire such debt have been treated as
an extraordinary item, net of tax.

FINANCIAL CONDITION

FINANCE INCOME RECEIVABLE. Finance income receivable, decreased to $301.0
million at March 31, 1997 from $362.9 million at December 31, 1996. This 17.0%
decrease reflects a non-recurring $98.0 million pre-tax charge during the first
quarter (See Management's Discussion and Analysis - RESULTS OF OPERATIONS)
partially offset by amounts capitalized upon completion of the Company's first
quarter securitization related to the present value of estimated cash flows.

DEFERRED INCOME TAX. Deferred income taxes declined to $8.1 million at
March 31, 1997 from $54.4 million at December 31, 1996. This decrease reflects
the recognition of a tax benefit from the current quarter loss from operations
and extraordinary charge.

ACCOUNTS PAYABLE AND ACCRUED LIABILITIES. Accounts payable and accrued
liabilities increased 43.6% to $18.9 million at March 31, 1997 as compared with
$13.2 million at December 31, 1996. This increase is partly due to accrued
securitization expenses associated with the Company's first quarter
securitization transaction, as well as increased accruals for salary, occupancy
and various operating expenses reflecting the continued growth in the Company's
staffing, facilities, loan purchases and servicing portfolio. In addition, the
Company recorded accruals during the first quarter of 1997 related to severance
agreements for certain former executives and increased legal expenses
associated with recent litigation filed against the Company as well
as costs to resolve legal issues involving certain consignment dealers
initially utilized by the Company.

<PAGE>

DELINQUENCY, CREDIT LOSS AND REPOSSESSION EXPERIENCE

The following tables describe the Company's delinquency, credit loss and
repossession experience for the periods indicated. A delinquent loan may result
in the repossession and foreclosure of the collateral for the loan. Losses
resulting from repossession and foreclosure of loans are charged against
applicable allowances.
<TABLE>
<CAPTION>

MARCH 31, DECEMBER 31,
DELINQUENCY EXPERIENCE (1): 1997 1996
------------------------- --------------------------
NUMBER OF NUMBER OF
LOANS BALANCE LOANS BALANCE
---------- ---------- ------------ ----------
<S> <C> <C> <C> <C>
(DOLLARS IN THOUSANDS)
Servicing portfolio at end of period . . . . . . . . . . . . 336,129 $4,194,598 302,450 $3,791,857
Delinquencies:
31-60 days. . . . . . . . . . . . . . . . . . . . . . . . 3,803 47,006 3,884 47,225
61-90 days. . . . . . . . . . . . . . . . . . . . . . . . 1,894 24,092 1,255 15,877
91 days or more . . . . . . . . . . . . . . . . . . . . . 2,170 27,144 2,911 37,019
---------- ---------- ---------- ----------
Total automobile loans delinquent 31 or more
days. . . . . . . . . . . . . . . . . . . . . . . . . . . 7,867 $ 98,242 8,050 $ 100,121
Delinquencies as a percentage of number of
loans and amount outstanding at end of period (2) . . . . 2.34 % 2.34 % 2.66 % 2.64 %

Amount in repossession (3) . . . . . . . . . . . . . . . . . 5,306 $ 45,655 4,651 $ 64,929
---------- ---------- ---------- ----------
Total delinquencies and amount in
repossession (2). . . . . . . . . . . . . . . . . . . . . 13,173 $ 143,897 12,701 $ 165,050
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
</TABLE>

(2) Amounts shown do not include loans which are less than 31 days delinquent.

(3) Amount in repossession represents financed automobiles which have been
repossessed but not yet liquidated.

<PAGE>

<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
--------------------------------
CREDIT LOSS/REPOSSESSION EXPERIENCE (1): 1997 1996
----------- ------------
<S> <C> <C>
Average servicing portfolio outstanding during the period. . . . . . . $ 3,976,446 $ 2,461,267
Average number of loans outstanding during the period. . . . . . . . . 319,118 199,596
Number of repossessions. . . . . . . . . . . . . . . . . . . . . . . . 4,966 2,755
Annualized repossessions as a percentage of average number of loans
outstanding. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.22 % 5.52 %
Gross charge-offs (2) . . . . . . . . . . . . . . . . . . . . . . . . $ 46,410 $ 6,017
Recoveries (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,880 1,157
----------- -----------
Net losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 44,530 $ 4,860
----------- -----------
----------- -----------

Annualized gross charge-offs as a percentage of average servicing
portfolio. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.67 % 0.98 %
Annualized net losses as a percentage of average servicing portfolio . 4.48 % 0.79 %
</TABLE>

(1) All amounts and percentages are based on the principal amount scheduled to
be paid on each loan. The information in the table includes previously
sold loans which the Company continues to service.
(2) Gross charge-offs represent principal amounts which management estimated to
be uncollectable after the consideration of anticipated proceeds from the
disposition of repossessed assets and selling expenses. When estimating
the value of repossessed inventory management utilizes industry published
reports listing retail and wholesale values of used automobiles and
determines estimated proceeds within a range that management believes
reflects the then current market conditions and the Company's disposition
strategy for such inventory.
(3) Includes post-disposition amounts received on repossessed assets, net of
selling expenses.

The decrease in the delinquency rate at March 31, 1997, compared with
December 31, 1996, reflects the improved servicing and collection capabilities
resulting from the establishment of four new regional collection centers from
October through December 1996. Although the number of repossessed vehicles has
increased since December 31, 1996, reflecting a continued rise in defaults due
to growth of the Company's portfolio and seasoning of loans purchased under the
Company's Classic loan program, the net realizable value of the repossessed
inventory has declined as a result of the Company's revised policy with respect
to inventory valuation (see Management's Discussion and Analysis - RESULTS OF
OPERATIONS). Under its new policy, repossessions are recorded at a value which
approximates that which the Company believes can be achieved through wholesale
distribution channels (regardless of the distribution strategy ultimately
utilized). This change in valuation policy also affected gross charge-off and
net loss percentages during the first quarter of 1997 due to a valuation
adjustment to existing inventory. Excluding the one-time valuation adjustment,
annualized gross charge-offs and net losses would have been 2.09 percent and
1.90 percent, respectively, during the three months ended March 31, 1997. The
increase in charge-off and net loss rates compared with the same period a year
ago reflects the continued rise in Classic loan volume and seasoning of the
existing portfolio and also reflects the effect of selling an increased
proportion of repossessed vehicles through wholesale auctions (see Management's
Discussion and Analysis - RESULTS OF OPERATIONS). Pre-adjusted losses for the
six month rolling rate as calculated under the Company's recently retired 13%
Senior Term Note Indenture were 1.60 percent as of March 31, 1997.

<PAGE>

LIQUIDITY

The Company's business requires substantial cash to support its operating
activities. The principal cash requirements include (i) amounts necessary to
purchase and finance automobile loans pending securitization, (ii) dealer
participations, (iii) cash held from time to time in restricted spread accounts
to support securitizations and warehouse facilities and other securitization
expenses, (iv) interest advances to securitization trusts, (v) repossessed
inventory, and (vi) interest expense. The Company also uses significant amounts
of cash for operating expenses. The Company receives cash principally from
interest on loans held pending securitization, excess cash flow received from
securitization trusts and from fees earned through servicing of loans held by
such trusts. The Company has operated on a negative operating cash flow basis
and expects to continue to do so in the foreseeable future. The Company has
historically funded, and expects to continue to fund, these negative operating
cash flows, subject to limitations in various debt covenants, principally
through borrowings from financial institutions, sales of equity securities and
sales of senior and subordinated notes, among other resources, although there
can be no assurance that the Company will have access to capital markets in the
future or that financing will be available to satisfy the Company's operating
and debt service requirements or to fund its future growth. See "Capital
Resources."

PRINCIPAL USES OF CASH IN OPERATING ACTIVITIES

PURCHASES AND FINANCING OF AUTOMOBILE LOANS. Automobile loan purchases
represent the Company's most significant cash flow requirement. The Company
funds the purchase price of loans primarily through the use of warehouse
facilities. However, because advance rates under the warehouse facilities
generally provide funds from 90% to 97% of the principal balance of the loans,
the Company is required to fund the remainder of all purchases with other
available cash resources. The Company purchased $781.9 million of loans during
the first three months of 1997 compared to $633.5 million during the same period
in 1996.

DEALER PARTICIPATIONS. Consistent with industry practice, the Company pays
dealers participations for selling loans to the Company. These participations
typically require the Company to advance an up-front amount to dealers.
Participations paid by the Company to dealers during the three months ended
March 31, 1997 were $25.5 million, or approximately 3.26% of the principal
balance of loans purchased, compared with $24.7 million, or approximately 3.90%
of loans purchased during the same period in 1996. The decrease in dealer
participation as a percentage of loans purchased reflects the growth in the
volume of Classic loans.

SECURITIZATION OF AUTOMOBILE LOANS. In connection with securitizations,
the Company is required to fund spread accounts related to each transaction.
The Company funds these spread accounts by foregoing receipt of excess cash flow
until these spread accounts exceed predetermined levels. In certain
securitizations the Company also has been required to provide initial cash
deposits into such accounts. The Company had $164.1 million of restricted cash
in spread accounts at March 31, 1997, compared with $143.0 million at December
31, 1996. The Company also incurs certain expenses in connection with
securitizations, including underwriting fees, credit enhancement fees, trustee
fees and other costs, which approximate 0.5% per annum of the principal amount
of the asset-backed securities sold into securitizations.

<PAGE>

NET INTEREST MARGIN. Although the Company records net interest margin as
earned, the interest income component is generally received in cash from excess
cash flow over the life of the securitization trust, while the interest expense
component (primarily warehousing interest) is paid prior to securitization.

ADVANCES DUE TO SERVICER. As the servicer of loans sold in
securitizations, the Company periodically makes interest advances to the
securitization trusts to provide for temporary delays in the receipt of required
interest payments by borrowers. In accordance with servicing agreements, the
Company makes advances only in the event it expects to recover them through the
ultimate payments from the obligor on the loan. Beginning in December 1996, the
Company's servicing agreements were modified to require interest advances only
when the related loan is 31 days delinquent and greater.

REPOSSESSED INVENTORY. At March 31, 1997, the Company's inventory of
repossessed automobiles held for resale was $45.7 million, compared with $64.9
million at December 31, 1996. The rate of repossessed inventory turnover impacts
cash available for spread accounts under securitization trusts and,
consequently, the excess cash available for distribution to the Company. At
March 31, 1997, repossessed inventory was 1.1% of the total servicing portfolio
compared with 1.7% at December 31, 1996. In April 1997, the Company modified
its retail disposition strategy with a goal of increasing its rate of
repossessed inventory turnover. The improvement in excess cash flows due to the
increased inventory turnover rate may be partially reduced by lower recoveries
realized through an increased use of wholesale auctions.

PRINCIPAL SOURCES OF CASH IN OPERATING ACTIVITIES

EXCESS CASH FLOW. The Company receives excess cash flow from
securitization trusts, including the realization of gain on sale, the recovery
of dealer participations, and the recovery of accrued interest receivable
earned, but not yet collected, on loans held for sale. Recovery of dealer
participations and accrued interest receivable, which occur throughout the life
of the securitization, result in a reduction of the finance income receivable
and, because they have been considered in the original determination of the gain
on sale of loans, have no effect on the Company's results of operations in the
year in which the participations and interest are recovered from the
securitization trust. During the first quarter of 1997, the Company received
$13.8 million of excess cash flow, compared with $4.2 million during the first
three months in 1996. The Company received an additional $1.3 million and $2.3
million of cash during the first quarter of 1997 and 1996, respectively, which
was released from spread accounts associated with two securitization
transactions closed-out during the current quarter of 1997 and first quarter of
1996, respectively.

SERVICING FEES. The Company also receives servicing fee income with
respect to loans held by securitization trusts equal to 1% per annum of the
remaining principal balance, which amounted to $9.5 million and $5.7 million
during the three months ended March 31 1997 and 1996, respectively. Servicing
fee income is reflected in the Company's revenues as earned.

CAPITAL RESOURCES

The Company finances the acquisition of automobile loans primarily through
(i) warehouse facilities, pursuant to which loans are sold or financed generally
on a temporary basis and (ii) the

<PAGE>

securitization of loans, pursuant to which loans are sold as asset-backed
securities. Additional financing is required to fund the Company's operations.

WAREHOUSE FACILITIES. Automobile loans held for sale are funded primarily
through warehouse facilities. At March 31, 1997, the Company had warehouse
facilities in place with various financial institutions and institutional
lenders with an aggregate capacity of $717.3 million, of which $686.4 million
was available. Amounts due under warehouse facilities decreased to $30.9
million at March 31, 1997 from $111.1 million at December 31, 1996, primarily
due to timing of securitization transactions. Proceeds from securitizations,
generally received within seven to ten days following the cut-off date
established for the transaction, are applied to repay amounts outstanding under
warehouse facilities.

SECURITIZATION PROGRAM. An important capital resource for the Company has
been its ability to sell automobile loans in the secondary markets through
securitizations. The following table summarizes the Company's securitization
transaction for the three months ended March 31, 1997, which was publicly issued
and rated "AAA/Aaa".

<TABLE>
<CAPTION>
(DOLLARS IN THOUSANDS)
REMAINING REMAINING
BALANCE AS BALANCE AS A CURRENT WEIGHTED GROSS
OF PERCENTAGE OF WEIGHTED AVERAGE INTEREST
ORIGINAL MARCH 31, ORIGINAL AVERAGE SECURITIZATION RATE
DATE BALANCE 1997 BALANCE APR RATE SPREAD
- ------------- ----------------- -------------- ------------- -------------- --------------- -------------
<S> <C> <C> <C> <C> <C> <C>
March 97 (1) $ 775,000 $ 728,734 94.03% 15.51% 6.54% 8.97%
</TABLE>
- ----------------------------------------

(1) At March 31, 1997, $737.3 million of automobile loans had been delivered to
the trust and $37.7 million cash remained in the pre-funded portion of the
trust.

OTHER CAPITAL RESOURCES

Historically, the Company has utilized various debt and equity financings
to offset negative operating cash flows and support the continued growth in loan
volume, increased dealer participations, securitizations and general operating
expenses.

In March 1997, the Company sold $300 million 11.50% Senior Notes, due 2007.
Net proceeds received from the offering of the Senior Notes approximated $291.2
million.

CAUTIONARY STATEMENTS

Information or statements provided by the Company from time to time may
contain certain "forward-looking information" including information relating to
anticipated earnings per share, anticipated returns on equity, anticipated
growth in automobile loan purchases, anticipated net interest margins,
anticipated loan securitizations and gain on sale, anticipated operations costs
and employment growth, anticipated delinquency, loan loss and repossession
experience. The cautionary statements provided below are being made pursuant to
the provisions of the Private Securities Litigation Reform Act of 1995 (the
"Act") and with the intention of obtaining the benefits of the "safe harbor"
provisions of the Act for any such forward-looking information. Many of the
following important factors discussed below as well as other factors have also
been discussed in the Company's prior public filings.

<PAGE>

The Company cautions readers that any forward-looking information provided
by the Company is not a guarantee of future performance and that actual results
may differ materially from those in the forward-looking information as a result
of various factors, including but not limited to:

- - The effects of increased delinquency rates and loan loss rates, including
further write downs of finance income receivable and decreases in cash flow
from securitization trusts in the event certain portfolio performance tests
are violated.

- - The effects of "seasoning" of the Company's loan portfolio and increased
use of the Company's Classic loan program, each of which are likely to
adversely affect the Company's level of delinquencies and losses which may
require higher loss reserves and decrease cash flow from securitization
trusts in the event certain portfolio performance tests are violated.

- - The effects of the Company's modified retail disposition program which may
result in an increased use of wholesale dispositions for repossessed
inventory and thereby lower recovery rates.

- - The effects of interest rate fluctuations on the Company's net interest
margin and the value of its assets and liabilities; the continued legal or
commercial availability of techniques (including interest rate swaps and
similar financial instruments, loan repricing, hedging and other
techniques) used by the Company to manage the risk of such fluctuations and
the continuing operational viability of those techniques and the accounting
and regulatory treatment of such instruments.

- - Difficulties or delays in the securitization of the Company's automobile
loans and the resulting impact on the cost and availability of such
funding. Such difficulties and delays may result from changes in the
availability of credit enhancement in securitizations, the current legal,
regulatory, accounting and tax environment and adverse change in the
performance of the securitized loans.

- - Changes in the availability, amount, cost and other terms of warehouse
financing to purchase loans.

- - The amount, and rate of growth in, the Company's expenses (including
employee and marketing expenses) as the Company's business develops or
changes and the Company expands into new market areas; the effects of
changes within the Company's organization or in its compensation and
benefit plans; and the impact of unusual items resulting form the Company's
ongoing evaluation of its business strategies, asset valuations and
organizational structures.

- - The availability, amount, type and cost of debt or equity financing for the
Company to support negative operating cash flows and any changes to that
financing including any impact from changes in the Company's debt ratings.

- - The effects of changes in economic conditions which may increase the risk
of default on automobile loans, increase the number of customers seeking
protection under bankruptcy

<PAGE>

laws, reduce demand for automobile loans, and reduce demand for used cars
through retail channels.

- - The effects of intense competition from financial institutions, such as
banks, other automobiles finance companies, thrifts, leasing companies and
captive finance companies owned by automobile manufacturers.

- - The costs and other effects of legal and administrative cases and
proceedings, settlements and investigations, claims and changes in those
items, developments or assertions by or against the Company or its
subsidiaries; adoptions of new, or changes in existing, accounting policies
and practices and the application of such policies and practices.

<PAGE>

PART II - OTHER INFORMATION

Item 1. Legal Proceedings
In March 1997, two separate claims were filed against the Company
which assert violations of federal securities disclosure laws on
behalf of those persons who purchased the Company's common stock
between November, 1994 and March, 1997. The Company intends to
vigorously defend against such allegations. In addition, the Company
is party to litigation in the ordinary course of business, generally
involving actions against borrowers to collect amounts on loans or
recover vehicles. The Company does not expect any pending proceedings
to have a material adverse effect on the Company or its results of
operations.

Item 2. Changes in Securities
None

Item 3. Defaults Upon Senior Securities
None

Item 4. Submission of Matters to a Vote of Security Holders
None

Item 5. Other Information
None

Item 6. Exhibits and Reports on Form 8-K

(a) EXHIBITS

The following exhibits are filed in response to Item 601 of Regulation S-K.

EXHIBIT NO. DESCRIPTION

3.1 Restated Articles of Incorporation of the Registrant, as amended
(incorporated by reference to Exhibit No. 4.1 to Registrants
Statement on Form S-2, File No. 33-90108).

3.2 Restated Bylaws of the Registrant, as amended (incorporated by
reference to Exhibit 3.2 to the Registrants Annual Report on form
10-K for the year ended December 31, 1996).

4.1 Rights Agreement dated as of November 1, 1996, between the
Registrant and Norwest Bank Minnesota, National Association, as
Rights Agent (incorporated by reference to Exhibit 1 to the
Registrant's Registration Statement on Form 8-A filed November 7,
1996).

<PAGE>

Extendible Notes and Fixed Term-Notes, including forms of Notes
(incorporated by reference to Exhibit No. 4.8.1 to Post-Effective
Amendment No. 2 on Form S-3 to Registrant's Registration
Statement on Form S-1, File No. 33-81512).

4.3 Indenture, dated as of April 28, 1995, between the Registrant and
Norwest Bank Minnesota, National Association, as Trustee,
relating to the Registrant's 13% Senior Notes due 2000
(incorporated by reference to Exhibit 4.5 to the Registrant's
Annual Report on Form 10-K for the year ended December 31, 1995).

4.4 First Supplemental Indenture, dated as of August 11, 1995, to
Indenture, dated as of April 28, 1995, between the Registrant and
Norwest Bank Minnesota, National Association, as Trustee,
relating to the Registrant's 13% Senior Notes due 2000
(incorporated by reference to Exhibit 4.6 to the Registrant's
Annual Report on form 10-K for the year ended December 31, 1995).

4.5 Indenture dated as of March 15, 1996, between the Registrant and
Norwest Bank Minnesota, National Association, as Trustee,
relating to the Registrant's Subordinated Notes, Series 1996-A
due 2001 (incorporated by reference to Exhibit 4.5 to the
Registrants Annual Report on form 10-K for the year ended
December 31, 1996).

4.6 First Supplemental Indenture, dated as of March 15, 1996, to
Indenture, dated as of March 15, 1996, between the Registrant and
Norwest Bank Minnesota, National Association, as Trustee,
relating to the Registrant's Subordinated Notes, Series 1996-A
due 2001 (incorporated by reference to Exhibit 4.6 to the
Registrants Annual Report on form 10-K for the year ended
December 31, 1996).

4.7 Indenture dated as of March 12, 1997, between Olympic Financial
Ltd. and Norwest Bank Minnesota, National Association, as Trustee
(incorporated by reference to Exhibit 4.1 to the Company's
current report on Form 8-K dated March 12, 1997 and filed March
18, 1997).

4.8 First Supplemental Indenture, dated as of March 12, 1997 between
Olympic Financial Ltd. and Norwest Bank Minnesota, National
Association, as Trustee (incorporated by reference to Exhibit
4.2 to the Company's current report on Form 8-K dated March 12,
1997 and filed March 18, 1997).

4.9 Warrant Agreement, dated as of March 12, 1997 by and between
Olympic Financial Ltd. and Norwest Bank Minnesota, National
Association, as Trustee (incorporated by reference to Exhibit 4.3
to the Company's current report on Form 8-K dated March 12, 1997
and filed March 18, 1997).

4.10 Form of unit (incorporated by reference to Exhibit 4.4 to the
Company's current report on Form 8-K dated March 12, 1997 and
filed March 18, 1997).

<PAGE>

4.11 Form of 11.5% Senior Notes due March 15, 2007 (incorporated by
reference to Exhibit 4.5 to the Company's current report on Form
8-K dated March 12, 1997 and filed March 18, 1997).

4.12 Form of Initial Warrant Certificate (incorporated by reference to
Exhibit 4.6 to the Company's current report on Form 8-K dated
March 12, 1997 and filed March 18, 1997).

4.13 Second Supplemental Indenture dated as of March 11, 1997 to
Indenture dated as of April 28, 1995 between Olympic Financial
Ltd. and Norwest Bank Minnesota, National Association
(incorporated by reference to Exhibit 4.7 to the Company's
current report on Form 8-K dated March 12, 1997 and filed March
18, 1997).

10.1 Spread Account Agreement, dated as of March 25, 1993, as amended
and restated as of March 1, 1997 among the Company, Olympic
Receivables Finance Corp., Financial Security Assurance Inc. and
Norwest Bank Minnesota, National Associate, as Trustee and
Collateral Agent.

10.2 Series 1996-A Supplement, dated March 20, 1997, to Spread Account
Agreement, dated as of March 25, 1993, as amended and restated as
of March 1, 1997, among the Company, Olympic Receivables Finance
Corp., Financial Security Assurance Inc. and Norwest Bank
Minnesota, National Association, as Trustee and Collateral Agent.

10.3 Insurance and Indemnity Agreement, dated as of March 20, 1997,
among the Company, Financial Security Assurance Inc., Olympic
Automobile Receivables Trust, 1997-A, Olympic First GP Inc.,
Olympic Second GP Inc. and Olympic Receivables Finance Corp.

11.1 Computation of Earnings Per Share

12.1 Computation of Ratio of Earnings to Fixed Charges

12.2 Computation of Ratio of Earnings to Fixed Charge and Preferred
Stock Dividends

27 Financial Data Schedule

<PAGE>

(b) REPORTS ON FORM 8-K

On January 14, 1997, the Company filed a Current Report on Form 8-K, dated
January 6, 1997, reporting that Richard A. Greenawalt has accepted the position
of President and Chief Executive Officer and Warren Kantor was elected as
Chairman of the Board of Directors.

The Company filed a Current Report on Form 8-K, filed and dated March 7,
1997, reporting that the Company was served with a complaint in Texas state
court alleging that it originated loans above the maximum allowed rate by Texas
law.

On March 10, 1997, the Company filed a Current Report on Form 8-K, dated
March 7, 1997, reporting that the Company agreed to sell $300 million, 11.5%
Senior Notes due 2007 and 300,000 Warrants to purchase an aggregate of 2,052,000
shares of its Common Stock.

On March 12, 1997, the Company filed a Current Report on Form 8-K, dated
March 7, 1997, reporting a Form T-1 Statement of Eligibility of Norwest Bank,
Minnesota National Association, as Trustee, relating to the Company's $300
million, 11.5% Senior Notes.

On March 18, 1997, the Company filed a Current Report on Form 8-K, dated
March 12, 1997, reporting the $300 million 11.5% Senior Notes Indenture.

<PAGE>

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

OLYMPIC FINANCIAL LTD.

SIGNATURE TITLE DATE
- ------------------------------- -------------------------- ----------------

/s/ Richard Greenawalt
- -------------------------------
Richard Greenawalt President, Chief Executive April 25, 1997
Officer

/s/ John A. Witham
- -------------------------------
John A. Witham Executive Vice President April 25, 1997
and Chief Financial Officer
(Principal Financial Officer)

/s/ Brian S. Anderson
- --------------------------------
Brian S. Anderson Senior Vice President, April 25, 1997
Corporate Controller and
Assistant Secretary
(Principal Accounting
Officer)

<PAGE>

EXHIBIT INDEX

EXHIBIT NO. DESCRIPTION
- ----------- -----------
3.1 Restated Articles of Incorporation of the Registrant, as amended
(incorporated by reference to Exhibit No. 4.1 to Registrants
Statement on Form S-2, File No. 33-90108).

3.2 Restated Bylaws of the Registrant, as amended (incorporated by
reference to Exhibit 3.2 to the Registrants Annual Report on form
10-K for the year ended December 31, 1996).

4.2 First Amendment and Restatement, dated as of April 28, 1995 of
Indenture, dated July 1, 1994, between the Registrant and Norwest
Bank Minnesota, National Association, as Trustee, relating to the
Registrant's unsecured Extendible Notes and Fixed Term-Notes,
including forms of Notes (incorporated by reference to Exhibit
No. 4.8.1 to Post-Effective Amendment No. 2 on Form S-3 to
Registrant's Registration Statement on Form S-1, File No.
33-81512).

4.4 First Supplemental Indenture, dated as of August 11, 1995, to
Indenture, dated as of April 28, 1995, between the Registrant and
Norwest Bank Minnesota, National Association, as Trustee,
relating to the Registrant's 13% Senior Notes due 2000
(incorporated by reference to Exhibit 4.6 the Registrant's Annual
Report on form 10-K for the year ended December 31, 1995).

<PAGE>

to Exhibit 4.6 to the Registrants Annual Report on form 10-K for
the year ended December 31, 1996).

4.10 Form of unit (incorporated by reference to Exhibit 4.4 to the
Company's current report on Form 8-K dated March 12, 1997 and
filed March 18, 1997).

4.11 For of 11.5% Senior Notes due March 15, 2007 (incorporated by
reference to Exhibit 4.5 to the Company's current report on Form
8-K dated March 12, 1997 and filed March 18, 1997).

4.12 Form of Initial Warrant Certificate (incorporated by reference to
Exhibit 4.6 to the Company's current report on Form 8-K dated
March 12, 1997 and filed March 18, 1997).

<PAGE>

Corp., Financial Security Assurance Inc. and Norwest Bank
Minnesota, National Association, as Trustee and Collateral Agent.

11.1 Computation of Earnings Per Share

12.1 Computation of Ratio of Earnings to Fixed Charges

12.2 Computation of Ratio of Earnings to Fixed Charge and Preferred
Stock Dividends

27 Financial Data Schedule

<PAGE>

SPREAD ACCOUNT AGREEMENT,

dated as of March 25, 1993,

as amended and restated

as of March 1, 1997

among

OLYMPIC FINANCIAL LTD.,

OLYMPIC RECEIVABLES FINANCE CORP.,

FINANCIAL SECURITY ASSURANCE INC.

and

NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,

as Trustee and as Collateral Agent
<PAGE>

TABLE OF CONTENTS

Page
----

ARTICLE I

DEFINITIONS

Section 1.01. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.02. Rules of Interpretation . . . . . . . . . . . . . . . . . . . 12

ARTICLE II

CREDIT ENHANCEMENT FEE; SERIES SUPPLEMENTS; THE COLLATERAL

Section 2.01. Series 1993-A Credit Enhancement Fee. . . . . . . . . . . . . 12
Section 2.02. Series Supplements. . . . . . . . . . . . . . . . . . . . . . 13
Section 2.03. Grant of Security Interest by OFL and the Seller. . . . . . . 13
Section 2.04. Priority. . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 2.05. Seller and OFL Remain Liable. . . . . . . . . . . . . . . . . 14
Section 2.06. Maintenance of Collateral . . . . . . . . . . . . . . . . . . 15
Section 2.07. Termination and Release of Rights . . . . . . . . . . . . . . 15
Section 2.08. Non-Recourse Obligations of Seller. . . . . . . . . . . . . . 16
Section 2.09. Program Spread Account and Tag Accounts . . . . . . . . . . . 16

ARTICLE III

SPREAD ACCOUNTS

Section 3.01. Establishment of Spread Accounts; Initial
Deposits into Spread Accounts . . . . . . . . . . . . . . . . 19
Section 3.02. Investments . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 3.03. Distributions: Priority of Payments . . . . . . . . . . . . . 21
Section 3.04. General Provisions Regarding Spread Accounts. . . . . . . . . 24
Section 3.05. Reports by the Collateral Agent . . . . . . . . . . . . . . . 25

ARTICLE IV

THE COLLATERAL AGENT

Section 4.01. Appointment and Powers. . . . . . . . . . . . . . . . . . . . 25
Section 4.02. Performance of Duties . . . . . . . . . . . . . . . . . . . . 26
Section 4.03. Limitation on Liability . . . . . . . . . . . . . . . . . . . 26
Section 4.04. Reliance upon Documents . . . . . . . . . . . . . . . . . . . 27

<PAGE>

Page
----
Section 4.05. Successor Collateral Agent. . . . . . . . . . . . . . . . . . 27
Section 4.06. Indemnification . . . . . . . . . . . . . . . . . . . . . . . 29
Section 4.07. Compensation and Reimbursement. . . . . . . . . . . . . . . . 29
Section 4.08. Representations and Warranties of the Collateral
Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 4.09. Waiver of Setoffs . . . . . . . . . . . . . . . . . . . . . . 30
Section 4.10. Control by the Controlling Party. . . . . . . . . . . . . . . 30

ARTICLE V

COVENANTS OF THE SELLER

Section 5.01. Preservation of Collateral. . . . . . . . . . . . . . . . . . 30
Section 5.02. Opinions as to Collateral . . . . . . . . . . . . . . . . . . 30
Section 5.03. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 5.04. Waiver of Stay or Extension Laws; Marshalling of
Assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 5.05. Noninterference, etc. . . . . . . . . . . . . . . . . . . . . 31
Section 5.06. Seller Changes. . . . . . . . . . . . . . . . . . . . . . . . 32

ARTICLE VI

CONTROLLING PARTY; INTERCREDITOR PROVISIONS

Section 6.01. Appointment of Controlling Party. . . . . . . . . . . . . . . 32
Section 6.02. Controlling Party's Authority . . . . . . . . . . . . . . . . 33
Section 6.03. Rights of Secured Parties . . . . . . . . . . . . . . . . . . 34
Section 6.04. Degree of Care. . . . . . . . . . . . . . . . . . . . . . . . 35

ARTICLE VII

REMEDIES UPON DEFAULT

Section 7.01. Remedies upon a Default . . . . . . . . . . . . . . . . . . . 35
Section 7.02. Waiver of Default . . . . . . . . . . . . . . . . . . . . . . 35
Section 7.03. Restoration of Rights and Remedies. . . . . . . . . . . . . . 36
Section 7.04. No Remedy Exclusive . . . . . . . . . . . . . . . . . . . . . 36

ARTICLE VIII

MISCELLANEOUS

Section 8.01. Further Assurances. . . . . . . . . . . . . . . . . . . . . . 36
Section 8.02. Waiver. . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 8.03. Amendments; Waivers . . . . . . . . . . . . . . . . . . . . . 37
Section 8.04. Severability. . . . . . . . . . . . . . . . . . . . . . . . . 37

ii
<PAGE>

Page
----
Section 8.05. Nonpetition Covenant. . . . . . . . . . . . . . . . . . . . . 37
Section 8.06. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 8.07. Term of this Agreement. . . . . . . . . . . . . . . . . . . . 39
Section 8.08. Assignments: Third-Party Rights; Reinsurance. . . . . . . . . 40
Section 8.09. Consent of Controlling Party. . . . . . . . . . . . . . . . . 40
Section 8.10. Trial by Jury Waived. . . . . . . . . . . . . . . . . . . . . 40
Section 8.11. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 8.12. Consents to Jurisdiction. . . . . . . . . . . . . . . . . . . 41
Section 8.13. Limitation of Liability . . . . . . . . . . . . . . . . . . . 41
Section 8.14. Determination of Adverse Effect . . . . . . . . . . . . . . . 41
Section 8.15. Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 8.16. Headings. . . . . . . . . . . . . . . . . . . . . . . . . . . 42

EXHIBIT A Form of Pooling and Servicing Agreement

iii
<PAGE>

SPREAD ACCOUNT AGREEMENT, dated as of March 25, 1993, as amended and restated
as of March 1, 1997 (the "Agreement"), by and among OLYMPIC FINANCIAL LTD., a
Minnesota corporation ("OFL"), OLYMPIC RECEIVABLES FINANCE CORP., a Delaware
corporation (the "Seller"), FINANCIAL SECURITY ASSURANCE INC., a New York
stock insurance company ("Financial Security") and NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION, a national banking association in its capacities as
Trustee under each Pooling and Servicing Agreement referred to below and as
Trustee under each Indenture referred to below, in such capacity as agent for
the Noteholders and Certificateholders with respect to the related Series (in
each such capacities the "Trustee") and as Collateral Agent (as defined
below).

RECITALS

1. Olympic Automobile Receivables Trust, 1993-A (the "Series
1993-A Trust") was formed pursuant to a Pooling and Servicing Agreement,
dated as of March 1, 1993 (the "Series 1993-A Pooling and Servicing
Agreement"), among OFL, as Servicer, the Seller, the Trustee and the Backup
Servicer.

2. Pursuant to Pooling and Servicing Agreements or Sale and
Servicing Agreements, the Seller from time to time sells all of its right,
title and interest in and to Receivables and certain other Trust Property.

3. The Seller has requested that Financial Security issue
Policies to guarantee payment of the Guaranteed Distributions or Scheduled
Payments (as defined in the relevant Policy) on each Distribution Date in
respect of asset-backed securities backed by such Receivables and Other Trust
Property.

4. In partial consideration of the issuance of the Policies,
the Seller has agreed that Financial Security shall have certain rights as
Controlling Party, to the extent set forth herein.

5. The Seller is a wholly owned special purpose subsidiary of
OFL. Certain of the purchasers of Receivables and Other Trust Property have
agreed to pay a Credit Enhancement Fee to the Seller in consideration of the
obligations of the Seller and OFL pursuant hereto and in consideration of the
obligations of OFL pursuant to the Insurance Agreements (such obligations
forming part of the Insurer Secured Obligations referred to herein). The
Insurer Secured Obligations form part of the consideration to Financial
Security for its issuance of the Policies.

6. In order to secure the performance of the Secured
Obligations, to further effect and enforce the subordination provisions to
which the Credit Enhancement Fee is subject, and in consideration of the
receipt of the Credit Enhancement Fee, OFL and the Seller agreed to pledge
the Collateral as Collateral to the Collateral Agent for the benefit of
Financial Security and for the benefit of the Trustees on behalf of the
Trusts, upon the terms and conditions set forth herein.

<PAGE>

7. In connection with the issuance of Policies subsequent to
the Policy issued with respect to the Series 1993-A Trust, it is contemplated
that Financial Security will obtain certain Controlling Party rights with
respect to the related Series, and that, in connection with each such
additional Series, the parties hereto have entered into or will enter into a
Series Supplement hereto pursuant to which the Seller has pledged or will
pledge additional Collateral pursuant to the terms hereof and such Series
Supplement.

8. The Seller has entered into a Repurchase Agreement dated as
of December 3, 1996 with Arcadia Receivables Conduit Corp., a Delaware
corporation, (the "Issuer") (the "Repurchase Agreement") pursuant to which
the Seller has sold or will sell all of its right, title and interest in
certain Receivables, and that the Issuer will issue one or more classes or
tranches of Warehousing Notes pursuant to an Indenture among the Issuer, the
Indenture Trustee and the Collateral Agent, and that Financial Security in
its discretion may issue one or more Policies with respect to certain
scheduled payments on the corresponding Notes.

9. The parties have previously executed, amended and restated
this Agreement, and now wish to further amend and restate this Agreement to
supplement certain provisions therein in order to reflect the intent of the
parties.

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 1.01. DEFINITIONS. All terms defined in the document
entitled "OFL Grantor Trusts Standard Terms and Conditions of Agreement
Effective March 1, 1993" (the "Standard Terms and Conditions") shall have the
same meaning with respect to each Series in this Agreement. If the related
Series was issued pursuant to a Pooling and Servicing Agreement, all terms
defined in Section 1.01 of such Pooling and Servicing Agreement shall have
the same meaning with respect to the related Series in this Agreement. If
the related Series was issued pursuant to a Trust Agreement, Sale and
Servicing Agreement and Indenture, all terms defined in the related Sale and
Servicing Agreement shall have the same meaning with respect to the related
Series in this Agreement. If the related Series was issued pursuant to an
Indenture and the related Receivables were sold to the Issuer pursuant to a
Repurchase Agreement, all terms defined in the related Servicing Agreement
and Repurchase Agreement shall have the same meaning with respect to the
related Series in this Agreement. If a term is defined herein with respect
to one or more Series, if applicable, such term shall be defined with respect
to any other Series in the Series Supplement related thereto. The following
terms shall have the following respective meanings:

2
<PAGE>

"AUTHORIZED OFFICER" means, (i) with respect to Financial
Security, the Chairman of the Board, the President, the Executive Vice
President or any Managing Director of Financial Security, (ii) with respect
to the Trustee or the Collateral Agent, any Vice President or Trust Officer
thereof, (iii) with respect to OFL, the President or any Vice President
thereof, and (iv) with respect to the Seller, the President or any Vice
President thereof.

"AVERAGE DELINQUENCY RATIO" means, with respect to any Series
(other than the Warehousing Series) and any Determination Date, the
arithmetic average of the Delinquency Ratios for such Determination Date and
the two immediately preceding Determination Dates.

"CAPTURE EVENT" means the occurrence of an "Event of Default,"
as defined in the Indenture, dated as of March 12, 1997, between 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, with respect to
which a permanent waiver has not been effected in accordance with the terms
of such agreement.

"COLLATERAL" means the Series 1993-A Collateral, any property
pledged pursuant to Section 2.09(f), and, with respect to any Series, all
collateral delivered hereunder with respect to each of the Series, as
specified in the related Series Supplement.

"COLLATERAL AGENT" means, initially, Norwest Bank Minnesota,
National Association, in its capacity as collateral agent on behalf of the
Secured Parties, including its successors in interest, until a successor
Person shall have become the Collateral Agent pursuant to Section 4.05
hereof, and thereafter "Collateral Agent" shall mean such successor Person.

"COLLECTION ACCOUNT SHORTFALL" means (A), with respect to any
Series created pursuant to a Pooling and Servicing Agreement, any
Distribution Date, and a time of determination, the excess, if any, of the
amount required to be distributed on such Distribution Date pursuant to
subsections (i) through (vi) of Section 4.6(a) of the Standard Terms and
Conditions over the amount on deposit in and available for distribution (or,
for the purposes of Section 3.03(a), calculated on a pro forma basis to be on
deposit in and available for distribution) on such Distribution Date from the
Collection Account related to such Series, and (B) with respect to any Series
created pursuant to a Trust Agreement, Sale and Servicing Agreement and
Indenture, or with respect to any Series issued by the Issuer, the meaning
assigned in the related Series Supplement.

"CONTROLLING PARTY" means with respect to a Series, at any
time, the Person designated as the Controlling Party at such time pursuant to
Section 6.01 hereof.

"CRAM DOWN LOSS" means, if a court of appropriate jurisdiction
in an insolvency proceeding shall have issued an order reducing the Principal
Balance of a Receivable, the amount of such reduction. A "Cram Down Loss"
shall be deemed to have occurred on the date of issuance of such order.

3
<PAGE>

"CUMULATIVE DEFAULT RATE" means, with respect to any
Determination Date and any Series (other than the Warehousing Series), the
fraction, expressed as a percentage, the numerator of which is equal to the
sum of (a) the Principal Balance of all Receivables which became Spread
Account Liquidated Receivables since the Cutoff Date as of the related
Accounting Date plus (b) the Principal Balance of all Receivables with
respect to which all or any portion of a Scheduled Payment has become 91 or
more days delinquent as of the related Accounting Date (not including those
Receivables included in clause (a) above) and the denominator of which is
equal to the sum of (i) the original Aggregate Principal Balance as of the
Initial Cutoff Date plus (ii) the Prefunded Amount as of the Series Closing
Date.

"CUMULATIVE NET LOSS RATE" means, with respect to any
Determination Date and any Series (other than the Warehousing Series), the
fraction, expressed as a percentage, the numerator of which is equal to the
sum of (a) Net Losses for such Determination Date plus (b) 40% of the
Principal Balance of all Receivables with respect to which all or any portion
of a Scheduled Payment has become 91 or more days delinquent (not including
Receivables included under the definition of Net Losses in clause (a) above)
as of the related Accounting Date and the denominator of which is equal to
the sum of (i) the original Aggregate Principal Balance as of the Initial
Cutoff Date plus (ii) the Prefunded Amount as of the Series Closing Date.

"DEEMED CURED" means, with respect to Series 1994-B, Series
1994-A, Series 1993-D, Series 1993-C, Series 1993-B or Series 1993-A and each
other Spread Account for which "Deemed Cured" is not defined in the related
Series Supplement, (a) with respect to a Trigger Event that has occurred
pursuant to clause (A)(i) or (ii) of the definition thereof, as of a
Determination Date that no such clause (A)(i) or clause (A)(ii) Trigger Event
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 a Trigger Event that has occurred pursuant to clause (A)(iii)
or clause (A)(iv) of the definition thereof, as of the next Determination
Date which occurs in a calendar month which is a multiple of three months
succeeding the Closing Date, that no such clause (A)(iii) or clause (A)(iv)
Trigger Event with respect to such Series shall have occurred as of such
Determination Date.

"DEFAULT" means, with respect to any Series, at any time, (i)
if Financial Security is then the Controlling Party with respect to such
Series, any Insurance Agreement Event of Default with respect to such Series,
and (ii) if the Trustee is then the Controlling Party with respect to such
Series, any Servicer Termination Event with respect to such Series.

"DELINQUENCY RATIO" means, with respect to any Determination
Date and any Series (other than the Warehousing Series), the fraction,
expressed as a percentage, the numerator of which is equal to the sum of the
Principal Balances (as of the related Accounting Date) of all Receivables
that were delinquent with respect to all or any portion of a Scheduled
Payment more than 30 days as of the related Accounting Date or that became a
Purchased Receivable as of the related Accounting Date and that were
delinquent with respect to all or any portion of a Scheduled Payment more
than 30 days as of such Accounting Date and the denominator of which is equal
to the Aggregate Principal Balance as of the related Accounting Date.

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<PAGE>

"ELIGIBLE ACCOUNT" means a segregated trust account that (i)
is either (x) maintained with a depository institution or trust company the
long-term unsecured debt obligations of which are rated "AA" or higher by
Standard & Poor's and "Aa2" or higher by Moody's, or (y) maintained with a
depository institution or trust company the commercial paper or other
short-term unsecured debt obligations of which are rated "A-l+" by Standard &
Poor's and "P-l" by Moody's and (ii) in either case, such depository
institution or trust company shall have been specifically approved by the
Controlling Party, acting in its discretion, by written notice to the
Collateral Agent.

"FINAL TERMINATION DATE" means, with respect to a Series, the
date that is the later of (i) the Insurer Termination Date with respect to
such Series and (ii) the Trustee Termination Date with respect to such Series.

"FINANCIAL SECURITY DEFAULT" means, with respect to any
Series, any one of the following events shall have occurred and be continuing:

(a) Financial Security shall have failed to make a payment
required under a related Policy;

(b) Financial Security shall have (i) filed a petition or
commenced any case or proceeding under any provision or chapter
of the United States Bankruptcy Code, the New York State
Insurance Law or any other similar federal or state law relating
to insolvency, bankruptcy, rehabilitation, liquidation or
reorganization, (ii) made a general assignment for the benefit
of its creditors, or (iii) had an order for relief entered
against it under the United States Bankruptcy Code, the New York
State Insurance Law, or any other similar federal or state law
relating to insolvency, bankruptcy, rehabilitation, liquidation
or reorganization which is final and nonappealable; or

(c) a court of competent jurisdiction, the New York Department
of Insurance or other competent regulatory authority shall have
entered a final and nonappealable order, judgment or decree (i)
appointing a custodian, trustee, agent or receiver for Financial
Security or for all or any material portion of its property or
(ii) authorizing the taking of possession by a custodian,
trustee, agent or receiver of Financial Security (or the taking
of possession of all or any material portion of the property of
Financial Security).

"INITIAL PRINCIPAL AMOUNT" means $59,222,640.38 with respect
to Series 1993-A.

"INITIAL SPREAD ACCOUNT DEPOSIT" means $2,368,906 for Series
1993-A.

"INITIAL SPREAD ACCOUNT MAXIMUM AMOUNT" means, with respect to
Series 1993-A and any Distribution Date, an amount equal to the greater of
(i) 7% of the Certificate Balance as of such Distribution Date (after giving
effect to the distribution in respect of principal made on such Distribution
Date) and (ii) the Spread Account Minimum Amount as of such Distribution Date.

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<PAGE>

"INSURANCE AGREEMENT" means, with respect to any Series, the
Insurance and Indemnity Agreement among Financial Security, the Seller, OFL
and such other parties as may be named therein.

"INSURER SECURED OBLIGATIONS" means, with respect to a Series,
all amounts and obligations which OFL, the Seller and such other parties as
may be named therein may at any time owe or be required to perform to or on
behalf of Financial Security (or any agents, accountants or attorneys for
Financial Security) under the Insurance Agreement related to such Series or
under any Transaction Document in respect of such Series, regardless of
whether such amounts are owed or performance is due now or in the future,
whether liquidated or unliquidated, contingent or non-contingent.

"INSURER TERMINATION DATE" means, with respect to any Series,
the date which is the latest of (i) the date of the expiration of all
Policies issued in respect of such Series, (ii) the date on which Financial
Security shall have received payment and performance in full of all Insurer
Secured Obligations with respect to such Series and (iii) the latest date on
which any payment referred to above could be avoided as a preference or
otherwise under the United States Bankruptcy Code or any other similar
federal or state law relating to insolvency, bankruptcy, rehabilitation,
liquidation or reorganization, as specified in an Opinion of Counsel
delivered to the Collateral Agent and the Trustee.

"ISSUER" means Arcadia Receivables Conduit Corp., a Delaware
corporation.

"LIEN" means, as applied to the property or assets (or the
income, proceeds, products, rents 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 (and/or such income, proceeds, products, rents or profits) are
transferred, sequestered or otherwise identified for the purpose of
subjecting or making available the same for payment of debt or performance of
any other obligation in priority to the payment of the general, unsecured
creditors of such Person.

"NET LOSSES" means, with respect to any Determination Date and
any Series (other than the Warehousing Series), the positive difference of
(A) the sum of (i) the aggregate of the Principal Balances as of the related
Accounting Date (plus accrued and unpaid interest to the end of the related
Monthly Period, at the applicable APR) of all Receivables that became Spread
Account Liquidated Receivables since the Cutoff Date, plus (ii) the Purchase
Amount of all Receivables that became Purchased Receivables as of the related
Accounting Date and that were delinquent with respect to all or any portion
of a Scheduled Payment more than 30 days as of such Accounting Date, plus
(iii) the aggregate of all Cram Down Losses as of the related Accounting Date
that occurred since the Cutoff Date, over (B) the Liquidation Proceeds
received by the Trust as of the related Accounting Date since the Cutoff
Date.

"NON-CONTROLLING PARTY" means, with respect to a Series, at
any time, the Secured Party that is not the Controlling Party at such time.

<PAGE>

"OBLIGOR" means, with respect to any Receivable, 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.

"OFL" means Olympic Financial Ltd., a Minnesota corporation.

"OPINION OF COUNSEL" means a written opinion of counsel
acceptable, as to form, substance and issuing counsel, to the Controlling
Party.

"PAYMENT PRIORITIES" means the priority of PRO RATA
distributions described in clause (iii) of priority THIRD of Section 3.03(a).

"POLICY" means the Series 1993-A Policy and any insurance
policy subsequently issued by Financial Security with respect to a Series.

"POOLING AND SERVICING AGREEMENT" means, with respect to
Series 1993-A, the Series 1993-A Pooling and Servicing Agreement and, for
each other Series created pursuant to a Pooling and Servicing Agreement, the
Pooling and Servicing Agreement related to such Series.

"PROGRAM SPREAD ACCOUNT" has the meaning specified in Section
2.09(a) hereof.

"SECURED OBLIGATIONS" means, with respect to each Series, the
Insurer Secured Obligations with respect to such Series and the Trustee
Secured Obligations with respect to such Series.

"SECURED PARTIES" means, with respect to a Series and the
related Collateral, each of the Trustee, in respect of the Trustee Secured
Obligations with respect to such Series, and Financial Security, in respect
of the Insurer Secured Obligations with respect to such Series.

"SECURITY INTERESTS" means, with respect to Series 1993-A
Certificates, the security interests and Liens in the Series 1993-A
Collateral granted pursuant to Section 2.03 hereof, and, with respect to any
other Series, the security interests and Liens in the related Collateral
granted pursuant to the related Series Supplement.

"SERIES 1993-A CERTIFICATES" means the Series of Certificates
issued on the date hereof pursuant to the Series 1993-A Pooling and Servicing
Agreement.

"SERIES 1993-A COLLATERAL" has the meaning specified in
Section 2.03(a) hereof.

"SERIES 1993-A CREDIT ENHANCEMENT FEE" means the amount
distributable on each Distribution Date pursuant to Section 4.6(a)(vi) and
(vii) of the Standard Terms and Conditions as incorporated by reference in
the Series 1993-A Pooling and Servicing Agreement.

"SERIES 1993-A POOLING AND SERVICING AGREEMENT" means the
Pooling and Servicing Agreement, dated as of the date hereof, among OFL, in
its individual capacity and as

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<PAGE>

Servicer, the Seller, the Trustee and the Backup Servicer, as such agreement
may be supplemented, amended or modified from time to time.

"SERIES 1993-A RECEIVABLE" means each Receivable referenced on
the Schedule of Receivables attached to the Series 1993-A Pooling and
Servicing Agreement.

"SERIES OF SECURITIES" or "SERIES" means the Series 1993-A
Certificates or, as the context may require, any other series of Certificates
and/or Notes issued as described in Section 2.02 hereof, or collectively, all
such series; PROVIDED, HOWEVER, Series, as used collectively shall not
include any Series of Warehousing Notes when such term is used in, or with
respect to, the definitions "Cumulative Default Rate," "Average Delinquency
Ratio," "Cumulative Net Loss Rate," "Deemed Cured," "Delinquency Ratio," "Net
Losses," "Spread Account Shortfall" and "Spread Account Default Level."

"SERIES SUPPLEMENT" means a supplement hereto executed by the
parties hereto in accordance with Section 2.02 hereof.

"SPREAD ACCOUNT" has the meaning specified in Section 3.01(a)
hereof.

"SPREAD ACCOUNT ADDITIONAL DEPOSIT" with respect to any Series
created pursuant to a Trust Agreement, Sale and Servicing Agreement and
Indenture, has the meaning assigned in the related Series Supplement.

"SPREAD ACCOUNT LIQUIDATED RECEIVABLE" means, 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 past due.

"SPREAD ACCOUNT MAXIMUM AMOUNT" means, with respect to Series
1993-A and any Distribution Date:

(i) if no Insurance Agreement Event of Default with respect to such
Series has occurred and is continuing as of the related Determination
Date, no Capture Event has occurred and is continuing as of the
related Determination Date, no Trigger Event has occurred as of the
related Determination Date, and any Trigger Event with respect to such
Series is Deemed Cured as of the related Determination Date, then the
Initial Spread Account Maximum Amount with respect to such Series and
such Distribution Date;

(ii) if (A) a Trigger Event with respect to Series 1993-A has
occurred as of the Determination Date or (B) a Trigger Event with
respect to Series 1993-A has occurred as of a prior Distribution
Date and is not Deemed Cured as of the related Determination Date,
and no Insurance Agreement Event of Default with respect to Series
1993-A 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)

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<PAGE>

10% of the Series 1993-A 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
such Series 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 1993-A 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
1993-A and any Distribution Date: , an amount equal to the greater of:

(i) $100,000, and

(ii) the lesser of:

(A) 1% of the Initial Principal Amount of such Series, but in no
event less than $500,000, and

(B) the Certificate Balance as of such Distribution Date (after
giving effect to the distribution in respect of principal
made on such Distribution Date).

"SPREAD ACCOUNT SHORTFALL" means, with respect to any
Distribution Date and any Series (other than the Warehousing Series) with
respect to which an Insurance Agreement Event of Default has occurred and is
continuing, or a Capture Event has occurred and is continuing, the excess, if
any, of the Spread Account Maximum Amount for such Series and such
Distribution Date and the amount on deposit in such Spread Account as of such
Distribution Date after giving effect to distributions made on such
Distribution Date pursuant to priority SECOND of Section 3.03(b).

"STOCK PLEDGE AGREEMENT" means the Third Amended and Restated
Stock Pledge Agreement, dated as of December 3, 1996, between OFL, Financial
Security and the Collateral Agent, as amended from time to time.

"TAG ACCOUNT" has the meaning specified in Section 2.09(c).

"TRANSACTION DOCUMENTS" means, with respect to a Series, this
Agreement, each of the Pooling and Servicing Agreement or Trust Agreement,
Sale and Servicing Agreement and Indenture, or Servicing Agreement,
Repurchase Agreement, Indenture and Security Agreement, as applicable, the
Insurance Agreement, the Custodian Agreement, the Purchase Agreement, any
Subsequent Purchase Agreements and Subsequent Transfer Agreements, any
Underwriting Agreement, the Lockbox Agreement, and the Stock Pledge Agreement
related to such Series.

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<PAGE>

"TRIGGER EVENT" means, with respect to Series 1993-A 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) [reserved];

(ii) the Average Delinquency Ratio for such Determination Date shall
be equal to or greater than 5.00%;

(iii) the Cumulative Default Rate shall be equal to or greater than
(A) 3.15%, with respect to any Determination Date occurring
prior to or during the sixth calendar month succeeding the
Series 1993-A Closing Date, (B) 5.50%, with respect to any
Determination Date occurring after the sixth, and prior to or
during the 12th, calendar month succeeding the Series 1993-A
Closing Date, (C) 7.0%, with respect to any Determination Date
occurring after the 12th, and prior to or during the 18th,
calendar month succeeding the Series 1993-A Closing Date, (D)
7.5%, with respect to any Determination Date occurring after
the 18th, and prior to or during the 24th, calendar month
succeeding the Series 1993-A Closing Date, (E) 8.15%, with
respect to any Determination Date occurring after the 24th, and
prior to or during the 30th, calendar month succeeding the
Series 1993-A Closing Date, (F) 8.75%, with respect to any
Determination Date occurring after the 30th, and prior to or
during the 36th, calendar month succeeding the Series 1993-A
Closing Date, (G) 9.0%, with respect to any Determination Date
occurring after the 36th, and prior to or during the 42nd,
calendar month succeeding the Series 1993-A Closing Date, (H)
9.25%, with respect to any Determination Date occurring after
the 42nd, and prior to or during the 48th, calendar month
succeeding the Series 1993-A Closing Date, (I) 9.50%, with
respect to any Determination Date occurring after the 48th, and
prior to or during the 54th, calendar month succeeding the
Series 1993-A Closing Date, (J) 9.75%, with respect to any
Determination Date occurring after the 54th, and prior to or
during the 60th calendar month succeeding the Series 1993-A
Closing Date, (K) 9.9%, with respect to any Determination Date
occurring after the 60th, and prior to or during the 66th,
calendar month succeeding the Series 1993-A Closing Date, or
(L) 10.0%, with respect to any Determination Date occurring
after the 66th, and prior to or during the 72nd, calendar month
succeeding the Series 1993-A Closing Date; or

(iv) the Cumulative Net Loss Rate shall be equal to or greater than
(A) 1.25%, with respect to any Determination Date occurring
prior to or during the sixth calendar month succeeding the
Series 1993-A Closing Date, (B) 2.0%, with respect to any
Determination Date occurring after the sixth, and prior to or
during the 12th, calendar month succeeding

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<PAGE>

the Series 1993-A Closing Date, (C) 2.75%, with respect to any
Determination Date occurring after the 12th, and prior to or
during the 18th, calendar month succeeding the Series 1993-A
Closing Date, (D) 3.0%, with respect to any Determination Date
occurring after the 18th, and prior to or during the 24th,
calendar month succeeding the Series 1993-A Closing Date, (E)
3.25%, with respect to any Determination Date occurring after
the 24th, and prior to or during the 30th, calendar month
succeeding the Series 1993-A Closing Date, (F) 3.5%, with
respect to any Determination Date occurring after the 30th, and
prior to or during the 36th, calendar month succeeding the
Series 1993-A Closing Date, (G) 3.6%, with respect to any
Determination Date occurring after the 36th, and prior to or
during the 42nd, calendar month succeeding the Series 1993-A
Closing Date, (H) 3.7%, with respect to any Determination Date
occurring after the 42nd, and prior to or during the 48th,
calendar month succeeding the Series 1993-A Closing Date, (I)
3.8%, with respect to any Determination Date occurring after
the 48th, and prior to or during the 54th, calendar month
succeeding the Series 1993-A Closing Date, (J) 3.9%, with
respect to any Determination Date occurring after the 54th, and
prior to or during the 60th, calendar month succeeding the
Series 1993-A Closing Date, (K) 3.95%, with respect to any
Determination Date occurring after the 60th, and prior to or
during the 66th, calendar month succeeding the Series 1993-A
Closing Date, or (L) 4.0%, with respect to any Determination
Date occurring after the 66th, and prior to or during the 72nd,
calendar month succeeding the Series 1993-A Closing Date.

(B) The amount specified with respect to such Series in the last
sentence of Section 2.09(f) hereof is positive on such
Determination Date, and such amount has not been deposited in
the related Tag Account on such Determination Date.

"TRUST" means a trust formed pursuant to a Pooling and Servicing
Agreement or a Trust Agreement, as the case may be.

"TRUST PROPERTY," with respect to any Series (other than the
Warehousing Series), has the meaning specified in the related Pooling and
Servicing Agreement or Trust Agreement, as the case may be, and with respect
to the Warehousing Series, means the Seller Conveyed Property (as defined in
the Repurchase Agreement).

"TRUSTEE" means (A) with respect to any Series created pursuant to
a Pooling and Servicing Agreement, the Trustee named in such Pooling and
Servicing Agreement, or (B) with respect to any Series issued pursuant to an
Indenture, the Trustee named in such Indenture in its capacity as agent for
the Noteholders and, if applicable, the Certificateholders.

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<PAGE>

"TRUSTEE SECURED OBLIGATIONS" means, with respect to a Series, all
amounts and obligations which OFL or the Seller may at any time owe or be
required to perform to or on behalf of (i) the Trustee, the Trust or the
Certificateholders under the Pooling and Servicing Agreement with respect to
such Series, (ii) the Trustee, the Owner Trustee, the Trust, the
Certificateholders or the Noteholders under the Trust Agreement, the Sale and
Servicing Agreement or the Indenture with respect to such Series or (iii) the
Trustee and the Noteholders under the Indenture with respect to the
Warehousing Series.

"TRUSTEE TERMINATION DATE" means, with respect to any Series, the
date which is the later of (i) the date on which the Trustee shall have
received, as Trustee for the holders of the Certificates of such Series, or
as Indenture Trustee on behalf of (and as agent for) the Noteholders and/or
Certificateholders of such Series, payment and performance in full of all
Trustee Secured Obligations arising out of or relating to such Series or (ii)
except with respect to the Warehousing Series, the date on which all payments
in respect of the Certificates shall have been made and the related Trust
shall have been terminated pursuant to the terms of the related Pooling and
Servicing Agreement or Trust Agreement.

"UNDERWRITING AGREEMENT" means, with respect to any Series (other
than the Warehousing Series), the Underwriting Agreement among OFL, the
Seller and the Underwriters named therein.

"UNIFORM COMMERCIAL CODE" or "UCC" means the Uniform Commercial
Code in effect in the relevant jurisdiction, as the same may be amended from
time to time.

"WAREHOUSING SERIES" means all notes issued by the Issuer.

Section 1.02. RULES OF INTERPRETATION. The terms "hereof,"
"herein" or "hereunder," unless otherwise modified by more specific
reference, shall refer to this Agreement in its entirety. Unless otherwise
indicated in context, the terms "Article," "Section," "Appendix," "Exhibit"
or "Annex" shall refer to an Article or Section of, or Appendix, Exhibit or
Annex to, this Agreement. 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 2.01. SERIES 1993-A CREDIT ENHANCEMENT FEE. The Series
1993-A Pooling and Servicing Agreement provides for the payment to the Seller
of a Series 1993-A 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 OFL hereby agree that
payment of the Series 1993-A Credit Enhancement Fee in the manner and subject
to the conditions set forth herein and in the Series 1993-A Pooling and
Servicing Agreement is

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<PAGE>

adequate consideration and the exclusive consideration to be received by the
Seller or OFL for the obligations of the Seller pursuant hereto and the
obligations of OFL pursuant hereto (including, without limitation, the
transfer by the Seller to the Collateral Agent of the Initial Spread Account
Deposit) and pursuant to the Series 1993-A Insurance Agreement. The Seller
and OFL hereby agree with the Trustee and with Financial Security that
payment of the Series 1993-A Credit Enhancement Fee to the Seller is
expressly conditioned on subordination of the Series 1993-A Credit
Enhancement Fee to payments on the Certificates of any Series, payments on
the Notes 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 and Section 3.03 hereof; and
the Security Interest of the Secured Parties in the Series 1993-A Collateral
is intended to effect and enforce such subordination and to provide security
for the Series 1993-A Secured Obligations and the Secured Obligations with
respect to each other Series.

Section 2.02. SERIES SUPPLEMENTS. The parties hereto intend to enter
into a Series Supplement hereto with respect to any Series other than the Series
1993-A Certificates. The parties will enter into a Series Supplement only if the
following conditions shall have been satisfied:

(i) The Seller shall have sold or will sell Receivables to a
Trust or to a corporation pursuant to (A) a Pooling and Servicing Agreement
under which the Trustee shall act as trustee, (B) a Sale and Servicing
Agreement in form and substance satisfactory to Financial Security, with
respect to which the Trustee shall act as Indenture Trustee, and which Sale
and Servicing Agreement may provide for the sale of Subsequent Receivables
to the related Trust or (C) a Repurchase Agreement in form and substance
satisfactory to Financial Security, with respect to which the Trustee shall
act as Indenture Trustee with respect to the related Notes;

(ii) Financial Security shall have issued (A) one or more
Policies in respect of the Guaranteed Distributions on Certificates issued
pursuant to the related Pooling and Servicing Agreement or Trust Agreement,
and/or (B) one or more Note Policies in respect of the Scheduled Payments
on the Notes issued pursuant to the related Indenture; and

(iii) Pursuant to the related Series Supplement any and all
right, title and interest of the Seller, OFL or any affiliate of either of
them in the Collateral specified herein shall be pledged to the Secured
Parties substantially on the terms set forth in Section 2.03 hereof.

Section 2.03. GRANT OF SECURITY INTEREST BY OFL AND THE SELLER.

(a) In order to secure the performance of the Secured Obligations
with respect to each Series, the Seller (and OFL, 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 with respect to each Series, a lien on and
security interest in (which lien and security interest is intended to be prior
to all

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<PAGE>

other liens, security interest or other encumbrances), all of its right,
title and interest in and to the following (all being collectively referred
to herein as the "Series 1993-A Collateral"):

(i) the Series 1993-A Credit Enhancement Fee and all rights and
remedies that the Seller may have to enforce payment of the Series 1993-A
Credit Enhancement Fee whether under the Series 1993-A Pooling and
Servicing Agreement or otherwise;

(ii) the Series 1993-A Spread Account established pursuant to
Section 3.01 hereof, 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 1993-A Spread
Account; and

(iv) all distributions, revenues, products, substitutions,
benefits, profits and proceeds, in whatever form, of any of the foregoing.

(b) In order to effectuate the provisions and purposes of this
Agreement, 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 Agreement, executed and filed an appropriate Uniform
Commercial Code financing statement in Minnesota sufficient to assure that the
Collateral Agent, as agent for the Secured Parties, has a first priority
perfected security interest in all Series 1993-A Collateral which can be
perfected by the filing of a financing statement.

Section 2.04. PRIORITY. The Seller (and OFL, to the extent it may
have any rights in the Collateral) intends the security interests in favor of
the Secured Parties to be prior to all other Liens in respect of the
Collateral, and OFL and the Seller shall take all actions necessary to obtain
and maintain, in favor of the Collateral Agent, for the benefit of the
Secured Parties, a first lien on and a first priority, perfected security
interest in the Collateral. Subject to the provisions hereof specifying the
rights and powers of the Controlling Party from time to time to control
certain specified matters relating to the Collateral, each Secured Party
shall have all of the rights, remedies and recourse with respect to the
Collateral afforded a secured party under the Uniform Commercial Code of the
State of New York and all other applicable law in addition to, and not in
limitation of, the other rights, remedies and recourse granted to such
Secured Parties by this Agreement or any other law relating to the creation
and perfection of liens on, and security interests in, the Collateral.

Section 2.05. SELLER AND OFL REMAIN LIABLE. The Security Interests
are granted as security only and shall not (i) transfer or in any way affect
or modify, or relieve either the Seller or OFL from, any obligation to
perform or satisfy, any term, covenant, condition or agreement to be
performed or satisfied by the Seller or OFL under or in connection with this
Agreement, the Insurance Agreement or any other Transaction Document to which
it

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is a party or (ii) impose any obligation on any of the Secured Parties or the
Collateral Agent to perform or observe any such term, covenant, condition or
agreement or impose any liability on any of the Secured Parties or the
Collateral Agent for any act or omission on its part relative thereto or for
any breach of any representation or warranty on its part contained therein or
made in connection therewith, except, in each case, to the extent provided
herein and in the other Transaction Documents.

Section 2.06. MAINTENANCE OF COLLATERAL.

(a) SAFEKEEPING. The Collateral Agent agrees to maintain the
Collateral received by it (or evidence thereof, in the case of book-entry
securities in the name of the Collateral Agent) and all records and documents
relating thereto at the office of the Collateral Agent specified in Section
8.06 hereof or such other address within the State of Minnesota (unless all
filings have been made to continue the perfection of the security interest in
the Collateral to the extent such security interest can be perfected by
filing a financing statement, as evidenced by an Opinion of Counsel delivered
to the Controlling Party), as may be approved by the Controlling Party. The
Collateral Agent shall keep all Collateral and related documentation in its
possession separate and apart from all other property that it is holding in
its possession and from its own general assets and shall maintain accurate
records pertaining to the Eligible Investments and Spread Accounts included
in the Collateral in such a manner as shall enable the Collateral Agent and
the Secured Parties to verify the accuracy of such record-keeping. The
Collateral Agent's books and records shall at all times show that the
Collateral is held by the Collateral Agent as agent of the Secured Parties
and is not the property of the Collateral Agent. The Collateral Agent will
promptly report to each Secured Party and the Seller any failure on its part
to hold the Collateral as provided in this Section 2.06(a) and will promptly
take appropriate action to remedy any such failure.

(b) ACCESS. The Collateral Agent shall permit each of the
Secured Parties, or their respective duly authorized representatives,
attorneys, auditors or designees, to inspect the Collateral in the possession
of or otherwise under the control of the Collateral Agent pursuant hereto at
such reasonable times during normal business hours as any such Secured Party
may reasonably request upon not less than one Business Day's prior written
notice.

Section 2.07. TERMINATION AND RELEASE OF RIGHTS.

(a) On the Insurer Termination Date relating to a Series, the
rights, remedies, powers, duties, authority and obligations conferred upon
Financial Security pursuant to this Agreement in respect of the Collateral
related to such Series shall terminate and be of no further force and effect
and all rights, remedies, powers, duties, authority and obligations of
Financial Security with respect to such Collateral shall be automatically
released; PROVIDED that any indemnity provided to or by Financial Security
herein shall survive such Insurer Termination Date. If Financial Security is
acting as Controlling Party with respect to a Series on the related Insurer
Termination Date, Financial Security agrees, at the expense of the Seller, to
execute and deliver such instruments as the successor Controlling Party may
reasonably request to effectuate such release, and any such instruments so
executed and delivered shall be fully binding on Financial Security and any
Person claiming by, through or under Financial Security.

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<PAGE>

(b) On the Trustee Termination Date related to a Series, the
rights, remedies, powers, duties, authority and obligations, if any,
conferred upon the Trustee pursuant to this Agreement in respect of the
Collateral related to such Series shall terminate and be of no further force
and effect and all such rights, remedies, powers, duties, authority and
obligations of the Trustee with respect to such Collateral shall be
automatically released; PROVIDED that any indemnity provided to the Trustee
herein shall survive such Trustee Termination Date. If the Trustee is acting
as Controlling Party with respect to a Series on the related Trustee
Termination Date, the Trustee agrees, at the expense of the Seller, to
execute and deliver such instruments as the Seller may reasonably request to
effectuate such release, and any such instruments so executed and delivered
shall be fully binding on the Trustee.

(c) On the Final Termination Date with respect to a Series, the
rights, remedies, powers, duties, authority and obligations conferred upon
the Collateral Agent and each Secured Party pursuant to this Agreement with
respect to such Series shall terminate and be of no further force and effect
and all rights, remedies, powers, duties, authority and obligations of the
Collateral Agent and each Secured Party with respect to the Collateral
related to such Series shall be automatically released. On the Final
Termination Date with respect to a Series, the Collateral Agent agrees, and
each Secured Party agrees, at the expense of the Seller, to execute such
instruments of release, in recordable form if necessary, in favor of the
Seller as the Seller may reasonably request, to deliver any Collateral in its
possession to the Seller, and to otherwise release the lien of this Agreement
and release and deliver to the Seller the Collateral related to such Series.

Section 2.08. NON-RECOURSE OBLIGATIONS OF SELLER. Notwithstanding
anything herein or in the other Transaction Documents to the contrary, the
parties hereto agree that the obligations of the Seller hereunder (without
limiting the obligation to apply distributions of the respective Credit
Enhancement Fees in accordance with Section 3.03(b)) shall be recourse only
to the extent of amounts released to the Seller pursuant to priority EIGHTH
of Section 3.03(b) and retained by the Seller in accordance with the next
sentence. The Seller agrees that it shall not declare or make payment of (i)
any dividend or other distribution on or in respect of any shares of its
capital stock or (ii) any payment on account of the purchase, redemption,
retirement or acquisition of (x) any shares of its capital stock or (y) any
option, warrant or other right to acquire shares of its capital stock, or
(iii) any payment of any loan made by OFL to the Seller, or of any deferred
portion of the purchase price payable by the Seller to OFL with respect to
any Receivable unless (in each case) at the time of such declaration or
payment (and after giving effect thereto) no amount payable by Seller under
any Transaction Document is then due and owing but unpaid. Nothing contained
herein shall be deemed to limit the rights of the Certificateholders (or
Certificate Owners) or Noteholders (or Note Owners) under any other
Transaction Document.

Section 2.09. PROGRAM SPREAD ACCOUNT AND TAG ACCOUNTS. (a) On or
prior to the date of any transfer of cash by the Seller pursuant to Section
2.09(b)(i), the Collateral Agent at the direction of the Seller shall
establish at the same institution at which the Spread Accounts established
hereunder are then maintained an Eligible Account, designated "Program Spread
Account -- Norwest Bank Minnesota, National Association" (the "Program

<PAGE>

Spread Account"). The Program Spread Account shall continue to be maintained
at the same institution as the Spread Accounts established hereunder.

(b) The Collateral Agent shall hold, for the benefit of the Seller,
the following property in the Program Spread Account:

(i) all cash amounts from time to time on deposit in the Program
Spread Account which at the Seller's election it has delivered to the Collateral
Agent from (x) the proceeds of the sale of securities of a Series or (y) amounts
released to the Seller from the Lien of this Agreement ; and

(ii) investments made with the proceeds of the property described in
clause (i) above, or made with amounts on deposit in the Program Spread Account.

Notwithstanding anything herein or in any Series Supplement to the
contrary, the property held by the Collateral Agent under this Section 2.09(b)
shall not constitute Collateral hereunder.

(c) With respect to each Series for which the Seller has made an
election pursuant to Section 2.09(f) in connection with such Series, on or prior
to the date of any transfer of cash from the Program Spread Account in
connection with such election, the Collateral Agent at the direction of the
Seller shall establish at the same institution at which the Spread Accounts
established hereunder are then maintained an Eligible Account, designated "Tag
Account Series [series designation] - Norwest Bank Minnesota, National
Association, as Collateral Agent for Financial Security Assurance Inc. and
another Secured Party" (each such account, a "Tag Account"). Each Tag Account
shall continue to be maintained at the same institution as the Spread Accounts
established hereunder.

(d) In order to secure the performance of the Secured Obligations
with respect to each Series, the Seller 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 with respect to each
Series, a lien on and a security interest on (which lien and security interest
is intended to be prior to all other liens, security interests and other
encumbrances), all of its right, title and interest in and to the following:

(i) each Tag Account established pursuant to Section 2.09(c)
hereof, (including, without limitation, all monies, checks, securities,
investments and other documents held in or evidencing any such accounts);

(ii) all of the Seller's right, title and interest in and to
investments made with proceeds of the property described in clause (i) above;
and

(iii) all distributions, revenues, products, substitutions, benefits,
profits and proceeds, in whatever form, of any of the foregoing.

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<PAGE>

In order to effectuate the provisions and purposes of this Agreement,
including for the purpose of perfecting the security interests granted
hereunder, the Seller represents and warrants that it shall, prior to the
deposit of amounts in any Tag Account, execute and file an appropriate Uniform
Commercial Code financing statement in Minnesota sufficient to assure that the
Collateral Agent, as agent for the Secured Parties, has a first priority
perfected security interest on the Collateral pledged or to be pledged pursuant
to Section 2.09(d) which can be perfected by the filing of a financing
statement.

(e) The Program Spread Account and each Tag Account shall be
separate from each respective Trust or Issuer and amounts on deposit therein
will not constitute a part of the Trust Property of any Trust or the assets of
any Issuer. Except as specifically provided herein, the Program Spread Account
and each Tag Account shall be maintained by the Collateral Agent at all times
separate and apart from any other account of the Seller, OFL, the Servicer, the
Trust or the Issuer. All income or loss on investments of funds in the Program
Spread Account and any Tag Account shall be reported by the Seller as taxable
income or loss of the Seller.

(f) Upon the occurrence of an event specified in clause (A) of the
definition of Trigger Event with respect to a Series and until such event is
Deemed Cured, at the election of the Seller amounts on deposit in the Program
Spread Account may be withdrawn on the related Determination Date by the
Collateral Agent from the Program Spread Account and irrevocably deposited into
one or more Tag Accounts for each Series with respect to which an event
specified in such clause (A) shall have occurred (and which event is not Deemed
Cured) and with respect to which the Seller has made such election. In the
event of such election, the Collateral Agent shall deposit from the Program
Spread Account into the related Tag Account, on such related Determination Date,
an amount equal to the excess, if any, of amounts on deposit in the Spread
Account (excluding any amount in any related Tag Account, and taking into
account any deposits thereto to be made pursuant to the first paragraph of
Section 3.03(b) and taking into account any withdrawals therefrom to be made
pursuant to priority FIRST of Section 3.03(b) on the related Distribution Date,
but not taking into account any other changes in the amount on deposit in such
account pursuant to Section 3.03(b)) over the amount specified in clause (i) of
the definition of Spread Account Maximum Amount with respect to such Series
(taking into account the decline in the related Series Balance to be effected on
the related Distribution Date).

(g) Amounts on deposit in the Program Spread Account shall be
released from such account at any time upon the request of the Seller. Funds in
the Program Spread Account shall not be commingled with funds in any Spread
Account, any Tag Account or with any other moneys. Amounts on deposit in a
Spread Account shall be released from the Lien of this Agreement and delivered
to the Seller, or at the direction of the Seller deposited into the Program
Spread Account, upon deposit of a like amount pursuant to Section 2.09(f) into
the related Tag Account.

(h) Upon deposit pursuant to Section 2.09(f) of amounts into a Tag
Account for a Series such amounts shall be treated fungibly with all amounts on
deposit in the Spread Account with respect to the same Series, except that,
amounts deposited into a Spread Account

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<PAGE>

pursuant to Section 3.03(b) shall be deemed to be deposited into the Spread
Account, and amounts withdrawn from a Spread Account pursuant to Section
3.03(b) shall be withdrawn first from the related Tag Account and second from
the Spread Account. Except as otherwise explicitly specified, all references
herein to a Series Spread Account hereunder shall be deemed to include
reference to any Tag Account created with respect to such Series, and all
references herein to amounts on deposit in a Series Spread Account shall be
deemed to include reference amounts on deposit in the related Tag Account, if
any, created with respect to such Series.

ARTICLE III

SPREAD ACCOUNTS

Section 3.01. ESTABLISHMENT OF SPREAD ACCOUNTS; INITIAL
DEPOSITS INTO SPREAD ACCOUNTS.

(a) On or prior to the Closing Date relating to a Series, the
Collateral Agent shall establish with respect to such Series, at its office or
at another depository institution or trust company an Eligible Account,
designated, "Spread Account -- Series [insert Series designation] -- Norwest
Bank Minnesota, National Association, as Collateral Agent for Financial Security
Assurance Inc. and another Secured Party" (the "Spread Account"). All Spread
Accounts established under this Agreement from time to time shall be maintained
at the same depository institution (which depository institution may be changed
from time to time in accordance with this Agreement). If any Spread Account
established with respect to a Series ceases to be an Eligible Account, the
Collateral Agent shall, within five Business Days, establish a new Eligible
Account for such Series.

(b) No withdrawals may be made of funds in any Spread Account
except as provided in Section 3.03 of this Agreement and in the Warehousing
Series Supplement. Except as specifically provided in this Agreement, funds in a
Spread Account established with respect to a Series shall not be commingled with
funds in a Spread Account established with respect to another Series or with any
other moneys. All moneys deposited from time to time in such Spread Account and
all investments made with such moneys shall be held by the Collateral Agent as
part of the Collateral with respect to such Series.

(c) On the Closing Date with respect to a Series (other than the
Warehousing Series), the Collateral Agent shall deposit the Initial Spread
Account Deposit with respect to such Series, if any, received from the Seller
into the related Spread Account. On each Subsequent Transfer Date (if any) with
respect to a Series (other than the Warehousing Series), the Collateral Agent
shall deposit the Spread Account Additional Deposit delivered by the related
Trust on behalf of the Seller into the related Spread Account.

(d) Each Spread Account shall be separate from each respective
Trust and amounts on deposit therein will not constitute a part of the Trust
Property of any Trust. Except as specifically provided herein, each Spread
Account shall be maintained by the Collateral Agent at all times separate and
apart from any other account of the Seller, OFL, the Servicer or the

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Trust or the Issuer, as the case may be. All income or loss on investments
of funds in any Spread Account shall be reported by the Seller as taxable
income or loss of the Seller.

Section 3.02. INVESTMENTS.

(a) Funds which may at any time be held in the Spread Account
established with respect to a Series or in the Program Spread Account shall be
invested and reinvested by the Collateral Agent, at the written direction (which
may include, subject to the provisions hereof, general standing instructions) of
the Seller (unless a Default shall have occurred and be continuing, in which
case at the written direction of the Controlling Party) or its designee received
by the Collateral Agent by 1:00 P.M. New York City time on the Business Day
prior to the date on which such investment shall be made, in one or more
Eligible Investments in the manner specified in Section 3.02(c). If no written
direction with respect to any portion of such Spread Account or the Program
Spread Account is received by the Collateral Agent, the Collateral Agent shall
invest such funds overnight in such Eligible Investments as the Collateral Agent
may select, provided that the Collateral Agent shall not be liable for any loss
or absence of income resulting from such investments.

(b) Each investment made pursuant to this Section 3.02 on any date
shall mature not later than the Business Day immediately preceding the
Distribution Date next succeeding the day such investment is made, except that
any investment made on the day preceding a Distribution Date shall mature on
such Distribution Date; PROVIDED that any investment of funds in any Account
maintained with the Collateral Agent in any investment as to which the
Collateral Agent is the obligor, if otherwise qualified as an Eligible
Investment (including any repurchase agreement on which the Collateral Agent in
its commercial capacity is liable as principal), may mature on the Distribution
Date next succeeding the date of such investment.

(c) Any investment of funds in the Spread Account or in the Program
Spread 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 Collateral Agent, (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 Collateral
Agent'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 Collateral Agent on the records of such
institution, and such institution shall have sent the Collateral Agent a
confirmation thereof,

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<PAGE>

(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 Collateral Agent
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 Collateral
Agent. Subject to the other provisions hereof, the Collateral Agent 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 Collateral Agent or its agent, together with each
document of transfer, if any, necessary to transfer title to such investment to
the Collateral Agent in a manner which complies with Section 2.06 and this
subsection.

(d) If amounts on deposit in any Spread Account are at any time
invested in an Eligible Investment payable on demand, the Collateral Agent shall
(i) consistent with any notice required to be given thereunder, demand that
payment thereon be made on the last day such Eligible Investment is permitted to
mature under the provisions hereof and (ii) demand payment of all amounts due
thereunder promptly upon receipt of written notice from the Controlling Party to
the effect that such investment does not constitute an Eligible Investment.

(e) All moneys on deposit in a Spread Account together with any
deposits or securities in which such moneys may be invested or reinvested, and
any gains from such investments, shall constitute Collateral hereunder with
respect to the related Series, subject to the Security Interests of the Secured
Parties.

(f) Subject to Section 4.03 hereof, the Collateral Agent shall not
be liable by reason of any insufficiency in any Spread Account resulting from
any loss on any Eligible Investment included therein except for losses
attributable to the Collateral Agent's failure to make payments on Eligible
Investments as to which the Collateral Agent, in its commercial capacity, is
obligated.

Section 3.03. DISTRIBUTIONS: PRIORITY OF PAYMENTS.

(a) On or before each Deficiency Claim Date, the Collateral Agent
will make the following calculations on the basis of information (including,
without limitation, the amount of any Collection Account Shortfall with respect
to any Series) received pursuant to (x) Section 3.9 of the Standard Terms and
Conditions, Section 5.03 of the Pooling and Servicing Agreements, or (y) Section
3.9 of the Sale and Servicing Agreements, or (z) Section 3.11 of the Servicing
Agreement, as applicable, with respect to each Series; PROVIDED, HOWEVER, that
if the Collateral Agent receives notice from Financial Security of the
occurrence of an Insurance Agreement Event of Default with respect to any
Series, or of the occurrence of a Capture Event, such notice shall be
determinative for the purposes of determining the Spread Account Default Level
and Spread Account Maximum Amount for such Series:

FIRST, determine the amounts to be on deposit in the respective Spread
Accounts (taking into account amounts in respect of the respective Credit
Enhancement Fees to be deposited into the related Spread Accounts) on the
next succeeding Distribution Date

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which will be available to satisfy any Collection Account Shortfall and any
Warehousing Shortfall;

SECOND, determine (i) the amounts, if any, to be distributed from each
Spread Account related to each Series with respect to which there exists a
Collection Account Shortfall and (ii) whether, following distribution from
the related Spread Accounts to the respective Trustees for deposit into the
respective Collection Accounts with respect to which there exist Collection
Account Shortfalls, a Collection Account Shortfall will continue to exist
with respect to one or more Series;

THIRD, (i) if a Collection Account Shortfall will continue to exist
with respect to one or more Series following the distributions from the
related Spread Accounts contemplated by paragraph SECOND above, determine
the amount, if any, to be distributed to the Trustee with respect to each
Series from unrelated Spread Accounts in respect of such Collection Account
Shortfall(s). This determination shall be made as follows: (i) of the
aggregate of the amounts to be on deposit in the respective Spread Accounts
for such Distribution Date (as determined pursuant to paragraph FIRST
above, after making the withdrawals pursuant to paragraph SECOND above), up
to the aggregate of the Collection Account Shortfalls for such Distribution
Date, (ii) drawn from each Spread Account PRO RATA in accordance with
amounts on deposit therein, and (iii) distributed to the respective
Trustees in the following order of priority and PRO RATA within each
priority (1) in the same priority as amounts are to be distributed pursuant
to Section 4.6 of the Standard Terms and Conditions included in the
respective Pooling and Servicing Agreements and pursuant to Section 4.6 of
the respective Sale and Servicing Agreements, and pursuant to Section
3.6(a) or 3.6(b) of the Servicing Agreement, as applicable, so that any
shortfalls with respect to priority (i) of each such Section are to be
covered first, any shortfalls with respect to priority (ii) of each such
Section are to be covered second, and so forth, until priority (v) of such
Section, so that priority (v) of Section 4.6 of the Standard Terms and
Conditions and of the Sale and Servicing Agreement and priority (v) of
Section 3.6(a) or priority (v) of Section 3.6(b) of the Servicing Agreement
are to be covered fifth, (2) if Section 4.6 of one or more Sale and
Servicing Agreements provides for distribution in respect of interest or
principal on Notes or Certificates with priorities numerically greater than
(v), in the same priority as amounts are to be distributed pursuant to each
such Section 4.6, so that any shortfalls with respect to priority (vi) of
each such Section 4.6 are covered first, and so forth through all
priorities relating to interest or principal on Notes or Certificates and
(3) amounts to be distributed to the Security Insurer;

On such Deficiency Claim Date, the Collateral Agent shall deliver a
certificate to each Trustee in respect of which the Collateral Agent has
received notice pursuant to (i) Section 3.9 of the Standard Terms and Conditions
of a Collection Account Shortfall or (ii) Section 3.9 of the Sale and Servicing
Agreement of a Collection Account Shortfall or (iii) Section 3.11 of the
Servicing Agreement of a Collection Account Shortfall or Warehousing Shortfall
stating the amount (which, in the case of (i) and (ii) above, shall be the sum
of the amount, if any, to be withdrawn from the related Spread Account, as
calculated pursuant to paragraph SECOND of this Section 3.03(a), plus, the
amount, if any, to be withdrawn from

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<PAGE>

unrelated Spread Accounts, as calculated pursuant to paragraph THIRD of this
Section 3.03(a), and which, in the case of a Collection Account Shortfall or
Warehousing Shortfall referred to in clause (iii) shall be the respective
amounts, if any, withdrawn from unrelated Spread Accounts, as calculated
pursuant to paragraph THIRD of this Section 3.03(a) or calculated to be
available pursuant to priority SEVENTH of Section 3.03(b)), if any, to be
distributed to such Trustee on the next Distribution Date in respect of such
Collection Account Shortfall or Warehousing Shortfall, as the case may be.

(b) On each Distribution Date, following delivery by the Trustee of
the respective Credit Enhancement Fees for deposit into the respective Spread
Accounts pursuant to Section 4.6 of the Standard Terms and Conditions included
in the respective Pooling and Servicing Agreements or Section 4.6 of the
respective Sale and Servicing Agreements, or the amount deposited into the
Spread Account for the Warehousing Series pursuant to Section 3.6 or Section
3.10 of the Warehousing Series Servicing Agreement, as applicable, and upon
receipt of a Deficiency Notice with respect to one or more such Series, or with
respect to priorities FIFTH and SIXTH to the extent the amounts referred to
therein are due and owing, the Collateral Agent shall make the following
distributions in the following order of priority. References herein to a Spread
Account shall include references to the related Tag Account and such amounts
shall be treated fungibly, except that amounts deposited into a Spread Account
pursuant to Section 3.03(b) shall be deemed to be deposited into a Spread
Account, and amounts withdrawn from a Spread Account pursuant to Section 3.03(b)
shall be withdrawn first from the related Tag Account and second from the Spread
Account.

FIRST, if with respect to any Series there exists a Collection Account
Shortfall from the Spread Account related to such Series, to the Trustee for
deposit in the related Collection Account the amount of such Collection Account
Shortfall;

SECOND, if with respect to any Series there exists a Collection
Account Shortfall after deposit into the Collection Account of amounts
distributed pursuant to priority FIRST, from each Spread Account, PRO RATA in
accordance with amounts on deposit therein (but in no event shall a withdrawal
from a Spread Account pursuant to this priority SECOND cause the amount on
deposit in such Spread Account to be below the Spread Account Withdrawal Floor
for such Spread Account if a Spread Account Withdrawal Floor is specified in the
Series Supplement establishing such Spread Account), an amount up to the
aggregate of the Collection Account Shortfalls for all Series, to the respective
Trustees in accordance with the Payment Priorities for deposit in the respective
Collection Accounts with respect to which there exist Collection Account
Shortfalls;

THIRD, if with respect to one or more Series (excluding the
Warehousing Series) there exists a Spread Account Shortfall, from amounts, if
any, on deposit in each Spread Account (excluding the Warehousing Series) in
excess of the related Spread Account Maximum Amount (after making any
withdrawals therefrom required by priority FIRST or SECOND of this Section
3.03(b)), an amount in the aggregate up to the aggregate of the Spread Account
Shortfalls for all Series for deposit into each Spread Account PRO RATA in
accordance with their respective Spread Account Shortfalls;

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FOURTH, if with respect to one or more Series (excluding the
Warehousing Series), amounts have been withdrawn from the related Spread Account
pursuant to priority FIRST or SECOND of this Section 3.03(b) on such
Distribution Date and/or on prior Distribution Dates and such amounts have not
been redeposited in full into such Spread Account pursuant to this priority
FOURTH (such amounts in the aggregate for a Series "Unreimbursed Amounts"), from
amounts, if any, on deposit in each Spread Account in excess of the related
Spread Account Maximum Amount (after making any withdrawals therefrom required
by priority FIRST, SECOND or THIRD of this Section 3.03(b)), an amount up to the
aggregate of the Unreimbursed Amounts for all such Series for deposit into each
Spread Account with respect to which there exist Unreimbursed Amounts PRO RATA
in accordance with the excess of the Spread Account Maximum Amount of each such
Spread Account over the amount on deposit in such Spread Account;

FIFTH, if any amounts are owed to a successor Servicer pursuant to
Section 9.3(c) of the Standard Terms and Conditions included in a Pooling and
Servicing Agreement or Section 8.3(c) of a Sale and Servicing Agreement and such
amounts are not payable pursuant to Section 4.6(a)(i) of the Standard Terms and
Conditions included in such Pooling and Servicing Agreement or Section 4.6(i) of
such Sale and Servicing Agreement, as applicable, from amounts on deposit in the
related Spread Account, an amount up to the amount so owed, to such Servicer;

SIXTH, if any amounts are owed by OFL or the Seller to a Trustee,
Indenture Trustee, Owner Trustee, Lockbox Bank, Custodian, Backup Servicer,
Administrator, Collateral Agent, the Indenture Collateral Agent or other service
provider to either the Trust or the Issuer for expenses that have not been
reimbursed by OFL or the Seller, from amounts on deposit in the related Spread
Account, an amount up to the amount so owed, to such Person;

SEVENTH, if with respect to the Warehousing Series there exists a
Warehousing Shortfall, from the aggregate of all amounts on deposit in the
Warehousing Series Spread Account and from the aggregate of all amounts in
unrelated Spread Accounts in excess of the related Spread Account Maximum Amount
(except that such limitation shall not exist with respect to a Spread Account
Maximum Amount which is unlimited), an amount up to the amount of such
Warehousing Shortfall (to the extent not distributed on such Distribution Date
pursuant to a prior priority of this Section 3.03(b)), to the Trustee for the
Warehousing Series for deposit in the Warehousing Series Collection Account; and

EIGHTH, any funds in a Spread Account in excess of the applicable
Spread Account Maximum Amount, and any funds in a Spread Account with respect to
a Series for which the Final Termination Date shall have occurred, to the
Seller.

Section 3.04. GENERAL PROVISIONS REGARDING SPREAD ACCOUNTS.

(a) Promptly upon the establishment (initially or upon any
relocation) of a Spread Account hereunder, the Collateral Agent shall advise the
Seller and each Secured Party in writing of the name and address of the
depository institution or trust company where such Spread Account has been
established (if not Norwest Bank Minnesota, National Association or

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any successor Collateral Agent in its commercial banking capacity), the name of
the officer of the depository institution who is responsible for overseeing such
Spread Account, the account number and the individuals whose names appear on the
signature cards for such Spread Account. The Seller shall cause each such
depository institution or trust company to execute a written agreement, in form
and substance satisfactory to the Controlling Party, waiving, and the Collateral
Agent by its execution of this Agreement hereby waives (except to the extent
expressly provided herein), in each case to the extent permitted under
applicable law, (i) any banker's or other statutory or similar Lien, and (ii)
any right of set-off or other similar right under applicable law with respect to
such Spread Account and any other Spread Account and agreeing, and the
Collateral Agent by its execution of this Agreement hereby agrees, to notify the
Seller, the Collateral Agent, and each Secured Party of any charge or claim
against or with respect to such Spread Account. The Collateral Agent shall give
the Seller and each Secured Party at least ten Business Days' prior written
notice of any change in the location of such Spread Account or in any related
account information. If the Collateral Agent changes the location of any Spread
Account, it shall change the location of the other Spread Accounts, so that all
Spread Accounts shall at all times be located at the same depository
institution. Anything herein to the contrary notwithstanding, unless otherwise
consented to by the Controlling Party in writing, the Collateral Agent shall
have no right to change the location of any Spread Account.

(b) Upon the written request of the Controlling Party or the Seller
and at the expense of the Seller, the Collateral Agent shall cause, at the
expense of the Seller, the depository institution at which any Spread Account is
located to forward to the requesting party copies of all monthly account
statements for such Spread Account.

(c) If at any time any Spread Account ceases to be an Eligible
Account, the Collateral Agent shall notify the Controlling Party of such fact
and shall establish within 5 Business Days of such determination, in accordance
with paragraph (a) of this Section, a successor Spread Account thereto, which
shall be an Eligible Account, at another depository institution acceptable to
the Controlling Party and shall establish successor Spread Accounts with respect
to all other Spread Accounts, each of which shall be an Eligible Account at the
same depository institution.

(d) No passbook, certificate of deposit or other similar instrument
evidencing a Spread Account shall be issued, and all contracts, receipts and
other papers, if any, governing or evidencing a Spread Account shall be held by
the Collateral Agent.

Section 3.05. REPORTS BY THE COLLATERAL AGENT. The Collateral Agent
shall report to the Seller, Financial Security, the Trustee and the Servicer on
a monthly basis no later than each Distribution Date with respect to the amount
on deposit in each Spread Account and the identity of the investments included
therein as of the last day of the related Monthly Period, and shall provide
accountings of deposits into and withdrawals from the Spread Accounts, and of
the investments made therein, to the independent accountants upon their request
for purposes of their reports pursuant to Section 3.11 of the Pooling and
Servicing Agreements and Section 3.11 of the Sale and Servicing Agreements.

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<PAGE>

ARTICLE IV

THE COLLATERAL AGENT

Section 4.01. APPOINTMENT AND POWERS. Subject to the terms and
conditions hereof, each of the Secured Parties hereby appoints Norwest Bank
Minnesota, National Association as the Collateral Agent with respect to the
Series 1993-A Collateral and the related Collateral subsequently specified in a
Series Supplement, and Norwest Bank Minnesota, National Association hereby
accepts such appointment and agrees to act as Collateral Agent with respect to
the Series 1993-A Collateral, and upon execution of any Series Supplement, shall
be deemed to accept such appointment, and agree to act as Collateral Agent with
respect to such Collateral, in each case, for the Secured Parties, to maintain
custody and possession of such Collateral (except as otherwise provided
hereunder) and to perform the other duties of the Collateral Agent in accordance
with the provisions of this Agreement. Each Secured Party hereby authorizes the
Collateral Agent to take such action on its behalf, and to exercise such rights,
remedies, powers and privileges hereunder, as the Controlling Party may direct
and as are specifically authorized to be exercised by the Collateral Agent by
the terms hereof, together with such actions, rights, remedies, powers and
privileges as are reasonably incidental thereto. The Collateral Agent shall act
upon and in compliance with the written instructions of the Controlling Party
delivered pursuant to this Agreement promptly following receipt of such written
instructions; provided that the Collateral Agent shall not act in accordance
with any instructions (i) which are not authorized by, or in violation of the
provisions of, this Agreement, (ii) which are in violation of any applicable
law, rule or regulation or (iii) for which the Collateral Agent has not received
reasonable indemnity. Receipt of such instructions shall not be a condition to
the exercise by the Collateral Agent of its express duties hereunder, except
where this Agreement provides that the Collateral Agent is permitted to act only
following and in accordance with such instructions.

Section 4.02. PERFORMANCE OF DUTIES. The Collateral Agent shall have
no duties or responsibilities except those expressly set forth in this Agreement
and the other Transaction Documents to which the Collateral Agent is a party or
as directed by the Controlling Party in accordance with this Agreement. The
Collateral Agent shall not be required to take any discretionary actions
hereunder except at the written direction and with the indemnification of the
Controlling Party.

Section 4.03. LIMITATION ON LIABILITY. Neither the Collateral Agent
nor any of its directors, officers or employees, shall be liable for any action
taken or omitted to be taken by it or them hereunder, or in connection herewith,
except that the Collateral Agent shall be liable for its negligence, bad faith
or willful misconduct; nor shall the Collateral Agent be responsible for the
validity, effectiveness, value, sufficiency or enforceability against the Seller
or OFL of this Agreement or any of the Collateral (or any part thereof).
Notwithstanding any term or provision of this Agreement, the Collateral Agent
shall incur no liability to the Seller, OFL or the Secured Parties for any
action taken or omitted by the Collateral Agent in connection with the
Collateral, except for the negligence or willful misconduct on the part of the
Collateral Agent, and, further, shall incur no liability to the Secured Parties
except for negligence or willful misconduct in carrying out its duties to the
Secured Parties. Subject to Section 4.04, the

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Collateral Agent shall be protected and shall incur no liability to any such
party in relying upon the accuracy, acting in reliance upon the contents, and
assuming the genuineness of any notice, demand, certificate, signature,
instrument or other document reasonably believed by the Collateral Agent to
be genuine and to have been duly executed by the appropriate signatory, and
(absent actual knowledge to the contrary) the Collateral Agent shall not be
required to make any independent investigation with respect thereto. The
Collateral Agent shall at all times be free independently to establish to its
reasonable satisfaction, but shall have no duty to independently verify, the
existence or nonexistence of facts that are a condition to the exercise or
enforcement of any right or remedy hereunder or under any of the Transaction
Documents. The Collateral Agent may consult with counsel, and shall not be
liable for any action taken or omitted to be taken by it hereunder in good
faith and in accordance with the written advice of such counsel. The
Collateral Agent shall not be under any obligation to exercise any of the
remedial rights or powers vested in it by this Agreement or to follow any
direction from the Controlling Party unless it shall have received reasonable
security or indemnity satisfactory to the Collateral Agent against the costs,
expenses and liabilities which might be incurred by it.

Section 4.04. RELIANCE UPON DOCUMENTS. In the absence of bad faith or
negligence on its part, the Collateral Agent shall be entitled to rely on any
communication, instrument, paper or other document reasonably believed by it to
be genuine and correct and to have been signed or sent by the proper Person or
Persons and shall have no liability in acting, or omitting to act, where such
action or omission to act is in reasonable reliance upon any statement or
opinion contained in any such document or instrument.

Section 4.05. SUCCESSOR COLLATERAL AGENT.

(a) MERGER. Any Person into which the Collateral Agent may be
converted or merged, or with which it may be consolidated, or to which it may
sell or transfer its trust business and assets as a whole or substantially as a
whole, or any Person resulting from any such conversion, merger, consolidation,
sale or transfer to which the Collateral Agent is a party, shall (provided it is
otherwise qualified to serve as the Collateral Agent hereunder) be and become a
successor Collateral Agent hereunder and be vested with all of the title to and
interest in the Collateral and all of the trusts, powers, discretions,
immunities, privileges and other matters as was its predecessor without the
execution or filing of any instrument or any further act, deed or conveyance on
the part of any of the parties hereto, anything herein to the contrary
notwithstanding, except to the extent, if any, that any such action is necessary
to perfect, or continue the perfection of, the security interest of the Secured
Parties in the Collateral.

(b) RESIGNATION. The Collateral Agent and any successor Collateral
Agent may resign only (i) upon a determination that by reason of a change in
legal requirements the performance of its duties under this Agreement would
cause it to be in violation of such legal requirements in a manner which would
result in a material adverse effect on the Collateral Agent, and the Controlling
Party does not elect to waive the Collateral Agent's obligation to perform those
duties which render it legally unable to act or elect to delegate those duties
to another Person, or (ii) with the prior written consent of the Controlling
Party. The Collateral Agent shall give not less than 60 days' prior written
notice of any such permitted resignation by registered or certified mail to the
other Secured Party and the Seller; PROVIDED, that such

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<PAGE>

resignation shall take effect only upon the date which is the latest of (i)
the effective date of the appointment of a successor Collateral Agent and the
acceptance in writing by such successor Collateral Agent of such appointment
and of its obligation to perform its duties hereunder in accordance with the
provisions hereof, (ii) delivery of the Collateral to such successor to be
held in accordance with the procedures specified in Article II hereof, and
(iii) receipt by the Controlling Party of an Opinion of Counsel to the effect
described in Section 5.02. Notwithstanding the preceding sentence, if by the
contemplated date of resignation specified in the written notice of
resignation delivered as described above no successor Collateral Agent or
temporary successor Collateral Agent has been appointed Collateral Agent or
becomes the Collateral Agent pursuant to subsection (d) hereof, the resigning
Collateral Agent may petition a court of competent jurisdiction in New York,
New York for the appointment of a successor.

(c) REMOVAL. The Collateral Agent may be removed by the Controlling
Party at any time, with or without cause, by an instrument or concurrent
instruments in writing delivered to the Collateral Agent, the other Secured
Party and the Seller. A temporary successor may be removed at any time to allow
a successor Collateral Agent to be appointed pursuant to subsection (d) below.
Any removal pursuant to the provisions of this subsection (c) shall take effect
only upon the date which is the latest of (i) the effective date of the
appointment of a successor Collateral Agent and the acceptance in writing by
such successor Collateral Agent of such appointment and of its obligation to
perform its duties hereunder in accordance with the provisions hereof, (ii)
delivery of the Collateral to such successor to be held in accordance with the
procedures specified in Article II hereof and (iii) receipt by the Controlling
Party of an Opinion of Counsel to the effect described in Section 5.02.

(d) ACCEPTANCE BY SUCCESSOR. The Controlling Party shall have the
sole right to appoint each successor Collateral Agent. Every temporary or
permanent successor Collateral Agent appointed hereunder shall execute,
acknowledge and deliver to its predecessor and to each Secured Party and the
Seller an instrument in writing accepting such appointment hereunder and the
relevant predecessor shall execute, acknowledge and deliver such other documents
and instruments as will effectuate the delivery of all Collateral to the
successor Collateral Agent to be held in accordance with the procedures
specified in Article II hereof, whereupon such successor, without any further
act, deed or conveyance, shall become fully vested with all the estates,
properties, rights, powers, duties and obligations of its predecessor. Such
predecessor shall, nevertheless, on the written request of either Secured Party
or the Seller, execute and deliver an instrument transferring to such successor
all the estates, properties, rights and powers of such predecessor hereunder. In
the event that any instrument in writing from the Seller or a Secured Party is
reasonably required by a successor Collateral Agent to more fully and certainly
vest in such successor the estates, properties, rights, powers, duties and
obligations vested or intended to be vested hereunder in the Collateral Agent,
any and all such written instruments shall, at the request of the temporary or
permanent successor Collateral Agent, be forthwith executed, acknowledged and
delivered by the Seller. The designation of any successor Collateral Agent and
the instrument or instruments removing any Collateral Agent and appointing a
successor hereunder, together with all other instruments provided for herein,
shall be maintained with the records relating to the Collateral and, to the
extent required by applicable law, filed or recorded by the successor Collateral
Agent in each place where such filing or

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<PAGE>

recording is necessary to effect the transfer of the Collateral to the
successor Collateral Agent or to protect or continue the perfection of the
security interests granted hereunder.

(e) Any resignation or removal of a Collateral Agent and
appointment of a successor Collateral Agent shall be effected with respect to
this Agreement and all Series Supplements simultaneously, so that at no time is
there more than one Collateral Agent acting hereunder and under all Series
Supplements.

Section 4.06. INDEMNIFICATION. The Seller and OFL shall indemnify the
Collateral Agent, its directors, officers, employees and agents for, and hold
the Collateral Agent, its directors, officers, employees and agents harmless
against, any loss, liability or expense (including the costs and expenses of
defending against any claim of liability) arising out of or in connection with
the Collateral Agent's acting as Collateral Agent hereunder, except such loss,
liability or expense as shall result from the negligence, bad faith or willful
misconduct of the Collateral Agent or its officers or agents. The obligation of
the Seller and OFL under this Section shall survive the termination of this
Agreement and the resignation or removal of the Collateral Agent. The
Collateral Agent covenants and agrees that the obligations of the Seller
hereunder and under Section 4.07 shall be limited to the extent provided in
Section 2.08, and further covenants not to take any action to enforce its rights
to indemnification hereunder with respect to the Seller and to payment under
Section 4.07 except in accordance with the provisions of Section 8.05, or
otherwise to assert any Lien or take any other action in respect of the
Collateral or the Trust Property of a Series until the applicable Final
Termination Date.

Section 4.07. COMPENSATION AND REIMBURSEMENT. The Seller agrees for
the benefit of the Secured Parties and as part of the Secured Obligations (a) to
pay to the Collateral Agent, from time to time, reasonable compensation for all
services rendered by it hereunder (which compensation shall not be limited by
any provision of law in regard to the compensation of a collateral trustee); and
(b) to reimburse the Collateral Agent upon its request for all reasonable
expenses, disbursements and advances incurred or made by the Collateral Agent in
accordance with any provision of, or carrying out its duties and obligations
under, this Agreement (including the reasonable compensation and fees and the
expenses and disbursements of its agents, any independent certified public
accountants and independent counsel), except any expense, disbursement or
advances as may be attributable to negligence, bad faith or willful misconduct
on the part of the Collateral Agent.

Section 4.08. REPRESENTATIONS AND WARRANTIES OF THE COLLATERAL AGENT.
The Collateral Agent represents and warrants to the Seller and to each Secured
Party as follows:

(a) DUE ORGANIZATION. The Collateral Agent is a national banking
association, duly organized, validly existing and in good standing under the
laws of the United States and is duly authorized and licensed under applicable
law to conduct its business as presently conducted.

(b) CORPORATE POWER. The Collateral Agent has all requisite right,
power and authority to execute and deliver this Agreement and to perform all of
its duties as Collateral Agent hereunder.

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(c) DUE AUTHORIZATION. The execution and delivery by the Collateral
Agent of this Agreement and the other Transaction Documents to which it is a
party, and the performance by the Collateral Agent of its duties hereunder and
thereunder, have been duly authorized by all necessary corporate proceedings and
no further approvals or filings, including any governmental approvals, are
required for the valid execution and delivery by the Collateral Agent, or the
performance by the Collateral Agent, of this Agreement and such other
Transaction Documents.

(d) VALID AND BINDING AGREEMENT. The Collateral Agent has duly
executed and delivered this Agreement and each other Transaction Document to
which it is a party, and each of this Agreement and each such other Transaction
Document constitutes the legal, valid and binding obligation of the Collateral
Agent, enforceable against the Collateral Agent in accordance with its terms,
except as (i) such enforceability may be limited by bankruptcy, insolvency,
reorganization and similar laws relating to or affecting the enforcement of
creditors' rights generally and (ii) the availability of equitable remedies may
be limited by equitable principles of general applicability.

Section 4.09. WAIVER OF SETOFFS. The Collateral Agent hereby
expressly waives any and all rights of setoff that the Collateral Agent may
otherwise at any time have under applicable law with respect to any Spread
Account and agrees that amounts in the Spread Accounts shall at all times be
held and applied solely in accordance with the provisions hereof.

Section 4.10. CONTROL BY THE CONTROLLING PARTY. The Collateral Agent
shall comply with notices and instructions given by the Seller only if
accompanied by the written consent of the Controlling Party, except that if any
Default shall have occurred and be continuing, the Collateral Agent shall act
upon and comply with notices and instructions given by the Controlling Party
alone in the place and stead of the Seller.

ARTICLE V

COVENANTS OF THE SELLER

Section 5.01. PRESERVATION OF COLLATERAL. Subject to the rights,
powers and authorities granted to the Collateral Agent and the Controlling Party
in this Agreement, the Seller shall take such action as is necessary and proper
with respect to the Collateral in order to preserve and maintain such Collateral
and to cause (subject to the rights of the Secured Parties) the Collateral Agent
to perform its obligations with respect to such Collateral as provided herein.
The Seller will do, execute, acknowledge and deliver, or cause to be done,
executed, acknowledged and delivered, such instruments of transfer or take such
other steps or actions as may be necessary, or required by the Controlling
Party, to perfect the Security Interests granted hereunder in the Collateral, to
ensure that such Security Interests rank prior to all other Liens and to
preserve the priority of such Security Interests and the validity and
enforceability thereof. Upon any delivery or substitution of Collateral, the
Seller shall be obligated to execute such documents and perform such actions as
are necessary to create in the Collateral Agent for the benefit of the Secured
Parties a valid first Lien on, and valid and

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<PAGE>

perfected, first priority security interest in, the Collateral so delivered
and to deliver such Collateral to the Collateral Agent, free and clear of any
other Lien, together with satisfactory assurances thereof, and to pay any
reasonable costs incurred by any of the Secured Parties or the Collateral
Agent (including its agents) or otherwise in connection with such delivery.

Section 5.02. OPINIONS AS TO COLLATERAL. Not more than 90 days nor
less than 30 days prior to (i) each anniversary of the date hereof during the
term of this Agreement and (ii) each date on which the Seller proposes to take
any action contemplated by Section 5.06, the Seller shall, at its own cost and
expense, furnish to each Secured Party and the Collateral Agent an Opinion of
Counsel with respect to each Series either (a) stating that, in the opinion of
such counsel, such action has been taken with respect to the execution and
filing of any financing statements and continuation statements and other actions
as are necessary to perfect, maintain and protect the lien and security interest
of the Collateral Agent (and the priority thereof), on behalf of the Secured
Parties, with respect to such Collateral against all creditors of and purchasers
from the Seller or OFL and reciting the details of such action, or (b) stating
that, in the opinion of such counsel, no such action is necessary to maintain
such perfected lien and security interest. Such Opinion of Counsel shall further
describe each execution and filing of any financing statements and continuation
statements and such other actions as will, in the opinion of such counsel, be
required to perfect, maintain and protect the lien and security interest of the
Collateral Agent, on behalf of the Secured Parties, with respect to such
Collateral against all creditors of and purchasers from the Seller or OFL for a
period, specified in such Opinion, continuing until a date not earlier than
eighteen months from the date of such Opinion.

Section 5.03. NOTICES. In the event that OFL or the Seller acquires
knowledge of the occurrence and continuance of any Insurance Agreement Event of
Default or Servicer Termination Event or of any event of default or like event,
howsoever described or called, under any of the Transaction Documents, the
Seller shall immediately give notice thereof to the Collateral Agent and each
Secured Party.

Section 5.04. WAIVER OF STAY OR EXTENSION LAWS; MARSHALLING OF
ASSETS. The Seller covenants, to the fullest extent permitted by applicable law,
that it will not at any time insist upon, plead, or in any manner whatsoever
claim or take the benefit or advantage of, any appraisement, valuation, stay,
extension or redemption law wherever enacted, now or at any time hereafter in
force, in order to prevent or hinder the enforcement of this Agreement or any
absolute sale of the Collateral or any part thereof, or the possession thereof
by any purchaser at any sale under Article VII of this Agreement; and the
Seller, to the fullest extent permitted by applicable law, for itself and all
who may claim under it, hereby waives the benefit of all such laws, and
covenants that it will not hinder, delay or impede the execution of any power
herein granted to the Collateral Agent, but will suffer and permit the execution
of every such power as though no such law had been enacted. The Seller, for
itself and all who may claim under it, waives, to the fullest extent permitted
by applicable law, all right to have the Collateral marshalled upon any
foreclosure or other disposition thereof.

Section 5.05. NONINTERFERENCE, ETC. The Seller shall not (i) waive or
alter any of its rights under the Collateral (or any agreement or instrument
relating thereto) without the prior written consent of the Controlling Party; or
(ii) fail to pay any tax, assessment, charge

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<PAGE>

or fee levied or assessed against the Collateral, or to defend any action, if
such failure to pay or defend may adversely affect the priority or
enforceability of the Seller's right, title or interest in and to the Collateral
or the Collateral Agent's lien on, and security interest in, the Collateral for
the benefit of the Secured Parties; or (iii) take any action, or fail to take
any action, if such action or failure to take action will interfere with the
enforcement of any rights under the Transaction Documents.

Section 5.06. SELLER CHANGES.

(a) CHANGE IN NAME, STRUCTURE, ETC. The Seller shall not change its
name, identity or corporate structure unless it shall have given each Secured
Party and the Collateral Agent at least 60 days' prior written notice thereof,
shall have effected any necessary or appropriate assignments or amendments
thereto and filings of financing statements or amendments thereto, and shall
have delivered to the Collateral Agent and each Secured Party an Opinion of
Counsel of the type described in Section 5.02. The parties hereto acknowledge
receipt of prior written notice of the Seller's intent to change its name on or
after January 1, 1997 to Arcadia Receivables Finance Corp.

(b) RELOCATION OF THE SELLER. Neither OFL nor the Seller shall
change its principal executive office unless it gives each Secured Party and the
Collateral Agent at least 90 days' prior written notice of any relocation of its
principal executive office. If the Seller relocates its principal executive
office or principal place of business from Minnesota, the Seller shall give
prior notice thereof to the Controlling Party and the Collateral Agent and shall
effect whatever appropriate recordations and filings are necessary and shall
provide an Opinion of Counsel to the Controlling Party and the Collateral Agent,
to the effect that, upon the recording of any necessary assignments or
amendments to previously-recorded assignments and filing of any necessary
amendments to the previously filed financing or continuation statements or upon
the filing of one or more specified new financing statements, and the taking of
such other actions as may be specified in such opinion, the security interests
in the Collateral shall remain, after such relocation, valid and perfected.

ARTICLE VI

CONTROLLING PARTY; INTERCREDITOR PROVISIONS

Section 6.01. APPOINTMENT OF CONTROLLING PARTY. From and after the
Closing Date of a Series until the Insurer Termination Date related to such
Series, Financial Security shall be the Controlling Party with respect to such
Series and shall be entitled to exercise all the rights given the Controlling
Party hereunder with respect to such Series. From and after the Insurer
Termination Date related to such Series until the Trustee Termination Date
related to such Series, the Trustee shall be the Controlling Party with respect
to such Series. Notwithstanding the foregoing, in the event that a Financial
Security Default shall have occurred and be continuing, the Trustee shall be the
Controlling Party with respect to such Series until the applicable Trustee
Termination Date. If prior to an Insurer Termination Date the Trustee shall have
become the Controlling Party with respect to a Series as a result of the
occurrence

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<PAGE>

of a Financial Security Default and either such Financial Security Default is
cured or for any other reason ceases to exist or the Trustee Termination Date
with respect to a Series occurs, then upon such cure or other cessation or on
such Trustee Termination Date, as the case may be, Financial Security shall,
upon notice thereof being duly given to the Collateral Agent, again be the
Controlling Party with respect to such Series.

Section 6.02. CONTROLLING PARTY'S AUTHORITY.

(a) Each of OFL and the Seller hereby irrevocably appoint the
Controlling Party, and any successor to the Controlling Party appointed pursuant
to Section 6.01, its true and lawful attorney, with full power of substitution,
in the name of OFL, the Seller, the Secured Parties or otherwise, but (subject
to Section 2.08) at the expense of the Seller, to the extent permitted by law to
exercise, at any time and from time to time while any Insurance Agreement Event
of Default has occurred and is continuing, any or all of the following powers
with respect to all or any of the Collateral related to the relevant Series: (i)
to demand, sue for, collect, receive and give acquittance for any and all monies
due or to become due upon or by virtue thereof, (ii) to settle, compromise,
compound, prosecute or defend any action or proceeding with respect thereto,
(iii) to sell, transfer, assign or otherwise deal with the same or the proceeds
thereof as fully and effectively as if the Collateral Agent were the absolute
owner thereof, and (iv) to extend the time of payment of any or all thereof and
to make any allowance or other adjustments with respect thereto; PROVIDED that
the foregoing powers and rights shall be exercised in accordance with the
provisions of Article VII hereof.

(b) With respect to each Series of Certificates and the related
Collateral, each Secured Party hereby irrevocably and unconditionally
constitutes and appoints the Controlling Party with respect to such Series, and
any successor to such Controlling Party appointed pursuant to Section 6.01 from
time to time, as the true and lawful attorney-in-fact of such Secured Party for
so long as such Secured Party is the Non-Controlling Party, 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 such Secured Party
such acts, things and deeds for and on behalf of and in the name of such Secured
Party under this Agreement with respect to such Series which such Secured Party
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, without limitation, exercise full right, power and authority to
take, or defer from taking, any and all acts with respect to the administration
of the Collateral related to such Series, and the enforcement of the rights of
the Secured Parties hereunder with respect to such Series, on behalf of and for
the benefit of such Controlling Party and such Non-Controlling Party, as their
interests may appear.

(c) So long as Financial Security shall be the Controlling Party
with respect to a Series (other than the Warehousing Series), the Trustee hereby
agrees, that if there exists an Insurance Agreement Event of Default with
respect to such Series:

(i) Financial Security shall have the exclusive right to
direct the Trustee as to any and all actions to be taken under the related
Transaction Documents,

<PAGE>

including without limitation all actions with respect to the giving of
directions to the Servicer and any subservicer with respect to the
servicing of the Receivables of such Series; enforcement of any rights of
the Trustee under such Transaction Documents; and the giving or withholding
of any other consents, requests, notices, directions, approvals, extensions
or waivers under or in respect of any such Transaction Documents; and

(ii) Financial Security shall have the right to control the
time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred upon
the Trustee under the related Pooling and Servicing Agreement or under any
other Transaction Document, including the remedies provided in Article VII.

PROVIDED, HOWEVER, that the Trustee may decline to follow any of the above
directions from Financial Security, if the Trustee, in accordance with an
opinion of counsel to the Trustee, that is independent of the Trustee,
determines that the action or proceeding so directed may not lawfully be taken
or if the Trustee in good faith determines that the action or proceeding so
directed would involve it in personal liability for which adequate indemnity is
not reasonably assured to it or, in the case of actions or directions not
specifically permitted to be taken by Financial Security so long as no Financial
Security Default has occurred and is continuing, would adversely affect the
interests of the Certificateholders in any material respect.

(d) So long as Financial Security shall be the Controlling Party
with respect to a Series (other than the Warehousing Series), the Trustee shall
not, without the prior written consent of Financial Security:

(i) appoint new independent accountants with respect to the
Series;

(ii) consent to the amendment of or supplement to any of the
Transaction Documents related to the Series; or

(iii) waive a Servicer Termination Event under the related Pooling
and Servicing Agreement or Sale and Servicing Agreement, as applicable.

(e) So long as Financial Security shall be the Controlling Party
with respect to a Series:

(i) Financial Security shall have the rights provided in
Section 5.3 of each Pooling and Servicing Agreement, Section 5.4 of each
Sale and Servicing Agreement and Section 5.19 of each Indenture in respect
of the direction of insolvency proceedings.

(ii) Financial Security shall have the right to direct the
Trustee as to any and all actions to be taken in the event of the
occurrence of a Servicer Termination Event under the related Pooling and
Servicing Agreement and shall have such other rights in respect of the
appointment of a successor servicer as are provided in such Pooling and
Servicing Agreement.

34
<PAGE>

Section 6.03. RIGHTS OF SECURED PARTIES. With respect to each Series
of Certificates and the related Collateral, the Non-Controlling Party at any
time expressly agrees that it shall not assert any rights that it may otherwise
have, as a Secured Party with respect to the Collateral, to direct the
maintenance, sale or other disposition of the Collateral or any portion thereof,
notwithstanding the occurrence and continuance of any Default with respect to
such Series or any non-performance by OFL or the Seller of any obligation owed
to such Secured Party hereunder or under any other Transaction Document, and
each party hereto agrees that the Controlling Party shall be the only Person
entitled to assert and exercise such rights.

Section 6.04. DEGREE OF CARE.

(a) CONTROLLING PARTY. Notwithstanding any term or provision of
this Agreement, the Controlling Party shall incur no liability to OFL or the
Seller for any action taken or omitted by the Controlling Party in connection
with the Collateral, except for any gross negligence, bad faith or willful
misconduct on the part of the Controlling Party and, further, shall incur no
liability to the Non-Controlling Party except for a breach of the terms of this
Agreement or for gross negligence, bad faith or willful misconduct in carrying
out its duties, if any, to the Non-Controlling Party. The Controlling Party
shall be protected and shall incur no liability to any such party in relying
upon the accuracy, acting in reliance upon the contents and assuming the
genuineness of any notice, demand, certificate, signature, instrument or other
document believed by the Controlling Party to be genuine and to have been duly
executed by the appropriate signatory, and (absent manifest error or actual
knowledge to the contrary) the Controlling Party shall not be required to make
any independent investigation with respect thereto. The Controlling Party shall,
at all times, be free independently to establish to its reasonable satisfaction
the existence or nonexistence, as the case may be, of any fact the existence or
nonexistence of which shall be a condition to the exercise or enforcement of any
right or remedy under this Agreement or any of the Transaction Documents.

(b) THE NON-CONTROLLING PARTY. The Non-Controlling Party shall not
be liable to the Seller for any action or failure to act by the Controlling
Party or the Collateral Agent in exercising, or failing to exercise, any rights
or remedies hereunder.

ARTICLE VII

REMEDIES UPON DEFAULT

Section 7.01. REMEDIES UPON A DEFAULT. If a Default with respect to a
Series has occurred and is continuing, the Collateral Agent shall, at the
direction of the Controlling Party, take whatever action at law or in equity as
may appear necessary or desirable in the judgment of the Controlling Party to
collect and satisfy all Insurer Secured Obligations (including, but not limited
to, foreclosure upon the Collateral and all other rights available to secured
parties under applicable law) or to enforce performance and observance of any
obligation, agreement or covenant under any of the Transaction Documents related
to such Series. Notwithstanding the foregoing, the Collateral Agent shall not be
entitled to take any action and the Controlling Party shall not be entitled to
give any direction with respect to the

35
<PAGE>

Trust Property, except to the extent provided in the Transaction Documents
and Sections 6.02(a), (c), (d) and (e) hereof.

Section 7.02. WAIVER OF DEFAULT. The Controlling Party shall have the
sole right, to be exercised in its complete discretion, to waive any Default by
a writing setting forth the terms, conditions and extent of such waiver signed
by the Controlling Party and delivered to the Collateral Agent, the other
Secured Party and the Seller. Any such waiver shall be binding upon the Non-
Controlling Party and the Collateral Agent. Unless such writing expressly
provides to the contrary, any waiver so granted shall extend only to the
specific event or occurrence which gave rise to the Default so waived and not to
any other similar event or occurrence which occurs subsequent to the date of
such waiver.

Section 7.03. RESTORATION OF RIGHTS AND REMEDIES. If the Collateral
Agent has instituted any proceeding 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 such Collateral Agent, then and in
every such case the Seller, the Collateral Agent and each of the Secured Parties
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 Secured Parties shall continue as though no such proceeding
had been instituted.

Section 7.04. NO REMEDY EXCLUSIVE. No right or remedy herein
conferred upon or reserved to the Collateral Agent, the Controlling Party or
either of the Secured Parties is intended to be exclusive of any other right or
remedy, and every right or 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, in equity or otherwise (but, in each case,
shall be subject to the provisions of this Agreement limiting such remedies),
and each and every right, power and remedy whether specifically herein given or
otherwise existing may be exercised from time to time and as often and in such
order as may be deemed expedient by the Controlling Party, and the exercise of
or the beginning of the exercise of any right or power or remedy shall not be
construed to be a waiver of the right to exercise at the same time or thereafter
any other right, power or remedy.

ARTICLE VIII

MISCELLANEOUS

Section 8.01. 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
Agreement or to confirm or perfect any transaction described or contemplated
herein.

Section 8.02. WAIVER. Any waiver by any party of any provision of
this Agreement or any right, remedy or option hereunder shall only prevent and
estop such party

36
<PAGE>

from thereafter enforcing such provision, right, remedy or option if such
waiver is given in writing and only as to the specific instance and for the
specific purpose for which such waiver was given. The failure or refusal of
any party hereto to insist in any one or more instances, or in a course of
dealing, upon the strict performance of any of the terms or provisions of
this Agreement by any party hereto or the partial exercise of any right,
remedy or option hereunder shall not be construed as a waiver or
relinquishment of any such term or provision, but the same shall continue in
full force and effect.

Section 8.03. AMENDMENTS; WAIVERS. No amendment, modification, waiver
or supplement to this Agreement or any provision of this Agreement shall in any
event be effective unless the same shall have been made or consented to in
writing by each of the parties hereto and each Rating Agency shall have
confirmed in writing that such amendment will not cause a reduction or
withdrawal of a rating on any Series; PROVIDED, HOWEVER, that, for so long as
Financial Security shall be the Controlling Party with respect to a Series,
amendments, modifications, waivers or supplements hereto relating to such
Series, the related Collateral or Spread Account or any requirement hereunder to
deposit or retain any amounts in such Spread Account or to distribute any
amounts therein as provided in Section 3.03 shall be effective if made or
consented to in writing by Financial Security, the Seller, OFL and the
Collateral Agent (the consent of which shall not be withheld or delayed with
respect to any amendment that does not adversely affect the Collateral Agent)
but shall in no circumstances require the consent of the Trustee or the
Certificateholders related to such Series or any other Series.

Section 8.04. SEVERABILITY. In the event that any provision of this
Agreement or the application thereof to any party hereto or to any circumstance
or in any jurisdiction governing this Agreement shall, to any extent, be invalid
or unenforceable under any applicable statute, regulation or rule of law, then
such provision shall be deemed inoperative to the extent that it is invalid or
unenforceable and the remainder of this Agreement, and the application of any
such invalid or unenforceable provision to the parties, jurisdictions or
circumstances other than to whom or to which it is held invalid or
unenforceable, shall not be affected thereby nor shall the same affect the
validity or enforceability of any other provision of this Agreement. The parties
hereto further agree that the holding by any court of competent jurisdiction
that any remedy pursued by the Collateral Agent, or any of the Secured Parties,
hereunder is unavailable or unenforceable shall not affect in any way the
ability of the Collateral Agent or any of the Secured Parties to pursue any
other remedy available to it or them (subject, however, to the provisions of
this Agreement limiting such remedies).

Section 8.05. NONPETITION COVENANT. Notwithstanding any prior
termination of this Agreement, each of the parties hereto agrees that it shall
not, prior to one year and one day after the Final Scheduled Distribution Date
with respect to each Series, acquiesce, petition or otherwise invoke or cause
the Seller or OFL to invoke the process of the United States of America, any
State or other political subdivision thereof or any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government for the purpose of commencing or sustaining a case by or against
the Seller, OFL or the Trust under a Federal or state bankruptcy, insolvency or
similar law or appointing a receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar official of the Seller, OFL or the Trust or all or
any part of its property or assets or ordering the winding up or liquidation of
the affairs

37
<PAGE>

of the Seller, OFL or the Trust. The parties agree that damages will be an
inadequate remedy for breach of this covenant and that this covenant may be
specifically enforced.

Section 8.06. NOTICES. All notices, demands, certificates, requests
and communications hereunder ("notices") shall be in writing and shall be
effective (a) upon receipt when sent through the U.S. mails, registered or
certified mail, return receipt requested, postage prepaid, with such receipt to
be effective the date of delivery indicated on the return receipt, or (b) one
Business Day after delivery to an overnight courier, or (c) on the date
personally delivered to an Authorized Officer of the party to which sent, or (d)
on the date transmitted by legible telecopier transmission with a confirmation
of receipt, in all cases addressed to the recipient as follows:

(i) If to OFL:

Olympic Financial Ltd.
7825 Washington Avenue South, Suite 410
Minneapolis, Minnesota 55439-2435
Attention: Treasurer

Telecopier No.: (612) 942-6730

(ii) If to the Seller:

Olympic Receivables Finance Corp.
7825 Washington Avenue South, Suite 410
Minneapolis, Minnesota 55439-2435
Attention: Treasurer

Telecopier No.: (612) 942-6730

(iii) If to Financial Security:

Financial Security Assurance Inc.
350 Park Avenue - 13th Floor
New York, New York 10022
Attention: Surveillance Department

Telecopier No.: (212) 339-3518
(212) 339-3529

(in each case in which notice or other communication to Financial
Security refers to a Default or a claim on the Policy or in which
failure on the part of Financial Security to respond shall be deemed
to constitute consent or acceptance, then with a copy to the attention
of the Senior Vice President Surveillance)

38
<PAGE>

(iv) If to the Trustee:

Norwest Bank Minnesota, National Association
6th Street and Marquette Avenue
Minneapolis, Minnesota 55479-0070
Attention: Corporate Trust Services - Asset Backed
Administration

Telecopier No.: (612) 667-3539

(v) If to the Collateral Agent:

Norwest Bank Minnesota, National Association
6th Street and Marquette Avenue
Minneapolis, Minnesota 55479-0070
Attention: Corporate Trust Services - Asset Backed
Administration

Telecopier No.: (612) 667-3539

(vi) If to Moody's:

Moody's Investor's Service, Inc.
99 Church Street
New York, New York 10007

Telecopier No.: (212) 553-0344

(vii) If to Standard & Poor's:

Standard & Poor's Ratings Group
26 Broadway
New York, New York 10004

Telecopier No.: (212) 208-1582

A copy of each notice given hereunder to any party hereto shall also be given to
(without duplication) Financial Security, the Seller, the Trustee and the
Collateral Agent. Each party hereto may, by notice given in accordance herewith
to each of the other parties hereto, designate any further or different address
to which subsequent notices shall be sent.

Section 8.07. TERM OF THIS AGREEMENT. This Agreement shall take
effect on the Closing Date of the Series 1993-A Certificates and shall continue
in effect until the last Final Termination Date to occur with respect to each
Series. On such Final Termination Date, this Agreement shall terminate, all
obligations of the parties hereunder shall cease and terminate and the
Collateral, if any, held hereunder and not to be used or applied in discharge of
any obligations of the Seller or OFL in respect of the Secured Obligations or
otherwise under this Agreement, shall be released to and in favor of the Seller,
PROVIDED that the provisions of

39
<PAGE>

Sections 4.06, 4.07 and 8.05 shall survive any termination of this Agreement
and the release of any Collateral upon such termination.

Section 8.08. ASSIGNMENTS: THIRD-PARTY RIGHTS; REINSURANCE.

(a) This Agreement shall be a continuing obligation of the parties
hereto and shall (i) be binding upon the parties and their respective successors
and assigns, and (ii) inure to the benefit of and be enforceable by each Secured
Party and the Collateral Agent, and by their respective successors, transferees
and assigns. Neither the Seller nor OFL may assign this Agreement, or delegate
any of its duties hereunder, without the prior written consent of the
Controlling Party.

(b) Financial Security shall have the right (unless a Financial
Security Default shall have occurred and be continuing) to give participations
in its rights under this Agreement and to enter into contracts of reinsurance
with respect to any Policy issued in connection with a Series of Certificates
and each such participant or reinsurer shall be entitled to the benefit of any
representation, warranty, covenant and obligation of each party (other than
Financial Security) hereunder as if such participant or reinsurer was a party
hereto and, subject only to such agreement regarding such reinsurance or
participation, shall have the right to enforce the obligations of each such
other party directly hereunder; PROVIDED, HOWEVER, that no such reinsurance or
participation agreement or arrangement shall relieve Financial Security of its
obligations hereunder, under the Transaction Documents to which it is a party or
under any such Policy. In addition, nothing contained herein shall restrict
Financial Security from assigning to any Person pursuant to any liquidity
facility or credit facility any rights of Financial Security under this
Agreement or with respect to any real or personal property or other interests
pledged to Financial Security, or in which Federal Security has a security
interest, in connection with the transactions contemplated hereby. The terms of
any such assignment or participation shall contain an express acknowledgment by
such Person of the condition of this Section and the limitations of the rights
of Financial Security hereunder.

Section 8.09. CONSENT OF CONTROLLING PARTY. In the event that the
Controlling Party's consent is required under the terms hereof or under the
terms of any Transaction Document, it is understood and agreed that, except as
otherwise provided expressly herein, the determination whether to grant or
withhold such consent shall be made solely by the Controlling Party in its sole
discretion.

Section 8.10. TRIAL BY JURY WAIVED. Each of the parties hereto
waives, to the fullest extent permitted by law, any right it may have to a trial
by jury in respect of any litigation arising directly or indirectly out of,
under or in connection with this Agreement, any of the other Transaction
Documents or any of the transactions contemplated hereunder or thereunder. Each
of the parties hereto (a) certifies that no representative, agent or attorney of
any other party has represented, expressly or otherwise, that such other party
would not, in the event of litigation, seek to enforce the foregoing waiver and
(b) acknowledges that it has been induced to enter into this Agreement and the
other Transaction Documents to which it is a party, by among other things, this
waiver.

40
<PAGE>

Section 8.11. GOVERNING LAW. This Agreement 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.

Section 8.12. CONSENTS TO JURISDICTION. Each of the parties hereto
irrevocably submits to the jurisdiction of the United States District Court for
the Southern District of New York, any court in the state of New York located in
the city and county of New York, and any appellate court from any thereof, in
any action, suit or proceeding brought against it and related to or in
connection with this Agreement, the other Transaction Documents or the
transactions contemplated hereunder or thereunder or for recognition or
enforcement of any judgment and each of the parties hereto irrevocably and
unconditionally agrees that all claims in respect of any such suit or action or
proceeding may be heard or determined in such New York State court or, to the
extent permitted by law, in such federal court. Each of the parties hereto
agrees 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,
each of the parties hereby waives and agrees not to assert by way of motion, as
a defense or otherwise in any such suit, action or proceeding, any claim that it
is not 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 this Agreement or any of the
other Transaction Documents or the subject matter hereof or thereof may not be
litigated in or by such courts. Each of OFL 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. Each of OFL and the Seller
agrees that service of such process upon such Person shall constitute personal
service of such process upon it. Nothing contained in this Agreement shall limit
or affect the rights of any party hereto to serve process in any other manner
permitted by law or to start legal proceedings relating to any of the
Transaction Documents against OFL or the Seller or their respective property in
the courts of any jurisdiction.

Section 8.13. LIMITATION OF LIABILITY. It is expressly understood and
agreed by the parties hereto that (a) Norwest Bank Minnesota, National
Association is executing this Agreement (i) not in its individual capacity but
in its capacity as trustee of the Trusts pursuant to the Transaction Documents
and (ii) as Collateral Agent hereunder (b) in no case whatsoever shall Norwest
Bank Minnesota, National Association in its capacity as trustee of Trusts be
personally liable on, or for any loss in respect of, any of the statements,
representations, warranties, covenants, agreements or obligations of the Trust
hereunder, all such liability, if any, being expressly waived by the parties
hereto.

Section 8.14. DETERMINATION OF ADVERSE EFFECT. Any determination of
an adverse effect on the interest of the Secured Parties or the
Certificateholders shall be made without consideration of the availability of
funds under the Policies.

Section 8.15. COUNTERPARTS. This Agreement 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.

41
<PAGE>

Section 8.16. HEADINGS. The headings of sections and paragraphs and
the Table of Contents contained in this Agreement are provided for convenience
only. They form no part of this Agreement and shall not affect its construction
or interpretation.

42
<PAGE>

IN WITNESS WHEREOF, the parties hereto have executed this Agreement,
as amended and restated, as of the date set forth on the first page hereof.

OLYMPIC FINANCIAL LTD.

By
-------------------------------------------
Name:
Title

OLYMPIC RECEIVABLES FINANCE CORP.

By
-------------------------------------------
Name:
Title:

FINANCIAL SECURITY ASSURANCE INC.

By
-------------------------------------------
Authorized Officer

NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION, as Trustee

By
-------------------------------------------
Name:
Title:

NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION, as Collateral Agent

By
-------------------------------------------
Name:
Title:

<PAGE>

SERIES 1997-A SUPPLEMENT

dated as of March 20, 1997

SPREAD ACCOUNT AGREEMENT

dated as of March 25, 1993,

as amended and restated

as of March 1, 1997

among

OLYMPIC FINANCIAL LTD.

OLYMPIC RECEIVABLES FINANCE CORP.

FINANCIAL SECURITY ASSURANCE INC.

and

NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,

as Trustee and as Collateral Agent

<PAGE>

TABLE OF CONTENTS

Page
----

ARTICLE I

DEFINITIONS

Section 1.1 Definitions. . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.2 Rules of Interpretation. . . . . . . . . . . . . . . . . 6

ARTICLE II

CREDIT ENHANCEMENT FEE; SERIES SUPPLEMENTS; THE COLLATERAL

Section 2.1 Series 1997-A Credit Enhancement Fee . . . . . . . . . . 6
Section 2.2 Series Supplements . . . . . . . . . . . . . . . . . . . 6
Section 2.3 Grant of Security Interest by OFL and the Seller . . . . 7

ARTICLE III

SPREAD ACCOUNT

Section 3.1 Establishment of Series 1997-A Spread Account; Initial
Deposit into Series 1997-A Spread Account. . . . . . . . 7
Section 3.2 Spread Account Additional Deposits . . . . . . . . . . . 8

ARTICLE IV

MISCELLANEOUS

Section 4.1 Further Assurances . . . . . . . . . . . . . . . . . . . 8
Section 4.2 Governing Law. . . . . . . . . . . . . . . . . . . . . . 8
Section 4.3 Counterparts . . . . . . . . . . . . . . . . . . . . . . 8
Section 4.4 Headings . . . . . . . . . . . . . . . . . . . . . . . . 8

Schedule I

<PAGE>

SERIES 1997-A SUPPLEMENT

SERIES 1997-A SUPPLEMENT, dated as of March 20, 1997 (the "Series 1997-A
Supplement"), by and among OLYMPIC FINANCIAL LTD., a Minnesota corporation
("OFL"), OLYMPIC RECEIVABLES FINANCE CORP., a Delaware corporation (the
"Seller"), FINANCIAL SECURITY ASSURANCE INC., a New York stock insurance company
("Financial Security"), and NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION, a
national banking association, in its capacities as Trustee under each Pooling
and Servicing Agreement and as Indenture Trustee under each Indenture referred
to in the Spread Account Agreement (as defined below), in such capacity as agent
for the Noteholders and Certificateholders with respect to the related Series
(in each of such capacities, the "Trustee") and 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 March 1,
1997 (the "Spread Account Agreement"), and, as contemplated by Section 2.02 of
the Spread Account Agreement, this Series 1997-A Supplement constitutes a Series
Supplement to the Spread Account Agreement so that hereafter this Series 1997-A
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. Olympic Automobile Receivables Trust, 1997-A (the "Series 1997-A
Trust") is being formed contemporaneously herewith pursuant to the Series 1997-A
Trust Agreement (as defined herein).

3. Pursuant to the Series 1997-A Sale and Servicing Agreement, the Seller
is selling to the Series 1997-A Trust all of its right, title and interest in
and to the Initial Receivables (as defined in the Series 1997-A Sale and
Servicing Agreement) and certain other Trust Property (as defined in the Series
1997-A Trust Agreement).

4. Pursuant to the Series 1997-A Trust Agreement, the Series 1997-A Trust
is issuing the Series 1997-A Certificates (as defined herein). Pursuant to the
Series 1997-A Indenture, the Series 1997-A Trust is issuing the Series 1997-A
Notes (as defined herein).

5. The Seller has requested that Financial Security issue the Series
1997-A Note Policy to the Trustee to guarantee payment of the Scheduled Payments
(as defined in such Policy) on each Payment Date in respect of the Series 1997-A
Notes, and has requested that Financial Security issue the Series 1997-A
Certificate Policy to Mellon Bank (DE), National Association, as Owner Trustee
under the Series 1997-A Trust Agreement, to guarantee payment of the Guaranteed
Distributions (as defined in such Policy) on each Distribution Date in respect
of the Series 1997-A Certificates.

<PAGE>

6. In partial consideration of the issuance of the Series 1997-A Note
Policy and the Series 1997-A Certificate 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-A Indenture.

7. The Seller is a wholly owned special purpose subsidiary of OFL. The
Series 1997-A Trust has agreed to pay the Series 1997-A Credit Enhancement Fee
to the Seller in consideration of the obligations of the Seller and OFL pursuant
hereto and in consideration of the obligations of OFL pursuant to the Series
1997-A Insurance Agreement (such obligations forming part of the Series 1997-A
Insurer Secured Obligations as referred to herein). The Series 1997-A Insurer
Secured Obligations form part of the consideration to Financial Security for its
issuance of the Series 1997-A Policies.

8. In order to secure the performance of the Series 1997-A Secured
Obligations, to further effect and enforce the subordination provisions to which
the Series 1997-A Credit Enhancement Fee is subject, and in consideration of the
receipt of the Series 1997-A Credit Enhancement Fee, OFL and the Seller have
agreed to pledge the Series 1997-A 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-A Sale and Servicing Agreement shall have the same meaning with respect to
this Series 1997-A Supplement. The following terms shall have the following
meanings:

"COLLECTION ACCOUNT SHORTFALL" means, with respect to Series 1997-A and any
Distribution Date, the Deficiency Claim Amount, as defined in the Series 1997-A
Sale and Servicing Agreement, with respect to such Distribution Date.

"DEEMED CURED" means with respect to Series 1997-A, (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-A, 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,

<PAGE>

as of the next Determination Date which occurs in a calendar month which is a
multiple of three months succeeding the Series 1997-A 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-A.

"INITIAL SPREAD ACCOUNT DEPOSIT" means $7,750,000 for Series 1997-A.

"INITIAL SPREAD ACCOUNT MAXIMUM AMOUNT" means, with respect to Series 1997-
A and any Distribution Date, an amount equal to the greater of (i) 7% of the
Series 1997-A 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-A BALANCE" means, with respect to Series 1997-A and any
Distribution Date, the sum of the aggregate principal amount of the Series 1997-
A Notes and the Certificate Balance with respect to Series 1997-A Certificates
as of such Distribution Date (after giving effect to the distributions in
respect of principal on the Notes and on the Certificates made on such
Distribution Date).

"SERIES 1997-A CERTIFICATE POLICY" means the financial guaranty insurance
policy issued by Financial Security with respect to the Series 1997-A
Certificates.

"SERIES 1997-A CERTIFICATES" means the Certificates issued on the date
hereof pursuant to the Series 1997-A Trust Agreement.

"SERIES 1997-A COLLATERAL" has the meaning specified in Section 2.3(a)
hereof.

"SERIES 1997-A CREDIT ENHANCEMENT FEE" means the amount distributable on
each Distribution Date pursuant to Section 4.6(viii) and (ix) of the Series
1997-A Sale and Servicing Agreement.

"SERIES 1997-A INDENTURE" means the Indenture, dated as of March 1, 1997,
among the Series 1997-A Trust, the Trustee and the Indenture Collateral Agent.

"SERIES 1997-A NOTE POLICY" means the financial guaranty insurance policy
issued by Financial Security with respect to the Series 1997-A Notes.

"SERIES 1997-A 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-A Indenture.

"SERIES 1997-A OWNER TRUSTEE" means Mellon Bank (DE), National Association,
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-A Trust Agreement.

<PAGE>

"SERIES 1997-A RECEIVABLE" means each Receivable referenced on the Schedule
of Receivables attached to the Series 1997-A Sale and Servicing Agreement, as
supplemented from time to time during the Funding Period by one or more
Subsequent Transfer Agreements.

"SERIES 1997-A RESERVE ACCOUNT" means the Reserve Account established
pursuant to Section 4.1(d) of the Series 1997-A Sale and Servicing Agreement.

"SERIES 1997-A SALE AND SERVICING AGREEMENT" means the Sale and Servicing
Agreement, dated as of March 1, 1997, among the Series 1997-A Trust, OFL, 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-A SECURED OBLIGATIONS" means the Insurer Secured Obligations
and the Trustee Secured Obligations with respect to Series 1997-A.

"SERIES 1997-A SECURITIES" means the Series 1997-A Notes and the Series
1997-A Certificates, collectively.

"SERIES 1997-A SPREAD ACCOUNT" means the Spread Account established
pursuant to Section 3.1(a) hereof.

"SERIES 1997-A SUPPLEMENT" means this Series 1997-A Supplement which
constitutes a Series Supplement to the Spread Account Agreement.

"SERIES 1997-A TRUST AGREEMENT" means the Trust Agreement, dated as of
March 1, 1997, among the Seller, Olympic First GP Inc., Olympic Second GP Inc.,
Financial Security and the Series 1997-A Owner Trustee.

"SPREAD ACCOUNT ADDITIONAL DEPOSIT" means, with respect to Series 1997-A
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-A 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-A Notes and the Series 1997-
A Certificates will be in the highest category by such Rating Agencies.

"SPREAD ACCOUNT MAXIMUM AMOUNT" means, with respect to Series 1997-A and
any Distribution Date:

(i) if no Insurance Agreement Event of Default with respect to Series
1997-A 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-A 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-A and such Distribution Date;

<PAGE>

(ii) if an event specified in clause (A) of the definition of Trigger
Event with respect to Series 1997-A 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-A 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-A 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-A 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-A 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-A and
any Distribution Date, an amount equal to the greater of:

(i) $100,000, and

(ii) the lesser of:

(A) 1.5% of the Initial Principal Amount of Series 1997-A, and

(B) the Series 1997-A Balance.

"SPREAD ACCOUNT WITHDRAWAL FLOOR" means, with respect to Series 1997-A and
any Determination Date, an amount equal to the Spread Account Minimum Amount.

"TRIGGER EVENT" means, with respect to Series 1997-A 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 6.18% 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;

<PAGE>

(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-A 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-A 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-A CREDIT ENHANCEMENT FEE. The Series 1997-A
Sale and Servicing Agreement provides for the payment to the Seller of the
Series 1997-A 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 OFL hereby agree that payment of the Series
1997-A Credit Enhancement Fee in the manner and subject to the conditions set
forth herein and in the Series 1997-A Sale and Servicing Agreement is adequate
consideration and the exclusive consideration to be received by the Seller or
OFL for the obligations of the Seller pursuant hereto and the obligations of OFL
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-A) and pursuant to the Series 1997-A Insurance Agreement. The
Seller and OFL hereby agree with the Trustee and with Financial Security that
payment of the Series 1997-A Credit Enhancement Fee to the Seller is expressly
conditioned on subordination of the Series 1997-A 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-A Collateral is intended to
effect and enforce such subordination and to provide security for the Series
1997-A 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-A Supplement with respect to
the Series 1997-A Securities.

<PAGE>

Section 2.3 GRANT OF SECURITY INTEREST BY OFL AND THE SELLER.

(a) In order to secure the performance of the Secured Obligations with
respect to each Series, the Seller (and OFL, 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-A
Collateral"):

(i) the Series 1997-A Credit Enhancement Fee and all rights and
remedies that the Seller may have to enforce payment of the Series 1997-A
Credit Enhancement Fee whether under the Series 1997-A Sale and Servicing
Agreement or otherwise;

(ii) the Series 1997-A Spread Account established pursuant to
Section 3.1 of this Series 1997-A 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);

(iv) all distributions, revenues, products, substitutions,
benefits, profits and proceeds, in whatever form, of any of the foregoing.

(b) In order to effectuate the provisions and purposes of this Series
1997-A 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-A 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-A Collateral which
can be perfected by the filing of a financing statement.

ARTICLE III

SPREAD ACCOUNT

Section 3.1 ESTABLISHMENT OF SERIES 1997-A SPREAD ACCOUNT; INITIAL
DEPOSIT INTO SERIES 1997-A SPREAD ACCOUNT.

(a) On or prior to the Closing Date relating to the Series 1997-A
Certificates, the Collateral Agent shall establish with respect to Series 1997-
A, at its office or at another

<PAGE>

depository institution or trust company, an Eligible Account, designated
"Spread Account--Series 1997-A--Norwest Bank Minnesota, National Association,
as Collateral Agent for Financial Security Assurance Inc. and another Secured
Party" (the "Series 1997-A Spread Account").

(b) On the Closing Date relating to the Series 1997-A, the Collateral
Agent shall deposit the Initial Spread Account Deposit with respect to Series
1997-A received from the Seller into the Series 1997-A Spread Account.

Section 3.2 SPREAD ACCOUNT ADDITIONAL DEPOSITS. On each Subsequent
Transfer Date, the Series 1997-A Trust will, pursuant to Section 2.4 of the
Series 1997-A 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-A Trust into the Series 1997-A
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-A Supplement or to confirm or perfect any transaction described or
contemplated herein.

Section 4.2 GOVERNING LAW. This Series 1997-A 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.

Section 4.3 COUNTERPARTS. This Series 1997-A 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-A Supplement are provided for
convenience only. They form no part of this Series 1997-A Supplement and shall
not affect its construction or interpretation.

<PAGE>

IN WITNESS WHEREOF, the parties hereto have executed this Series 1997-A
Supplement as of the date set forth on the first page hereof.

OLYMPIC FINANCIAL LTD.

By
--------------------------------------------
John A. Witham
Executive Vice President and
Chief Financial Officer

OLYMPIC RECEIVABLES FINANCE CORP.

By
--------------------------------------------
John A. Witham
Senior Vice President and
Chief Financial Officer

FINANCIAL SECURITY ASSURANCE INC.

By
--------------------------------------------
Authorized Officer

NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION, as Trustee

By
--------------------------------------------
Thomas D. Wraalstad
Corporate Trust Officer

NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION, as Collateral Agent

By
--------------------------------------------
Thomas D. Wraalstad
Corporate Trust Officer

<PAGE>

SCHEDULE I

Determination Date* Cumulative Default Rate Cumulative Net Loss Rate
(month) (Column A) (Column B)

0 to 3 2.60% 1.35%
3 to 6 4.78% 2.35%
6 to 9 6.72% 3.18%
9 to 12 8.32% 3.77%
12 to 15 9.09% 4.13%
15 to 18 10.14% 4.45%
18 to 21 11.08% 4.70%
21 to 24 11.78% 4.90%
24 to 27 12.42% 5.05%
27 to 30 12.96% 5.20%
30 to 33 13.37% 5.30%
33 to 36 13.68% 5.40%
36 to 39 13.96% 5.48%
39 to 42 14.12% 5.55%
42 to 45 14.27% 5.63%
45 to 48 14.40% 5.67%
48 to 51 14.47% 5.70%
51 to 54 14.54% 5.74%
54 to 57 14.57% 5.77%
57 to 60 14.61% 5.79%
60 to 63 14.62% 5.81%
63 to 66 14.64% 5.82%
66 to 69 14.65% 5.84%
69 to 72 14.68% 5.85%

- -----------------------
* Such Determination Date occurring after the designated calendar months
succeeding the Series 1997-A Closing Date appearing first in the column below,
and prior to or during the designated calendar months succeeding the Series
1997-A Distribution Date appearing second in the column below.

<PAGE>

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

INSURANCE AND INDEMNITY AGREEMENT

among

FINANCIAL SECURITY ASSURANCE INC.,

OLYMPIC AUTOMOBILE RECEIVABLES TRUST, 1997-A,

OLYMPIC FIRST GP INC.,

OLYMPIC SECOND GP INC.,

OLYMPIC RECEIVABLES FINANCE CORP.

and

OLYMPIC FINANCIAL LTD.

Dated as of March 20, 1997

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

Olympic Automobile Receivables Trust, 1997-A

5.50% Class A-1 Automobile Receivables-Backed Notes

6.125% Class A-2 Automobile Receivables-Backed Notes

6.40% Class A-3 Automobile Receivables-Backed Notes

6.625% Class A-4 Automobile Receivables-Backed Notes

6.80% Class A-5 Automobile Receivables-Backed Notes

6.65% Automobile Receivables-Backed Certificates

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

<PAGE>
TABLE OF CONTENTS

Page
----

ARTICLE I

DEFINITIONS

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

ARTICLE II

REPRESENTATIONS, WARRANTIES AND COVENANTS

Section 2.01. Representations and Warranties of the Trust. . . . . . . . 9
Section 2.02. Affirmative Covenants of the Trust . . . . . . . . . . . . 12
Section 2.03. Negative Covenants of the Trust. . . . . . . . . . . . . . 17
Section 2.04. Representations and Warranties of OFL and of the Class GP
Certificateholders . . . . . . . . . . . . . . . . . . . . 18
Section 2.05. Affirmative Covenants of OFL and each Class GP
Certificateholder. . . . . . . . . . . . . . . . . . . . . 21
Section 2.06. Negative Covenants of OFL and each Class GP
Certificateholder. . . . . . . . . . . . . . . . . . . . . 25
Section 2.07. Representations and Warranties of OFL and the Seller . . . 27
Section 2.08. Affirmative Covenants of OFL and the Seller. . . . . . . . 32
Section 2.09. Negative Covenants of OFL and the Seller . . . . . . . . . 36
Section 2.10. Representations and Warranties of OFL. . . . . . . . . . . 38
Section 2.11. Affirmative Covenants of OFL . . . . . . . . . . . . . . . 40
Section 2.12. Negative Covenants of OFL. . . . . . . . . . . . . . . . . 44

ARTICLE III

THE POLICIES; REIMBURSEMENT; INDEMNIFICATION

Section 3.01. Conditions Precedent to Issuance of the Policies . . . . . 46
Section 3.02. Payment of Fees and Premium. . . . . . . . . . . . . . . . 51
Section 3.03. Reimbursement and Additional Payment Obligation. . . . . . 52
Section 3.04. Certain Obligations Not Recourse to OFL; Recourse to Trust
Property . . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 3.05. Indemnification. . . . . . . . . . . . . . . . . . . . . . 53
Section 3.06. Payment Procedure. . . . . . . . . . . . . . . . . . . . . 55
Section 3.07. Subrogation. . . . . . . . . . . . . . . . . . . . . . . . 55

ARTICLE IV

FURTHER AGREEMENTS; MISCELLANEOUS

Section 4.01. Effective Date; Term of Agreement. . . . . . . . . . . . . 56
Section 4.02. Further Assurances and Corrective Instruments. . . . . . . 56
Section 4.03. Obligations Absolute . . . . . . . . . . . . . . . . . . . 56
Section 4.04. Assignments; Reinsurance; Third-Party Rights . . . . . . . 58
Section 4.05. Liability of Financial Security. . . . . . . . . . . . . . 58

ARTICLE V
<PAGE>

Page
----
EVENTS OF DEFAULT; REMEDIES

Section 5.01. Events of Default. . . . . . . . . . . . . . . . . . . . . 59
Section 5.02. Remedies; Waivers. . . . . . . . . . . . . . . . . . . . . 61

ARTICLE VI

MISCELLANEOUS

Section 6.01. Amendments, Etc. . . . . . . . . . . . . . . . . . . . . . 62
Section 6.02. Notices. . . . . . . . . . . . . . . . . . . . . . . . . . 62
Section 6.03. Severability . . . . . . . . . . . . . . . . . . . . . . . 64
Section 6.04. Governing Law. . . . . . . . . . . . . . . . . . . . . . . 64
Section 6.05. Consent to Jurisdiction. . . . . . . . . . . . . . . . . . 64
Section 6.06. Consent of Financial Security. . . . . . . . . . . . . . . 65
Section 6.07. Counterparts . . . . . . . . . . . . . . . . . . . . . . . 65
Section 6.08. Headings . . . . . . . . . . . . . . . . . . . . . . . . . 65
Section 6.09. Trial by Jury Waived . . . . . . . . . . . . . . . . . . . 65
Section 6.10. Limited Liability. . . . . . . . . . . . . . . . . . . . . 65
Section 6.11. Limited Liability of Mellon Bank (DE), National
Association. . . . . . . . . . . . . . . . . . . . . . . . 66
Section 6.12. Entire Agreement . . . . . . . . . . . . . . . . . . . . . 66

Schedule I

<PAGE>

INSURANCE AND INDEMNITY AGREEMENT

INSURANCE AND INDEMNITY AGREEMENT dated as of March 20, 1997, among
FINANCIAL SECURITY ASSURANCE INC., a New York stock insurance company
("Financial Security"), OLYMPIC AUTOMOBILE RECEIVABLES TRUST, 1997-A, a
Delaware business trust (the "Trust"), OLYMPIC FIRST GP INC., a Delaware
corporation ("First Class GP Certificateholder"), OLYMPIC SECOND GP INC., a
Delaware corporation ("Second Class GP Certificateholder" and collectively
with First Class GP Certificateholder, the "Class GP Certificateholders"),
OLYMPIC RECEIVABLES FINANCE CORP., a Delaware corporation (the "Seller"), and
OLYMPIC FINANCIAL LTD., a Minnesota corporation (when referred to
individually hereunder, "OFL", 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 Certificates pursuant to the Trust Agreement
and Notes pursuant to the Indenture.

2. Each Certificate will represent a fractional undivided
interest in the Trust. Each Note will be secured by the Indenture Property.
The Trust has requested that Financial Security issue two financial guaranty
insurance policies guarantying respectively certain distributions of interest
and principal on the Certificates and 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. OFL 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 Policies by Financial Security, the payment of premium
in respect of the Policies, the

<PAGE>

indemnity and reimbursement to be provided to Financial Security in respect
of amounts paid by Financial Security under the Policies or otherwise and
certain other matters.

In consideration of the premises and of the agreements herein
contained, Financial Security, the Trust, the Class GP Certificateholders,
OFL, individually and as Servicer, and the Seller hereby agree as follows:

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-A. 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.

"CERTIFICATES" means the Certificates issued under the Trust
Agreement.

"CERTIFICATE POLICY" means the financial guaranty insurance policy,
including any endorsements thereto, issued by Financial Security with respect
to the Certificates, substantially in the form attached as Exhibit B hereto.

"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 OFL, as the case may be, each entity, whether or not incorporated,
which is affiliated with the Trust, the Seller or OFL, 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.

<PAGE>

"DEMAND NOTES" means the Series 1993-C Demand Notes, the Series
1993-D Demand Notes, the Series 1994-A Demand Notes, the Series 1994-B Demand
Notes, the Series 1995-B Demand Notes, Series 1995-C Demand Notes, the Series
1995-D Demand Notes, the Series 1995-E Demand Notes, the Series 1996-A Demand
Notes, the Series 1996-B Demand Notes, the Series 1996-C Demand Notes, the
Series 1996-D Demand Notes and the Series 1997-A Demand Notes.

"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 each Policy, the final
date of the Term of such Policy, as specified therein.

"FINANCIAL SECURITY" means Financial Security Assurance Inc., a New
York stock insurance company, its successors and assigns.

"FINANCIAL STATEMENTS" means with respect to OFL the audited
consolidated balance sheets as of December 31, 1995, December 31, 1994 and
December 31, 1993 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 September 30, 1996 and
September 30, 1995 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 Policies.

"INDENTURE COLLATERAL AGENT" means initially, Norwest Bank
Minnesota, National Association, 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.

<PAGE>

"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.

"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 each 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.

<PAGE>

"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.

"POLICIES" means the Note Policy and the Certificate Policy.

"PORTFOLIO PERFORMANCE EVENT OF DEFAULT" means an Event of Default
specified in clause (j), (k), or (l) 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 OFL dated the date hereof in respect of the premium payable by OFL in
consideration of the issuance of the Policies.

"PREMIUM SUPPLEMENT" means a non-refundable premium, in addition to
the premium payable in accordance with Section 3.02 of this Agreement,
payable by OFL 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.

"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, and
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 and the Warehousing Notes.

"PROSPECTUS" has the meaning set forth in Section 2.07(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
2.07(o) of this Agreement.

<PAGE>

"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 March 1, 1997 among the Seller, OFL, 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.

"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 April 28,
1995 between OFL and Norwest Bank Minnesota, National Association, as amended
or supplemented, relating to OFL's $145,000,000 13% Senior Notes due 2000.

"SERIES 1993-C DEMAND NOTES" means each of the Demand Notes, dated
August 17, 1993, issued by OFL to First Class GP Certificateholder and the
Demand Note, dated August 17, 1993, issued by OFL to Second Class GP
Certificateholder.

"SERIES 1993-D DEMAND NOTES" means each of the Demand Notes, dated
December 2, 1993, issued by OFL to First Class GP Certificateholder and the
Demand Note, dated December 2, 1993, issued by OFL to Second Class GP
Certificateholder.

"SERIES 1994-A DEMAND NOTES" means each of the Demand Notes, dated
April 5, 1994, issued by OFL to First Class GP Certificateholder and the
Demand Note, dated April 5, 1994, issued by OFL to Second Class GP
Certificateholder.

"SERIES 1994-B DEMAND NOTES" means each of the Demand Notes, dated
September 23, 1994, issued by OFL to Class B-GP Certificateholder and the
Demand Note, dated September 23, 1994, issued by OFL to Class I-GP
Certificateholder.

"SERIES 1995-B DEMAND NOTES" means each of the Demand Notes, dated
March 15, 1995, issued by OFL to the Class GP Certificateholders.

<PAGE>

"SERIES 1995-C DEMAND NOTES" means each of the Demand Notes, dated
June 15, 1995, issued by OFL to the Class GP Certificateholders.

"SERIES 1995-D DEMAND NOTES" means each of the Demand Notes, dated
September 21, 1995, issued by OFL to the Class GP Certificateholders.

"SERIES 1995-E DEMAND NOTES" means each of the Demand Notes, dated
December 6, 1995, issued by OFL to the Class GP Certificateholders.

"SERIES 1996-A DEMAND NOTES" means each of the Demand Notes, dated
March 14, 1996, issued by OFL to the Class GP Certificateholders.

"SERIES 1996-B DEMAND NOTES" means each of the Demand Notes, dated
June 14, 1996, issued by OFL to the Class GP Certificateholders.

"SERIES 1996-C DEMAND NOTES" means each of the Demand Notes, dated
September 12, 1996, issued by OFL to the Class GP Certificateholders.

"SERIES 1996-D DEMAND NOTES" means each of the Demand Notes, dated
December 12, 1996, issued by OFL to the Class GP Certificateholders.

"SERIES 1997-A" means the Series of Certificates and Notes issued
on the date hereof pursuant to the Trust Agreement and the Indenture,
respectively.

"SERIES 1997-A DEMAND NOTES" means each of the Demand Notes, dated
March 20, 1997, issued by OFL to the Class GP Certificateholders.

"SERIES OF CERTIFICATES", "SERIES OF NOTES" or "SERIES" means
Series 1997-A or any, or as the context may require, all, additional series
of certificates or notes or both 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 March 20, 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 March 1, 1997 as
supplemented in accordance with the terms thereof, among OFL, 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, OFL, 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.

<PAGE>

"TERM OF THE POLICY" means, with respect to each 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.

"TRUST AGREEMENT" means the Trust Agreement, dated as of March 1,
1997, among the Seller, the Class GP Certificateholders, Financial Security
and Mellon Bank (DE), National Association, 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. and BancAmerica Securities, Inc.

"UNDERWRITING AGREEMENT" means the Pricing Agreement, dated March 13,
1997, among OFL 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.

<PAGE>

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 the Notes and
the Certificates and pledge and assign its assets pursuant to the Indenture and
has duly authorized the issuance of the Notes and Certificates 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

<PAGE>

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 of the Certificates, 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 Certificates, 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
Certificates, when executed, authenticated and delivered in accordance with the
Trust Agreement, will be validly issued and outstanding and entitled to the
benefits of the Trust Agreement and will evidence the entire beneficial
ownership interest in the Trust. 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 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.

<PAGE>

(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 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.

(l) SECURITY INTEREST IN FUNDS AND INVESTMENTS. Assuming the
retention of funds in the Accounts (other than the Certificate Distribution
Account) 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.

(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 OFL, 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.

<PAGE>

(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 believe 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, the
Noteholders or the Certificateholders, as the case may be, copies of all
reports, certificates, statements, financial statements or notices furnished to
the Indenture Trustee, the Noteholders or the Certificateholders, 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

<PAGE>
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 or Certificateholder, 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:

(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).

<PAGE>

(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 Certificates, 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;

(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.

<PAGE>

(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 AND CERTIFICATES. The Trust shall, upon
retirement of the Certificates and 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 applicable Policy, surrender the applicable
Policy to Financial Security for cancellation.

(i) DISCLOSURE DOCUMENT. Each Prospectus delivered with respect to
the Notes and the Certificates shall clearly disclose that the Policies are 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 and the Certificates 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:

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.

<PAGE>

(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 OFL, the Seller, or any
other Affiliates thereof or that the assets of the Trust are available
to pay the creditors of OFL, 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 OFL, the Seller, each Class GP
Certificateholder 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 OFL, 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 OFL, the Seller,
either Class GP Certificateholder 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 OFL, the Seller, each Class GP
Certificateholder and each Affiliate of any of them.

(vii) The Trust shall maintain an arm's-length relationship with
OFL, the Seller, each Class GP Certificateholder 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, OFL, the Seller, each Class GP Certificateholder and each
Affiliate of any of them except, in each case, as contemplated by the
Transaction Documents.

<PAGE>

(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-A 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 the Trust is taxable as a partnership for federal and state income tax
purposes and not as an association (or publicly traded partnership), 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.

(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

<PAGE>

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, the Certificateholders 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.

Section 2.04. REPRESENTATIONS AND WARRANTIES OF OFL AND OF THE CLASS
GP CERTIFICATEHOLDERS. Each of OFL and each Class GP Certificateholder (with
respect to) represents and warrants as of the date hereof and as of the Closing
Date, as follows:

(a) DUE ORGANIZATION AND QUALIFICATION. Each Class GP
Certificateholder 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. Each Class GP
Certificateholder is duly qualified to do business, is in good standing and has

<PAGE>

obtained all necessary licenses, permits, charters, registrations and approvals
(together, "approvals") necessary for the conduct of its business as described
in the Transaction Documents and the performance of its obligations under the
Transaction Documents.

(b) POWER AND AUTHORITY. Each Class GP Certificateholder has all
necessary corporate power and authority to conduct its business as described in
the Transaction Documents, 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 each Class GP
Certificateholder is a party has been duly authorized by all necessary corporate
action on the part of such Class GP Certificateholder 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 such Class GP Certificateholder, including,
without limitation, any governmental entity or such Class GP Certificateholder's
stockholder.

(d) NONCONTRAVENTION. Neither the execution and delivery of this
Agreement and each other Transaction Document to which each Class GP
Certificateholder 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 it is a party,

(i) conflicts with or results in any breach or violation of any
provision of the charter or bylaws of such Class GP Certificateholder
or any law, rule, regulation, order, writ, judgment, injunction,
decree, determination or award currently in effect having
applicability to such Class GP Certificateholder or any of its
properties, including regulations issued by an administrative agency
or other governmental authority having supervisory powers over it,

(ii) constitutes a default by such Class GP Certificateholder
under or a breach of any provision of any loan agreement, mortgage,
indenture or other agreement or instrument to which such Class GP
Certificateholder 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 such Class GP Certificateholder'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 OFL's or either Class GP
Certificateholder's best knowledge, threatened, before any court, regulatory
body, administrative agency, arbitrator or governmental agency or
instrumentality having jurisdiction over either Class GP Certificateholder or
its properties: (A) asserting the invalidity of this Agreement or any other
Transaction Document to which either Class GP Certificateholder is a party,
(B) seeking to prevent the issuance of the Certificates or 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

<PAGE>

Agreement or any other Transaction Document to which either Class GP
Certificateholder is a party, (D) which might result in a Material Adverse
Change with respect to such Class GP Certificateholder or (E) which might
adversely affect the federal or state tax attributes of the Notes, the
Certificates or of the Trust.

(f) VALID AND BINDING OBLIGATIONS. Each of the Transaction Documents
to which each Class GP Certificateholder is a party, when executed and delivered
by such Class GP Certificateholder, and assuming due authorization, execution
and delivery by the other parties thereto, will constitute the legal, valid and
binding obligation of such Class GP Certificateholder 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.

(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 each Class GP Certificateholder of this Agreement or of any
other Transaction Document to which either Class GP Certificateholder 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 either Class GP Certificateholder in the
conduct of its business violates any law, regulation, judgment, agreement, order
or decree applicable to such Class GP Certificateholder which, if enforced,
would result in a Material Adverse Change with respect to such Class GP
Certificateholder.

(i) SPECIAL PURPOSE ENTITY.

(i) The capital of each Class GP Certificateholder is adequate
for the business and undertakings of such Class GP Certificateholder.

(ii) Other than with respect to the ownership by OFL of the
stock of each Class GP Certificateholder, the issuance of the Demand
Notes by OFL to each Class GP Certificateholder, and except for its
ownership of the Series 1993-C Class B Certificates, the Series 1993-D
Class B Certificates, the Series 1994-A Class B Certificates, the
Series 1994-B Class B-GP and Class I-GP Certificates, the Series 1995-
B Class GP Certificates, the Series 1995-C Class GP Certificates, the
Series 1995-D Class B-GP and Class I-GP Certificates, the Series 1995-
E Class GP Certificates, the Series 1996-A Class GP Certificates, the
Series 1996-B Class GP Certificates, the Series 1996-C Class GP
Certificates, the Series 1996-D GP Certificates and the Series 1997-A
Class GP Certificates, it is not engaged in any business transactions
with OFL or any Affiliate of OFL.

(iii) At least one executive officer and one director of each
Class GP Certificateholder shall be a person who is not, and will not
be, a director, officer,

<PAGE>
employee or holder of any equity securities of OFL, the Seller, or
any Affiliate of either of them.

(iv) Each Class GP Certificateholder's funds and assets are not,
and will not be, commingled with the funds of any other Person.

(v) The by-laws of each Class GP Certificateholder 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.

(j) SOLVENCY; FRAUDULENT CONVEYANCE. Each Class GP Certificateholder
is solvent and will not be rendered insolvent by the Transaction and, after
giving effect to such Transaction, such Class GP Certificateholder will not be
left with an unreasonably small amount of capital with which to engage in its
business. Neither Class GP Certificateholder intends to incur, or believes that
it has incurred, debts beyond its ability to pay such debts as they mature.
Neither Class GP Certificateholder contemplates the commencement of insolvency,
bankruptcy, liquidation or consolidation proceedings or the appointment of a
receiver, liquidator, conservator, trustee or similar official in respect of
such Class GP Certificateholder or any of its assets.

(k) CAPITAL STRUCTURE. The shares of stock of each Class GP
Certificateholder which have been pledged pursuant to the Stock Pledge Agreement
constitute all of the issued and outstanding shares of such Class GP
Certificateholder. All of the outstanding equity securities of the Trust in
which each Class GP Certificateholder owns an interest are owned by such Class
GP Certificateholder free and clear of any Lien.

(l) ERISA. Each Class GP Certificateholder is in compliance with
ERISA and has not incurred and does not reasonable expect to incur any liability
to any Plan or to PBGC in connection with any Plan or to contribute now or in
the future in respect of any Plan.

(m) SECURITIES LAWS COMPLIANCE. Neither Class GP Certificateholder
is required to be registered as an "investment company" under the Investment
Company Act of 1940. Neither Class GP Certificateholder is subject to the
information reporting requirements of the Exchange Act.

(n) TRANSACTION DOCUMENTS. All of the representations and warranties
made by each Class GP Certificateholder in the Transaction Documents are
incorporated by reference herein as if set forth herein and each such
representation and warranty is true and correct as of the Closing Date.

Section 2.05. AFFIRMATIVE COVENANTS OF OFL AND EACH CLASS GP
CERTIFICATEHOLDER. OFL and each Class GP Certificateholder (with respect to
itself) 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. Such Class GP
Certificateholder will comply with all terms and conditions of this Agreement
and each other

<PAGE>

Transaction Document to which it is a party and with all material
requirements of any law, rule or regulation applicable to it. Each Class GP
Certificateholder 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. Each Class GP Certificateholder 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. Each Class GP Certificateholder 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.
Each Class GP Certificateholder shall keep or cause to be kept in reasonable
detail books and records of account of such Class GP Certificateholder's assets
and business. Each Class GP Certificateholder shall furnish to Financial
Security as soon as available, and in any event within 90 days after the close
of each fiscal year of such Class GP Certificateholder, the unaudited balance
sheet of such Class GP Certificateholder as of the end of such fiscal year and
the unaudited statements of income, changes in shareholders' equity and cash
flows of such Class GP Certificateholder 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. Each Class GP Certificateholder shall
deliver to Financial Security, within 90 days after the close of each fiscal
year of such Class GP Certificateholder, a certificate signed by an Authorized
Officer of such Class GP Certificateholder stating that (i) a review of such
Class GP Certificateholder'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 such Class GP Certificateholder 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 such Class GP Certificateholder 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; and
(iii) the financial statements submitted in accordance with Section 2.05(c)
hereof, as applicable, are complete and correct in all material respects and
present fairly the financial condition and results of operations of such Class
GP Certificateholder as of the dates and for the periods indicated, in
accordance with generally accepted accounting principles consistently applied.

(e) ACCESS TO RECORDS; DISCUSSIONS WITH OFFICERS AND ACCOUNTANTS.
Each Class GP Certificateholder shall, upon the request of Financial Security,
permit Financial Security or its authorized agents (i) to inspect the books and
records of such Class GP Certificateholder as

<PAGE>

they may relate to the obligations of such Class GP Certificateholder under
the Transaction Documents, such Class GP Certificateholder's business and the
Transaction and (ii) to discuss the affairs, finances and accounts of such
Class GP Certificateholder with any of its officers, directors and
representatives, including its Independent Accountants. Each inspections and
discussions shall be conducted during normal business hours and shall not
unreasonably disrupt the business of such Class GP Certificateholder. The
books and records of each Class GP Certificateholder will be maintained at
the address designated herein for receipt of notices, unless such Class GP
Certificateholder shall otherwise advise the parties hereto in writing.

(f) NOTICE OF MATERIAL EVENTS. OFL and each Class GP
Certificateholder 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 such Class GP Certificateholder 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 such Class GP
Certificateholder's principal office or any change in the location of
such Class GP Certificateholder'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
such Class GP Certificateholder 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 such Class GP Certificateholder or the
Trust;

(v) the commencement of any proceedings by or against such Class
GP Certificateholder 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 such Class GP Certificateholder
or any of its assets;

(vi) the receipt of notice that (A) such Class GP
Certificateholder is being placed under regulatory supervision, (B)
any license, permit, charter, registration or approval necessary for
the conduct of such Class GP Certificateholder's business is to be, or
may be, suspended or revoked, or (C) such Class GP Certificateholder
is to cease and desist any practice, procedure or policy employed by
such Class GP Certificateholder in the conduct of its business, and
such cessation may result in a Material Adverse Change with respect to
such Class GP Certificateholder or the Trust; or

<PAGE>

(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 such Class GP Certificateholder or the
Trust.

(g) MAINTENANCE OF LICENSES. Such Class GP Certificateholder shall
maintain all licenses, permits, charters and registrations which are material to
the performance by such Class GP Certificateholder of its obligations under this
Agreement and each other Transaction Document to which the Seller is a party or
by which such Class GP Certificateholder is bound.

(h) SPECIAL PURPOSE ENTITY.

(i) Such Class GP Certificateholder 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
the Trust, OFL, the Seller or any other Affiliate of any of them or
that, except as expressly provided in the Transaction Documents, the
assets of such Class GP Certificateholder are available to pay the
creditors of OFL, the Seller or any Affiliate of any of them. 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 such Class GP Certificateholder.

(ii) Such Class GP Certificateholder shall maintain corporate
records and books of account separate from those of OFL, the Trust,
the Seller and any Affiliate of any of them.

(iii) Such Class GP Certificateholder shall obtain proper
authorization from its board of directors of all corporate action
requiring such authorization, meetings of the board of directors of
such Class GP Certificateholder 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) Such Class GP Certificateholder shall obtain proper
authorization from its shareholders of all corporate action requiring
shareholder approval, meetings of the shareholders of such Class GP
Certificateholder 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 such Class GP
Certificateholder have been paid by OFL, operating expenses and
liabilities of such Class GP Certificateholder shall be paid from its
own funds.

<PAGE>

(vi) The annual financial statements of such Class GP
Certificateholder shall disclose the effects of such Class GP
Certificateholder's transactions in accordance with generally accepted
accounting principles and shall disclose that the assets of such Class
GP Certificateholder are not available except as expressly provided in
the Transaction Agreements to pay creditors of OFL, the Seller or any
Affiliate of either of them.

(vii) The resolutions, agreements and other instruments of such
Class GP Certificateholder underlying the transactions described in
this Agreement and in the other Transaction Documents shall be
continuously maintained by such Class GP Certificateholder as official
records of such Class GP Certificateholder separately identified and
held apart from the records of OFL, the Seller, the Trust and any
Affiliate of any of them.

(viii) Except as expressly provided in the Transaction Documents
such Class GP Certificateholder shall maintain an arm's-length
relationship with OFL, the Seller and any Affiliate of either of them
and will not hold itself out as being liable for the debts of OFL, the
Seller or any Affiliate of either of them.

(ix) Such Class GP Certificateholder shall keep its assets and
its liabilities wholly separate from those of all other entities,
including, but not limited to, OFL, the Seller and any Affiliate of
either of them except, in each case, as contemplated by the
Transaction Documents.

(i) RETIREMENT OF NOTES AND CERTIFICATES. Such Class GP
Certificateholder shall cause the Trust, upon retirement of the Notes or
Certificates, to furnish to Financial Security a notice of such retirement, and,
upon such retirement and the expiration of the term of the Note Policy or
Certificate Policy, to surrender such Note Policy or Certificate Policy, as
applicable, to Financial Security for cancellation.

(j) INCORPORATION OF COVENANTS. Each Class GP Certificateholder
agrees to comply with each of the covenants of such Class GP Certificateholder
set forth in the Transaction Documents and hereby incorporates such covenants by
reference as if each were set forth herein.

(k) TAX MATTERS. As of the Closing Date, the Trust is, and shall
remain during the Term of this Agreement, taxable as a partnership for federal
and state income tax purposes and not as an association (or publicly traded
partnership) taxable as a corporation.

Section 2.06. NEGATIVE COVENANTS OF OFL AND EACH CLASS GP
CERTIFICATEHOLDER. Each of OFL and each Class GP Certificateholder (with
respect to itself) hereby agrees that during the Term of this Agreement, unless
Financial Security shall otherwise give its prior express written consent:

(a) WAIVER, AMENDMENTS, ETC. Each Class GP Certificateholder shall
not waive, modify, amend, supplement or consent to any waiver, modification,
amendment of or

<PAGE>

supplement to, any of the provisions of any of the 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. Neither Class GP
Certificateholder shall 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, with the prior
written consent of Financial Security, as permitted by its certificate of
incorporation.

(d) NO LIENS. Neither Class GP Certificateholder shall, 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 such
Class GP Certificateholder as debtor, or sign any security agreement authorizing
any secured party thereunder to file such a financing statement.

(e) ISSUANCE OF STOCK. Neither Class GP Certificateholder shall
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 Stock Pledge Agreement.

(f) IMPAIRMENT OF RIGHTS. Neither Class GP Certificateholder shall
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 Certificateholders, the Noteholders or Financial
Security.

(g) NO MERGERS. Neither Class GP Certificateholder shall 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.

(h) ERISA. Neither Class GP Certificateholder shall contribute or
incur any obligation to contribute to, or incur any liability in respect of, any
Plan or Multiemployer Plan.

(i) OTHER ACTIVITIES. Neither Class GP Certificateholder shall:

(i) sell, pledge, transfer, exchange or otherwise dispose of any
of its assets except as permitted under the Transaction Documents;

<PAGE>

(ii) engage in any business or activity except as contemplated
by the Transaction Documents and as permitted by its certificate of
incorporation; or

(iii) declare or make payment of (a) any divided or other
distribution on any shares of its capital stock or (b) any payment on
account of the purchase, redemption, retirement or acquisition of (1)
any shares of its capital stock or (2) 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) the aggregate net worth of the two Class GP
Certificateholders would be greater than the Minimum Net Worth.

(j) INSOLVENCY. Neither Class GP Certificateholder shall 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 make a general assignment for the benefit of its
creditors. Neither Class GP Certificateholder shall take any action in
furtherance of, or indicating the consent to, approval of, or acquiescence in
any of the acts set forth above. Neither Class GP Certificateholder shall admit
in writing its inability to pay its debts.

Section 2.07. REPRESENTATIONS AND WARRANTIES OF OFL AND THE SELLER.
Each of OFL 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.

<PAGE>

(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

(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 OFL'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 Certificates
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, the Certificates 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 Certificates, when executed, authenticated
and delivered in accordance with the Trust

<PAGE>

Agreement, will be validly issued and outstanding and entitled to the
benefits of the Trust Agreement and will evidence the entire beneficial
ownership interest in the Trust. 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 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 OFL 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 OFL which has a material possibility of causing a
Material Adverse Change with respect to the Seller or OFL, 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 OFL which would

<PAGE>

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 OFL 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 OFL or any Affiliate of OFL.

(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 OFL or any of its Affiliates or Subsidiaries.

(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, or selling the
Certificates, as provided in the Transaction Documents, with any intent to
hinder, delay or defraud any of the Seller's creditors.

30
<PAGE>

(o) REGISTRATION STATEMENTS; PROSPECTUS. The Seller has filed with the
Securities and Exchange Commission (the "Commission") registration statements
on Form S-3 (Nos. 33-97608 and 333-14983), including a preliminary prospectus
and prospectus supplement for the registration of the Certificates and 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 statements (as amended, if applicable) and the
prospectus, together with the prospectus supplement relating to the
Certificates and 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
Statements" 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 Certificates and 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 Underwriter
for such use. The Registration Statements 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
Certificate or Note will comply, in all material respects with the
requirements of the Securities Act and the Rules and Regulations. The
Registration Statements and the Prospectus at the time the Registration
Statements became effective did not and on the date hereof does not, contain
an 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 Certificates and
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.

<PAGE>

(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 (other than the Certificate Account) 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 2.08. AFFIRMATIVE COVENANTS OF OFL AND THE SELLER. Each of OFL
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 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
2.07(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. 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, the Noteholders or the

<PAGE>

Certificateholders, as the case may be, copies of all reports, certificates,
statements, financial statements or notices furnished to the Trustee, the
Noteholders or the Certificateholders, 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 2.08(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.

(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 Certificates, 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;

<PAGE>

(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

(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

<PAGE>

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 and Certificates shall clearly disclose that the Policies are 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 and Certificates 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 avoid the appearance of
conducting business on behalf of OFL or any other Affiliate thereof or that
the assets of the Seller are available to pay the creditors of OFL 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 OFL 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

<PAGE>

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 OFL, 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 OFL 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 OFL and each other Affiliate thereof.

(viii) The Seller shall maintain an arm's-length relationship with
OFL and the other Affiliates thereof and will not hold itself out as being
liable for the debts of OFL 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
OFL and the other Affiliates thereof except, in each case, as contemplated
by the Transaction Documents.

(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-A 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 2.09. NEGATIVE COVENANTS OF OFL AND THE SELLER. Each of OFL
and the Seller hereby agrees that during the Term of this Agreement, unless
Financial Security shall otherwise give its prior express written consent:

<PAGE>

(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 Certificates or 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 Certificates or 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.

(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 Certificateholders, 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 Certificates or 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.

<PAGE>

(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 Certificates or 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 Certificates or 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.

Section 2.10. REPRESENTATIONS AND WARRANTIES OF OFL. OFL
represents and warrants, as of the date hereof and as of the Closing Date, as
follows:

(a) DUE ORGANIZATION AND QUALIFICATION. OFL 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. OFL 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. OFL 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. OFL 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.

<PAGE>

(c) DUE AUTHORIZATION. The execution, delivery and performance of
this Agreement and each other Transaction Document to which OFL 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 OFL's stockholders.

(d) NONCONTRAVENTION. Neither the execution and delivery of this
Agreement and each other Transaction Document to which OFL 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 OFL
is a party,

(i) conflicts with or results in any breach or violation of any
provision of the corporate charter or bylaws of OFL or any law, rule,
regulation, order, writ, judgment, injunction, decree, determination
or award currently in effect having applicability to OFL or any of its
properties, including regulations issued by an administrative agency
or other governmental authority having supervisory powers over OFL,

(ii) constitutes a default by OFL under or a breach of any
provision of any loan agreement, mortgage, indenture or other
agreement or instrument to which OFL 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 OFL'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 OFL's best knowledge, threatened,
before any court, regulatory body, administrative agency, or other
governmental instrumentality having jurisdiction over OFL or its properties:
(A) asserting the invalidity of this Agreement or any other Transaction
Document to which OFL is a party, (B) seeking to prevent the issuance of the
Notes, the Certificates 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 OFL is a party, (D) which might result in a Material
Adverse Change with respect to OFL or (E) which might adversely affect the
federal or state tax attributes of the Notes, the Certificates 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 OFL. Each of the other Transaction Documents to which OFL is
a party when executed and delivered by OFL, and assuming the due
authorization, execution and delivery by the other parties thereto, will
constitute the legal, valid and binding obligation of OFL 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.

<PAGE>

(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 OFL of this Agreement or of any other Transaction
Document to which OFL 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 OFL, 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 OFL 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, OFL 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 OFL.

(i) COMPLIANCE WITH LAW, ETC. No practice, procedure or policy
employed or proposed to be employed by OFL in the conduct of its business
violates any law, regulation, judgment, agreement, order or decree applicable
to OFL which, if enforced, would result in a Material Adverse Change with
respect to OFL.

(j) TAXES. OFL 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 OFL in connection with the Transaction, the execution and delivery
of the Transaction Documents and the issuance of the Notes and Certificates
have been paid or shall have been paid at or prior to the Closing Date.

(k) ERISA. OFL 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 2.12(e) hereof.

(l) INCORPORATION OF CERTAIN REPRESENTATIONS AND WARRANTIES. OFL
represents and warrants to Financial Security that the representations and
warranties of OFL set forth in the Transaction Documents are (in each case)
true and correct as if set forth herein.

Section 2.11. AFFIRMATIVE COVENANTS OF OFL. OFL 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. OFL 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. OFL will not cause or permit
to become effective any amendment to or modification of any

<PAGE>

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.
OFL 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. OFL 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
2.10(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.
OFL shall keep or cause to be kept in reasonable detail books and records of
account of OFL's assets and business. OFL, 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, the
Noteholders or the Certificateholders, as the case may be, copies of all
reports, certificates, statements or notices furnished to the Owner Trustee,
Indenture Trustee, the Noteholders or the Certificateholders, as the case
may be, pursuant to the Transaction Documents. OFL shall also furnish or
cause to be furnished to Financial Security:

(i) ANNUAL FINANCIAL STATEMENTS. As soon as available, and in
any event within 90 days after the close of each fiscal year of OFL,
the audited balance sheets of OFL 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 OFL 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 OFL'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 2.11(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 OFL, the unaudited consolidated
balance sheets of OFL as of the end of such quarter and the unaudited
consolidated statements of income, changes in shareholders' equity and
cash flows of OFL 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
2.11(d) hereof.

(iii) ACCOUNTANTS' REPORTS. Promptly upon receipt thereof, copies
of any reports submitted to OFL by its independent accountants in
connection with any examination of the financial statements of OFL.

<PAGE>

(iv) CERTAIN INFORMATION. Promptly after the filing or sending
thereof, copies of all proxy statements, financial statements, reports
and registration statements which OFL files, or delivers to, the IRS,
the Commission, or any other federal government agency, authority or
body which supervises the issuance of securities by OFL or any
national securities exchange.

(d) COMPLIANCE CERTIFICATE. OFL shall deliver to Financial
Security within 90 days after the close of each fiscal year of OFL, a
certificate signed by an Authorized Officer of OFL stating that:

(i) a review of OFL'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 OFL 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 OFL 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;
and

(iii) the financial statements submitted in accordance with
Section 2.11(c) hereof, as applicable, are complete and correct in all
material respects and present fairly the financial condition and results of
operations of OFL 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.
OFL shall, upon the request of Financial Security, permit Financial Security
or its authorized agents (i) to inspect the books and records of OFL as they
may relate to the Notes, the Certificates, the Receivables, the obligations
of OFL as Servicer under the Transaction Documents, its business and the
Transaction and (ii) to discuss the affairs, finances and accounts of OFL
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 OFL. The books and records of OFL will be maintained at the address of
OFL designated herein for receipt of notices, unless OFL shall otherwise
advise the parties hereto in writing.

(f) NOTICE OF MATERIAL EVENTS. OFL 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 OFL
involving potential damages or penalties in an uninsured amount in excess
of $10,000 in any one instance or $25,000 in the aggregate;

<PAGE>

(ii) any change in the location of OFL's principal office or any
change in the location of the OFL'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 OFL 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 OFL;

(v) the commencement of any proceedings by or against OFL 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 OFL or any
of its assets;

(vi) the receipt of notice that (A) OFL is being placed under
regulatory supervision, (B) any license, permit, charter, registration or
approval necessary for the conduct of OFL's business is to be, or may be,
suspended or revoked, or (C) OFL is to cease and desist any practice,
procedure or policy employed by OFL in the conduct of its business, and
such cessation may result in a Material Adverse Change with respect to OFL;
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 OFL.

(g) MAINTENANCE OF LICENSES. OFL shall maintain all licenses,
permits, charters and registrations which are material to the performance by
OFL of its obligations under this Agreement and each other Transaction
Document to which OFL is a party or by which OFL is bound.

(h) ERISA. OFL 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,
OFL 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.

<PAGE>

(i) THIRD-PARTY BENEFICIARY. OFL 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) and the covenants set forth in Section 3.6(a) shall be limited
to the remedies set forth in the Sale and Servicing Agreement.

(j) INCORPORATION OF COVENANTS. OFL agrees to comply with each of
OFL's covenants set forth in the Transaction Documents and hereby
incorporates such covenants by reference as if each were set forth herein.

Section 2.12. NEGATIVE COVENANTS OF OFL. OFL hereby agrees that
during the Term of this Agreement, unless Financial Security shall otherwise
give its express written consent:

(a) RESTRICTIONS ON LIENS. OFL 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. OFL 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, the Certificateholders or Financial
Security.

(c) LIMITATION ON MERGERS. OFL 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 OFL 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 OFL
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 OFL under the Transaction Documents and shall expressly
assume in writing all of the obligations of OFL, 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 OFL immediately prior to such consolidation, merger or transfer of assets;
and OFL shall give Financial Security written notice of any such
consolidation, merger or transfer of assets on the

<PAGE>

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. OFL shall furnish to Financial Security all
information requested by it that is reasonably necessary to determine
compliance with this paragraph.

(d) WAIVER, AMENDMENTS, ETC. OFL 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.

(e) ERISA. OFL shall not contribute or incur any obligation to
contribute to, or incur any liability in respect of, any Plan or
Multiemployer Plan, except that OFL may make such a contribution or incur
such a liability provided that neither OFL 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. OFL 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 either
Class GP Certificateholder or (B) seeking appointment of a receiver,
trustee, custodian or other similar official for the Seller or for
either Class GP Certificateholder. OFL 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.

<PAGE>

ARTICLE III

THE POLICIES; REIMBURSEMENT; INDEMNIFICATION

Section 3.01. CONDITIONS PRECEDENT TO ISSUANCE OF THE POLICIES.
Financial Security agrees to issue the Policies subject to satisfaction of
the conditions set forth below.

(a) The obligation of Financial Security to issue the Policies 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
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 Class GP Certificateholders,
the Seller and of OFL 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 Policies 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 OFL 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 and the Certificates 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

<PAGE>

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) with respect to each Class GP Certificateholder, copies,
certified to be true copies by an Authorized Officer of such Class GP
Certificateholder, of (i) the resolutions of the board of directors
of such Class GP Certificateholder authorizing the execution, delivery
and performance of this Agreement and each other Transaction Document
to which such Class GP Certificateholder is a party and all other
transactions and documents evidencing any other necessary action of
such Class GP Certificateholder (which certification shall state that
such resolutions have not been modified, are in full force and effect
and constitute the only resolutions adopted by such Class GP
Certificateholder's board of directors or any committee thereof with
respect thereto), (ii) the corporate charter, as amended, of such
Class GP Certificateholder and (iii) the by-laws, as amended, of such
Class GP Certificateholder.

(iv) 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;

(v) copies, certified to be true copies by an Authorized Officer
of OFL, of (i) the resolutions of the board of directors of OFL
authorizing the execution, delivery and performance of this Agreement
and each other Transaction Document to which OFL is a party and all
other transactions and documents contemplated hereby and thereby, and
of all documents evidencing any other necessary action of OFL (which
certification shall state that such resolutions have not been
modified, are in full force and effect and constitute the only
resolutions adopted by OFL's board of directors or any committee
thereof with respect thereto), (ii) the corporate charter of OFL
and (iii) the by-laws, as amended, of OFL;

(vi) 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;

<PAGE>

(vii) with respect to each Class GP Certificateholder, a
certificate of an Authorized Officer of such Class GP Certificateholder
stating that (i) all consents, licenses and approvals necessary for such
Class GP Certificateholder to execute, deliver and perform this Agreement,
the other Transaction Documents to which such Class GP Certificateholder is
a party and all other documents and instruments on the part of such Class
GP Certificateholder to be delivered pursuant hereto or thereto have been
obtained, and (ii) all such consents, licenses and approvals are in full
force and effect, such Class GP Certificateholder has not received any
notice of any proceeding for the revocation of any such license, charter,
permit or approval, and, to such Class GP Certificateholder's knowledge,
there is no threatened action or proceeding or any basis therefor;

(viii) 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;

(ix) a certificate of an Authorized Officer of OFL stating that
(i) all consents, licenses and approvals necessary for OFL to execute,
deliver and perform this Agreement, the other Transaction Documents to
which OFL is a party and all other documents and instruments on the part of
OFL to be delivered pursuant hereto or thereto have been obtained, and
(ii) all such consents, licenses and approvals are in full force and
effect, OFL has not received any notice of any proceeding for the
revocation of any such license, charter, permit or approval, and, to OFL'S
knowledge, there is no threatened action or proceeding or any basis
therefor;

(x) 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 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;

(xi) with respect to each Class GP Certificateholder, a
certificate of an Authorized Officer of such Class GP Certificateholder
certifying (i) the names and true signatures of the officers of such Class
GP Certificateholder executing and delivering this Agreement, the other
Transaction Documents to which such Class GP Certificateholder is party and
the other documents to be executed and delivered by such Class GP
Certificateholder hereunder and thereunder, (ii) that approval of such
Class GP

<PAGE>

Certificateholder stockholders of the execution and delivery of
this Agreement, the other Transaction Documents and all other such
documents to be executed and delivered, by such Class GP Certificateholder
hereunder, has been obtained or is not required, and (iii) that no
resolution for the dissolution of such Class GP Certificateholder has been
adopted or contemplated and that no such proceedings have been commenced or
are contemplated;

(xii) 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;

(xiii) a certificate of an Authorized Officer of OFL certifying (i)
the names and true signatures of the officers of OFL executing and
delivering this Agreement, the other Transaction Documents to which OFL is
a party and the other documents to be executed and delivered by OFL
hereunder and thereunder, (ii) that approval by OFL'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 OFL
hereunder, has been obtained or is not required, and (iii) that no
resolution for the dissolution of OFL has been adopted or contemplated and
that no such proceedings have been commenced or are contemplated;

(xiv) 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;

(xv) with respect to each Class GP Certificateholder, a
certificate of an Authorized Officer of such Class GP Certificateholder to
the effect that (x) the representations and warranties of such Class GP
Certificateholder 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 such Class GP
Certificateholder are satisfied;

(xvi) 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;

(xvii) a certificate of an Authorized Officer of OFL to the effect
that (x) the representations and warranties of OFL set forth or
incorporated by reference in this

<PAGE>

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
OFL are satisfied;

(xviii) favorable opinions of counsel and special Texas counsel to
the Seller and OFL in form and substance satisfactory to Financial Security
and its counsel;

(xix) a favorable opinion of counsel to each of the Trust, the
Class GP Certificateholders, 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;

(xx) 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;

(xxi) a fully executed copy of each of the Transaction Documents;

(xxii) 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;

(xxiii) a certificate or opinion of Independent Accountants
addressed to Financial Security in form and substance satisfactory to
Financial Security;

(xxiv) 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

(xxv) 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 Policies 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, the Class A-5 Notes and the
Certificates, when issued, will be rated "AAA" by S&P and "Aaa" by Moody's.

<PAGE>

(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 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.

(g) 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 and Certificates (other than the issuance of the Policies)
shall have been concurrently satisfied.

Section 3.02. PAYMENT OF FEES AND PREMIUM.

(a) LEGAL FEES. On the Closing Date, OFL shall pay or cause to be
paid legal fees and disbursements incurred by Financial Security in connection
with the issuance of the Policies 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 Certificates and the Transaction shall be paid by OFL
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 and Certificates shall be
for the account of, shall be billed to, and shall be paid by OFL. 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 or Certificates, in
which case the cost for such agency shall be paid by OFL.

(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 OFL. Any additional fees
incurred by Financial Security after the Closing Date in respect of any
additional consents shall be paid by OFL on demand.

(d) PREMIUM. In consideration of the issuance by Financial Security
of the Policies, OFL 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

<PAGE>

nonrefundable without regard to whether Financial Security makes any payment
under the Policies or any other circumstances relating to the Notes or the
Certificates or provision being made for payment of the Notes or the
Certificates 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 designated from time to time by Financial Security by
written notice to the Seller and OFL.

Section 3.03. REIMBURSEMENT AND ADDITIONAL PAYMENT OBLIGATION. Each
of OFL 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 Policies;

(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 Policies to the extent Financial
Security has not been immediately reimbursed on the date that any amount is paid
by Financial Security under the Policies, (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 Policies; 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

<PAGE>

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, OFL, the Indenture Trustee, the Owner Trustee or the Trust
including, without limitation, any amounts payable by OFL in its capacity as
Servicer or by the Trust, in respect of the Notes or the Certificates and any
other amounts owed pursuant to any Transaction Documents; and any payments made
by Financial Security as, or in lieu of, any servicing, 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 OFL of amounts due hereunder.

Section 3.04. CERTAIN OBLIGATIONS NOT RECOURSE TO OFL; 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 in respect of distributions on the Certificates
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 OFL 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 OFL, 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 OFL. In addition to any and all rights of
reimbursement, indemnification, subrogation and any other rights pursuant hereto
or under law or in equity, OFL 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 or the Certificates;

<PAGE>

(ii) the negligence, bad faith, willful misconduct, misfeasance,
malfeasance or theft committed by any director, officer, employee or agent
of the Trust, either Class GP Certificateholder, the Seller or OFL in
connection with the Transaction;

(iii) the violation by the Trust, either Class GP
Certificateholder, the Seller or OFL of any federal, state or foreign law,
rule or regulation, or any judgment, order or decree applicable to it;

(iv) the breach by the Trust, either Class GP Certificateholder,
the Seller or OFL of any representation, warranty or covenant under any of
the Transaction Documents or the occurrence, in respect of the Trust,
either Class GP Certificateholder, the Seller or OFL, 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 Statements 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 Statements 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 OFL hereunder, Financial Security shall
promptly notify OFL in writing, and OFL 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 OFL if (i) OFL has
agreed to pay such fees and expenses, (ii) OFL 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 Class GP Certificateholders, the Seller
or OFL, 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, either Class GP Certificateholder,
the Seller or OFL (in which case, if the Indemnified Party notifies OFL in
writing that it elects to employ separate

<PAGE>

counsel at the expense of OFL, OFL 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 OFL 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 firm of attorneys at any time for the
Indemnified Parties, which firm shall be designated in writing by Financial
Security). OFL shall not be liable for any settlement of any such action or
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 OFL shall have received notice in
accordance with this subsection (c) OFL 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 OFL is determined to be unavailable for any
Indemnified Party (other than due to application of this Section), OFL shall
contribute to the losses incurred by the Indemnified Party on the basis of the
relative fault of OFL, 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 OFL
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 OFL. 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 OFL acknowledges that, to the extent of any payment made
by Financial Security pursuant to the Policies, 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 and the Certificateholders
to any moneys paid or payable in respect of the Notes or the Certificates
respectively under the Transaction Documents or otherwise. Each of the Trust,
the Indenture Trustee, the Seller and OFL 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

<PAGE>

moneys paid or payable in respect of the Notes or the Certificates under the
Transaction Documents or otherwise.

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
Policies and the Policies shall have been surrendered to Financial Security for
cancellation and (b) all amounts payable to Financial Security, the Noteholders,
and the Certificateholders under the Transaction Documents and under the Notes
and the Certificates 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, each Class GP Certificateholder, the
Seller and OFL 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, each Class GP Certificateholder,
the Seller and OFL 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, the Certificates or the Policies; 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, either Class GP
Certificateholder, the Seller or OFL may have at any time against Financial
Security or any other Person;

(iv) any document presented in connection with the Policies
proving to be forged, fraudulent, invalid or insufficient in any respect or
any statement therein being untrue or inaccurate in any respect;

<PAGE>

(v) any payment by Financial Security under the Policies against
presentation of a certificate or other document which does not strictly
comply with terms of the Policies;

(vi) any failure of the Seller or the Trust to receive the
proceeds from the Sale of the Notes to receive the proceeds from the sale
of the Certificates;

(vii) any breach by the Trust, the Class GP Certificateholders,
the Seller or OFL 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, either Class GP Certificateholder, the Seller or OFL in respect of
any Transaction Document.

(b) The Trust, each Class GP Certificateholder, the Seller and OFL
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,
either Class GP Certificateholder, the Seller or OFL; (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,
either Class GP Certificateholder, Seller or OFL from pursuing any rights or
remedies it may have against any other Person in a separate legal proceeding.

57
<PAGE>

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, First
Class GP Certificateholder, Second Class GP Certificateholder, the Seller nor
OFL 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.

(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 Policies 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 Policies.

(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 or
Certificateholder (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 respective Policies), other than
Financial Security, against the Trust, either Class GP Certificateholder, the
Seller, OFL 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 or Certificateholder shall have
any right to payment from any premiums paid or payable hereunder or from any
other amounts paid by the Seller or OFL pursuant to Section 3.02, 3.03 or 3.04
hereof (without limitation to the rights of the Noteholders and the
Certificateholders 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 Policies 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 Policies,
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

<PAGE>

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 events shall constitute an Event of Default hereunder:

(a) any demand for payment shall be made under either of the
Policies;

(b) any representation or warranty made by the Trust, either of the
Class GP Certificateholders, the Seller, OFL 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 any material
respect;

(c) (i) the Trust, either Class GP Certificateholder, the Seller, OFL
or the Servicer shall fail to pay when due any amount payable by the Seller, OFL
or the Servicer under any of the Related Documents (other than payments of
principal and interest on the Notes and the Certificates); (ii) the Trust,
either Class GP Certificateholder, the Seller, OFL 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, either Class GP Certificateholder, the Seller, OFL 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, either Class GP
Certificateholder, the Seller, OFL 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

<PAGE>

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 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-A 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 7.66%.

(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;

<PAGE>

(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, OFL, 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.

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, each Class GP Certificateholder, the Seller or OFL
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.

<PAGE>

(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 OFL. 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.

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 either 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:

Olympic Receivables Finance Corp.
7825 Washington Avenue South, Suite 410
Minneapolis, Minnesota 55439-2435

<PAGE>

Telephone: (612) 942-9888
Telecopier: (612) 942-6730

Olympic Financial Ltd.
7825 Washington Avenue South
Minneapolis, Minnesota 55439-2435
Telephone: (612) 942-9880
Telecopier: (612) 942-6730

(d) To First Class GP Certificateholder:

Olympic First GP Inc.
7825 Washington Avenue South
Minneapolis, Minnesota 55439-2435
Telephone: (612) 942-9880
Telecopier: (612) 942-6730

(e) To Second Class GP Certificateholder:

Olympic Second GP Inc.
7825 Washington Avenue South
Minneapolis, Minnesota 55439-2435
Telephone: (612) 942-9880
Telecopier: (612) 942-6730

(f) To the Trust:

Olympic Automobile Receivables Trust, 1997-A
c/o Mellon Bank (DE), National Association,
as Owner Trustee
919 North Market Street, Second Floor
Wilmington, Delaware 19801
Attention: Robert H. Bell
Telephone: (302) 421-2283
Telecopier: (302) 421-2323

with a copy to:

Mellon Bank, National Association
Two Mellon Bank Center
Room 325
Pittsburgh, Pennsylvania 15259
Attention: Kent Christman
Telephone: (412) 234-5737

<PAGE>

Telecopier: (412) 234-9196

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 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.

<PAGE>

(c) Each of the Class GP Certificateholders, OFL 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. Each of the
Class GP Certificateholders, the Seller and OFL 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 OFL 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 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 THAT 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, the Certificates or the Policies, 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

<PAGE>

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 MELLON BANK (DE), NATIONAL
ASSOCIATION. It is expressly understood and agreed by the parties hereto that
(a) this Agreement is executed and delivered by Mellon Bank (DE), National
Association, 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 Mellon Bank (DE),
National Association, 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 Mellon Bank (DE), National Association, 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 Mellon Bank (DE), National Association 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 Policies set
forth the entire agreement between the parties with respect to the subject
matter thereof, and this 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.

<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:
----------------------------------------------
Authorized Officer

OLYMPIC AUTOMOBILE RECEIVABLES
TRUST, 1997-A

By: Mellon Bank (DE), National Association,
not in its individual capacity, but solely in
its capacity as Owner Trustee under the Trust
Agreement

By:
-----------------------------------------
E.D. Renn
Vice President

OLYMPIC FIRST GP INC.

By:
----------------------------------------------
John A. Witham
Vice President and Chief Financial Officer

OLYMPIC SECOND GP INC.

By:
----------------------------------------------
John A. Witham
Vice President and Chief Financial Officer

OLYMPIC FINANCIAL LTD.

By:
----------------------------------------------
John A. Witham
Executive Vice President and
Chief Financial Officer

OLYMPIC RECEIVABLES FINANCE CORP.

By:
----------------------------------------------
John A. Witham
Senior Vice President and
Chief Financial Officer
<PAGE>

SCHEDULE I

Determination Date* Cumulative Default Rate Cumulative Net Loss Rate
(month) (Column A) (Column B)

0 to 3 3.74% 1.90%
3 to 6 7.17% 3.45%
6 to 9 10.07% 4.76%
9 to 12 12.48% 5.66%
12 to 15 13.64% 6.19%
15 to 18 15.21% 6.68%
18 to 21 16.63% 7.05%
21 to 24 17.68% 7.35%
24 to 27 18.63% 7.58%
27 to 30 19.44% 7.80%
30 to 33 20.06% 7.95%
33 to 36 20.52% 8.10%
36 to 39 20.94% 8.21%
39 to 42 21.18% 8.33%
42 to 45 21.41% 8.44%
45 to 48 21.60% 8.50%
48 to 51 21.71% 8.55%
51 to 54 21.81% 8.60%
54 to 57 21.85% 8.65%
57 to 60 21.89% 8.68%
60 to 63 21.92% 8.70%
63 to 66 21.94% 8.72%
66 to 69 21.96% 8.74%
69 to 72 21.99% 8.76%

- ----------------------
* Such Determination Date occurring after the designated calendar months
succeeding the Series 1997-A Closing Date appearing first in the column below,
and prior to or during the designated calendar months succeeding the Series
1997-A Distribution Date appearing second in the column below.

<PAGE>

EXHIBIT 11.1

OLYMPIC FINANCIAL LTD.
COMPUTATION OF EARNINGS PER SHARE
(DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
--------------------------
1997 1996
------------ ------------
<S> <C> <C>
PRIMARY:
Income (loss) before extraordinary item and preferred
dividends. . . . . . . . . . . . . . . . . . . . . . . . . $ (59,511) $ 11,078
Less preferred dividends . . . . . . . . . . . . . . . . . . ---- (444)
----------- -----------
Net income (loss) before extraordinary item applicable to
common stock . . . . . . . . . . . . . . . . . . . . . . . (59,511) 10,634
Less extraordinary item. . . . . . . . . . . . . . . . . . . (15,828) ----
----------- -----------
Net income (loss) applicable to common stock . . . . . . . $ (75,339) $ 10,634
----------- -----------
----------- -----------

Weighted average number of common shares outstanding . . . . 38,358,743 23,138,424
Net effect of assumed exercise of stock options and
warrants . . . . . . . . . . . . . . . . . . . . . . . . . 669,344 2,603,248
----------- -----------
Weighted average primary shares. . . . . . . . . . . . . . 39,028,087 25,741,672
----------- -----------
----------- -----------

Net income (loss) per common share before extraordinary
item . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (1.52) $ 0.41
Extraordinary item per common share. . . . . . . . . . . . . (0.41) ----
----------- -----------
Net income (loss) per common share . . . . . . . . . . . . $ (1.93) $ 0.41
----------- -----------
----------- -----------

FULLY DILUTED (1):
Income (loss) before extraordinary item and preferred
dividends. . . . . . . . . . . . . . . . . . . . . . . . . $ (59,511) $ 11,078
Less extraordinary item. . . . . . . . . . . . . . . . . . . (15,828) ----
----------- -----------
Net income (loss), as adjusted . . . . . . . . . . . . . . $ (75,339) $ 11,078
----------- -----------
----------- -----------

Weighted average number of common shares outstanding . . . . 38,358,743 23,138,424
Net effect of assumed exercise of stock options and
warrants . . . . . . . . . . . . . . . . . . . . . . . . . 838,796 2,933,625
Net effect of assumed conversion of 8% Cumulative
Convertible Exchangeable Preferred stock . . . . . . . . . ---- 4,146,280
----------- -----------
Weighted average fully diluted shares. . . . . . . . . . . 39,197,539 30,218,329
----------- -----------
----------- -----------

Net income (loss) per common share before extraordinary
item . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (1.52) $ 0.37
Extraordinary item per common share. . . . . . . . . . . . . (0.41) ----
----------- -----------
Net income (loss) per common share . . . . . . . . . . . . $ (1.93) $ 0.37
----------- -----------
----------- -----------
</TABLE>

(1) For the three months ended March 31, 1997, the computation of fully diluted
earnings per share results in an anti-dilutive earnings per share amount
and is therefore reported equal to primary earnings per share.

<PAGE>

EXHIBIT 12.1
OLYMPIC FINANCIAL LTD.
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31, YEAR ENDED DECEMBER 31,
-------------------------- --------------------------------------------------------------
1997 1996 1996 1995 1994 1993 1992
------------- ----------- ----------- ----------- ----------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
COMPUTATION OF INCOME:
Income (loss) before income taxes
and extraordinary item. . . . . . . . $ (96,097) $ 18,464 $ 96,004 $ 48,835 $ 6,030 $ 1,395 $ (1,342)
Capitalized interest . . . . . . . . . . ---- ---- ---- ---- ---- ---- ----
------------- ----------- ----------- ----------- ----------- ---------- -----------
Income (loss) before income taxes
and capitalized interest. . . . . . . (96,097) 18,464 96,004 48,835 6,030 1,395 (1,342)
Fixed charges. . . . . . . . . . . . . . 8,562 5,786 26,366 17,784 5,700 1,927 878
------------- ----------- ----------- ----------- ----------- ---------- -----------
Total income (loss) for computation. . . $ (87,535) $ 24,250 $ 122,370 $ 66,619 $ 11,730 $ 3,322 $ (464)
------------- ----------- ----------- ----------- ----------- ---------- -----------
------------- ----------- ----------- ----------- ----------- ---------- -----------

Ratio of earnings to fixed charges . . . ---- 4.19x 4.64x 3.75x 2.06x 1.72x ----
Deficiency in earnings to fixed
charges . . . . . . . . . . . . . . . (96,097) ---- ---- ---- ---- ---- (1,342)

ADDITIONAL INFORMATION:
Net rental expense . . . . . . . . . . . $ 2,913 $ 813 $ 3,520 $ 1,842 $ 861 $ 391 $ 207
------------- ----------- ----------- ----------- ----------- ---------- -----------
------------- ----------- ----------- ----------- ----------- ---------- -----------
</TABLE>

(a) Portion of rental deemed representative of interest equals one third of
rental expense.

<PAGE>

EXHIBIT 12.2
OLYMPIC FINANCIAL LTD.
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS

(DOLLARS IN THOUSANDS)

COMPUTATION OF FIXED CHARGES:
Portion of rentals deemed
representative of interest (a). . . . $ 971 $ 271 $ 1,173 $ 614 $ 284 $ 129 $ 68
INTEREST:
Interest on long-term debt . . . . . . . 6,442 4,738 21,153 15,529 4,885 1,648 702
Interest other than funding of
purchase of auto loans. . . . . . . . 872 522 2,836 945 116 63 70
Amortization of debt placement . . . . . 277 256 1,204 696 415 87 38
Capitalized interest . . . . . . . . . . ---- ---- ---- ---- ---- ---- ----
------------- ----------- ----------- ----------- ----------- ---------- -----------
Total fixed charges. . . . . . . . . . . $ 8,562 $ 5,787 $ 26,366 $ 17,784 $ 5,700 $ 1,927 $ 878
Preferred stock dividends in a
pre-tax basis . . . . . . . . . . . . ---- 741 1,829 3,688 3,286 192 ----
------------- ----------- ----------- ----------- ----------- ---------- -----------
Total combined fixed charges and
preferred stock dividends . . . . . . $ 8,562 $ 6,528 $ 28,195 $ 21,472 $ 8,986 $ 2,119 $ 878
------------- ----------- ----------- ----------- ----------- ---------- -----------
------------- ----------- ----------- ----------- ----------- ---------- -----------
Ratio of earnings (deficit) to
combined fixed charges and
preferred stock dividends . . . . . . ---- 3.72x 4.34x 3.10x 1.31x 1.57x ----
Deficiency in earnings to combined
fixed charges and preferred stock
dividends . . . . . . . . . . . . . . (96,097) ---- ---- ---- ---- ---- $ (1,342)

(a) Portion of rental deemed representative of interest equals one third of
rental expense.

<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE 3/31/97
FORM 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 23,596
<SECURITIES> 0
<RECEIVABLES> 662,867
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 35,871
<PP&E> 21,479
<DEPRECIATION> 5,264
<TOTAL-ASSETS> 738,549
<CURRENT-LIABILITIES> 57,967
<BONDS> 351,479
0
0
<COMMON> 381
<OTHER-SE> 328,722
<TOTAL-LIABILITY-AND-EQUITY> 738,549
<SALES> 0
<TOTAL-REVENUES> (47,863)
<CGS> 0
<TOTAL-COSTS> 40,643
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 7,591
<INCOME-PRETAX> (96,097)
<INCOME-TAX> (36,586)
<INCOME-CONTINUING> (59,511)
<DISCONTINUED> 0
<EXTRAORDINARY> 15,828
<CHANGES> 0
<NET-INCOME> (75,339)
<EPS-PRIMARY> (1.93)
<EPS-DILUTED> (1.93)

</TABLE>