ARCADIA RECEIVABLES FINANCE CORP, 8-K, 1999-04-14

ARCADIA RECEIVABLES FINANCE CORP
8-K, 1999-04-14
ASSET-BACKED SECURITIES

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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

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

FORM 8-K

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

Date of Report (Date of earliest event reported): March 17, 1999

ARCADIA RECEIVABLES FINANCE CORP.
as originator of
ARCADIA AUTOMOBILE RECEIVABLES TRUST, 1999-A
------------------------------------------------------
(Exact name of registrant as specified in its charter)

Delaware 333-48141 41-1743653
- - -------------------------------------------------------------------------------
(State or other jurisdiction (Commission (IRS employer
of incorporation) file number) identification No.)

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

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

--------------------------------------------------------------------------
(Former name or former address, if changed since last report)

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Item 1. CHANGES IN CONTROL OF REGISTRANT.

Not applicable.

Item 2. ACQUISITION OR DISPOSITION OF ASSETS.

Not applicable.

Item 3. BANKRUPTCY OR RECEIVERSHIP.

Not applicable.

Item 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANTS.

Not applicable.

Item 5. OTHER EVENTS.

Not applicable.

Item 6. RESIGNATIONS OF REGISTRANT'S DIRECTORS.

Not applicable.

Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.

(a) Financial statements of businesses acquired.

Not applicable.

(b) Pro forma financial information.

Not applicable.

The following are filed herewith. The exhibit numbers correspond
with Item 601(b) of Regulation S-K.

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

1.1 Pricing Agreement dated March 11, 1999, among
Arcadia Receivable Finance Corp., Arcadia
Financial Ltd., Chase Securities Inc., Credit
Suisse First Boston Corporation, J.P. Morgan
Securities Inc. and NationsBanc Montgomery
Securities LLC.

1.2 Underwriting Agreement Standard Provisions for
Automobile Receivables - Backed Certificates
and Automobile Receivables - Backed Notes
(March 1999)

4.1 Trust Agreement, dated as of March 1, 1999
among Arcadia Receivables Finance Corp.,
Financial Security Assurance Inc. and Wilmington
Trust Company, as Owner Trustee (without
exhibits)

<PAGE>

4.2 Indenture, dated as of March 1, 1999 between
Arcadia Automobile Receivables Trust, 1999-A and
Norwest Bank Minnesota, National Association,
as Trustee and Indenture Collateral Agent
(without exhibits)

4.3 Sale and Servicing Agreement, dated as of
March 1, 1999 among Arcadia Automobile
Receivables Trust, 1999-A, as Issuer, Arcadia
Receivables Finance Corp., as Seller, Arcadia
Financial Ltd., in its individual capacity and
as Servicer, and Norwest Bank Minnesota, National
Association, as Backup Servicer (without
exhibits)

4.4 Receivables Purchase Agreement and Assignment,
dated as of March 1, 1999 by and between
Arcadia Receivables Finance Corp., as Purchaser,
and Arcadia Financial Ltd., as Seller (without
exhibits)

4.5 Financial Guaranty Insurance Policy issued by
Financial Security Assurance Inc. with respect to
the Automobile Receivables-Backed Notes

8.1 Opinion and Consent of Dorsey & Whitney LLP with
respect to tax matters

23.1 Consent of Dorsey & Whitney LLP (included as part
of Exhibit 8.1)

23.2 Consent of PricewaterhouseCoopers LLP

<PAGE>

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

Dated: March 17, 1999 ARCADIA RECEIVABLES FINANCE CORP.,
as originator of Arcadia Automobile
Receivables Trust, 1999-A

By: /s/ Brian S. Anderson
------------------------------------
Brian S. Anderson
Vice President

<PAGE>

[EXECUTION COPY]

$60,000,000 4.96% Class A-1 Automobile
Receivables-Backed Notes
$153,000,000 5.373% Class A-2 Automobile
Receivables-Backed Notes
$65,000,000 5.75% Class A-3 Automobile
Receivables-Backed Notes
$105,000,000 5.94% Class A-4 Automobile
Receivables-Backed Notes
$167,000,000 6.12% Class A-5 Automobile
Receivables-Backed Notes

ARCADIA FINANCIAL LTD.
ARCADIA RECEIVABLES FINANCE CORP.

ARCADIA AUTOMOBILE RECEIVABLES TRUST, 1999-A

PRICING AGREEMENT

March 11, 1999
CHASE SECURITIES INC.
270 Park Avenue
New York, New York 10022

CREDIT SUISSE FIRST BOSTON CORPORATION
11 Madison Avenue
New York, New York 10010

J.P. MORGAN SECURITIES INC.
60 Wall Street
New York, New York 10260

NATIONSBANC MONTGOMERY SECURITIES LLC
231 South LaSalle Street
Chicago, IL 60697

Ladies and Gentlemen:

Arcadia Receivables Finance Corp., a Delaware corporation (the "Company"),
and Arcadia Financial Ltd., a Minnesota corporation ("Arcadia Financial"),
confirm their agreement with Chase Securities Inc., Credit Suisse First Boston
Corporation, J.P. Morgan Securities Inc. and

<PAGE>

NationsBanc Montgomery Securities LLC (the "Underwriters") as follows:

The Company, a wholly-owned subsidiary of Arcadia Financial, proposes to
cause Arcadia Automobile Receivables Trust, 1999-A (the "Trust") to be created
pursuant to the Trust Agreement (the "Trust Agreement"), dated as of March 1,
1999, among the Company, as seller, Financial Security Assurance Inc. (the "Note
Insurer") and Wilmington Trust Company (the "Owner Trustee") and to cause the
Trust to issue and sell to the Underwriters $60,000,000 principal amount of its
4.96% Class A-1 Automobile Receivables-Backed Notes (the "Class A-1 Notes"),
$153,000,000 principal amount of its 5.373% Class A-2 Automobile
Receivables-Backed Notes (the "Class A-2 Notes"), $65,000,000 principal amount
of its 5.75% Class A-3 Automobile Receivables-Backed Notes (the "Class A-3
Notes"), $105,000,000 principal amount of its 5.94% Class A-4 Automobile
Receivables-Backed Notes (the "Class A-4 Notes"), $167,000,000 principal amount
of its 6.12% Class A-5 Automobile Receivables-Backed Notes (the "Class A-5
Notes" and, together with the Class A-1 Notes, the Class A-2 Notes, the Class
A-3 Notes, and the Class A-4 Notes, the "Notes"), to be issued under the
Indenture (the "Indenture"), dated as of March 1, 1999, between the Trust and
Norwest Bank Minnesota, National Association, as Indenture Trustee (the
"Indenture Trustee") and as Indenture Collateral Agent (the "Indenture
Collateral Agent").

The Notes will be collateralized by the Trust Property (as defined below).
The Trust's assets (the "Trust Property") will include, among other things, a
pool of retail installment sales contracts and promissory notes (the
"Receivables") purchased from motor vehicle dealers by Arcadia Financial and
secured by new and used automobiles and light trucks (the "Financed Vehicles"),
certain monies paid or payable on the Initial Receivables (as defined below)
after March 5, 1999 (the "Initial Cutoff Date") and under the Subsequent
Receivables (as defined below) after the respective subsequent cutoff date
designated by the Seller (each a "Subsequent Cutoff Date") that are purchased by
and conveyed to the Trust, such amounts as from time to time may be held in the
Lockbox Account (established pursuant to the Counterpart to Agency Agreement and
Retail Lockbox Agreement (the "Lockbox Agreement"), dated as of the Closing Date
(as defined below), among Arcadia Financial, the Indenture Trustee, the Trust,
Harris Trust and Savings Bank (the "Lockbox Bank") and the Note Insurer), the
Collection Account and certain other accounts established and maintained by the
Servicer (as defined below) pursuant to the Sale and Servicing Agreement (as
defined below) (including all investments in the Collection Account and such
other accounts and all income from the investment of funds therein and proceeds
thereof), an assignment of Arcadia Financial's security interests in the
Financed Vehicles, an assignment of the right to receive

<PAGE>

proceeds from the exercise of rights against Dealers under agreements between
Arcadia Financial and such Dealers and the assignment of rights in respect of
each Receivable from the applicable Dealer to Arcadia Financial, an assignment
of the right to receive the proceeds from claims on certain insurance policies
covering the Financed Vehicles or the Obligors, assignment of the rights of the
Company under the Purchase Agreement and any Subsequent Purchase Agreement (each
as defined below) and certain other rights, as more fully described under the
Trust Agreement and the Sale and Servicing Agreement. In addition, the Trust
Property will include monies on deposit in a pre-funding account (the
"Pre-Funding Account"), certain funds in which (the "Pre-Funded Amount") will be
used to purchase Receivables from the Company that are originated subsequent to
the Initial Cutoff Date and monies on deposit in a reserve account (including
all investments in such accounts and all income from the investment of funds
therein and all proceeds thereof), the funds of which will be drawn upon to fund
certain shortfalls in the Collection Account.

Certain Receivables (the "Initial Receivables") and the related Trust
Property will be conveyed to the Company by Arcadia Financial pursuant to one or
more purchase agreements, executed on or prior to the Closing Date, between the
Company and Arcadia Financial (the "Purchase Agreements") and, on the Closing
Date, will be purchased by the Trust from the Company pursuant to the Sale and
Servicing Agreement (the "Sale and Servicing Agreement") dated March 1, 1999,
among the Trust, the Company, Arcadia Financial, in its individual capacity and
as servicer (the "Servicer") and Norwest Bank Minnesota, National Association,
as the backup servicer. Following the Closing Date, pursuant to the Sale and
Servicing Agreement, the Company will be obligated, subject only to the
availability thereof, to sell, and the Trust will be obligated to purchase,
subject to the satisfaction of certain conditions set forth therein, additional
Receivables (the "Subsequent Receivables") from time to time during the Funding
Period (the amount of such Subsequent Receivables being equal to the Pre-Funded
Amount on the Closing Date). Subsequent Receivables will be purchased by the
Company from Arcadia Financial pursuant to one or more subsequent purchase
agreements (each, a "Subsequent Purchase Agreement"). Concurrently with the
issuance of the Notes, (i) the Note Insurer will issue a financial guaranty
insurance policy with respect to the Notes (the "Note Policy") pursuant to the
Insurance and Indemnity Agreement, dated as of the Closing Date, among the
Company, Arcadia Financial, the Trust and the Note Insurer (the "Insurance
Agreement"), to the Indenture Trustee pursuant to which the Note Insurer will
unconditionally and irrevocably guarantee to the holders of the Notes payment of
the Scheduled Payments with respect to each Distribution Date, (ii) Arcadia
Financial, the Company, the Note Insurer and Norwest Bank Minnesota, National
Association, as the Collateral Agent, will enter

<PAGE>

into the Series 1999-A Supplement to the Spread Account Agreement (the "Spread
Account Agreement"), dated as of the Closing Date, regarding certain rights of
the Note Insurer in consideration of the issuance of the Policies, and (iii) the
Trust, the Indenture Trustee, the Note Insurer and Arcadia Financial, as
Custodian (the "Custodian"), will enter into the Custodian Agreement (the
"Custodian Agreement"), dated as of the Closing Date, pursuant to which the
Custodian will hold the original installment sales contract or promissory note
as well as copies of documents and instruments relating to each Receivable and
evidencing the security interest in the Financed Vehicle securing each
Receivable (the "Receivable Files"). The Notes will be issued in an aggregate
principal amount which is equal to the sum of the aggregate principal balance of
the Receivables as of the Initial Cutoff Date and the Pre-Funded Amount on the
Closing Date.

On the Closing Date, the Note Insurer and the Underwriters will also enter
into an Indemnification Agreement (the "Indemnification Agreement") regarding
indemnification for certain information included in the Registration Statement
and Prospectus, each referred to below.

Capitalized terms used but not defined herein have the meanings assigned in
the Sale and Servicing Agreement.

The terms of the Notes are set forth in the Registration Statement and the
related Prospectus dated June 10, 1998, as supplemented by a Prospectus
Supplement dated March 11, 1999.

All the provisions contained in the document entitled Arcadia Automobile
Receivables Trusts Underwriting Agreement Standard Provisions for Automobile
Receivables-Backed Certificates and Automobile Receivables-Backed Notes (March
1999) (the "Standard Underwriting Terms"), a copy of which you have previously
received, are herein incorporated by reference in their entirety and shall be
deemed to be a part of this Pricing Agreement to the same extent as if such
provisions had been set forth in full herein. This Pricing Agreement, together
with the Standard Underwriting Terms incorporated herein by reference, is
referred to herein as the "Underwriting Agreement."

In addition to the conditions to the Underwriters' obligations incorporated
herein by reference from the Standard Underwriting Terms, the obligations of the
Underwriters to purchase and pay for the Notes as provided herein shall be
subject to receipt of the opinion of Gardere & Wynne, special Texas counsel for
Arcadia Financial and the Company, dated the Closing Date and to the effect set
forth in Section 5(k) of the Standard Underwriting Terms.

<PAGE>

On the basis of the representations, warranties and agreements contained in
this Underwriting Agreement, but subject to the terms and conditions set forth
in this Underwriting Agreement, the Company agrees to cause the Trust to issue
and sell to the Underwriters, and the Underwriters agree, severally and not
jointly, to purchase from the Trust on the Closing Date the respective amounts
of the Notes at the respective prices as set forth in Schedule A annexed hereto.

The Notes will be delivered by the Company to you at the office of Dorsey &
Whitney LLP, 250 Park Avenue, New York, New York 10177 (or at such other
location as you and the Company determine) at 10:00 a.m., New York time, on
March 17, 1999 (or if the New York or American Stock Exchanges or commercial
banks in The City of New York are not open on such day, the next day on which
such exchanges and banks are open), or at such other time not later than eight
full business days thereafter as you and the Company determine, such time being
herein referred to as the "Closing Date". Each class of Notes so to be delivered
will be represented by one or more definitive notes having an aggregate initial
principal amount of $60,000,000 for the Class A-1 Notes, $153,000,000 for the
Class A-2 Notes, $65,000,000 for the Class A-3 Notes, $105,000,000 for the Class
A-4 Notes, and $167,000,000 for the Class A-5 Notes in the case of notes sold in
the United States, registered in the name of Cede & Co., as nominee for DTC.

Notices to Chase Securities Inc. 270 Park Avenue, 7th Floor, New York, New
York 10022 Attention: Global Asset Backed Securities.

<PAGE>

If the foregoing correctly sets forth the understanding between the Company
and the Underwriters, please so indicate in the space provided below for that
purpose, whereupon this letter shall constitute a binding agreement between
Arcadia Financial and the Company on the one hand and the Underwriters on the
other.

Very truly yours,

ARCADIA FINANCIAL LTD.

By: /s/ John A. Witham
------------------
Name: John A. Witham
Title: Executive Vice President
and Chief Financial Officer

ARCADIA RECEIVABLES FINANCE CORP.

By /s/ John A. Witham
------------------
Name: John A. Witham
Title: Senior Vice President
and Chief Financial Officer

ACCEPTED as of the date first above written:

CHASE SECURITIES INC.

By /s/Robert Villani
----------------------
Name: Robert Villani
Title: Vice President

<PAGE>

CREDIT SUISSE FIRST BOSTON CORPORATION

By /s/ Erik A. Falk
---------------------
Name: Erik A. Falk
Title: Vice President

J.P. MORGAN SECURITIES INC.

By /s/ Richard Lawrence
----------------------
Name: Richard Lawrence
Title: Vice President

NATIONSBANC MONTGOMERY SECURITIES LLC

By /s/ Robert Okabe
-------------------
Name: Robert Okabe
Title: Managing Director

<PAGE>

SCHEDULE A

Chase Securities Inc.

Purchase Price Principal Amount
<S> <C> <C>
100% $15,000,000 Class A-1 Notes
100% $38,250,000 Class A-2 Notes
99.994420% $16,250,000 Class A-3 Notes
99.993790% $26,250,000 Class A-4 Notes
99.995687% $41,750,000 Class A-5 Notes

Credit Suisse First Boston

J.P. Morgan Securities Inc.

Nationsbank Montgomery Securities LLC

<PAGE>

ARCADIA FINANCIAL LTD.
ARCADIA RECEIVABLES FINANCE CORP.

ARCADIA AUTOMOBILE RECEIVABLES TRUSTS

UNDERWRITING AGREEMENT
STANDARD PROVISIONS FOR AUTOMOBILE
RECEIVABLES-BACKED CERTIFICATES AND
AUTOMOBILE RECEIVABLES-BACKED NOTES
(March 1999)

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

From time to time, Arcadia Receivables Finance Corp., a Delaware
corporation (the "Company"), and Arcadia Financial Ltd., a Minnesota corporation
("Arcadia Financial"), may enter into one or more pricing agreements that
provide for the sale by an Arcadia Automobile Receivables Trust to be created by
the Company of automobile receivables-backed certificates (the "Certificates")
and automobile receivables-backed notes (the "Notes") (the Certificates and the
Notes sometimes collectively referred to herein as the "Securities") to the
several underwriters named therein (each, a "Pricing Agreement" and, including
the provisions hereof incorporated therein by reference, an "Underwriting
Agreement").

The terms and rights of any particular issuance of Certificates (the
"Designated Certificates") or Notes (the "Designated Notes") (the Designated
Certificates and the Designated Notes sometimes collectively referred to herein
as the "Designated Securities") shall be as specified in the Pricing Agreement
relating thereto. Particular sales of Designated Securities may be made from
time to time by the Arcadia Automobile Receivables Trust designated in the
Pricing Agreement relating to such Designated Securities (the "Trust") to the
several underwriters named in such Pricing Agreement (the "Underwriters"), for
whom the firms designated as representatives of the Underwriters of such
Designated Securities in the Pricing Agreement relating thereto will act as
representatives (the "Representatives"). The term Representatives also refers
to a single firm acting as sole representative of the Underwriters and to
Underwriters or a single firm acting as sole Underwriter acting without any firm
being designated as their representative. These standard provisions shall not
be construed as an obligation of the Company to sell any Designated Securities
or as an obligation of any Underwriter to purchase any Designated Securities.
The obligation of the

<PAGE>

Company to issue and sell any Designated Securities shall be evidenced by the
Pricing Agreement relating thereto with respect to the Designated Securities
named therein. Each Pricing Agreement shall specify, among other things, the
Trust that will issue such Designated Securities, the aggregate principal amount
(or notional principal amount) of such Designated Securities, the names of the
Underwriters and the Representatives, the purchase price to the Underwriters of
such Designated Securities, the principal amount of such Designated Securities
to be purchased by each Underwriter and the date, time and manner of delivery of
such Designated Securities and payment therefor.

1. DESCRIPTION OF SECURITIES. The Company, a wholly-owned subsidiary
of Arcadia Financial, proposes to cause the Trust designated in the related
Pricing Agreement to be created pursuant to a trust agreement (the "Trust
Agreement") among the Company, as seller, the trustee specified in the related
Pricing Agreement (the "Owner Trustee") and any such other parties as shall be
specified in the related Pricing Agreement and to cause the Trust to issue and
sell to the several Underwriters the Designated Certificates to be issued under
such Trust Agreement and/or the Designated Notes to be issued under an Indenture
(the "Indenture") between the Trust, the trustee specified in the related
Pricing Agreement (the "Indenture Trustee") and any such other parties as shall
be specified in the related Pricing Agreement. The Designated Notes will be
collateralized by the Trust Property (as defined below), and each Certificate
will represent a fractional undivided interest in the related Trust. The assets
of each Trust (the "Trust Property") will include, among other things, a pool of
simple interest retail installment sales contracts and promissory notes (the
"Receivables") purchased or to be purchased from motor vehicle dealers
("Dealers") by Arcadia Financial and secured by new and used automobiles and
light trucks (the "Financed Vehicles"), certain monies paid or payable thereon
after the Cutoff Date (the "Cutoff Date") specified in the related Pricing
Agreement (excluding certain insurance premiums), any financial guaranty
insurance policies issued by an insurer in respect of the Designated Securities
(the "Security Insurer") pursuant to an insurance and indemnity agreement among
the Trust, the Company, Arcadia Financial and the Security Insurer and any other
parties specified in the related Pricing Agreement (an "Insurance Agreement") or
other form of credit enhancement specified in the related Pricing Agreement,
such amounts as from time to time may be held in a lockbox account (established
pursuant to a counterpart to an agency agreement and retail lockbox agreement
between Arcadia Financial, the Owner Trustee, the lockbox bank (the "Lockbox
Bank") specified in the related Pricing Agreement (the "Lockbox Agreement") and
the Security Insurer) and the Collection Account (including all investments in
the Collection Account and all income from the investment of funds therein and
proceeds thereof), an assignment of Arcadia Financial's security interests in
the Financed Vehicles, an assignment of the right to receive proceeds from the
exercise of rights against Dealers under agreements between Arcadia Financial
and such Dealers and the assignment of rights in respect of each Receivable from
the applicable Dealer to Arcadia Financial, an assignment of the right to
receive the proceeds from claims on certain insurance policies covering the
Financed Vehicles or the Obligors, an assignment of the rights of the Company
under

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<PAGE>

the Receivables Purchase Agreement (as defined below) and the other property and
the proceeds thereof to be conveyed to the Trust pursuant to the sale and
servicing agreement (the "Sale and Servicing Agreement") among the Trust, as
issuer, the Company, as seller, Arcadia Financial, in its individual capacity
and as servicer, and the backup servicer specified in the related Pricing
Agreement (the "Backup Servicer"), and any other parties specified in and as
more fully described in the related Pricing Agreement or the Sale and Servicing
Agreement. In addition, if so specified in the related Pricing Agreement, the
Trust Property will include monies on deposit in a pre-funding account (the
"Pre-Funding Account") which will be used to purchase Receivables from Arcadia
Financial originated subsequent to the Cutoff Date.

Unless otherwise specified in the related Pricing Agreement, the
Receivables and the related Trust Property will be conveyed to the Company by
Arcadia Financial pursuant to a Receivables Purchase Agreement and Assignment
between the Company and Arcadia Financial (a "Receivables Purchase Agreement")
and will be conveyed to the related Trust by the Company pursuant to the Sale
and Servicing Agreement. Concurrently with the issuance of the Designated
Securities, unless otherwise specified in the related Pricing Agreement, (i)
with respect to the Designated Certificates, if any, the Security Insurer will
issue a Policy to the Owner Trustee pursuant to which the Security Insurer will
unconditionally and irrevocably guarantee to the holders of the Designated
Certificates payment of the Guaranteed Distributions with respect to each
Distribution Date and certain other amounts, as set forth in such Policy (the
"Certificate Policy"), (ii) with respect to the Designated Notes, if any, the
Security Insurer will issue a Policy to the Indenture Trustee pursuant to which
the Security Insurer will unconditionally and irrevocably guarantee to the
holders of the Designated Notes payment of the Guaranteed Distributions with
respect to each Distribution Date and certain other amounts, as set forth in
such Policy (the "Note Policy" and, together with the Certificate Policy, the
"Policies"), (iii) Arcadia Financial, the Company, the Security Insurer, the
trustee and the collateral agent specified in the related Pricing Agreement (the
"Collateral Agent") will enter into a Spread Account Agreement or series
supplement thereto (the "Spread Account Agreement") regarding certain rights of
the Security Insurer in consideration of the issuance of the Policies, (iv) the
Trust, the Indenture Trustee, the Security Insurer and Arcadia Financial or the
other custodian specified in the related Pricing Agreement (the "Custodian")
will enter into a custodian agreement (the "Custodian Agreement") pursuant to
which the Custodian will hold the original installment sales contract or
promissory note as well as copies of documents and instruments relating to each
Receivable and evidencing the security interest in the Financed Vehicle securing
each Receivable (the "Receivable Files"), and (v) the Trust and the parties
specified in the related Pricing Agreement will enter into an administration
agreement (the "Administration Agreement") pursuant to which the administrator
specified in such Pricing Agreement (the "Administrator"), will perform certain
administrative tasks of the Owner Trustee and the Indenture Trustee imposed
under the Trust Agreement, the

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<PAGE>

Indenture and certain other agreements. Unless specified in the related Pricing
Agreement with respect to a Pre-Funding Account, the Designated Securities will
be issued in an aggregate principal amount which is equal to the sum of
aggregate principal balance of the Receivables as of the Cutoff Date and the
amount, if any, deposited in the Pre-Funding Account on the Closing Date (as
hereinafter defined).

At the Closing Date for the sale of Designated Securities specified in
each Pricing Agreement, the Security Insurer and the Underwriters will also
enter into an Indemnification Agreement (the "Indemnification Agreement")
regarding indemnification for certain information included in the Registration
Statement and Prospectus, referred to below.

Capitalized terms used but not defined herein when used in connection
with any Pricing Agreement, have the meanings assigned in the related Sale and
Servicing Agreement.

2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND ARCADIA
FINANCIAL. In addition to any representations and warranties specified in the
related Pricing Agreement, by their execution of a Pricing Agreement, the
Company and Arcadia Financial, jointly and severally, shall represent and
warrant to, and agree with, each Underwriter that:

(a) A registration statement on Form S-3 (File No. 333-48141) with
respect to the Securities, including a prospectus, has been prepared by the
Company in conformity with the requirements of the Securities Act of 1933
("Act") and the rules and regulations ("Rules and Regulations") of the
Securities and Exchange Commission ("Commission") thereunder and filed with
the Commission and has become effective. Such registration statement and
prospectus may have been amended or supplemented prior to the date of the
date hereof; any such amendment or supplement was so prepared and filed,
and any such amendment filed after the effective date of such registration
statement has become effective. No stop order suspending the effectiveness
of the registration statement has been issued, and no proceeding for that
purpose has been instituted or threatened by the Commission. A prospectus
supplement ("Prospectus Supplement") setting forth the terms of the
Designated Securities and of their sale and distribution has been or will
be so prepared and will be filed pursuant to Rule 424(b) of the Rules and
Regulations on or before the second business day after the date hereof (or
such earlier time as may be required by the Rules and Regulations). Copies
of such registration statement and prospectus, any such amendment or
supplement and all documents incorporated by reference therein that were
filed with the Commission on or prior to the date it is first used in
connection with the offering of the Designated Securities (including one
fully executed copy of the registration statement and of

-4-
<PAGE>

each amendment thereto for each of the Underwriters and for counsel for the
Underwriters) have been delivered to the Representatives. Such
registration statement, as it may have heretofore been amended, is referred
to herein as the "Registration Statement," and the final form of prospectus
included in the Registration Statement, as supplemented by the Prospectus
Supplement, is referred to herein as the "Prospectus." Each form of
Prospectus, or Prospectus and Prospectus Supplement, if any, heretofore
made available for use in offering the Securities is referred to herein as
a "Preliminary Prospectus." Any reference herein to the Registration
Statement, the Prospectus, any amendment or supplement thereto or any
Preliminary Prospectus shall be deemed to refer to and include the
documents incorporated by reference therein, and any reference herein to
the terms "amend," "amendment" or "supplement" with respect to the
Registration Statement or Prospectus shall be deemed to refer to and
include the filing after the execution hereof of any document with the
Commission deemed to be incorporated by reference therein.

(b) Each part of the Registration Statement, when such part
became or becomes effective, each Preliminary Prospectus (if any) on
the date of filing thereof with the Commission, and the Prospectus and
any amendment or supplement thereto, on the date of filing thereof
with the Commission and at the Closing Date, conformed or will conform
in all material respects with the requirements of the Act and the
Rules and Regulations; each part of the Registration Statement, when
such part became or becomes effective, did not or will 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; each Preliminary Prospectus (if any), on the
date of filing thereof with the Commission, and the Prospectus and any
amendment or supplement thereto, on the date of filing thereof with
the Commission and at the Closing Date, did not or will not include an
untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; except that
the foregoing shall not apply to statements in or omissions from any
such document in reliance upon, and in conformity with, written
information furnished to the Company by the Representatives, or by any
Underwriter through the Representatives, specifically for use in the
preparation thereof.

(c) The documents incorporated by reference in the Registration
Statement, the Prospectus, any amendment or supplement thereto or any
Preliminary Prospectus, when they became or become effective under the
Act or were or are filed with the Commission under the Securities
Exchange Act of 1934 ("Exchange Act"), as the case may be,

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<PAGE>

conformed or will conform in all material respects with the requirements of
the Act or the Exchange Act, as applicable, and the rules and regulations
of the Commission thereunder.

(d) Each of Arcadia Financial and the Company has been duly
incorporated and is an existing corporation in good standing under the
laws of its jurisdiction of incorporation and is duly qualified to do
business, is in good standing and has obtained all necessary licenses
and approvals in each jurisdiction in which the failure to so qualify
or to obtain such license or approval would materially and adversely
affect the enforceability of any Receivable or any other part of the
Trust Property or the ability of Arcadia Financial or the Company to
perform their respective obligations under, or adversely affect the
validity or enforceability of, the Pricing Agreement, the Sale and
Servicing Agreement, the Trust Agreement, the Indenture, the
Receivables Purchase Agreement, the Insurance Agreement, the Spread
Account Agreement, the Lockbox Agreement, the Designated Securities or
the Administration Agreement; and all of the outstanding shares of
capital stock of the Company have been duly authorized and validly
issued, are fully paid and non-assessable and are owned beneficially
and of record by the Company subject to no security interest, other
encumbrance or adverse claim other than the security interest of
Financial Security Assurance Inc. ("Financial Security") pursuant to
the Stock Pledge Agreement, dated as of March 25, 1993, as amended, by
and among Arcadia Financial, the Company and Financial Security (the
"Stock Pledge Agreement").

(e) Arcadia Financial has full power and authority (corporate
and other) to conduct its business as described in the Registration
Statement and Prospectus, and to execute, deliver and perform the
obligations to be performed by it, under the Pricing Agreement, the
Sale and Servicing Agreement, the Receivables Purchase Agreement, the
Insurance Agreement, the Spread Account Agreement and the Lockbox
Agreement and, if applicable, the Administration Agreement, and had at
all relevant times, and on the Closing Date will have, full power,
authority and legal right to acquire, own, sell and assign the
Receivables and the related Trust Property to the Company and to
service the Receivables as contemplated by the Sale and Servicing
Agreement.

(f) The Company has full power and authority (corporate and
other) to conduct its business as described in the Registration
Statement and Prospectus and to execute and deliver and perform the
obligations to be performed by it, under the Pricing Agreement, the
Trust Agreement,

-6-
<PAGE>

the Sale and Servicing Agreement, the Receivables Purchase Agreement, the
Insurance Agreement, the Spread Account Agreement and the Lockbox Agreement
and had at all relevant times, and on the Closing Date will have, full
power, authority and legal right to acquire, own, sell and assign the
Receivables and the other Trust Property.

(g) The Trust has been duly formed and is validly existing as a
business trust under the laws of the State of Delaware, 12 Del. C. Section
3801, ET SEQ.; and has the power and authority to execute, deliver and
perform its obligations under the Sale and Servicing Agreement, the
Indenture, the Administration Agreement, the Designated Notes and the
Designated Certificates.

(h) The Trust Agreement, the Sale and Servicing Agreement, the
Receivables Purchase Agreement, the Insurance Agreement, the Spread
Account Agreement, the Lockbox Agreement and the Pricing Agreement
have been duly authorized and when duly executed and delivered by the
parties thereto will constitute valid and legally binding obligations
of the Company, enforceable in accordance with their terms, subject,
as to enforcement, to bankruptcy, insolvency, reorganization and other
laws of general applicability relating to or affecting creditors'
rights and to general equity principles, provided that no
representation is made with respect to the enforceability of Section 6
hereof insofar as such provisions relate to indemnification for
liabilities arising under applicable securities laws.

(i) The Sale and Servicing Agreement, the Receivables Purchase
Agreement, the Insurance Agreement, the Spread Account Agreement, the
Custodian Agreement, the Lockbox Agreement and the Pricing Agreement
and, if applicable, the Administration Agreement, have been duly
authorized and when duly executed and delivered by the parties thereto
will constitute valid and legally binding obligations of Arcadia
Financial, enforceable in accordance with their terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization and other laws
of general applicability relating to or affecting creditors' rights
and to general equity principles, provided that no representation is
made with respect to the enforceability of Section 6 hereof insofar as
such provisions relate to indemnification for liabilities arising
under applicable securities laws.

(j) The Sale and Servicing Agreement, the Indenture, the Insurance
Agreement, the Custodian Agreement and the Administration Agreement have
been duly authorized and, when duly executed and delivered by the parties
thereto, each will constitute a valid and legally binding obligation of the
Trust, enforceable in accordance with its terms, subject, as to
enforcement, to bank-

-7-
<PAGE>

ruptcy, insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general equity
principles. The Trust's assignment of the Collateral to the Collateral
Agent pursuant to the Indenture will vest in the Collateral Agent, for the
benefit of the Certificateholders and the Noteholders, a first priority
perfected security interest therein, subject to no prior lien, mortgage,
security interest, pledge, adverse claim, charge or other encumbrance.

(k) The Designated Certificates, if any, have been duly
authorized and, when duly executed, issued and delivered as
contemplated hereby and by the Trust Agreement, will constitute valid
and legally binding obligations, enforceable in accordance with their
terms and entitled to the benefits and security afforded by the Trust
Agreement, subject, as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or
affecting creditors' rights and to general equity principles.

(l) The Designated Notes, if any, have been duly authorized and, when
duly executed, issued and delivered as contemplated hereby and by the
Indenture, will constitute valid and legally binding obligations,
enforceable in accordance with their terms and entitled to the benefits and
security afford by the Indenture, subject as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general applicability relating
to or affecting creditors' rights and to general equity principles.

(m) Except as contemplated in the Prospectus, subsequent to the
respective dates as of which information is given in the Registration
Statement and the Prospectus, none of Arcadia Financial, the Company
or the Trust has incurred any liabilities or obligations, direct or
contingent, or entered into any transactions, not in the ordinary
course of business, that are material to Arcadia Financial, the
Company or the Trust, and there has not been any material change, on a
consolidated basis, in the capital stock, short-term debt or long-term
debt of Arcadia Financial, the Company or the Trust, or any material
adverse change, or any development involving a prospective material
adverse change, in the condition (financial or other), business,
prospects, net worth or results of operations of Arcadia Financial,
the Company or the Trust.

(n) Except as set forth in the Prospectus, there is not pending
or, to the knowledge of Arcadia Financial or the Company, threatened
any action, suit or proceeding to which Arcadia Financial, the
Company, the Trust or any subsidiaries of Arcadia Financial (other
than the Company) is a party, before or by any court or governmental
agency or body, that

-8-
<PAGE>

might result in any material adverse change in the condition (financial or
other), business, prospects, net worth or results of operations of Arcadia
Financial, the Company or the Trust, or might materially and adversely
affect the properties or assets thereof or the transactions contemplated
herein.

(o) There are no contracts or documents that are required to be
filed as exhibits to the Registration Statement that have not been so
filed.

(p) The execution, delivery and performance of the Pricing
Agreement, the Trust Agreement, the Sale and Servicing Agreement, the
Indenture, the Receivables Purchase Agreement, the Insurance
Agreement, the Spread Account Agreement, the Lockbox Agreement, the
Custodian Agreement, the Administration Agreement and the Designated
Securities and the consummation of the transactions therein
contemplated will not result in a breach or violation of any of the
terms and provisions of, or constitute a default under, any statute,
any agreement or instrument to which Arcadia Financial, the Company or
the Trust is a party or by which it is bound or to which any of the
property of Arcadia Financial, the Company or the Trust is subject,
the articles of incorporation or by-laws of Arcadia Financial, the
certificate of incorporation or by-laws of the Company, or any order,
rule or regulation of any court or governmental agency or body having
jurisdiction over Arcadia Financial, the Company or the Trust or any
of their properties; and no consent, approval, authorization or order
of, or filing with, any court, governmental, regulatory or
administrative authority, agency, body or official is required for the
consummation of the transactions contemplated by the Pricing Agreement
the Trust Agreement, the Sale and Servicing Agreement, the Indenture,
the Receivables Purchase Agreement, the Insurance Agreement, the
Spread Account Agreement, the Lockbox Agreement, the Custodian
Agreement, the Administration Agreement and the Designated Securities,
except such as have been obtained under the Act and such as may be
required under state securities laws in connection with the purchase
and distribution of the Designated Securities by the Underwriters; and
the Company has full power and authority to sell the Designated
Securities as contemplated by the Pricing Agreement.

(q) None of the Company, Arcadia Financial, the Trust or any of the
other subsidiaries of Arcadia Financial is an "investment company" or a
company "controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.

-9-
<PAGE>

(r) Arcadia Financial and the other subsidiaries of Arcadia Financial
possess all franchises, certificates, licenses, permits and other
authorizations from governmental bodies or regulatory authorities that are
necessary for the conduct of their respective businesses or the ownership,
maintenance and operation of their respective properties and assets,
including without limiting the foregoing, licenses necessary to act as a
sales finance company in each state in which the Company, Arcadia Financial
and the other subsidiaries of Arcadia Financial conduct their respective
businesses, and none of the Trust, the Company, Arcadia Financial, or any
of the other subsidiaries of Arcadia Financial is in violation of any
franchise, certificate, license, permit or other authorization, except
where such failure would not result in any material adverse change in the
condition (financial or other), business, prospects, net worth or results
of operations of Arcadia Financial, the Company or the Trust, or any of
such other subsidiaries, or might materially and adversely affect the
properties or assets of Arcadia Financial, the Company or the Trust.

(s) The Company, Arcadia Financial, the Trust and the other
subsidiaries of Arcadia Financial are in compliance with, and no violation
exists under, any and all applicable rules, regulations and orders,
including without limiting the foregoing, the motor vehicle retail
installment sales acts of each state in which the Company, Arcadia
Financial, the Trust and the other subsidiaries of Arcadia Financial
conduct their respective businesses, and all applicable federal statutes
and regulations, except where the failure so to comply or a violation
thereunder would not result in any material adverse change in the condition
(financial or other), business, prospects, net worth or results of
operations of Arcadia Financial, the Company, the Trust or any such other
subsidiaries, or might materially and adversely affect the properties or
assets of Arcadia Financial, the Company or the Trust.

(t) The Company, Arcadia Financial, and the Trust have the right to
use all tradenames, service marks, trademarks and other intangible property
rights used in their business and such use by the Company and Arcadia
Financial does not infringe on the rights of any other person or entity.

(u) As of the Closing Date, the representations and warranties of
Arcadia Financial and the Company in the Trust Agreement, the Sale and
Servicing Agreement, the Indenture, the Receivables Purchase Agreement, the
Administration Agreement, the Spread Account Agreement and the Insurance
Agreement, as applicable, will be true and correct.

3. PURCHASE, SALE AND DELIVERY OF DESIGNATED SECURITIES. On the
basis of the representations, warranties and agreements contained in the related
Pricing Agreement, but subject to the terms and conditions therein set forth,
the Company

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<PAGE>

agrees to cause the Trust designated in the related Pricing Agreement to issue
and sell to each Underwriter, and each Underwriter agrees, severally and not
jointly, to purchase from the Company, (i) at the purchase price specified in
the related Pricing Agreement the aggregate principal amount (or notional
principal amount) of Designated Certificates set forth in such Pricing Agreement
and (ii) at the purchase price specified in the related Pricing Agreement the
aggregate principal amount of the Designated Notes set forth in such Pricing
Agreement.

Unless otherwise specified in the Pricing Agreement, the Designated
Securities will be delivered by the Company to the Representatives for the
accounts of the several Underwriters against payment of the purchase price
therefor by wire transfer of immediately available funds to an account
designated by the Company not later than the Closing Date at the time and place
specified in the related Pricing Agreement, or at such other time not later than
eight full business days after the date of the Pricing Agreement as the
Representatives and the Company determine, such time being herein referred to as
the "Closing Date." The Designated Securities so to be delivered will be
represented by one or more definitive certificates having an aggregate initial
principal amount specified in the Pricing Agreement registered in such name or
names as the Underwriters may request. The Company shall make such definitive
certificates available for inspection by the Underwriters at least one business
day prior to the Closing Date.

It is understood that the Representatives, acting individually and not
in a representative capacity, may (but shall not be obligated to) make payment
to the Company on behalf of any other Underwriter for the Designated Securities
to be purchased by such Underwriter. Any such payment by the Representatives
shall not relieve any such Underwriter of any of its obligations under any
Pricing Agreement.

4. COVENANTS. In addition to any covenants specified in the related
Pricing Agreement, by their execution of a Pricing Agreement, the Company and
Arcadia Financial, jointly and severally, covenant and agree with each
Underwriter that:

(a) The Company will cause the Prospectus to be filed as required by
Section 2(a) hereof (but only if the Representatives have not reasonably
objected thereto by notice to the Company after having been furnished a
copy a reasonable time prior to filing) and will notify the Representatives
promptly of such filing. During the period in which a prospectus relating
to the Designated Securities is required to be delivered under the Act, the
Company will notify the Representatives promptly of the time when any
subsequent amendment to the Registration Statement has become effective or
any subsequent supplement to the Prospectus has been filed and of any
request by the Commission for any amendment or supplement to the
Registration Statement or Prospectus or for

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<PAGE>

additional information; it will prepare and file with the Commission,
promptly upon the request of the Representatives, any amendments or
supplements to the Registration Statement or Prospectus that, in the
opinion of the Representatives, may be necessary or advisable in connection
with the distribution of the Designated Securities by the Underwriters; it
will file no amendment or supplement to the Registration Statement or
Prospectus (other than any prospectus supplement relating to the offering
of other securities registered under the Registration Statement or any
document required to be filed under the Exchange Act that upon filing is
deemed to be incorporated by reference therein) to which the
Representatives shall reasonably object by notice to the Company after
having been furnished a copy a reasonable time prior to the filing; and it
will furnish to the Representatives at or prior to the filing thereof a
copy of any such prospectus supplement or any document that upon filing is
deemed to be incorporated by reference in the Registration Statement or
Prospectus.

(b) The Company will advise the Representatives, promptly after
it shall receive notice or obtain knowledge thereof, of the issuance
by the Commission of any stop order suspending the effectiveness of
the Registration Statement, of the suspension of the qualification of
the Designated Securities for offering or sale in any jurisdiction, or
of the initiation or threatening of any proceeding for any such
purpose; and it will promptly use its best efforts to prevent the
issuance of any stop order or suspension or to obtain its withdrawal
if such a stop order or suspension should be issued.

(c) Within the time during which a prospectus relating to the
Designated Securities is required to be delivered under the Act, the
Company will comply as far as it is able with all requirements imposed
upon it by the Act and by the Rules and Regulations, as from time to
time in force, so far as necessary to permit the continuance of sales
of or dealings in the Designated Securities as contemplated by the
provisions hereof and the Prospectus. If during such period any event
occurs as a result of which the Prospectus as then amended or
supplemented would include an untrue statement of a material fact or
omit to state a material fact necessary to make the statements
therein, in the light of the circumstances then existing, not
misleading, or if during such period it is necessary to amend or
supplement the Registration Statement or Prospectus to comply with the
Act, the Company will promptly notify the Representatives and will
amend or supplement the Registration Statement or Prospectus (at the
expense of the Company and Arcadia Financial) so as to correct such
statement or omission or effect such compliance. Neither the
Representatives' consent to, nor the

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<PAGE>

Underwriters' delivery of, any such amendment or supplement shall
constitute a waiver of any of the provisions set forth in Section 6 hereof.

(d) The Company will use its best efforts to qualify the Designated
Securities for sale under the securities laws of such jurisdictions as the
Representatives reasonably designate and to continue such qualifications in
effect so long as required for the distribution of the Designated
Securities, except that the Company shall not be required in connection
therewith to qualify as a foreign corporation or to execute a general
consent to service of process in any jurisdiction. The Company will also
arrange for the determination of the eligibility for investment of the
Designated Securities under the laws of such jurisdictions as the
Representatives reasonably request.

(e) The Company will furnish to the Underwriters copies of the
Registration Statement, each Preliminary Prospectus, the Prospectus
(including all documents incorporated by reference therein) and all
amendments and supplements to such documents, in each case as soon as
available and in such quantities as the Representatives may from time
to time reasonably request.

(f) As soon as practicable, but not later than the Availability Date
(as defined below), the Company will cause the Trust to make generally
available to Certificateholders and Noteholders an earnings statement
(which need not be audited), as provided in Rule 158 under the Act or
otherwise, covering a period of at least 12 months beginning after the date
of the Agreement that shall satisfy the provisions of Section 11(a) of the
Act. For the purpose of the preceding sentence, (i) "Availability Date"
means the 45th day after the end of the fourth fiscal quarter of the Trust
following the fiscal quarter of the Trust that includes the date of the
Pricing Agreement, except that, if such fourth fiscal quarter is the last
quarter of the Trust's fiscal year, "Availability Date" means the 90th day
after the end of such fourth fiscal quarter and (ii) an "earnings
statement" shall be sufficient if (a) there is included the information
required for statements of income contained either in Item 8 of Form 10-K,
in Part I, Item 1 of Form 10-Q or in Rule 14a-3(b) under the Exchange Act
and (b) the information is contained in one report or any combination of
reports either on Form 10-K, Form 10-Q, Form 8-K or the annual report to
securityholders pursuant to Rule 14a-3 under the Exchange Act. For
purposes hereof, a Trust's fiscal year shall end on each June 30.

(g) The Company or Arcadia Financial, on behalf of the Trust, will
file all reports on Form SR, pursuant to Rule 463 under the Act, and all
reports required to be filed with the Commission on behalf of the Trust
pursuant to the Exchange Act, any order of the Commission thereunder or
pursuant to a "no-

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<PAGE>

action" letter (or similar form of exemptive relief) from the staff of the
Commission and will furnish, or cause to be furnished, copies of all such
reports to the Underwriters.

(h) For a period from the date of the Pricing Agreement to the first
date on which none of the Designated Securities are outstanding, the
Company will deliver, or cause to be delivered, to the Underwriters (i) by
first-class mail and as soon as is practicable, copies of (x) each
certificate, annual statement of compliance and accountants' report
delivered to the Indenture Trustee pursuant to Article III of the Sale and
Servicing Agreement or to the Security Insurer pursuant to Section 2.02 of
the Insurance Agreement and (y) each amendment or supplement to the Trust
Agreement, the Sale and Servicing Agreement, the Indenture, the Receivables
Purchase Agreement, the Insurance Agreement, the Spread Account Agreement,
the Lockbox Agreement, the Custodian Agreement or the Administration
Agreement and (ii) on each Determination Date, or as soon thereafter as is
practicable, but in any event not later than the second business day
immediately succeeding such Determination Date, a copy of the Servicer's
Certificate for the related Collection Period.

(i) So long as any of the Designated Securities are outstanding, the
Company or Arcadia Financial, as applicable, will furnish to the
Underwriters, by first-class mail, as soon as practicable, (i) all
documents required to be distributed to Certificateholders and Noteholders
and (ii) from time to time, such other information concerning the Company,
Arcadia Financial or the Trust, as the Underwriters may reasonably request.

(j) Arcadia Financial and the Company, whether or not the
transactions contemplated under any Pricing Agreement are consummated
or the Pricing Agreement is terminated, will pay (i) all expenses
incident to the performance of their obligations under the Pricing
Agreement and under the Trust Agreement, the Sale and Servicing
Agreement, the Indenture, the Receivables Purchase Agreement, the
Insurance Agreement, the Spread Account Agreement, the Custodian
Agreement, the Lockbox Agreement, the Administration Agreement and the
Designated Securities, (ii) will pay the expenses of printing all
documents relating to the offering, and (iii) will reimburse the
Underwriters for (a) any expenses (including fees and disbursements of
counsel) incurred by them in connection with the matters referred to
in Section 4(d) hereof and the preparation of memoranda relating
thereto, (b) the fees and disbursements of counsel to the
Underwriters, reasonably incurred in connection with the registration,
purchase, sale and delivery of the Designated Securities and (c) any
fees charged by investment rating agencies for rating the Designated
Securities. If the

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<PAGE>

sale of the Designated Securities provided for in the Pricing Agreement is
not consummated by reason of any failure, refusal or inability on the part
of the Company or Arcadia Financial to perform any agreement on its part to
be performed, or because any other condition of the Underwriters'
obligations under the Pricing Agreement required to be fulfilled by the
Company or Arcadia Financial is not fulfilled, the Company and Arcadia
Financial will reimburse the several Underwriters for all reasonable
out-of-pocket disbursements (including fees and disbursements of counsel)
incurred by the Underwriters in connection with their investigation,
preparing to market and marketing the Designated Securities or in
contemplation of performing their obligations under the Pricing Agreement.
The Company and Arcadia Financial shall not in any event be liable to any
of the Underwriters for loss of anticipated profits from the transactions
covered by the Pricing Agreement.

(k) The Company and Arcadia Financial will apply the net
proceeds from the sale of the Designated Securities as set forth in
the Prospectus.

(l) To the extent, if any, that any rating to be provided with
respect to the Designated Securities, as set forth in Section 6(n) hereof,
is conditional upon the furnishing of documents or information or the
taking of any other actions by Arcadia Financial or the Company, Arcadia
Financial and/or the Company, as the case may be, shall furnish such
documents or information and take any such other actions.

(m) During the period ending 20 business days after the date of the
Pricing Agreement, the Company and Arcadia Financial will not, directly or
indirectly, offer or sell, or determine to offer or sell, (i) any notes
collateralized by, or certificates evidencing an ownership interest in,
receivables generated pursuant to retail automobile or light-duty truck
installment sale contracts or (ii) any debt securities that are
substantially similar to the Designated Securities of the Company or
Arcadia Financial or of an issuer for which Arcadia Financial or the
Company is a sponsor or which has been formed or is beneficially owned by
the Company or Arcadia Financial, in either case without the Underwriters'
prior written consent.

(n) On or before the final purchase of Subsequent Receivables by
the Trust and the expiration of the Pre-Funding Period, Arcadia
Financial must receive a letter from the independent auditors for
Arcadia Financial, satisfactory in form and substance to Arcadia
Financial and the Underwriters, to the effect that such accountants have
performed certain specified procedures, all of which have been agreed to
by Arcadia

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<PAGE>

Financial, as a result of which they have determined, having examined in
accordance with such agreed upon procedures, that the Subsequent Receivables
conform to the related requirements described in the Prospectus. The foregoing
letter shall be at the expense of Arcadia Financial.

(o) At the time of the execution and delivery of each Subsequent Transfer,
the Subsequent Receivables will have been duly and validly assigned to the
Trustee in accordance with the Sale and Servicing Agreement; and when such
assignment is effected, a duly and validly perfected transfer of all such
Subsequent Receivables subject to no prior lien, mortgage, security interest,
pledge charge or other encumbrance created by Arcadia Financial or the Company
will have occurred.

(p) On or prior to each Subsequent Closing Date, the Company shall deliver
to the Underwriters, or cause the delivery of, the opinions and officer's
certificates, substantially in the form of the items listed in Section 2.4(b) of
the related Sale and Servicing Agreement, each dated on the Subsequent Closing
Date, with such conforming changes thereto as the Underwriters may reasonably
request. As of the related Subsequent Closing Date, each of the Subsequent
Receivables will meet the eligibility criteria described in the Prospectus.

(q) The Company shall comply with the requirements of the No-Action Letter
of May 20, 1994 issued by the Commission to Kidder, Peabody Acceptance
Corporation 1, Kidder Peabody & Company, Incorporated and Kidder Structured
Asset Corporation, as made applicable to other issuers and underwriters by the
Commission in response to the request of the Public Securities Association dated
May 24, 1994 (collectively, the "Kidder/PSA Letter"), and the requirements of
the No-Action Letter of February 17, 1995 issued by the Commission to the Public
Securities Association (the "PSA Letter" and together with the Kidder/PSA
letter, the "No-Action Letters") with regard to the filing of any "Computational
Materials," "ABS Term Sheets" and "Collateral Term Sheets" (together "Term
Sheets") as such terms are defined in the No-Action Letters and will file with
the Commission a current report on Form 8-K setting forth all Computational
Materials, ABS Term Sheets and Collateral Term sheets within the applicable time
periods allotted for such filing pursuant to the No-Action Letters.

5. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations of the
several Underwriters to purchase and pay for the Designated Securities as
provided in the Pricing Agreement shall be subject to the accuracy, as of the
date of such Pricing Agreement and the Closing Date (as if made at the Closing
Date), of the representations and warranties of the Company and Arcadia
Financial in the Pricing Agreement, to the performance by the Company and
Arcadia Financial of their respective obligations under the Pricing Agreement
and to the following additional conditions:

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<PAGE>

(a) The Prospectus shall have been filed as required by
Section 2(a) hereof; and no stop order suspending the effectiveness of
the Registration Statement shall have been issued and no proceeding
for that purpose shall have been instituted or, to the knowledge of
the Company, Arcadia Financial or any Underwriter, threatened by the
Commission, and any request of the Commission for additional
information (to be included in the Registration Statement or the
Prospectus or otherwise) shall have been complied with to the
satisfaction of the Representatives.

(b) No Underwriter shall have advised the Company or Arcadia
Financial that the Registration Statement or Prospectus, or any
amendment or supplement thereto, contains an untrue statement of fact
that in the opinion of the Representatives is material, or omits to
state a fact that in the opinion of the Representatives is material
and is required to be stated therein or is necessary to make the
statements therein not misleading.

(c) Except as contemplated in the Prospectus, subsequent to the
respective dates as of which such information is given in the
Registration Statement and the Prospectus, there shall not have been
any change, on a consolidated basis, in the capital stock, short-term
debt (other than in the ordinary course of Arcadia Financial's
business of purchasing Receivables) or long-term debt of the Security
Insurer, Arcadia Financial, the Company or the other subsidiaries of
Arcadia Financial, or any adverse change, or any development involving
a prospective adverse change, in the condition (financial or other),
business, prospects, net worth or results of operations of the
Security Insurer, Arcadia Financial, the Company or the other
subsidiaries of Arcadia Financial or any change in the rating assigned
to the claims-paying ability of the Security Insurer or any securities
of Arcadia Financial or the Company or any public announcement that
any "nationally recognized statistical rating organization" (as
defined for purposes of Rule 436(g) under the Act) has under
surveillance or review its rating assigned to the claims-paying
ability of the Security Insurer or any securities of Arcadia Financial
or the Company (other than an announcement with positive implications
of a possible upgrading, and no implication of a possible downgrading,
of such

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<PAGE>

rating), that, in the judgment of the Representatives, makes it impractical
or inadvisable to offer or deliver the Designated Securities on the terms
and in the manner contemplated in the Prospectus.

(d) Unless otherwise specified in the Pricing Agreement, the
Representatives shall have received the opinion of Dorsey & Whitney
LLP (or, if so specified in the Pricing Agreement, such other counsel
as is reasonably satisfactory to the Representatives), counsel for
Arcadia Financial and the Company, dated the Closing Date, to the
effect that:

(i) Each of Arcadia Financial and the Company has been duly
incorporated and is an existing corporation in good standing
under the laws of its jurisdiction of incorporation; and all of
the outstanding shares of capital stock of the Company have been
duly authorized and validly issued, are fully paid and
non-assessable and are owned beneficially and of record by
Arcadia Financial subject to no security interest, other
encumbrance or adverse claim other than the security interest of
the Security Insurer pursuant to the Stock Pledge Agreement;

(ii) No qualification to do business as a foreign corporation in
the State of Minnesota is necessary for the Company to purchase the
Receivables from Arcadia Financial and assign the Receivables to the
Trust and to perform its other obligations under the Sale and
Servicing Agreement;

(iii) No qualification to do business as a foreign corporation
in the State of Minnesota is necessary for the Owner Trustee or the
Trust to own the Receivables or to conduct the other transactions
contemplated by the Trust Agreement, the Sale and Servicing Agreement
and the Indenture;

(iv) Arcadia Financial has corporate power and authority to
conduct its business as described in the Registration Statement and
Prospectus, and to execute, deliver and perform the obligations to be
performed by it, under the Pricing Agreement, the Sale and Servicing
Agreement, the Receivables Purchase Agreement, the Insurance
Agreement, the

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<PAGE>

Spread Account Agreement, the Lockbox Agreement, the Custodian
Agreement and the Designated Securities and, if applicable, the
Administration Agreement, and had at all relevant times, and on the
Closing Date has, full power and authority to acquire, own, sell and
assign the Receivables and the related Trust Property to the Company
and to service the Receivables as contemplated by the Sale and
Servicing Agreement;

(v) The Company has corporate power and authority to conduct its
business as described in the Registration Statement and Prospectus and
to execute and deliver and perform the obligations to be performed by
it under the Pricing Agreement, the Trust Agreement, the Sale and
Servicing Agreement, the Receivables Purchase Agreement, the Insurance
Agreement, the Spread Account Agreement, the Lockbox Agreement, the
Designated Securities and had at all relevant times, and on the
Closing Date has, full power and authority to acquire, own, sell and
assign the Receivables and the other Trust Property;

(vi) The direction by the Company to authenticate the
Designated Certificates has been duly authorized by the Company
and, when the Designated Certificates have been duly executed,
authenticated and delivered by the Owner Trustee in accordance
with the Trust Agreement and delivered and paid for pursuant to
the relevant Pricing Agreement, will constitute valid and legally
binding obligations, enforceable in accordance with their terms
and entitled to the benefits and security afforded by the Trust
Agreement, subject as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability relating
to or affecting creditors' rights and to general equity
principles.

(vii) The direction by the Company to the Indenture Trustee
to authenticate the Designated Notes has been duly authorized by
the Company and, when the Designated Notes have been duly
executed and delivered by the Owner Trustee and, when
authenticated by the Indenture Trustee in accordance with the
Indenture and delivered and paid for pursuant to the relevant
Pricing Agreement, will constitute valid and legally binding

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<PAGE>

obligations, enforceable in accordance with their terms and entitled
to the benefits and security afforded by the Indenture, subject as to
enforcement, to bankruptcy, insolvency, reorganization and other laws
of general applicability relating to or affecting creditors' rights
and to general equity principles;

(viii) The Registration Statement has become effective
under the Act; the Prospectus has been filed as required by
Section 2(a) hereof; and no stop order suspending the
effectiveness of the Registration Statement has been issued and
to the best knowledge of such counsel no proceeding for that
purpose has been instituted or threatened by the Commission;

(ix) Each part of the Registration Statement, when such
part became effective, and the Prospectus and any amendment or
supplement thereto, on the date of filing thereof with the
Commission and at the Closing Date, complied as to form in all
material respects with the requirements of the Act and the Rules
and Regulations; such counsel have no reason to believe that
either any part of the Registration Statement, when such part
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 and any amendment or supplement
thereto, on the date of filing thereof with the Commission or at
the Closing Date, included an untrue statement of a material fact
or omitted to state a material fact necessary to make the
statements therein, in the light of the circumstances under which
they were made, not misleading; it being understood that such
counsel need express no opinion as to the financial statements or
other financial data included in any of the documents mentioned
in this clause;

(x) The descriptions in the Registration Statement and
Prospectus of statutes, legal and governmental proceedings,
contracts and other documents are accurate and fairly present the
information required to be shown;

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<PAGE>

and such counsel do not know of any statutes or legal or governmental
proceedings required to be described in the Prospectus that are not
described as required, or of any contracts or documents of a character
required to be described in the Registration Statement or Prospectus
(or required to be filed under the Exchange Act if upon such filing
they would be incorporated by reference therein) or to be filed as
exhibits to the Registration Statement that are not described and
filed as required;

(xi) The Trust Agreement, the Sale and Servicing Agreement, the
Receivables Purchase Agreement, the Insurance Agreement, the Spread
Account Agreement, the Lockbox Agreement have each been duly
authorized, executed and delivered by the Company; and each
constitutes a valid and legally binding obligation of the Company,
enforceable against the Company in accordance with its terms, subject,
as to enforcement, to bankruptcy, insolvency, reorganization and other
laws of general applicability relating to or affecting creditors'
rights and to general equity principles;

(xii) The Sale and Servicing Agreement, the Receivables Purchase
Agreement, the Insurance Agreement, the Spread Account Agreement, the
Custodian Agreement and the Lockbox Agreement and, if applicable, the
Administration Agreement, have each been duly authorized, executed and
delivered by Arcadia Financial and each constitutes a valid and
legally binding obligation of Arcadia Financial, enforceable against
Arcadia Financial in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization and other laws
of general applicability relating to or affecting creditors' rights
and to general equity principles;

(xiii) The Sale and Servicing Agreement, the Indenture, the
Custodian Agreement and the Administration Agreement each constitutes
a valid and legally binding obligation of the Trust, enforceable
against the Trust in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization and other laws
of general applicability relating to or affecting creditors' rights
and to general equity principles;

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<PAGE>

(xiv) There are no actions, proceedings or investigations
pending, or to the knowledge of such counsel, threatened before any
court, governmental, regulatory or administrative authority, agency,
body or official or other tribunal (w) asserting the invalidity of the
Pricing Agreement, the Trust Agreement, the Sale and Servicing
Agreement, the Indenture, the Receivables Purchase Agreement, the
Insurance Agreement, the Spread Account Agreement, the Lockbox
Agreement, the Custodian Agreement, the Designated Securities or the
Administration Agreement, (x) seeking to prevent the issuance of the
Designated Securities or the consummation of any of the transactions
contemplated by the Pricing Agreement, the Trust Agreement, the Sale
and Servicing Agreement, the Indenture, the Receivables Purchase
Agreement, the Insurance Agreement, the Spread Account Agreement, the
Lockbox Agreement, the Custodian Agreement, the Designated Securities
or the Administration Agreement, (y) that would, if determined
adversely to Arcadia Financial, the Company or the Trust, materially
and adversely affect the ability of Arcadia Financial, the Company or
the Trust to perform their respective obligations under, or the
validity or enforceability of, the Pricing Agreement, the Trust
Agreement, the Sale and Servicing Agreement, the Indenture, the
Receivables Purchase Agreement, the Insurance Agreement, the Spread
Account Agreement, the Lockbox Agreement, the Designated Securities,
the Custodian Agreement or the Administration Agreement, or (z) that
would affect adversely the Federal income tax attributes of the
Designated Certificates, as described in the Prospectus under the
heading "Certain Federal Income Tax Consequences";

(xiv) The Pricing Agreement has been duly authorized,
executed and delivered by Arcadia Financial and the Company;

(xv) Neither the transfer of the Receivables and the related
Trust Property to the Company pursuant to the Receivables Purchase
Agreement nor the transfer of the Receivables and the other Trust
Property to the Owner Trustee acting on behalf of the Trust, the grant
of the security interest in the Collateral to the Collateral Agent
pursuant to the Indenture, the issuance, sale or

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<PAGE>

delivery of the Designated Securities, the execution, delivery and
performance by Arcadia Financial, the Company or the Trust, as
applicable, of the Pricing Agreement, the Trust Agreement, the Sale
and Servicing Agreement, the Indenture, the Receivables Purchase
Agreement, the Insurance Agreement, the Spread Account Agreement, the
Lockbox Agreement, the Custodian Agreement, the Designated Securities
or the Administration Agreement nor the consummation of any of the
transactions contemplated herein or therein, nor the fulfillment of
the terms hereof or thereof by Arcadia Financial, the Company or the
Trust will result in a breach or violation of any of the terms and
provisions of, or constitute a default under, any statute, agreement
or instrument known to such counsel to which Arcadia Financial, the
Company, or the Trust is a party or by which it is bound or to which
any of the property of Arcadia Financial, the Company or the Trust is
subject, the articles of incorporation or by-laws of Arcadia
Financial, the certificate of incorporation or by-laws of the Company,
or any order, rule or regulation known to such counsel of any court or
governmental agency or body having jurisdiction over Arcadia
Financial, the Company or the Trust or any of their properties; and no
consent, approval, authorization or order of, or filing with, any
court, governmental, regulatory or administrative authority, agency,
body or official is required for the consummation of the transactions
contemplated by the Pricing Agreement, the Trust Agreement, the Sale
and Servicing Agreement, the Indenture, the Receivables Purchase
Agreement, the Insurance Agreement, the Spread Account Agreement, the
Lockbox Agreement, the Custodian Agreement, the Designated Securities
or the Administration Agreement, or in connection with the issuance or
sale of the Designated Securities by the Company, except such as have
been obtained under the Act and such as may be required under state
securities laws in connection with the purchase and distribution of
the Designated Securities by the Underwriters;

(xvi) The Trust's assignment of the Collateral to the Collateral
Agent pursuant to the Indenture will vest in the Collateral Agent, for
the benefit of the Certificateholders and the Noteholders, a first
priority perfected security interest therein, subject to no prior lien

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<PAGE>

mortgage, security interest, pledge, adverse claim, charge or other
incumbrance.

(xvii) The statements in the Registration Statement and the
Prospectus under the headings "Risk--Certain Legal Aspects," "Certain
Legal Aspects of the Receivables," "Certain Federal Income Tax
Consequences" and "ERISA Considerations," to the extent that they
describe matters of law or legal conclusions with respect thereto,
have been prepared or reviewed by such counsel and are correct in all
material respects;

(xviii) The Designated Securities, the Trust Agreement, the
Insurance Agreement, the Sale and Servicing Agreement, the Indenture,
the Receivables Purchase Agreement, the Lockbox Agreement, the Pricing
Agreement, the Custodian Agreement, the Policies and the
Administration Agreement conform in all material respects with the
descriptions thereof contained in the Registration Statement and the
Prospectus;

(xix) Neither the Trust Agreement nor the Sale and Servicing
Agreement is required to be qualified under the Trust Indenture Act of
1939, as amended, and neither the Company nor the Trust is required to
register as an "investment company" or a company "controlled" by an
"investment company" under the Investment Company Act of 1940, as
amended;

(xx) The Indenture has been duly qualified under the Trust
Indenture Act; and

(xxi) The trust fund created by the Trust Agreement will not,
for New York or Minnesota income tax purposes, be classified as an
association taxable as a corporation, and Certificateholders and
Noteholders who are not residents of or otherwise subject to tax in
New York or Minnesota will not, by reason of their acquisition of an
interest in the Designated Securities, be subject to New York or
Minnesota income, franchise, excise or similar taxes with respect to
interest on the Designated Securities or with respect to any of the
other Trust Property.

In rendering their opinion as aforesaid, such counsel may rely (a) as
to matters involving the application of laws of any jurisdiction other than
the

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<PAGE>

States of Minnesota and New York or the United States, to the extent they
deem proper and specify in such opinion, upon the opinion of other counsel
who are reasonably satisfactory to counsel to the Underwriters and (b) as
to matters of fact, to the extent they deem proper, upon certificates of
responsible officers of Arcadia Financial and the Company and public
officials; provided that such counsel shall state that they believe that
they and the Representatives are justified in relying upon such opinions
and certificates.

(e) The Representatives shall have received from Mayer, Brown &
Platt, counsel for the Underwriters (or, if so specified in the
Pricing Agreement, such other counsel as is reasonably satisfactory to
the Representatives), such opinion or opinions, dated the Closing
Date, with respect to the incorporation of Arcadia Financial and the
Company, the validity of the Designated Securities, the Registration
Statement, the Prospectus and other related matters as the
Representatives reasonably may request, and such counsel shall have
received such papers and information as they request to enable them to
pass upon such matters.

(f) At or prior to the time of execution of the Pricing Agreement
and at the Closing Date, the Representatives shall have received a
letter from the independent auditors for Arcadia Financial, dated the
date of delivery thereof, confirming that they are independent public
accountants with respect to the Company and Arcadia Financial within the
meaning of the Act and the applicable published Rules and Regulations
thereunder, substantially in the form of the draft to which the
Representatives have previously agreed and otherwise in form and
substance satisfactory to the Representatives.

(g) The Representatives shall have received from the Company a
certificate, signed by the Chairman of the Board, the President or a
Vice President and by the principal financial or accounting officer of
the each of Arcadia Financial and the Company, dated the Closing Date,
to the effect that, to the best of their knowledge based upon
reasonable investigation:

(i) The representations and warranties of Arcadia Financial
or the Company, as the case may be, in the Pricing Agreement are
true and correct, as if made at and as of the

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<PAGE>

Closing Date, and Arcadia Financial or the Company, as the case may
be, has complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied at or prior to the
Closing Date;

(ii) No stop order suspending the effectiveness of the
Registration Statement has been issued, and no proceeding for
that purpose has been instituted or is threatened by the
Commission; and

(iii) Since the effective date of the Registration
Statement, there has occurred no event required to be set forth
in an amendment or supplement to the Registration Statement or
Prospectus that has not been so set forth, and there has been no
document required to be filed under the Exchange Act and the
rules and regulations of the Commission thereunder that upon such
filing would be deemed to be incorporated by reference in the
Prospectus that has not been so filed.

(h) The Representatives shall have received the opinion of Dorsey &
Whitney LLP (or such other counsel as is reasonably satisfactory to the
Representatives), counsel to Arcadia Financial and the Company, dated the
Closing Date, and also delivered to and satisfactory to the Rating
Agencies, substantially to the effect that (A) the transfer of the
Receivables by Arcadia Financial to the Company would be characterized as a
sale, (B) the transfer of the Receivables and the related Trust Property by
the Company to the Trust would be characterized as either a sale or the
grant of a security interest and (C) in the event of an involuntary or
voluntary case under the United States Bankruptcy Code, the separate
corporate existence of Arcadia Financial and the Company would not properly
be disregarded so as to substantively consolidate their assets and
liabilities.

(i) The Representatives shall have received the opinion of Dorsey &
Whitney LLP (or such other counsel as is reasonably satisfactory to the
Representatives), counsel to Arcadia Financial and the Company, dated the
Closing Date, and also delivered to and satisfactory to the Rating
Agencies, with respect to the perfection and priority of the security
interest (as defined in Section 1-201(37) of the Uniform Commercial Code)
of

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<PAGE>

the Trust in the Receivables, the other Trust Property and the proceeds
thereof.

(j) The Representatives shall have received the opinion of special
Minnesota counsel for Arcadia Financial and the Company as is reasonably
satisfactory to the Representatives, dated the Closing Date, to the effect
that:

(i) Arcadia Financial holds all franchises, certificates,
consents, licenses, permits and other governmental or regulatory
approvals or authorizations necessary to originate and service the
Receivables in the State of Minnesota and to perform its other
obligations under the Sale and Servicing Agreement, the Custodian
Agreement and the Administration Agreement;

(ii) No franchises, certificates, consents, licenses, permits or
other governmental or regulatory approvals or authorizations are
necessary in the State of Minnesota for the Company to purchase the
Receivables from Arcadia Financial and assign the Receivables to the
Trust and to perform its other obligations under the Trust Agreement
and the Sale and Servicing Agreement;

(iii) No franchises, certificates, consents, licenses, permits or
other governmental or regulatory approvals or authorizations are
necessary in the State of Minnesota for the Owner Trustee or the Trust
to own the Receivables or to conduct the other transactions
contemplated the Trust Agreement and the Sale and Servicing Agreement;
and

(iv) The form of contract or note used by Arcadia Financial in the
State of Minnesota, attached to such opinion, (A) assuming the valid
execution and delivery of such form by each of the parties thereto, is
enforceable in accordance with its terms under the laws of the State
of Minnesota and (B) complies with applicable state and local laws
relating to consumer sales and lending transactions, consumer credit
laws, equal credit opportunity and disclosure laws.

(k) Unless otherwise specified in the Pricing Agreement, the
Representatives shall have received opinions of special counsel for Arcadia
Financial and the Company in certain of the states where the

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<PAGE>

Receivables were originated, as specified in the Pricing Agreement, dated
the Closing Date, to the effect that:

(i) Arcadia Financial is duly qualified to do business as a
foreign corporation and is in good standing in the such state;

(ii) No qualification to do business as a foreign corporation in
such state is necessary for the Company to purchase the Receivables
from Arcadia Financial and assign the Receivables to the Trust and to
perform its other obligations under the Trust Agreement and the Sale
and Servicing Agreement;

(iii) No qualification to do business as a foreign corporation in
such state is necessary for the Owner Trustee or the Trust to own the
Receivables or to conduct the other transactions contemplated by the
Trust Agreement and the Sale and Servicing Agreement;

(iv) Arcadia Financial holds all franchises, certificates,
consents, licenses, permits and other governmental or regulatory
approvals or authorizations necessary to originate and service the
Receivables in such state and to perform its other obligations under
the Sale and Servicing Agreement and, if applicable, the Custodian
Agreement and the Administration Agreement;

(v) No franchises, certificates, consents, licenses, permits or
other governmental or regulatory approvals or authorizations are
necessary in such state for the Company to purchase the Receivables
from Arcadia Financial and assign the Receivables to the Trust and to
perform its other obligations under the Trust Agreement and the Sale
and Servicing Agreement;

(vi) No franchises, certificates, consents, licenses, permits or
other governmental or regulatory approvals or authorizations are
necessary in such state for the Owner Trustee or the Trust to own the
Receivables or conduct the other transactions contemplated by the
Trust Agreement and the Sale and Servicing Agreement;

(vii) The form of contract or note used by Arcadia Financial in such
state, attached to such opinion, (A) assuming the valid execution and

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<PAGE>

delivery of such form by each of the parties thereto, is enforceable
in accordance with its terms under the laws of such state and
(B) complies with applicable state and local laws relating to consumer
sales and lending transactions, consumer credit laws, equal credit
opportunity and disclosure laws;

(viii) Assuming Arcadia Financial is shown as secured party on the
related title certificate, prior to the consummation of the
transactions contemplated by the Receivables Purchase Agreement,
Arcadia Financial has a valid and perfected first priority security
interest in Financed Vehicles securing Receivables that are registered
in such state;

(ix) Following the sale of the Receivables by Arcadia Financial to
the Company pursuant to the Receivables Purchase Agreement, the
Company will have a valid and perfected first priority security
interest in Financed Vehicles securing Receivables that are registered
in such state, notwithstanding the fact that the certificates of title
to such Financed Vehicles have not been marked, amended or otherwise
noted to reflect the Company's security interest;

(x) Following the assignment of the Receivables by the Company to
the Trust pursuant to the Sale and Servicing Agreement, the Trust will
have a valid and perfected first priority security interest Financed
Vehicles securing Receivables that are registered in such state,
notwithstanding the fact that the certificates of title to such
Financed Vehicles have not been marked, amended or otherwise noted to
reflect the Trust's security interest;

(xi) The Trust's assignment of the Collateral to the Collateral
Agent pursuant to the Indenture will vest in the Collateral Agent, for
the benefit of the Certificateholders and the Noteholders, a first
priority perfected security interest therein, subject to no prior
lien, mortgage, security interest, pledge, adverse claim, charge or
other encumbrance;

(xii) The transfers of the Receivables from Arcadia Financial to the
Company, from the Company to the Trust and from the Trust to the
Indenture Trustee, and the consummation of the other

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<PAGE>

transactions contemplated by the Trust Agreement and the Sale and
Servicing Agreement and the Administration Agreement will not conflict
with any law or order of such state applicable to Arcadia Financial or
the Company currently in effect;

(xiii) Under the law of such state, the perfection of the transfers
of the Receivables by Arcadia Financial to the Company, by the Company
to the Trust and by the Trust to the Collateral Agent would be
governed by the law of the state (a) where the chief executive offices
of Arcadia Financial or the Company, as applicable, are located or (b)
where the Receivable Files are located;

(xiv) The trust fund created by the Trust Agreement will not, for the
income tax purposes of such state, be classified as an association
taxable as a corporation, and Certificateholders and Noteholders who
are not residents of or otherwise subject to tax in such state will
not, by reason of their acquisition of an interest in the Designated
Securities, be subject to income, franchise, excise or similar taxes
in such state with respect to interest on the Designated Securities or
with respect to any of the other Trust Property; and

(xv) The statements in the Registration Statement and the Prospectus
under the headings "Certain Legal Aspects of the Receivables" to the
extent that they describe matters of the law of such state or legal
conclusions with respect thereto, have been prepared or reviewed by
such counsel and are correct in all material respects.

(l) The Representatives shall have received the opinion of Richards,
Layton & Finger (or, if so specified in the Pricing Agreement, such other
counsel as is reasonably satisfactory to the Representatives), counsel to
the Owner Trustee, dated the Closing Date, to the effect that:

(i) The Owner Trustee has been duly incorporated and is validly
existing as a banking corporation under the laws of the State of
Delaware and has the power and authority to enter into, and to take
all action required of it under

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<PAGE>

the Trust Agreement and, on behalf of the Trust, under the Indenture,
the Sale and Servicing Agreement, the Administration Agreement and the
Custodian Agreement;

(ii) The Designated Certificates have been duly executed,
delivered and authenticated by the Owner Trustee;

(iii) The Designated Notes have been duly executed and delivered by
the Owner Trustee;

(iv) The execution and delivery of the Trust Agreement and, on
behalf of the Trust, the Indenture, the Sale and Servicing Agreement,
the Administration Agreement and the Custodian Agreement by the Owner
Trustee and the performance by the Owner Trustee of their terms do not
conflict with or result in a violation of (A) any law or regulation of
the United States of America or the State of Minnesota governing the
banking or trust powers of the Owner Trustee, or (B) the by-laws of
the Owner Trustee; and

(v) No approval, authorization or other action by, or filing with,
any governmental authority of the United States of America or the
State of Minnesota having jurisdiction over the banking or trust
powers of the Owner Trustee is required in connection with the
execution and delivery by the Owner Trustee of the Trust Agreement,
and on behalf of the Trust, the Indenture, the Sale and Servicing
Agreement, the Administration Agreement or the Custodian Agreement or
the performance by the Owner Trustee and the of the respective terms
thereof.

(m) Unless otherwise specified in the Pricing
Agreement, the Representatives shall have received the opinion of Richards,
Layton & Finger (or if so specified in the Pricing Agreement, such other
counsel as is reasonably satisfactory to the Representatives) special
counsel for the Owner Trustee, dated the Closing Date, to the effect that:

(i) The Trust has been duly formed and is validly existing as a
business trust under the laws of the State of Delaware, 12 Del. C.
Section 3801, ET SEQ.;

(ii) The Trust has the power and authority to execute, deliver and
perform its obligations under

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<PAGE>

the Sale and Servicing Agreement, the Indenture, the Administration
Agreement, the Designated Notes and the Designated Certificates;

(iii) To the extent that Article 9 of the Uniform Commercial Code
as in effect in the State of Delaware (the "UCC") is applicable
(without regard to conflicts of law principles), and assuming that the
security interest created by the Indenture in the Receivables, the
other Trust Property and the proceeds thereof has been duly created
and has attached, upon the filing of the Financing Statement with the
Secretary of State of the State of Delaware the Indenture Trustee will
have a perfected security interest in such Receivables, other Trust
Property and the proceeds thereof, and such security interest will be
prior to any other security interest that is perfected solely by the
filing of financing statements under the UCC, excluding purchase money
security interests under Section 9-312(4) of the UCC and temporarily
perfected security interests in proceeds under Section 9-306(3) of the
UCC; and

(iv) No re-filing or other action is necessary under the UCC in
the State of Delaware in order to maintain the perfection of such
security interest except for the filing of continuation statements at
five year intervals.

(n) The Representatives shall have received the opinion of Chapman
and Cutler (or, if so specified in the Pricing Agreement, such other
counsel as is reasonably satisfactory to the Representatives), counsel to
the Indenture Trustee and the Collateral Agent specified in the Pricing
Agreement, dated the Closing Date, to the effect that:

(i) The Indenture Trustee and Collateral Agent is a banking
corporation duly organized and validly existing under the laws of the
jurisdiction of its incorporation and is duly authorized and empowered
to exercise trust powers under applicable law;

(ii) The Indenture Trustee and Collateral Agent has corporate
power, authority and legal right to execute, deliver and perform its
obligations under the Indenture, the Sale and Servicing Agreement and
the Spread Account Agreement and has taken all necessary action to
authorize the execution, delivery and performance

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<PAGE>

by it of the Indenture, the Spread Account Agreement and the Sale and
Servicing Agreement;

(iii) The execution and delivery of the Indenture, the Sale and
Servicing Agreement and the Spread Account Agreement and the
performance by the Indenture Trustee of their terms (including as a
Backup Servicer under the Sale and Servicing Agreement) do not
conflict with or result in a violation of (A) any law or regulation of
the United States of America of the State of Minnesota governing the
banking or trust powers of the Indenture Trustee, or (B) the by-laws
of the Indenture Trustee; and

(iv) Each of the Indenture, the Sale and Servicing Agreement and
the Spread Account Agreement has been duly executed and delivered by
the Indenture Trustee and constitutes a legal, valid and binding
obligation of the Indenture Trustee, enforceable against the Indenture
Trustee in accordance with its respective terms, except that certain
of such obligations may be enforceable solely against the Trust
Property and except that such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium, liquidation, or
other similar laws applicable to banking corporations affecting the
enforcement of creditors' rights generally, and by general principles
of equity.

(o) The Representatives shall have received the opinion of counsel to
the Custodian (which counsel shall be reasonably satisfactory to the
Representatives), dated the Closing Date, to the effect that:

(i) The Custodian has been duly incorporated and is validly
existing and has the power and authority to enter into, and to take
all action required of it under the Custodian Agreement;
(ii) The execution and delivery of the Custodian Agreement by the
Custodian and the performance by the Custodian of its terms do not
conflict with or result in a violation of (A) any law or regulation of
the United States of America or the State of Minnesota governing the
powers of the Custodian, or (B) the By-Laws of the Custodian; and

(iii) No approval, authorization or other action by, or filing
with, any governmental

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<PAGE>

authority of the United States of America or the State of Minnesota
having jurisdiction over the powers of the Custodian is required in
connection with the execution and delivery by the Custodian of the
Custodian Agreement or the performance by the Custodian of the terms
of the Custodian Agreement.

(p) The Representatives shall have received the opinion of counsel to
the Security Insurer as is reasonably satisfactory to the Representatives,
dated the Closing Date, to the effect that:

(i) The Security Insurer is a stock insurance company duly
organized, validly existing and authorized to transact financial
guaranty insurance business under the laws of its state of
organization;

(ii) The Policies, the Insurance Agreement, the Spread Account
Agreement, the Custodian Agreement and the Indemnification Agreement
and, if applicable, the Indenture and the Sale and Servicing
Agreement, have been duly authorized, executed and delivered by the
Security Insurer;

(iii) The Policies, the Insurance Agreement, the Spread Account
Agreement, the Custodian Agreement and Indemnification Agreement and,
if applicable, the Indenture and the Sale and Servicing Agreement,
constitute legal, valid and binding obligations of the Security
Insurer, enforceable in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization,
rehabilitation, moratorium and other similar laws affecting the
enforceability of creditors' rights generally applicable in the event
of the bankruptcy or insolvency of the Security Insurer and to the
application of general principles of equity and subject, in the case
of the Indemnification Agreement, to the principles of public policy
limiting the right to enforce the indemnification provisions contained
therein insofar as they relate to indemnification for liabilities
arising under applicable securities laws;

(iv) The Policies are exempt from registration under the Act;

(v) Neither the execution or delivery of the Policies, the
Insurance Agreement, the Spread

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<PAGE>

Account Agreement, the Custodian Agreement and the Indemnification
Agreement and, if applicable, the Indenture and the Sale and Servicing
Agreement, by the Security Insurer, nor the performance by the
Security Insurer of its obligations thereunder, will conflict with or
result in a violation of the Security of Incorporation or By-Laws of
the Security Insurer, or result in a breach of, or constitute a
default under, any agreement or other instrument to which the
Security Insurer is a party or by which any of its properties are
bound, or violate any judgment, order or decree applicable to the
Security Insurer of any governmental or regulatory body,
administrative agency, court or arbitrator having jurisdiction over
the Security Insurer (except that in the published opinion of the
Securities and Exchange Commission the indemnification provisions of
the Indemnification Agreement, insofar as they relate to
indemnification for liabilities arising under the Act, are against
public policy as expressed in the Act and are therefore
unenforceable); and

(vi) With respect to the information regarding the Security
Insurer contained in the Registration Statement and the Prospectus and
any amendment or supplement thereto, such counsel has no reason to
believe that any such information contains any untrue statement of a
material fact or omits to state a material fact required to be stated
therein or necessary to make the statements therein, in light if the
circumstances in which they were made, not misleading.

(q) The Representatives shall have received the opinion of Chapman
and Cutler (or, if so specified in the Pricing Agreement, other counsel as
is reasonably satisfactory to the Representatives), counsel to the Lockbox
Bank, dated the Closing Date, to the effect that:

(i) The Lockbox Bank has been duly incorporated and is validly
existing as a national banking association and has the power and
authority to enter into, and to take all action required of it under
the Lockbox Agreement;

(ii) The Lockbox Agreement has been duly executed and delivered by
the Lockbox Bank and constitutes a legal, valid and binding obligation
of the Lockbox Bank, enforceable in accordance with its terms,
subject, as to enforcement, to

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<PAGE>

bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and to
general equity principles;

(iii) The execution and delivery of the Lockbox Agreement by the
Lockbox Bank and the performance by the Lockbox Bank of its terms do
not conflict with or result in a violation of (A) any law or
regulation of the United States of America or the State of Illinois
governing the banking powers of the Lockbox Bank, or (B) the By-Laws
of the Lockbox Bank; and

(iv) No approval, authorization or other action by, or filing
with, any governmental authority of the United States of America or
the State of Illinois having jurisdiction over the banking powers of
the Lockbox Bank is required in connection with the execution and
delivery by the Lockbox Bank of the Lockbox Agreement or the
performance by the Lockbox Bank of the terms of the Lockbox Agreement.

(r) The Representatives shall have received evidence that, on or
before the Closing Date, UCC-1 financing statements have been filed in the
offices of the Secretaries of State of the States of Minnesota and
Delaware, reflecting the transfer of the Receivable Files and the related
Trust Property by Arcadia Financial to the Company, by the Company to the
Owner Trustee and by the Owner Trustee to the Indenture Trustee.

(s) The Designated Securities shall have been rated "AAA" by Standard
& Poor's Rating Services, a division of The McGraw-Hill Companies, Inc. and
"Aaa" by Moody's Investors Service, Inc. (the "Rating Agencies") and
neither of the Rating Agencies shall have placed the rating of the
Designated Securities under review with possible negative implications.

(t) The Company and Arcadia Financial shall have furnished to
the Representatives such further certificates and documents as the
Representatives shall have reasonably requested.
All such opinions, certificates, letters and other documents will be in
compliance with the provisions hereof only if they are satisfactory in form and
substance to the Representatives. The Company will furnish the Representatives
with such conformed copies of such opinions,

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<PAGE>

certificates, letters and other documents as the Representatives shall
reasonably request.

6. INDEMNIFICATION AND CONTRIBUTION. (a) Arcadia Financial and the
Company will, jointly and severally, indemnify and hold harmless each
Underwriter against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in any part of the Registration
Statement when such part became effective, or in the Registration Statement, any
Preliminary Prospectus, any Term Sheet, the Prospectus, or any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will reimburse each
Underwriter for any legal or other expenses reasonably incurred by it in
connection with investigating or defending against such loss, claim, damage,
liability or action as such expenses are incurred; provided, however, that
Arcadia Financial and the Company shall not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged
omission made therein in reliance upon and in conformity with written
information furnished to Arcadia Financial or the Company by the
Representatives, or by any Underwriter through the Representatives, specifically
for use therein.

(b) Each Underwriter will severally and not jointly indemnify and
hold harmless the Company against any losses, claims, damages or liabilities to
which the Company may become subject, under the Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon an untrue statement or alleged untrue statement
of a material fact contained in any part of the Registration Statement when such
part became effective, or in the Registration Statement, any Preliminary
Prospectus, the Prospectus or any amendment or supplement thereto, or arise out
of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading; in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made therein in reliance upon and in conformity with written
information furnished to the Company by the Representatives, or by such
Underwriter through the Representatives, specifically for use therein; and will

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reimburse the Company for any legal or other expenses reasonably incurred by the
Company in connection with investigating or defending against any such loss,
claim, damage, liability or action as such expenses are incurred.

(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability that it may have to
any indemnified party under such subsection to the extent the indemnifying party
was not materially prejudiced by such omission or otherwise than under such
subsection. In case any such action shall be brought against any indemnified
party, and it shall notify the indemnifying party of the commencement thereof,
the indemnifying party shall be entitled to participate in, and, to the extent
that it shall wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel satisfactory to such
indemnified party (who shall not, except with the consent of the indemnified
party, be counsel to the indemnifying party), and after notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party shall not be liable to such indemnified
party under such subsection for any legal or other expenses subsequently
incurred by such indemnified party in connection with the defense thereof other
than reasonable costs of investigation.

In any such action, any indemnified party shall have the right to retain
its own counsel, but the fees and expenses of such counsel shall be at the
expense of such indemnified party unless (i) the indemnifying party and the
indemnified party shall have mutually agreed to the contrary, (ii) the
indemnified party has reasonably concluded (based upon advice of counsel to the
indemnified party) that there may be legal defenses available to it or other
indemnified parties that are different from or in addition to those available to
the indemnifying party, (iii) a conflict or potential conflict exists (based
upon advice of counsel to the indemnified party) between the indemnified party
and the indemnifying party (in which case the indemnifying party will not have
the right to direct the defense of such action on behalf of the indemnified
party) or (iv) the indemnifying party has elected to assume the defense of such
proceeding but has failed within a reasonable time to retain counsel reasonably
satisfactory to the indemnified person. It is understood that the indemnifying
party shall not, with respect to any action brought against any indemnified
party, be liable for the fees and expenses of more than one firm (in addition to
any local counsel) for all indemnified parties, and that all such fees and
expenses shall be reimbursed within a reasonable period of time as they are
incurred.

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<PAGE>

Unless it shall assume the defense of any proceeding, an indemnifying party
shall not be liable for any settlement of any proceeding effected without its
written consent, but if settled with such consent or if there be a final
judgment for the plaintiff, the indemnifying party shall indemnify the
indemnified party from and against any loss or liability by reason of such
settlement or judgment. If any indemnifying party assumes the defense of a
proceeding, it shall not settle, compromise or consent to the entry of any
judgment with respect thereto if indemnification or contribution could be sought
under this Section 6 (whether or not the indemnified parties are actual or
potential parties thereto), unless such settlement, compromise or consent (i)
includes an unconditional release of each indemnified party from all liability
arising out of such proceeding and (ii) does not include a statement as to or an
admission of fault, culpability or a failure to act by or on behalf of any
indemnified party.

(d) If the indemnification provided for in this Section 6 is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of the losses,
claims, damages or liabilities referred to in subsection (a) or (b) above,
(i) in such proportion as is appropriate to reflect the relative benefits
received by Arcadia Financial and the Company on the one hand and the
Underwriters on the other from the offering of the Designated Securities or
(ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
Arcadia Financial and the Company on the one hand and the Underwriters on the
other in connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by Arcadia Financial and the
Company on the one hand and the Underwriters on the other shall be deemed to be
in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company bear to the total underwriting
discounts and commissions received by the Underwriters, in each case as set
forth in the table on the cover page of the Prospectus Supplement. The relative
fault shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by Arcadia
Financial or the Company or the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
untrue statement or omission. Arcadia Financial and the Company on the one hand
and the Underwriters on the other agree that it would not be just and equitable
if contributions pursuant to this subsection (d) were to be

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<PAGE>

determined by pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation that does not take
account of the equitable considerations referred to in the first sentence of
this subsection (d). The amount paid by an indemnified party as a result of the
losses, claims, damages or liabilities referred to in the first sentence of this
subsection (d) shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating, preparing
to defend or defending against any action or claim that is the subject of this
subsection (d). Notwithstanding the provisions of this subsection (d), no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Designated Securities underwritten by it
and distributed to the public were offered to the public exceeds the amount of
any damages that such Underwriter has otherwise been required to pay by reason
of such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation. The Underwriters'
obligations in this subsection (d) to contribute are several in proportion to
their respective underwriting obligations and not joint.

(e) The obligations of Arcadia Financial and the Company under this
Section 6 shall be in addition to any liability that Arcadia Financial and the
Company may otherwise have and shall extend, upon the same terms and conditions,
to each person, if any, who controls any Underwriter within the meaning of the
Act; and the obligations of the Underwriters under this Section 6 shall be in
addition to any liability that the respective Underwriters may otherwise have
and shall extend, upon the same terms and conditions, to each director of the
Company (including any person who, with his consent, is named in the
Registration Statement as about to become a director of the Company), to each
officer of the Company who has signed the Registration Statement and to each
person, if any, who controls the Company within the meaning of the Act.

7. REPRESENTATIONS AND AGREEMENTS TO SURVIVE DELIVERY. All
representations, warranties and agreements of Arcadia Financial and the Company
herein or in the Pricing Agreement or in certificates delivered pursuant hereto
or pursuant to the Pricing Agreement, and the agreements of the several
Underwriters contained in Section 6 hereof, shall remain operative and in full
force and effect regardless of any investigation made by or on behalf of any
Underwriter or any controlling persons, or Arcadia Financial and the

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<PAGE>

Company or any of their officers, directors or any controlling persons, and
shall survive delivery of and payment for the Designated Securities under the
Pricing Agreement.

8. SUBSTITUTION OF UNDERWRITERS. (a) If any Underwriter or
Underwriters shall fail to take up and pay for the amount of Designated
Securities agreed by such Underwriter or Underwriters to be purchased under a
Pricing Agreement, upon tender of such Designated Securities in accordance with
the terms such Pricing Agreement, and the amount of Designated Securities not
purchased does not aggregate more than 10% of the total amount of Designated
Securities that the Underwriters are obligated to purchase under the Pricing
Agreement at the Closing Date, the remaining Underwriters shall be obligated to
take up and pay for (in proportion to their respective underwriting obligations
under the Pricing Agreement except as may otherwise be determined by the
Representatives) the Designated Securities that the withdrawing or defaulting
Underwriter or Underwriters agreed but failed to purchase.

(b) If any Underwriter or Underwriters shall fail to take up and pay
for the amount of Designated Securities agreed by such Underwriter or
Underwriters to be purchased under a Pricing Agreement, upon tender of such
Designated Securities in accordance with the terms hereof, and the amount of
Designated Securities not purchased aggregates more than 10% of the total amount
of Designated Securities that the Underwriters are obligated to purchase under
the Pricing Agreement at the Closing Date, and arrangements satisfactory to the
Representatives and the Company and Arcadia Financial for the purchase of such
Designated Securities by other persons are not made within 36 hours thereafter,
the Pricing Agreement shall terminate. In the event of any such termination the
Company shall not be under any liability to any Underwriter with respect to
Designated Securities not purchased by reason of such termination (except to the
extent provided in Section 4(j) and Section 6 hereof) nor shall any Underwriter
(other than an Underwriter who shall have failed, otherwise than for some reason
permitted under the Pricing Agreement, to purchase the amount of Designated
Securities agreed by such Underwriter to be purchased under the Pricing
Agreement) be under any liability to the Company with respect to such Designated
Securities (except to the extent provided in Section 6 hereof).

9. TERMINATION. Unless otherwise specified in the Pricing Agreement,
the Representatives shall have the right by giving notice as hereinafter
specified at any time at or prior to the Closing Date, to terminate the Pricing

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<PAGE>

Agreement if (i) Arcadia Financial or the Company shall have failed, refused or
been unable, at or prior to the Closing Date, to perform any agreement on its
part to be performed under the Pricing Agreement, (ii) any other condition of
the Underwriters' obligations under the Pricing Agreement is not fulfilled,
(iii) trading on the New York Stock Exchange or the American Stock Exchange
shall have been wholly suspended, (iv) minimum or maximum prices for trading
shall have been fixed, or maximum ranges for prices for securities shall have
been required, on the New York Stock Exchange or the American Stock Exchange, by
such exchange or by order of the Commission or any other governmental authority
having jurisdiction, (v) a banking moratorium shall have been declared by
Federal or New York authorities, or (vi) an outbreak or escalation of major
hostilities in which the United States is involved, a declaration of war by
Congress, any other substantial national or international calamity or any other
event or occurrence of a similar character shall have occurred since the
execution of the Pricing Agreement that, in the judgment of the Representatives,
makes it impractical or inadvisable to proceed with the completion of the sale
of and payment for the Designated Securities. Any such termination shall be
without liability of any party to any other party with respect to Designated
Securities not purchased by reason of such termination except that the
provisions of Section 4(j) and Section 6 hereof shall at all times be effective.
If the Representatives elect to terminate the Pricing Agreement as provided in
this Section, the Company and Arcadia Financial shall be notified promptly by
the Representatives by telephone, telex or telecopy, confirmed by letter.

10. NOTICES. All notices or communications under the Pricing
Agreement shall be in writing and if sent to the Representatives shall be
mailed, delivered, telexed or telecopied and confirmed to the Representatives at
the addresses specified in the related Pricing Agreement, if sent to Arcadia
Financial, shall be mailed, delivered, telexed or telecopied and confirmed to
Arcadia Financial at 7825 Washington Avenue South, Minneapolis, Minnesota
55439-2435, Attention: Secretary, or if sent to the Company, shall be mailed,
delivered, telexed or telecopied and confirmed to the Company 7825 Washington
Avenue South, Suite 410, Minneapolis, Minnesota 55439-2435, Attention:
Secretary. Notice to any Underwriter pursuant to Section 6 hereof shall be
mailed, delivered, telexed or telecopied and confirmed to such Underwriter's
address as it appears in such Underwriter's questionnaire or other notice
furnished to the Company in writing for the purpose of communications under the
Pricing Agreement. Any party to the Pricing Agreement may change such address
for notices by sending to the

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<PAGE>

parties to the Pricing Agreement written notice of a new address for such
purpose.

11. PARTIES. The Pricing Agreement shall inure to the benefit of and
be binding upon Arcadia Financial and the Company on the one hand and the
Underwriters on the other and their respective successors and the controlling
persons, officers and directors referred to in Section 6 hereof, and no other
person will have any right or obligation under the Pricing Agreement.

In all dealings with Arcadia Financial and the Company under the
Pricing Agreement, the Representatives shall act on behalf of each of the
several Underwriters, and any action under the Pricing Agreement taken by the
Representatives will be binding upon all the Underwriters.

12. APPLICABLE LAW. The Pricing Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York.

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<PAGE>

TRUST AGREEMENT

Dated as of March 1, 1999

among

ARCADIA RECEIVABLES FINANCE CORP.,

FINANCIAL SECURITY ASSURANCE INC.

and

WILMINGTON TRUST COMPANY
Owner Trustee

ARCADIA AUTOMOBILE RECEIVABLES TRUST, 1999-A

<PAGE>

TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
INTRODUCTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

ARTICLE I
DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.1. Definitions. . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.2. Usage of Terms . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 1.3. Section References . . . . . . . . . . . . . . . . . . . . . 4
SECTION 1.4. Material Adverse Effect. . . . . . . . . . . . . . . . . . . 4

ARTICLE II
CREATION OF TRUST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.1. Creation of Trust. . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.2. Office . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.3. Purposes and Powers. . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.4. Appointment of Owner Trustee . . . . . . . . . . . . . . . . 5
SECTION 2.5. Initial Capital Contribution of Trust Estate . . . . . . . . 5
SECTION 2.6. Declaration of Trust . . . . . . . . . . . . . . . . . . . . 5
SECTION 2.7. Liability of the Depositor . . . . . . . . . . . . . . . . . 5
SECTION 2.8. Title to Trust Property. . . . . . . . . . . . . . . . . . . 6
SECTION 2.9. Situs of Trust . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 2.10. Representations and Warranties of the Depositor. . . . . . . 6
SECTION 2.11. Federal Income Tax Treatment . . . . . . . . . . . . . . . . 7
SECTION 2.12. Covenants of the Depositor . . . . . . . . . . . . . . . . . 8
SECTION 2.13. Ownership of Trust . . . . . . . . . . . . . . . . . . . . . 9
SECTION 2.14. Maintenance of Office or Agency. . . . . . . . . . . . . . . 9

ARTICLE III
ACTIONS BY OWNER TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 3.1. Action by the Security Insurer with Respect to Bankruptcy. . 9
SECTION 3.2. Rights of Security Insurer . . . . . . . . . . . . . . . . . 9

ARTICLE IV
CERTAIN DUTIES OF TRUST . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 4.1. Accounting; Reports; Tax Returns . . . . . . . . . . . . . . 10

ARTICLE V
AUTHORITY AND DUTIES OF OWNER TRUSTEE . . . . . . . . . . . . . . . . . . 11
SECTION 5.1 General Authority. . . . . . . . . . . . . . . . . . . . . . 11
SECTION 5.2 General Duties . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 5.3 Action upon Instruction. . . . . . . . . . . . . . . . . . . 11
</TABLE>

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<PAGE>

<TABLE>

<S> <C> <C>
SECTION 5.4. No Duties Except as Specified in this Agreement or in Instructions............ 13
SECTION 5.5. No Action Except under Specified Documents or Instructions.................... 13
SECTION 5.6. Restrictions.................................................................. 13
SECTION 5.7. Administration Agreement...................................................... 13

ARTICLE VI
CONCERNING THE OWNER TRUSTEE............................................................... 14
SECTION 6.1. Acceptance of Trustee and Duties.............................................. 14
SECTION 6.2. Representations and Warranties................................................ 16
SECTION 6.3. Reliance; Advice of Counsel................................................... 16
SECTION 6.4. Not Acting in Individual Capacity............................................. 17
SECTION 6.5. Owner Trustee Not Liable for Notes or Receivables............................. 17
SECTION 6.6. Owner Trustee May Own Notes................................................... 18

ARTICLE VII
COMPENSATION OF OWNER TRUSTEE.............................................................. 18
SECTION 7.1. Owner Trustee's Fees and Expenses............................................. 18
SECTION 7.2. Indemnification............................................................... 18
SECTION 7.3. Non-recourse Obligations...................................................... 18

ARTICLE XIII
TERMINATION................................................................................ 19
SECTION 8.1. Termination of the Trust...................................................... 19
SECTION 8.2. Dissolution Events with respect to the Depositor.............................. 19

ARTICLE IX
SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES..................................... 20
SECTION 9.1. Eligibility Requirements for Owner Trustee.................................... 20
SECTION 9.2. Resignation or Removal of Owner Trustee....................................... 20
SECTION 9.3. Successor Owner Trustee....................................................... 21
SECTION 9.4. Merger or Consolidation of Owner Trustee...................................... 22
SECTION 9.5. Appointment of Co-Trustee or Separate Trustee................................. 22

ARTICLE X
MISCELLANEOUS PROVISIONS................................................................... 23
SECTION 10.1. Amendment.................................................................... 23
SECTION 10.2. Governing Law................................................................ 24
SECTION 10.3. Severability of Provisions................................................... 25
SECTION 10.4. Third-Party Beneficiaries.................................................... 25
SECTION 10.5. Counterparts................................................................. 25
SECTION 10.6. Notices...................................................................... 25
</TABLE>

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<PAGE>

EXHIBITS

Exhibit A -- Form of Certificate of Trust

- iii -
<PAGE>

THIS TRUST AGREEMENT, dated as of March 1, 1999, is made among
Arcadia Receivables Finance Corp., a Delaware corporation (the "Seller"),
Financial Security Assurance Inc. ("Financial Security") and Wilmington
Trust Company, a Delaware banking corporation, as Owner Trustee (in such
capacity, the "Owner Trustee").

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

ARTICLE I
DEFINITIONS

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

ADMINISTRATION AGREEMENT: The Administration Agreement, dated as of
March 17, 1999, between the Administrator and the Trust, as the same may be
amended and supplemented from time to time.

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

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

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

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

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

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

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

<PAGE>

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

DEPOSITOR: The Seller in its capacity as depositor hereunder.

DISSOLUTION EVENT: With respect to the Depositor, means the
termination or dissolution of such Person, or the occurrence of an Insolvency
Event with respect to such Person.

EXPENSES: The meaning assigned to such term in Section 7.2.

INDEMNIFIED PARTIES: The meaning assigned to such term in Section
7.2.

INSTRUCTING PARTY: The meaning assigned to such term in Section
5.3(a).

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

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

RELATED DOCUMENTS: The Sale and Servicing Agreement, the Indenture,
the Notes, the Purchase Agreements, each Subsequent Transfer Agreement, each
Subsequent Purchase Agreement, the Custodian Agreement, the Note Policy, the
Spread Account Agreement, the Stock Pledge Agreement, the Insurance
Agreement, the Administration Agreement, the Lockbox Agreement, the
Depository Agreement, and the Underwriting Agreement between AFL and the
Seller and the underwriters of the Notes. The Related Documents executed by
any party are referred to herein as "such party's Related Documents," "its
Related Documents" or by a similar expression.

SALE AND SERVICING AGREEMENT: The Sale and Servicing Agreement,
dated as of March 1, 1999 among the Trust, the Seller, AFL, in its individual
capacity and as Servicer, and Norwest Bank Minnesota, National Association,
as Backup Servicer, as the same may be amended and supplemented from time to
time.

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

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SECURITY INSURER: Financial Security Assurance Inc., or its
successor in interest.

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

SPREAD ACCOUNT: The Series 1999-A Spread Account established and
maintained pursuant to the Spread Account Agreement.

SPREAD ACCOUNT AGREEMENT: The Spread Account Agreement, dated as of
March 25, 1993, as thereafter amended and restated, among the Seller, AFL,
the Security Insurer, the Collateral Agent and the Indenture Trustee, as the
same may be amended, supplemented or otherwise modified in accordance with
the terms thereof.

STOCK PLEDGE AGREEMENT: The Third Amended and Restated Stock Pledge
Agreement, dated as of March 25, 1993, as thereafter amended and restated,
among the Security Insurer, AFL and the Collateral Agent, relating to the
stock of each of Arcadia First GP Inc., Arcadia Second GP Inc. and the
Seller, as the same may be amended, supplemented or otherwise modified in
accordance with the terms thereof.

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

TRUST ACCOUNTS: The Collection Account, the Subcollection Account,
the Lockbox Account, the Pre-Funding Account, the Reserve Account and the
Note Distribution Account.

TRUST PROPERTY: The property and proceeds of every description
conveyed pursuant to Section 2.5 hereof and Sections 2.1 and 2.4 of the Sale
and Servicing Agreement, together with the Trust Accounts (including all
Eligible Investments therein and all proceeds therefrom).

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

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

SECTION 1.4. MATERIAL ADVERSE EFFECT. Whenever a determination is
to be made under this Agreement as to whether a given event, action, course
of conduct or set of facts or circumstances could or would have a material
adverse effect on the Trust (or any similar or analogous determination), such
determination shall be made without taking into account the insurance
provided by the Note Policy.

ARTICLE II
CREATION OF TRUST

SECTION 2.1. CREATION OF TRUST. There is hereby formed a trust to
be known as "Arcadia Automobile Receivables Trust, 1999-A," in which name the
Trust may conduct business, make and execute contracts and other instruments
and sue and be sued.

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

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

(i) to issue the Notes pursuant to the Indenture and to
sell the Notes;

(ii) with the proceeds of the sale of the Notes, to fund the
Pre-Funding Account and the Reserve Account, to pay the organizational,
start-up and transactional expenses of the Trust and to pay the balance
to the Seller pursuant to the Sale and Servicing Agreement;

(iii) to assign, grant, transfer, pledge, mortgage and convey
the Trust Property to the Indenture Collateral Agent pursuant to the
Indenture for the benefit of the Security Insurer and the Indenture
Trustee on behalf of the Noteholders and to hold, manage and distribute
to the Depositor pursuant to the terms of the Sale and Servicing
Agreement any portion of the Trust Property released from the Lien of,
and remitted to the Trust pursuant to, the Indenture;

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

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

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

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

SECTION 2.4. APPOINTMENT OF OWNER TRUSTEE. The Depositor hereby
appoints the Owner Trustee as trustee of the Trust effective as of the date
hereof, to have all the rights, powers and duties set forth herein, and the
Owner Trustee hereby accepts such appointment.

SECTION 2.5. INITIAL CAPITAL CONTRIBUTION OF TRUST ESTATE. The
Depositor hereby sells, assigns, transfers, conveys and sets over to the
Owner Trustee, as of the date hereof, the sum of $10. The Owner Trustee
hereby acknowledges receipt in trust from the Depositor, as of the date
hereof, of the foregoing contribution, which shall constitute the initial
Trust Property. The Depositor shall pay organizational expenses of the Trust
as they may arise or shall, upon the request of the Owner Trustee, promptly
reimburse the Owner Trustee for any such expenses paid by the Owner Trustee.

SECTION 2.6. DECLARATION OF TRUST. The Owner Trustee hereby declares
that it will hold the Trust Property in trust upon and subject to the
conditions set forth herein, subject to the interests and rights in the Trust
Property granted to other Persons by the Related Documents. It is the
intention and agreement of the parties hereto that the Trust constitute a
business trust under the Business Trust Statute and that this Agreement
constitute the governing instrument of such business trust. None of the
parties hereto shall make the election provided in Treasury Regulation
Section 301.7701-3(c) to have the Trust classified as an association taxable
as a corporation. On the date hereof, the Owner Trustee shall file the
Certificate of Trust required by Section 3810(a) of the Business Trust
Statute in the Office of the Secretary of State. Effective as of the date
hereof, the Owner Trustee shall have all rights, powers and duties set forth
herein and in the Business Trust Statute with respect to accomplishing the
purposes of the Trust.

SECTION 2.7. LIABILITY OF THE DEPOSITOR. The Depositor shall be liable
directly to indemnify each injured party for all losses, claims, damages,
liabilities and expenses of the Trust, to the extent not paid out of the
Trust Property, to the extent provided in, and subject to the terms and
conditions contained in, the Spread Account Agreement; PROVIDED, FURTHER,
that the Depositor shall not be liable to indemnify any injured party if
such party has agreed that its recourse against the Trust for any obligation
or liability of the Trust to such party shall be limited

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to the assets of the Trust. In addition, any third party creditors of the
Trust (other than in connection with the obligations described in the
provisos to the preceding sentence for which the Depositor shall not be
liable) shall be deemed third party beneficiaries of this paragraph.

SECTION 2.8. TITLE TO TRUST PROPERTY. Legal title to all the Trust
Property shall be vested at all times in the Trust as a separate legal entity
except where applicable law in any jurisdiction requires title to any part of
the Trust Property to be vested in a trustee or trustees, in which case title
shall be deemed to be vested in the Owner Trustee, a co-trustee and/or a
separate trustee, as the case may be.

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

SECTION 2.10. REPRESENTATIONS AND WARRANTIES OF THE DEPOSITOR. By
execution of this Agreement, the Depositor makes the following
representations and warranties with respect to itself on which the Owner
Trustee relies in accepting the Trust Property in trust and upon which the
Security Insurer relies in issuing the Note Policy.

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

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

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

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<PAGE>

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

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

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

SECTION 2.11. FEDERAL INCOME TAX TREATMENT. The Depositor, the
Servicer, the Owner Trustee and each Noteholder agree to treat, and to take
no action inconsistent with the treatment of, the Notes as indebtedness for
purposes of federal, state, local and foreign income or franchise taxes and
any other tax imposed on or measured by income. Each Noteholder, by
acceptance of its Note, agrees to be bound by the provisions of this Section
2.11. Each Noteholder agrees that it will cause any Note Owner acquiring an
interest in a Note through it to comply with this Agreement as to the
treatment of the Notes as indebtedness under applicable tax law, as described
in this Section 2.11. Furthermore, subject to Section 4.1, the Depositor and
the Trustee shall treat the Trust as a security device only, and shall not
file tax returns or obtain an employer identification number on behalf of the
Trust.

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

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(a) among the Noteholders as of the first Record Date following
the end of such month, in proportion to their ownership of principal
amount of Notes on such date, an amount of net income up to the sum of
(i) Noteholders' Interest Distributable Amount for such month, (ii) the
portion of the market discount on the Receivables accrued during such
month that is allocable to the excess of the initial aggregate principal
amount of the Notes over their initial aggregate issue price, and (iii)
any Note Prepayment Premium distributable to the Noteholders with
respect to such month; and

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

If the net income of the Trust for any month is insufficient for the
allocations described in clause (a) above, subsequent net income shall first
be allocated to make up such shortfall before being allocated as provided in
clause (b). Net losses of the Trust, if any, for any month as determined for
Federal income tax purposes (and each item of income, gain, loss and
deduction entering into the computation thereof) shall be allocated to the
Depositor to the extent the Depositor is reasonably expected to bear the
economic burden of such net losses, then net losses shall be allocated among
the Noteholders as of the first Record Date following the end of such month
in proportion to their ownership of principal amount of the Notes on such
Record Date. The Depositor is authorized to modify the allocation in this
paragraph if necessary or appropriate, in its sole discretion, for the
allocations to reflect fairly the economic income, gain or loss to the
Noteholders to comply with the provisions of the Code and the accompanying
Treasury Regulations.

SECTION 2.12. COVENANTS OF THE DEPOSITOR. The Depositor agrees and
covenants for the benefit of the Security Insurer and the Owner Trustee,
during the term of this Agreement, and to the fullest extent permitted by
applicable law, that:

(a) it shall not sell, assign, transfer, give or encumber, by
operation of law or otherwise, in whole or in part, its interest in
the Trust;

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

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

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or declare or effect a moratorium on the debt of the Trust or take any
action in furtherance of any such action;

(d) it shall obtain from each counterparty to each Related
Document to which it or the Trust is a party and each other agreement
entered into on or after the date hereof to which it or the Trust is a
party, an agreement by each such counterparty that prior to the
occurrence of the event specified in Section 8.1(c) such counterparty
shall not institute against, or join any other Person in instituting
against, it or the Trust, any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings or other similar proceedings under
the laws of the United States or any state of the United States; and

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

SECTION 2.13. OWNERSHIP OF TRUST. Upon the formation of the Trust by
the contribution by the Depositor pursuant to Section 2.5, the Depositor
shall be the sole beneficiary of the Trust.

SECTION 2.14. MAINTENANCE OF OFFICE OR AGENCY. The Owner Trustee shall
maintain in Wilmington, Delaware, an office or offices or agency or agencies
where notices and demands to or upon the Owner Trustee in respect of the
Related Documents may be served. The Owner Trustee initially designates
Wilmington Trust Company, Rodney Square North, 1100 North Market Street,
Wilmington, Delaware 19890 as its principal corporate trust office for such
purposes. The Owner Trustee shall give prompt written notice to the
Depositor and the Security Insurer of any change in the location of any such
office or agency.

ARTICLE III
ACTIONS BY OWNER TRUSTEE

SECTION 3.1. ACTION BY THE SECURITY INSURER WITH RESPECT TO BANKRUPTCY.
The Owner Trustee shall not have the power to commence a voluntary proceeding
in bankruptcy relating to the Trust without the prior written consent of the
Security Insurer.

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SECTION 3.2. RIGHTS OF SECURITY INSURER. Notwithstanding anything to
the contrary in the Related Documents, without the prior written consent of
the Security Insurer (so long as no Insurer Default shall have occurred and
be continuing), the Owner Trustee shall not (i) remove the Administrator, the
Servicer or the Backup Servicer, (ii) initiate any claim, suit or proceeding
by the Trust or compromise any claim, suit or proceeding brought by or
against the Trust, (iii) authorize the merger or consolidation of the Trust
with or into any other business trust or other entity (other than in
accordance with Section 3.10 of the Indenture) or (iv) amend the Certificate
of Trust.

ARTICLE IV
CERTAIN DUTIES OF TRUST

SECTION 4.1. ACCOUNTING; REPORTS; TAX RETURNS.

(a) The Administrator has agreed pursuant to the Administration
Agreement that the Administrator shall (i) maintain (or cause to be
maintained) the books of the Trust on a calendar year basis on the accrual
method of accounting, and (ii) file or cause to be filed all documents
required to be filed by the Trust with the Securities and Exchange Commission
and otherwise take or cause to be taken all such actions as are notified by
the Servicer in writing to the Administrator as being required for the
Trust's compliance with all applicable provisions of state and federal
securities laws.

(b) Consistent with Section 2.11, the Depositor, the Owner Trustee and
the Administrator shall not file any federal income tax returns on behalf of
the Trust; provided, however, that if any class of Notes is treated as an
equity interest in the Trust, the Administrator shall file or cause to be
filed such tax returns relating to the Trust (including a partnership
information return, Form 1065), and direct the Owner Trustee to make such
elections as may from time to time be required or appropriate under any
applicable state or Federal statute or rule or regulation thereunder so as to
maintain the Trust's characterization as a partnership for Federal income tax
purposes. If the Trust is treated as a partnership for federal income tax
purposes, the Depositor shall be the "tax matters partner" of the Trust
pursuant to the Code.

(c) The Owner Trustee shall make all elections pursuant to this Section
4.1 only as directed in writing by the Depositor, with the consent of the
Security Insurer. The Depositor hereby directs the Owner Trustee to elect
under Section 1278 of the Code to include in income currently any market
discount that accrues with respect to the Receivables.

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

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

ARTICLE V
AUTHORITY AND DUTIES OF OWNER TRUSTEE

SECTION 5.1. GENERAL AUTHORITY. The Owner Trustee is authorized and
directed to execute and deliver the Related Documents to which the Trust is
to be a party and each certificate or other document attached as an exhibit
to or contemplated by the Related Documents to which the Trust is to be a
party and any amendment thereto, and on behalf of the Trust, to direct the
Indenture Trustee to authenticate and deliver the Class A-1 Notes in the
aggregate principal amount of $60,000,000, the Class A-2 Notes in the
aggregate principal amount of $153,000,000, the Class A-3 Notes in the
aggregate principal amount of $65,000,000, the Class A-4 Notes in the
aggregate principal amount of $105,000,000 and the Class A-5 Notes in the
aggregate principal amount of $167,000,000. In addition to the foregoing, the
Owner Trustee is authorized, but shall not be obligated, to take all actions
required of the Trust pursuant to the Related Documents. The Owner Trustee is
further authorized, on behalf of the Trust, to enter into the Administration
Agreement, to appoint, with the consent of the Security Insurer, a successor
Administrator and to take from time to time such action as the Instructing
Party recommends with respect to the Related Documents so long as such
actions are consistent with the terms of the Related Documents.

SECTION 5.2. GENERAL DUTIES. It shall be the duty of the Owner Trustee
to discharge (or cause to be discharged through the Administrator or such
agents as shall be appointed with the consent of the Security Insurer) all of
its responsibilities pursuant to the terms of this Agreement and the Related
Documents subject to the Related Documents and in accordance with the
provisions of this Agreement. Notwithstanding the foregoing, the Owner
Trustee shall be deemed to have discharged its duties and responsibilities
hereunder and under the Related Documents to the extent the Administrator has
agreed in the Administration Agreement to perform any act or to discharge any
duty of the Owner Trustee hereunder or under any Related Document, and the
Owner Trustee shall not be liable for the default or failure of the
Administrator to carry out its obligations under the Administration
Agreement. Notwithstanding anything herein or in any Related Document to the
contrary, the Owner Trustee shall discharge its obligations pursuant to
Section 5.3 and Section 5.4 of the Sale and Servicing Agreement directly and
not through the Administrator or any agent.

SECTION 5.3. ACTION UPON INSTRUCTION.

(a) Subject to Article IV and the terms of the Spread Account
Agreement, the Security Insurer (so long as an Insurer Default shall not have
occurred and be continuing) or the Depositor (if an Insurer Default shall
have occurred and be continuing) (the "Instructing Party") shall have the
exclusive right to direct the actions of the Owner Trustee in the management
of the

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Trust, so long as such instructions are not inconsistent with the express
terms set forth herein or in any Related Document. The Instructing Party
shall not instruct the Owner Trustee in a manner inconsistent with this
Agreement or the Related Documents. Notwithstanding the foregoing, the owner
Trustee shall, upon due authorization and consent by the Seller, execute and
deliver such notices, consents to the service of process and other necessary
registration forms as may be required to qualify the Trust under the
securities laws of any jurisdiction in which the underwriters of the Trust's
securities may seek to qualify the securities for sale. The Trust is not
hereby authorized without the express consent of the Seller to qualify the
Seller as a foreign corporation or to execute on behalf of the Seller a
general consent to service of process in any jurisdiction.

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

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

(d) In the event that the Owner Trustee is unsure as to the application
of any provision of this Agreement or any Related Document or any such
provision is ambiguous as to its application, or is, or appears to be, in
conflict with any other applicable provision, or in the event that this
Agreement permits any determination by the Owner Trustee or is silent or is
incomplete as to the course of action that the Owner Trustee is required to
take with respect to a particular set of facts, the Owner Trustee may give
notice (in such form as shall be appropriate under the circumstances) to the
Instructing Party requesting instruction and, to the extent that the Owner
Trustee acts or refrains from acting in good faith in accordance with any
such instruction received, the Owner Trustee shall not be liable, on account
of such action or inaction, to any Person. If the Owner Trustee shall not
have received appropriate instruction within 10 days of such notice (or
within such shorter period of time as reasonably may be specified in such
notice or may be necessary under the circumstances) it may, but shall be
under no duty to, take or refrain from taking such action, not inconsistent
with this Agreement or the Related Documents, as it shall deem to be in the
best interests of the Owners, and shall have no liability to any Person for
such action or inaction.

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SECTION 5.4. NO DUTIES EXCEPT AS SPECIFIED IN THIS AGREEMENT OR IN
INSTRUCTIONS. The Owner Trustee shall not have any duty or obligation to
manage, make any payment with respect to, register, record, sell, dispose of,
or otherwise deal with the Trust Property, or to otherwise take or refrain
from taking any action under, or in connection with, any document
contemplated hereby to which the Trust is a party, except as expressly
provided by the terms of this Agreement (including as provided in Section
5.2) or in any written instruction received by the Owner Trustee pursuant to
Section 5.3; and no implied duties or obligations shall be read into this
Agreement or any Related Document against the Owner Trustee. The Owner
Trustee shall have no responsibility for preparing, monitoring or filing any
financing or continuation statements in any public office at any time or
otherwise to perfect or maintain the perfection of any security interest or
lien granted to it hereunder or to record this Agreement or any Related
Document; however, the Owner Trustee will from time to time execute and
deliver such financing or continuation statements as are prepared by the
Servicer and delivered to the Owner Trustee for its execution on behalf of
the Trust for the purpose of perfecting or maintaining the perfection of such
a security interest or lien or effecting such a recording. The Owner Trustee
nevertheless agrees that it will, at its own cost and expense (and not at the
expense of the Trust), promptly take all action as may be necessary to
discharge any liens on any part of the Trust Property that are attributable
to claims against the Owner Trustee in its individual capacity that are not
related to the ownership or the administration of the Trust Property.

SECTION 5.5. NO ACTION EXCEPT UNDER SPECIFIED DOCUMENTS OR
INSTRUCTIONS. The Owner Trustee shall not manage, control, use, sell,
dispose of or otherwise deal with any part of, the Trust Property except (i)
in accordance with the powers granted to and the authority conferred upon the
Owner Trustee pursuant to this Agreement, (ii) in accordance with the Related
Documents and (iii) in accordance with any document or instruction delivered
to the Owner Trustee pursuant to Section 5.3.

SECTION 5.6. RESTRICTIONS. The Owner Trustee shall not take any action
(a) that is inconsistent with the purposes of the Trust set forth in Section
2.3 or (b) that, to the actual knowledge of the Owner Trustee, would result
in the Trust's becoming taxable as a corporation for Federal income tax
purposes.

SECTION 5.7. ADMINISTRATION AGREEMENT.

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

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

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

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

ARTICLE VI
CONCERNING THE OWNER TRUSTEE

SECTION 6.1. ACCEPTANCE OF TRUSTEE AND DUTIES. The Owner Trustee
accepts the trusts hereby created and agrees to perform its duties hereunder
with respect to such trusts but only upon the terms of this Agreement. The
Owner Trustee also agrees to disburse all monies actually received by it
constituting part of the Trust Property upon the terms of the Related
Documents and this Agreement. The Owner Trustee shall not be answerable or
accountable hereunder or under any Related Document under any circumstances,
except (i) for its own willful misconduct or gross negligence, (ii) in the
case of the inaccuracy of any representation or warranty contained in Section
6.2, (iii) for liabilities arising from the failure of the Owner Trustee to
perform obligations expressly undertaken by it in the last sentence of
Section 5.4 hereof, (iv) for any investments issued by the Owner Trustee or
any branch or affiliate thereof in its commercial capacity or (v) for taxes,
fees or other charges on, based on or measured by, any fees, commissions or
compensation received by the Owner Trustee. In particular, but not by way of
limitation (and subject to the exceptions set forth in the preceding
sentence):

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

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

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(c) no provision of this Agreement or any Related Document shall
require the Owner Trustee to expend or risk funds or otherwise incur any
financial liability in the performance of any of its rights or powers
hereunder or under any Related Document if the Owner Trustee shall have
reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably
assured or provided to it;

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

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

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

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

SECTION 6.2. REPRESENTATIONS AND WARRANTIES. The Owner Trustee hereby
represents and warrants to the Depositor and the Security Insurer (which
shall have relied on such representations and warranties in issuing the Note
Policy) that:

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

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

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

SECTION 6.3. RELIANCE; ADVICE OF COUNSEL.

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

(b) In the exercise or administration of the trusts hereunder and in
the performance of its duties and obligations under this Agreement or the
Related Documents, the Owner Trustee (i) may act directly or through its
agents or attorneys pursuant to agreements entered into with any of them, and
the Owner Trustee shall not be liable for the conduct or

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

SECTION 6.4. NOT ACTING IN INDIVIDUAL CAPACITY. Except as provided in
this Article VI, in accepting the trusts hereby created Wilmington Trust
Company acts solely as Owner Trustee hereunder and not in its individual
capacity and all Persons having any claim against the Owner Trustee by reason
of the transactions contemplated by this Agreement or any Related Document
shall look only to the Trust Property for payment or satisfaction thereof.

SECTION 6.5. OWNER TRUSTEE NOT LIABLE FOR NOTES OR RECEIVABLES. The
recitals contained herein shall be taken as the statements of the Depositor
(other than the signature or counter-signature of the Owner Trustee on the
Notes), and the Owner Trustee assumes no responsibility for the correctness
thereof. The Owner Trustee makes no representations as to the validity or
sufficiency of this Agreement or of any Related Document or the Notes (other
than the signature or counter-signature of the Owner Trustee on the Notes),
or of any Receivable or related documents. The Owner Trustee shall at no time
have any responsibility or liability for or with respect to the legality,
validity and enforceability of any Receivable, or the perfection and priority
of any security interest created by any Receivable in any Financed Vehicle or
the maintenance of any such perfection and priority of any security interest
created by any Receivable in any Financed Vehicle or the maintenance of any
such perfection and priority, or for or with respect to the sufficiency of
the Trust Property or its ability to generate the payments to be distributed
to Noteholders under the Indenture, including, without limitation: the
existence, condition and ownership of any Financed Vehicle; the existence and
enforceability of any insurance thereon; the existence and contents of any
Receivable or any computer or other record thereof; the validity of the
assignment of any Receivable to the Trust or of any intervening assignment;
the validity or sufficiency of the Note Policy; the completeness of any
Receivable; the performance or enforcement of any Receivable; the compliance
by the Seller or the Servicer with any warranty or representation made under
any Related Document or in any related document or the accuracy of any such
warranty or representation or any action of the Indenture Trustee, the
Custodian or the Servicer taken in the name of the Owner Trustee.

SECTION 6.6. OWNER TRUSTEE MAY OWN NOTES. The Owner Trustee in its
individual or any other capacity may become the owner or pledgee of Notes and
may deal with the Depositor, the Seller, the Indenture Trustee and the
Servicer in banking or other transactions with the same rights as it would
have it if were not Owner Trustee.

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ARTICLE VII
COMPENSATION OF OWNER TRUSTEE

SECTION 7.1. OWNER TRUSTEE'S FEES AND EXPENSES. The Owner Trustee shall
receive as compensation for its services hereunder such fees as have been
separately agreed upon before the date hereof between AFL and the Owner
Trustee, and the Owner Trustee shall be entitled to be reimbursed by AFL for
its other reasonable expenses hereunder, including the reasonable
compensation, expenses and disbursements of such agents, representatives,
experts and counsel as the Owner Trustee may employ in connection with the
exercise and performance of its rights and its duties hereunder; PROVIDED,
HOWEVER, that the Owner Trustee shall only be entitled to reimbursement for
expenses hereunder to the extent such expenses (i) are fees of outside
counsel engaged by the Owner Trustee in respect of the performance of its
obligations hereunder or (ii) relate to the performance of its obligations
pursuant to Section 4.1 hereof.

SECTION 7.2. INDEMNIFICATION. AFL shall be liable as primary obligor
for, and shall indemnify the Owner Trustee in its individual capacity and its
successors, assigns, agents and servants, and any co-trustee (including
William J. Wade) (collectively, the "Indemnified Parties") from and against,
any and all liabilities, obligations, losses, damages, taxes, claims, actions
and suits, and any and all reasonable costs, expenses and disbursements
(including reasonable legal fees and expenses) of any kind and nature
whatsoever (collectively, "Expenses") which may at any time be imposed on,
incurred by, or asserted against the Owner Trustee or any Indemnified Party
in any way relating to or arising out of this Agreement, the Related
Documents, the Trust Property, the administration of the Trust Property or
the action or inaction of the Owner Trustee hereunder, except only that AFL
shall not be liable for or required to indemnify the Owner Trustee from and
against Expenses arising or resulting from any of the matters described in
the third sentence of Section 6.1. The indemnities contained in this Section
shall survive the resignation or termination of the Owner Trustee or the
termination of this Agreement.

SECTION 7.3. NON-RECOURSE OBLIGATIONS. Notwithstanding anything in
this Agreement or any Related Document, the Owner Trustee agrees in its
individual capacity and in its capacity as Owner Trustee for the Trust that
all obligations of the Trust to the Owner Trustee individually or as Owner
Trustee for the Trust shall be recourse to the Trust Property only.

ARTICLE VIII
TERMINATION

SECTION 8.1. TERMINATION OF THE TRUST.

(a) The respective obligations and responsibilities of the Depositor
and the Owner Trustee created by this Agreement and the Trust created by this
Agreement shall terminate upon the latest of (i) the maturity or other
liquidation of the last Receivable (including the

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purchase as of any Accounting Date by the Seller or the Servicer at its
option of the corpus of the Trust as described in Section 9.1 of the Sale and
Servicing Agreement) and the subsequent distribution of amounts in respect of
such Receivables as provided in the Related Documents, (ii) the payment to the
Security Insurer of all amounts payable or reimbursable to it pursuant to the
Sale and Servicing Agreement or (iii) at the time provided in Section 8.2. In
any case, there shall be delivered to the Owner Trustee, the Indenture
Trustee and the Rating Agencies an Opinion of Counsel that all applicable
preference periods under federal, state and local bankruptcy, insolvency and
similar laws have expired with respect to the payments pursuant to clause
(ii); PROVIDED, HOWEVER, that in no event shall the trust created by this
Agreement continue beyond the expiration of 21 years from the death of the
last survivor of the descendants living on the date of this Agreement of Rose
Kennedy of the Commonwealth of Massachusetts; and PROVIDED, FURTHER, that the
rights to indemnification under Section 7.2 shall survive the termination of
the Trust. The Servicer shall promptly notify the Owner Trustee and the
Security Insurer of any prospective termination pursuant to this Section 8.1.

(b) Except as provided in Section 8.1(a), the Depositor shall not be
entitled to revoke or terminate the Trust.

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

SECTION 8.2. DISSOLUTION EVENTS WITH RESPECT TO THE DEPOSITOR. In the
event that a Dissolution Event shall occur with respect to the Depositor, the
Owner Trustee promptly upon obtaining knowledge of such occurrence shall
request an opinion of counsel from counsel acceptable to the Security Insurer
to the effect that a failure to terminate the Trust upon the occurrence of
such Dissolution Event (and the transfer, if any, of the interest in the
Trust held by the Depositor) will not cause the Trust to be treated as an
association (or publicly traded partnership) taxable as a corporation for
federal income tax purposes. In the event that the Owner Trustee is unable to
obtain such an opinion the Trust will terminate within 90 days after the
occurrence of the Dissolution Event with respect to the Depositor. Promptly
after the occurrence of the event referred to above, (i) the Depositor shall
give the Indenture Trustee, the Owner Trustee and the Security Insurer
written notice of the occurrence of such event, (ii) the Owner Trustee shall,
upon the receipt of such written notice, give prompt written notice to the
Indenture Trustee of the occurrence of such event and (iii) the Indenture
Trustee shall, upon receipt of written notice of the occurrence of such event
from the Owner Trustee or the Seller, give prompt written notice to the
Noteholders of the occurrence of such event; PROVIDED, HOWEVER, that any
failure to give a notice required by this sentence shall not prevent or
delay, in any manner, a termination of the Trust pursuant to the first
sentence of this Section 8.2. Upon a termination pursuant to this Section,
the Owner Trustee shall direct the Indenture Trustee to sell the assets of
the Trust (other than the Trust Accounts) at one or more private or public
sales

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conducted in any manner permitted by law. The proceeds of such a sale of the
assets of the Trust shall be distributed as provided in Section 9.1(b) of the
Sale and Servicing Agreement.

ARTICLE IX
SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES

SECTION 9.1. ELIGIBILITY REQUIREMENTS FOR OWNER TRUSTEE. The Owner
Trustee shall at all times be a corporation (i) satisfying the provisions of
Section 3807(a) of the Business Trust Statute; (ii) authorized to exercise
corporate trust powers; (iii) having a combined capital and surplus of at
least $50,000,000 and subject to supervision or examination by Federal or
State authorities; (iv) having (or having a parent which has) a rating of at
least Baa3 by Moody's or A-1 by Standard & Poor's; and (v) acceptable to the
Security Insurer in its sole discretion, so long as an Insurer Default shall
not have occurred and be continuing. If such corporation shall publish
reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for
the purpose of this Section, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set
forth in its most recent report of condition so published. In case at any
time the Owner Trustee shall cease to be eligible in accordance with the
provisions of this Section, the Owner Trustee shall resign immediately in the
manner and with the effect specified in Section 9.2.

SECTION 9.2. RESIGNATION OR REMOVAL OF OWNER TRUSTEE. The Owner
Trustee may at any time resign and be discharged from the trusts hereby
created by giving written notice thereof to the Depositor, the Security
Insurer and the Servicer at least 30 days before the date specified in such
instrument. Upon receiving such notice of resignation, the Depositor shall
promptly appoint a successor Owner Trustee meeting the qualifications set
forth in Section 9.1 by written instrument, in duplicate, one copy of which
instrument shall be delivered to the resigning Owner Trustee and one copy to
the successor Owner Trustee, provided that the Depositor shall have received
written confirmation from each of the Rating Agencies that the proposed
appointment will not result in an increased capital charge to the Security
Insurer by either of the Rating Agencies. If no successor Owner Trustee shall
have been so appointed and have accepted appointment within 30 days after
the giving of such notice of resignation, the resigning Owner Trustee or the
Security Insurer may petition any court of competent jurisdiction for the
appointment of a successor Owner Trustee.

If at any time the Owner Trustee shall cease to be eligible in
accordance with the provisions of Section 9.1 and shall fail to resign after
written request therefor by the Depositor or if at any time the Owner Trustee
shall be legally unable to act, or shall be adjudged bankrupt or insolvent,
or a receiver of the Owner Trustee or of its property shall be appointed, or
any public officer shall take charge or control of the Owner Trustee or of
its property or affairs for the purpose of rehabilitation, conservation or
liquidation, then the Depositor, with the consent of the Security Insurer (so
long as an Insurer Default shall not have occurred and be continuing) may

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remove the Owner Trustee. If the Depositor shall remove the Owner Trustee
under the authority of the immediately preceding sentence, the Depositor
shall promptly appoint a successor Owner Trustee meeting the qualification
requirements of Section 9.1 by written instrument, in triplicate, one copy of
which instrument shall be delivered to the outgoing Owner Trustee so removed,
one copy to the Security Insurer and one copy to the successor Owner Trustee
and payment of all fees owed to the outgoing Owner Trustee.

Any resignation or removal of the Owner Trustee and appointment of a
successor Owner Trustee pursuant to any of the provisions of this Section
shall not become effective until all fees and expenses, including any
indemnity payments, due to the outgoing Owner Trustee have been paid and
until acceptance of appointment by the successor Owner Trustee pursuant to
Section 9.3. The Depositor shall provide notice of such resignation or
removal of the Owner Trustee to each of the Rating Agencies.

SECTION 9.3. SUCCESSOR OWNER TRUSTEE. Any successor Owner Trustee
appointed pursuant to Section 9.2 shall execute, acknowledge and deliver to
the Depositor, the Security Insurer and to its predecessor Owner Trustee an
instrument accepting such appointment under this Agreement, and thereupon the
resignation or removal of the predecessor Owner Trustee shall become
effective and such successor Owner Trustee, without any further act, deed or
conveyance, shall become fully vested with all the rights, powers, duties,
and obligations of its predecessor under this Agreement, with like effect as
if originally named as Owner Trustee. The predecessor Owner Trustee shall
deliver to the successor Owner Trustee all documents and statements and
monies held by it under this Agreement; and the Depositor and the predecessor
Owner Trustee shall execute and deliver such instruments and do such other
things as may reasonably be required for fully and certainly vesting and
confirming in the successor Owner Trustee all such rights, powers, duties,
and obligations.

No successor Owner Trustee shall accept appointment as provided in this
Section unless at the time of such acceptance such successor Owner Trustee
shall be eligible pursuant to Section 9.1.

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

SECTION 9.4. MERGER OR CONSOLIDATION OF OWNER TRUSTEE. Any corporation
into which the Owner Trustee may be merged or converted or with which it may
be consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Owner Trustee shall be a party, or any corporation
succeeding to all or substantially all of the corporate trust business of the
Owner Trustee, shall be the successor of the Owner Trustee hereunder,

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provided such corporation shall be eligible pursuant to Section 9.1, without
the execution or filing of any instrument or any further act on the part of
any of the parties hereto, anything herein to the contrary notwithstanding,
and provided further that the Owner Trustee shall mail notice of such merger
or consolidation to the Rating Agencies.

SECTION 9.5. APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE.
Notwithstanding any other provisions of this Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any
part of the Trust Property or any Financed Vehicle may at the time be
located, the Administrator and the Owner Trustee acting jointly shall have
the power and shall execute and deliver all instruments to appoint one or
more Persons approved by the Owner Trustee and the Security Insurer to act as
co-trustee, jointly with the Owner Trustee, or separate trustee or separate
trustees, of all or any part of the Trust Property, and to vest in such
Person, in such capacity, such title to the Trust, or any part thereof, and,
subject to the other provisions of this Section, such powers, duties,
obligations, rights and trusts as the Administrator and the Owner Trustee may
consider necessary or desirable. If the Administrator shall not have joined
in such appointment within 15 days after the receipt by it of a request so to
do, the Owner Trustee, subject to the approval of the Security Insurer, shall
have the power to make such appointment. No co-trustee or separate trustee
under this Agreement shall be required to meet the terms of eligibility as a
successor trustee pursuant to Section 9.1 and no notice of the appointment of
any co-trustee or separate trustee shall be required pursuant to Section 9.2.

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

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

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

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

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

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

ARTICLE X
MISCELLANEOUS PROVISIONS

SECTION 10.1. AMENDMENT.

(a) This Agreement may be amended by the Depositor and the Owner
Trustee, with the prior written consent of the Security Insurer (so long as
an Insurer Default shall not have occurred and be continuing) but without the
consent of any of the Noteholders, (i) to cure any ambiguity, or (ii) to
correct, supplement or modify any provisions in this Agreement; PROVIDED,
HOWEVER, that such action shall not, as evidenced by an Opinion of Counsel,
adversely affect in any material respect the interests of any Noteholder.

(b) This Agreement may also be amended from time to time, with
the prior written consent of the Security Insurer (so long as an Insurer
Default shall not have occurred and be continuing), by the Depositor and the
Owner Trustee and, if such amendment materially and adversely affects the
interests of Noteholders, the consent of a Note Majority (which consent of
any Holder of a Note given pursuant to this Section or pursuant to any other
provision of this Agreement shall be conclusive and binding on such Holder
and on all future Holders of such Note and of any Note issued upon the
transfer thereof or in exchange thereof or in lieu thereof whether or not
notation of such consent is made upon the Note) for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions
of this Agreement, or of modifying in any manner the rights of the Holders of
Notes; PROVIDED, HOWEVER, that, subject to the express rights of the Security
Insurer under the Related Documents, including its rights to consent to
certain modifications of the Receivables pursuant to Section 3.2 of the Sale
and

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Servicing Agreement and its rights referred to in Section 5.02(c) of the
Indenture, no such amendment shall (a) increase or reduce in any manner the
amount of, or accelerate or delay the timing of, collections of payments on
Receivables or distributions that shall be required to be made on any Note or
the Class A-1 Interest Rate, the Class A-2 Interest Rate, the Class
A-3 Interest Rate, the Class A-4 Interest Rate or the Class A-5 Interest Rate
or (b) reduce the aforesaid percentage required to consent to any such
amendment or any waiver hereunder, without the consent of the Holders of all
Notes then outstanding.

(c) Prior to the execution of any such amendment or consent, the
Depositor shall furnish written notification of the substance of such
amendment or consent to each Rating Agency.

(d) Promptly after the execution of any such amendment or
consent, the Owner Trustee shall furnish written notification of the
substance of such amendment or consent to the Indenture Trustee unless such
parties have previously received such notification.

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

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

SECTION 10.2. GOVERNING LAW. This Agreement shall be governed by
and construed in accordance with the laws of the State of Delaware without
regard to the principles of conflicts of laws thereof and the obligations,
rights and remedies of the parties under this Agreement shall be determined
in accordance with such laws.

SECTION 10.3. SEVERABILITY OF PROVISIONS. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions
or terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity
or enforceability of the other provisions of this Agreement.

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SECTION 10.4. THIRD-PARTY BENEFICIARIES. This Agreement shall
inure to the benefit of and be binding upon the parties hereto and their
respective successors and permitted assigns. Except as otherwise provided in
this Agreement, no other Person shall have any right or obligation hereunder.
Without limiting the generality of the foregoing, all covenants and
agreements in this Agreement which expressly confer rights upon the Security
Insurer shall be for the benefit of and run directly to the Security Insurer,
and the Security Insurer shall be entitled to rely on and enforce such
covenants, subject, however, to the limitations on such rights provided in
this Agreement and the Related Documents. The Security Insurer may disclaim
any of its rights and powers under this Agreement (but not its duties and
obligations under the Note Policy) upon delivery of a written notice to the
Owner Trustee.

SECTION 10.5. COUNTERPARTS. For the purpose of facilitating its
execution and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts
shall be deemed to be an original, and all of which counterparts shall
constitute but one and the same instrument.

SECTION 10.6. NOTICES. All demands, notices and communications
under this Agreement shall be in writing, personally delivered or mailed by
certified mail-return receipt requested, and shall be deemed to have been
duly given upon receipt (a) in the case of the Depositor, at the following
address: 7825 Washington Avenue South, Minneapolis, Minnesota 55439-2435,
with copies to: Arcadia Financial Ltd., 7825 Washington Avenue South,
Minneapolis, Minnesota 55439-2435, Attention: President, (b) in the case of
the Owner Trustee, at Rodney Square North, 1100 North Market Street,
Wilmington, Delaware 19890, Attention: Corporate Trust Administration, (c) in
the case of each Rating Agency, 99 Church Street, New York, New York 10007
(for Moody's), and 26 Broadway, New York, New York 10004, Attention:
Asset-Backed Surveillance (for Standard & Poor's), and (d) in the case of the
Security Insurer, Financial Security Assurance Inc., 350 Park Avenue, New
York, NY 10022, Attention: Surveillance Department, Telex No.: (212)
688-3101, Confirmation: (212) 826-0100, Telecopy Nos.: (212) 339-3518, (212)
339-3529 (in each case in which notice or other communication to Financial
Security refers to an Event of Default, a claim on the Note Policy or with
respect to which failure on the part of Financial Security to respond shall
be deemed to constitute consent or acceptance, then a copy of such notice or
other communication should also be sent to the attention of the General
Counsel and the Head--Financial Guaranty Group "URGENT MATERIAL ENCLOSED") or
at such other address as shall be designated by any such party in a written
notice to the other parties.

[SIGNATURE PAGE FOLLOWS]

-25-
<PAGE>

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

ARCADIA RECEIVABLES FINANCE CORP.

By /s/ John A. Witham
----------------------------------
Name: John A. Witham
Title: Senior Vice President and
Chief Financial Officer

ARCADIA RECEIVABLES FINANCE CORP.,
in its capacity as Depositor

By /s/ John A. Witham
----------------------------------
Name: John A. Witham
Title: Senior Vice President and
Chief Financial Officer

FINANCIAL SECURITY ASSURANCE INC.

By /s/ Daniel Farrell
----------------------------------
Authorized Officer

WILMINGTON TRUST COMPANY

By /s/ Thomas P. Laskaris
----------------------------------
Name: Thomas P. Laskaris
Title: Vice President

<PAGE>

ARCADIA AUTOMOBILE RECEIVABLES TRUST, 1999-A

4.960% Class A-1 Automobile Receivables-Backed Notes
5.373% Class A-2 Automobile Receivables-Backed Notes
5.750% Class A-3 Automobile Receivables-Backed Notes
5.940% Class A-4 Automobile Receivables-Backed Notes
6.120% Class A-5 Automobile Receivables-Backed Notes

INDENTURE

Dated as of March 1, 1999

NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION
Trustee and Indenture Collateral Agent
<PAGE>

CROSS REFERENCE TABLE

TIA Indenture
Section Section
- - ------- ---------
<S> <C>
310(a)(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.11
(a)(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.11
(a)(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.10
(a)(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.(2)
(a)(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.11
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.08; 6.11
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
311(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.12
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.12
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
312(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.01
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.02
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.02
313(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.04
(b)(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.04
(b)(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.04
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.05
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.04
314(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.03
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.06; 11.15
(c)(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.01
(c)(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.01
(c)(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.01
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.01
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.01
(f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.01
315(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.01
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.05; 11.05
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.01
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.01
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.14
316(a)(last sentence). . . . . . . . . . . . . . . . . . . . . . 1.01
(a)(1)(A) . . . . . . . . . . . . . . . . . . . . . . . . . . 5.12
(a)(1)(B) . . . . . . . . . . . . . . . . . . . . . . . . . . 5.13
(a)(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.08
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
317(a)(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.03
(a)(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.03
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.03
318(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.07

</TABLE>

- - -----------------
(1) Note: This Cross Reference Table shall not, for any purpose, be deemed
to be part of this Indenture.
(2) N.A. means Not Applicable.

<PAGE>

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE. . . . . . . . . . . . . . . . .3
SECTION 1.01. Definitions . . . . . . . . . . . . . . . . . . . . . . . .3
SECTION 1.02. Incorporation by Reference of Trust Indenture
Act. . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 1.03. Rules of Construction . . . . . . . . . . . . . . . . . . 14

ARTICLE II
THE NOTES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 2.01. Form. . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 2.02. Execution, Authentication and Delivery. . . . . . . . . . 15
SECTION 2.03. Temporary Notes . . . . . . . . . . . . . . . . . . . . . 16
SECTION 2.04. Registration; Registration of Transfer and
Exchange . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 2.05. Mutilated, Destroyed, Lost or Stolen Notes . . . . . . . . 17
SECTION 2.06. Person Deemed Owner . . . . . . . . . . . . . . . . . . . 18
SECTION 2.07. Payment of Principal and Interest; Defaulted
Interest . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 2.08. Cancellation . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 2.09. Book-Entry Notes . . . . . . . . . . . . . . . . . . . . . 20
SECTION 2.10. Notices to Depository . . . . . . . . . . . . . . . . . . 21
SECTION 2.11. Definitive Notes . . . . . . . . . . . . . . . . . . . . . 21

ARTICLE III
COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 3.01. Payment of Principal, Interest and Premium . . . . . . . . 21
SECTION 3.02. Maintenance of Office or Agency . . . . . . . . . . . . . 22
SECTION 3.03. Money for Payments To Be Held in Trust . . . . . . . . . . 22
SECTION 3.04. Existence . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 3.05. Protection of Trust Estate . . . . . . . . . . . . . . . . 24
SECTION 3.06. Opinions as to Trust Estate . . . . . . . . . . . . . . . 25
SECTION 3.07. Performance of Obligations; Servicing of Receivables . . . 25
SECTION 3.08. Negative Covenants . . . . . . . . . . . . . . . . . . . . 26
SECTION 3.09. Annual Statement as to Compliance . . . . . . . . . . . . 27
SECTION 3.10. Issuer May Consolidate, etc. Only on Certain Terms . . . . 28
SECTION 3.11. Successor or Transferee . . . . . . . . . . . . . . . . . 30
SECTION 3.12. No Other Business . . . . . . . . . . . . . . . . . . . . 31
SECTION 3.13. No Borrowing . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 3.14. Servicer's Obligations . . . . . . . . . . . . . . . . . . 31
SECTION 3.15. Guarantees, Loans, Advances and Other Liabilities . . . . 31
SECTION 3.16. Capital Expenditures . . . . . . . . . . . . . . . . . . . 31
SECTION 3.17. Restricted Payments . . . . . . . . . . . . . . . . . . . 31
SECTION 3.18. Notice of Events of Default . . . . . . . . . . . . . . . 31
SECTION 3.19. Further Instruments and Acts . . . . . . . . . . . . . . . 31
SECTION 3.20. Compliance with Laws . . . . . . . . . . . . . . . . . . . 31
SECTION 3.21. Amendments of Sale and Servicing Agreement and
Trust Agreement . . . . . . . . . . . . . . . . . . . . . 32
SECTION 3.22. Removal of Administrator . . . . . . . . . . . . . . . . . 32
SECTION 3.23. Income Tax Characterization . . . . . . . . . . . . . . . 32

- i -
<PAGE>

ARTICLE IV
SATISFACTION AND DISCHARGE . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 4.01. Satisfaction and Discharge of Indenture . . . . . . . . . 32
SECTION 4.02. Application of Trust Money. . . . . . . . . . . . . . . . 33
SECTION 4.03. Repayment of Moneys Held by Paying Agent. . . . . . . . . 33
SECTION 4.04. Release of Trust Estate . . . . . . . . . . . . . . . . . 34

ARTICLE V
REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 5.01. Events of Default . . . . . . . . . . . . . . . . . . . . 34
SECTION 5.02. Rights upon Event of Default. . . . . . . . . . . . . . . 35
SECTION 5.03. Collection of Indebtedness and Suits for Enforcement by
Trustee; Authority of Controlling Party . . . . . . . . . 36
SECTION 5.04. Remedies. . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 5.05. Optional Preservation of the Receivables. . . . . . . . . 41
SECTION 5.06. Priorities. . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 5.07. Limitation of Suits . . . . . . . . . . . . . . . . . . . 42
SECTION 5.08. Unconditional Rights of Noteholders To Receive
Principal and Interest . . . . . . . . . . . . . . . . . 43
SECTION 5.09. Restoration of Rights and Remedies. . . . . . . . . . . . 43
SECTION 5.10. Rights and Remedies Cumulative. . . . . . . . . . . . . . 43
SECTION 5.11. Delay or Omission Not a Waiver. . . . . . . . . . . . . . 43
SECTION 5.12. Control by Noteholders. . . . . . . . . . . . . . . . . . 44
SECTION 5.13. Waiver of Past Defaults . . . . . . . . . . . . . . . . . 44
SECTION 5.14. Undertaking for Costs . . . . . . . . . . . . . . . . . . 45
SECTION 5.15. Waiver of Stay or Extension Laws. . . . . . . . . . . . . 45
SECTION 5.16. Action on Notes . . . . . . . . . . . . . . . . . . . . . 45
SECTION 5.17. Performance and Enforcement of Certain Obligations. . . . 45
SECTION 5.18. Claims Under Note Policy. . . . . . . . . . . . . . . . . 46
SECTION 5.19. Preference Claims . . . . . . . . . . . . . . . . . . . . 48

ARTICLE VI
THE TRUSTEE AND THE INDENTURE COLLATERAL AGENT . . . . . . . . . . . . . 49
SECTION 6.01. Duties of Trustee . . . . . . . . . . . . . . . . . . . . 49
SECTION 6.02. Rights of Trustee . . . . . . . . . . . . . . . . . . . . 52

SECTION 6.03. Individual Rights of Trustee. . . . . . . . . . . . . . . 53
SECTION 6.04. Trustee's Disclaimer. . . . . . . . . . . . . . . . . . . 53
SECTION 6.05. Notice of Defaults. . . . . . . . . . . . . . . . . . . . 53
SECTION 6.06. Reports by Trustee to Holders . . . . . . . . . . . . . . 54
SECTION 6.07. Compensation and Indemnity. . . . . . . . . . . . . . . . 54
SECTION 6.08. Replacement of Trustee. . . . . . . . . . . . . . . . . . 54
SECTION 6.09. Successor Trustee by Merger . . . . . . . . . . . . . . . 56

- ii -
<PAGE>

SECTION 6.10. Appointment of Co-Trustee or Separate Trustee . . . . . . 56
SECTION 6.11. Eligibility; Disqualification . . . . . . . . . . . . . . 58
SECTION 6.12. Preferential Collection of Claims Against Issuer. . . . . 58
SECTION 6.13. Appointment and Powers. . . . . . . . . . . . . . . . . . 58
SECTION 6.14. Performance of Duties . . . . . . . . . . . . . . . . . . 58
SECTION 6.15. Limitation on Liability . . . . . . . . . . . . . . . . . 59
SECTION 6.16. Reliance upon Documents . . . . . . . . . . . . . . . . . 59
SECTION 6.17. Successor Indenture Collateral Agent. . . . . . . . . . . 60
SECTION 6.18. Compensation and Indemnity. . . . . . . . . . . . . . . . 61
SECTION 6.19. Representations and Warranties of the Indenture
Collateral Agent . . . . . . . . . . . . . . . . . . . . 62
SECTION 6.20. Waiver of Setoffs . . . . . . . . . . . . . . . . . . . . 62
SECTION 6.21. Control by the Controlling Party. . . . . . . . . . . . . 63

ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS. . . . . . . . . . . . . . . . . . . . . 63
SECTION 7.01. Issuer To Furnish Trustee Names and Addresses to
Noteholders . . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 7.02. Preservation of Information; Communications to
Noteholders . . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 7.03. Reports by Issuer . . . . . . . . . . . . . . . . . . . . 63
SECTION 7.04. Reports by Trustee. . . . . . . . . . . . . . . . . . . . 64

ARTICLE VIII
ACCOUNTS, DISBURSEMENTS AND RELEASES . . . . . . . . . . . . . . . . . . 64
SECTION 8.01. Collection of Money . . . . . . . . . . . . . . . . . . . 64
SECTION 8.02. Trust Accounts. . . . . . . . . . . . . . . . . . . . . . 65
SECTION 8.03. General Provisions Regarding Accounts . . . . . . . . . . 66

ARTICLE IX
SUPPLEMENTAL INDENTURES. . . . . . . . . . . . . . . . . . . . . . . . . 66
SECTION 9.01. Supplemental Indentures Without Consent of Noteholders. . 66
SECTION 9.02. Supplemental Indentures With Consent of Noteholders . . . 67
SECTION 9.03. Execution of Supplemental Indentures. . . . . . . . . . . 69
SECTION 9.04. Effect of Supplemental Indenture. . . . . . . . . . . . . 69
SECTION 9.05. Conformity With Trust Indenture Act . . . . . . . . . . . 70
SECTION 9.06. Reference in Notes to Supplemental Indentures . . . . . . 70

ARTICLE X
REDEMPTION OF NOTES . . . . . . . . . . . . . . . . . . . . . . . . . . 70
SECTION 10.01. Redemption . . . . . . . . . . . . . . . . . . . . . . . 70
SECTION 10.02. Form of Redemption Notice. . . . . . . . . . . . . . . . 71
SECTION 10.03. Notes Payable on Redemption Date . . . . . . . . . . . . 72

ARTICLE XI
MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
SECTION 11.01. Compliance Certificates and Opinions, etc. . . . . . . . 72
SECTION 11.02. Form of Documents Delivered to Trustee . . . . . . . . . 74
SECTION 11.03. Acts of Noteholders. . . . . . . . . . . . . . . . . . . 75
SECTION 11.04. Notices, etc., to Trustee, Issuer and Rating Agencies. . 75
SECTION 11.05 Notices to Noteholders; Waiver . . . . . . . . . . . . . 76

- iii -
<PAGE>

SECTION 11.06. Alternate Payment and Notice Provisions. . . . . . . . . 77
SECTION 11.07. Conflict with Trust Indenture Act. . . . . . . . . . . . 77
SECTION 11.08. Effect of Headings and Table of Contents . . . . . . . . 77
SECTION 11.09. Successors and Assigns . . . . . . . . . . . . . . . . . 78
SECTION 11.10. Severability . . . . . . . . . . . . . . . . . . . . . . 78
SECTION 11.11. Benefits of Indenture. . . . . . . . . . . . . . . . . . 78
SECTION 11.12. Legal Holidays . . . . . . . . . . . . . . . . . . . . . 78
SECTION 11.13. Governing Law. . . . . . . . . . . . . . . . . . . . . . 78
SECTION 11.14. Counterparts . . . . . . . . . . . . . . . . . . . . . . 78
SECTION 11.15. Recording of Indenture . . . . . . . . . . . . . . . . . 78
SECTION 11.16. Trust Obligation . . . . . . . . . . . . . . . . . . . . 79
SECTION 11.17. No Petition. . . . . . . . . . . . . . . . . . . . . . . 79
SECTION 11.18. Inspection . . . . . . . . . . . . . . . . . . . . . . . 79
SECTION 11.19. Limitation of Liability. . . . . . . . . . . . . . . . . 80
SECTION 11.20. No Substantive Review of Compliance Documents. . . . . . 80

</TABLE>

- iv -
<PAGE>

<TABLE>

<S> <C>
Exhibit A -- Schedule of Receivables
Exhibit B -- Form of Depository Agreement
Exhibit C-1 -- Form of Class A-1 Note
Exhibit C-2 -- Form of Class A-2 Note
Exhibit C-3 -- Form of Class A-3 Note
Exhibit C-4 -- Form of Class A-4 Note
Exhibit C-5 -- Form of Class A-5 Note
Exhibit D -- Form of Note Policy
Exhibit E -- Letter Agreement Between AFL and the Trustee

</TABLE>

- v -
<PAGE>

INDENTURE, dated as of March 1, 1999, between ARCADIA
AUTOMOBILE RECEIVABLES TRUST, 1999-A, a Delaware business trust (the
"Issuer"), and NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION, in its
capacities as trustee (the "Trustee") and as Indenture Collateral Agent (as
defined below) and not in its individual capacity.

Each party agrees as follows for the benefit of the other
party and for the equal and ratable benefit of the Holders of the Issuer's
4.960% Class A-1 Automobile Receivables-Backed Notes (the "Class A-1 Notes"),
5.373% Class A-2 Automobile Receivables-Backed Notes (the "Class A-2 Notes"),
5.750% Class A-3 Automobile Receivables-Backed Notes (the "Class A-3 Notes"),
5.940% Class A-4 Automobile Receivables-Backed Notes (the "Class A-4 Notes")
and 6.120% Class A-5 Automobile Receivables-Backed Notes (the "Class A-5
Notes" and, together with the Class A-1 Notes, the Class A-2 Notes, the Class
A-3 Notes and the Class A-4 Notes, the "Notes"):

As security for the payment and performance by the Issuer of
its obligations under this Indenture and the Notes, the Issuer has agreed to
assign the Indenture Collateral (as defined below) as collateral to the
Indenture Collateral Agent for the benefit of the Trustee on behalf of the
Noteholders.

Financial Security Assurance Inc. (the "Security Insurer")
has issued and delivered a financial guaranty insurance policy, dated the
Closing Date (with endorsements, the "Note Policy"), pursuant to which the
Security Insurer guarantees certain Scheduled Payments, as defined in the
Note Policy.

As an inducement to the Security Insurer to issue and deliver
the Note Policy, the Issuer and the Security Insurer have executed and
delivered the Insurance and Indemnity Agreement, dated as of March 17, 1999
(as amended from time to time, the "Insurance Agreement"), among the Security
Insurer, the Issuer, Arcadia Receivables Finance Corp. and Arcadia Financial
Ltd.

As an additional inducement to the Security Insurer to issue
the Note Policy, and as security for the performance by the Issuer of the
Insurer Issuer Secured Obligations and as security for the performance by the
Issuer of the Trustee Issuer Secured Obligations, the Issuer has agreed to
assign the Indenture Collateral (as defined below) as collateral to the
Indenture Collateral Agent for the benefit of the Issuer Secured Parties, as
their respective interests may appear.

GRANTING CLAUSE

The Issuer hereby Grants to the Indenture Collateral Agent at
the Closing Date, on behalf of and for the benefit of the Issuer Secured
Parties to secure the performance of the respective Issuer Secured
Obligations, all of the Issuer's right, title and interest now owned or

<PAGE>

hereafter acquired in and to (a) the Initial Receivables and all moneys paid
or payable thereon or in respect thereof after the Initial Cutoff Date
(including amounts due on or before the Initial Cutoff Date but received by
AFL, the Seller or the Issuer after the Initial Cutoff Date); (b) the
Subsequent Receivables and all moneys paid or payable thereon or in respect
thereof after the related Subsequent Cutoff Date (including amounts due on or
before the related Subsequent Cutoff Date but received by AFL, the Seller or
the Issuer after the related Subsequent Cutoff Date); (c) an assignment of
the security interests of AFL in the Financed Vehicles; (d) the Insurance
Policies and any proceeds from any Insurance Policies relating to the
Receivables, the Obligors or the Financed Vehicles, including rebates of
premiums, all Collateral Insurance and any Force-Placed Insurance relating to
the Receivables; (e) an assignment of the rights of AFL or the Seller against
Dealers with respect to the Receivables under the Dealer Agreements and the
Dealer Assignments, (f) all items contained in the Receivable Files and any
and all other documents that AFL keeps on file in accordance with its
customary procedures relating to the Receivables, the Obligors or the
Financed Vehicles, (g) an assignment of the rights of the Seller under the
Purchase Agreement and each Subsequent Purchase Agreement, (h) property
(including the right to receive future Liquidation Proceeds) that secures a
Receivable and that has been acquired by or on behalf of the Trust pursuant
to liquidation of such Receivable, (i) the Trust Accounts and all funds on
deposit therein from time to time, and in all investments and proceeds
thereof (including all income thereon), (j) the Purchase Agreement and each
Subsequent Purchase Agreement, including the right assigned to the Issuer to
cause AFL to repurchase Receivables from the Seller under certain
circumstances, (k) the Sale and Servicing Agreement and each Subsequent
Transfer Agreement (including all rights of the Seller under the Purchase
Agreement and each Subsequent Purchase Agreement assigned to the Issuer
pursuant to the Sale and Servicing Agreement), and (l) all present and future
claims, demands, causes and choses in action in respect of any or all of the
foregoing and all payments on or under and all proceeds of every kind and
nature whatsoever in respect of any or all of the foregoing, including all
proceeds of the conversion, voluntary or involuntary, into cash or other
liquid property, all cash proceeds, accounts, accounts receivable, notes,
drafts, acceptances, chattel paper, checks, deposit accounts, insurance
proceeds, condemnation awards, rights to payment of any and every kind and
other forms of obligations and receivables, instruments and other property
which at any time constitute all or part of or are included in the proceeds
of any of the foregoing (collectively, the "Indenture Collateral").

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

ARTICLE I

DEFINITIONS AND INCORPORATION BY REFERENCE

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SECTION 1.01. DEFINITIONS.

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

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

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

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

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

"BOOK-ENTRY NOTE" means any Note registered in the name of
the Depository or its nominee, ownership of which is reflected on the books
of the Depository or on the books of a person maintaining an account with
such Depository (directly or as an indirect participant in accordance with
the rules of such Depository).

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

"CERTIFICATE OF TRUST" means the Certificate of Trust of the
Issuer substantially in the form of Exhibit A to the Trust Agreement.

"CLASS A-1 INTEREST RATE" means 4.960% per annum (computed on
the basis of actual days elapsed in a 360-day year).

"CLASS A-2 INTEREST RATE" means 5.373% per annum (computed on
the basis of actual days elapsed in a 360-day year).

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"CLASS A-3 INTEREST RATE" means 5.750% per annum (computed on
the basis of a 360-day year of twelve 30-day months).

"CLASS A-4 INTEREST RATE" means 5.940% per annum (computed on
the basis of a 360-day year of twelve 30-day months).

"CLASS A-5 INTEREST RATE" means 6.120% per annum (computed on
the basis of a 360-day year of twelve 30-day months).

"CLASS A-1 NOTES" means the 4.960% Class A-1 Automobile
Receivables-Backed Notes substantially in the form of Exhibit C-1.

"CLASS A-2 NOTES" means the 5.373% Class A-2 Automobile
Receivables-Backed Notes substantially in the form of Exhibit C-2.

"CLASS A-3 NOTES" means the 5.750% Class A-3 Automobile
Receivables-Backed Notes substantially in the form of Exhibit C-3.

"CLASS A-4 NOTES" means the 5.940% Class A-4 Automobile
Receivables-Backed Notes substantially in the form of Exhibit C-4.

"CLASS A-5 NOTES" means the 6.120% Class A-5 Automobile
Receivables-Backed Notes substantially in the form of Exhibit C-5.

"CLOSING DATE" means March 17, 1999.

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

"CONTROLLING PARTY" means the Security Insurer, so long as no
Insurer Default shall have occurred and be continuing, and the Trustee, for
so long as an Insurer Default shall have occurred and be continuing.

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

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

"DEFINITIVE NOTES" has the meaning specified in Section 2.09.

"DEPOSITORY" means the initial Depository, The Depository
Trust Company, the nominee of which is Cede & Co., as the registered Holder
of $60,000,000 in aggregate principal amount of the Class A-1 Notes,
$153,000,000 in aggregate principal amount of the Class A-2 Notes,
$65,000,000 in aggregate principal amount of the Class A-3 Notes,
$105,000,000 in aggregate principal amount of the Class A-4 Notes and
$167,000,000 in aggregate principal amount of the Class A-5 Notes as of the
Closing Date, and any permitted successor depository. The Depository shall
at all times be a "clearing corporation" as defined in Section 8-102(3) of
the New York UCC.

"DEPOSITORY AGREEMENT" means the agreement among the Issuer,
the Trustee and The Depository Trust Company, as the initial Depository,
dated as of the Closing Date, relating to the Notes substantially in the form
of Exhibit B.

"DEPOSITORY PARTICIPANT" means a broker, dealer, bank or
other financial institution or other Person for whom from time to time a
Depository effects book-entry transfers and pledges of securities deposited
with the Depository.

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

"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.

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

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

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<PAGE>

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

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

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

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

"INDENTURE COLLATERAL AGENT" means, initially, Norwest Bank
Minnesota, National Association, in its capacity as collateral agent on
behalf of the Issuer Secured Parties, including its successors in interest,
until and unless and a successor Person shall have become the Indenture
Collateral Agent pursuant to Section 6.17 hereof, and thereafter "Indenture
Collateral Agent" shall mean such successor Person.

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

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

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"INSURANCE AGREEMENT INDENTURE CROSS DEFAULT" has the meaning
specified therefor in the Insurance Agreement.

"INSURER ISSUER SECURED OBLIGATIONS" means all amounts and
obligations which the Issuer may at any time owe to or on behalf of the
Security Insurer under this Indenture, the Insurance Agreement or any other
Related Document.

"INTEREST RATE" means the Class A-1 Interest Rate, the Class
A-2 Interest Rate, the Class A-3 Interest Rate, the Class A-4 Interest Rate
and the Class A-5 Interest Rate, as applicable.

"ISSUER" means the party named as such in this Indenture
until a successor replaces it and, thereafter, means the successor and, for
purposes of any provision contained herein and required by the TIA, each
other obligor on the Notes.

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

"ISSUER SECURED OBLIGATIONS" means the Insurer Issuer Secured
Obligations and the Trustee Issuer Secured Obligations.

"ISSUER SECURED PARTIES" means each of the Trustee in respect
of the Trustee Issuer Secured Obligations and the Security Insurer in respect
of the Insurer Issuer Secured Obligations.

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

"NOTE" means a Class A-1 Note, Class A-2 Note, Class A-3
Note, Class A-4 Note or Class A-5 Note, as applicable.

"NOTE OWNER" means, with respect to a Book-Entry Note, the
Person who is the owner of such Book-Entry Note, as reflected on the books of
the Depository, or on the books of a Person maintaining an account with such
Depository (directly as a Depository participant or as an indirect
participant, in each case in accordance with the rules of such Depository)
and with respect to any Definitive Notes, the Holder.

"NOTE POLICY" means the Financial Guaranty Insurance Policy
issued by the Security Insurer with respect to the Notes, including any
endorsements thereto, in the form of Exhibit D.

"NOTE POLICY CLAIM AMOUNT" has the meaning specified in
Section 5.18.

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

"NOTICE OF CLAIM" has the meaning specified in Section 5.18.

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

"OPINION OF COUNSEL" means one or more written opinions of
counsel who may, except as otherwise expressly provided in this Indenture, be
employees of or counsel to the Issuer and who shall be satisfactory to the
Trustee and, if addressed to the Security Insurer, satisfactory to the
Security Insurer, and which shall comply with any applicable requirements of
Section 11.01, and shall be in form and substance satisfactory to the
Trustee, and if addressed to the Security Insurer, satisfactory to the
Security Insurer. Such Opinion of Counsel shall not be at the expense of the
Trustee.

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

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

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

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

PROVIDED, HOWEVER, that Notes which have been paid with proceeds of the Note
Policy shall continue to remain Outstanding for purposes of this Indenture
until the Security Insurer has been paid as subrogee hereunder or reimbursed
pursuant to the Insurance Agreement as evidenced by a written notice from the
Security Insurer delivered to the Trustee, and the Security Insurer shall be
deemed to be the Holder thereof to the extent of any payments thereon made by
the Security Insurer; PROVIDED, FURTHER, that in determining whether the
Holders of the requisite Outstanding Amount of the Notes have given any
request, demand, authorization, direction, notice, consent or waiver
hereunder or under any Related Document, Notes owned by the Issuer, any other
obligor

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

"OUTSTANDING AMOUNT" means the aggregate principal amount of
all Notes, or class of Notes, as applicable, Outstanding at the date of
determination.

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

"PAYING AGENT" shall initially mean the Trustee or, with
respect to any successor to the Trustee, any other Person that meets the
eligibility standards for the Trustee specified in Section 6.11 and, so long
as no Insurer Default shall have occurred and be continuing, is consented to
by the Security Insurer and is authorized by the Issuer to make the
distributions from the Note Distribution Account, including payment of
principal of or interest on the Notes on behalf of the Issuer.

"PAYMENT DATE" means a Distribution Date.

"PERSON" means any individual, corporation, estate,
partnership, joint venture, association, joint stock company, trust
(including any beneficiary thereof), unincorporated organization or
government or any agency or political subdivision thereof.

"PREDECESSOR NOTE" means, with respect to any particular
Note, every previous Note evidencing all or a portion of the same debt as
that evidenced by such particular Note; and, for the purpose of this
definition, any Note authenticated and delivered under Section 2.05 in lieu
of a mutilated, lost, destroyed or stolen Note shall be deemed to evidence
the same debt as the mutilated, lost, destroyed or stolen Note.

"PREFERENCE CLAIM" has the meaning specified in Section 5.19.

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

"RATING AGENCY" means each of Moody's and Standard & Poor's,
so long as such Persons maintain a rating on the Notes; and if either Moody's
or Standard & Poor's no longer maintains a rating on the Notes, such other
nationally recognized statistical rating organization

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selected by the Seller and (so long as an Insurer Default shall not have
occurred and be continuing) acceptable to the Security Insurer.

"RATING AGENCY CONDITION" means, with respect to any action,
that each Rating Agency shall have been given 10 days' prior notice thereof
and that each of the Rating Agencies shall have notified the Seller, the
Servicer, the Security Insurer, the Trustee, the Owner Trustee and the Issuer
in writing that such action will not result in a reduction or withdrawal of
the then current rating of the Notes and will not result in an increased
capital charge to the Security Insurer.

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

"REDEMPTION DATE" means (a) in the case of a redemption of
the Notes pursuant to Section 10.01(a) or a payment to Noteholders pursuant
to Section 10.01(c), the Payment Date specified by the Servicer or the Issuer
pursuant to Section 10.01(a) or 10.01(c), as applicable, or (b) in the case
of a redemption of Notes pursuant to Section 10.01(b), the Payment Date on or
immediately following the last day of the Funding Period.

"REDEMPTION PRICE" means (a) in the case of a redemption of
the Notes pursuant to Section 10.01(a), an amount equal to the principal
amount of the Notes redeemed plus accrued and unpaid interest on the
principal amount of each class of Notes at the respective Interest Rate for
each such class of Notes being so redeemed to but excluding the Redemption
Date, or (b) in the case of a payment made to Noteholders pursuant to Section
10.01(c), the amount on deposit in the Note Distribution Account, but not in
excess of the amount specified in clause (a) above.

"REGISTERED HOLDER" means the Person in whose name a Note is
registered on the Note Register on the applicable Record Date.

"RELATED DOCUMENTS" means the Trust Agreement, the Notes, the
Purchase Agreements, the Sale and Servicing Agreement, each Subsequent
Purchase Agreement, each Subsequent Transfer Agreement, the Administration
Agreement, the Custodian Agreement, the Note Policy, the Spread Account
Agreement, the Insurance Agreement, the Lockbox Agreement, the Stock Pledge
Agreement, the Depository Agreement and the Underwriting Agreement between
the Seller and AFL and the underwriters of the Notes. The Related Documents
executed by any party are referred to herein as "such party's Related
Documents," "its Related Documents" or by a similar expression.

"RESPONSIBLE OFFICER" means, with respect to the Trustee, any
officer assigned to the Corporate Trust Division (or any successor thereto),
including any Vice President, Assistant Vice President, Trust Officer, any
Assistant Secretary, any trust officer or any other officer of the Trustee
customarily performing functions similar to those performed by any of the
above

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designated officers and having direct responsibility for the administration
of the Trust. When used with respect to any other Person that is not an
individual, the President, any Vice President or Assistant Vice President or
the Controller of such Person, or any other officer or employee having
similar functions.

"SALE AND SERVICING AGREEMENT" means the Sale and Servicing
Agreement, dated as of March 1, 1999, among the Issuer, the Seller, the
Servicer and the Backup Servicer.

"SCHEDULE OF RECEIVABLES" means the listing of the
Receivables set forth in Exhibit A, as supplemented on each Subsequent
Transfer Date to reflect the sale to the Issuer of Subsequent Receivables.

"SCHEDULED PAYMENTS" has the meaning specified therefor in
the Note Policy.

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

"TERMINATION DATE" means the latest of (i) the expiration of
the Note Policy and the return of the Note Policy to the Security Insurer for
cancellation, (ii) the date on which the Security Insurer shall have received
payment and performance of all Insurer Issuer Secured Obligations and (iii)
the date on which the Trustee shall have received payment and performance of
all Trustee Issuer Secured Obligations.

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

"TRUST INDENTURE ACT" OR "TIA" means the Trust Indenture Act
of 1939 as in force on the date hereof, unless otherwise specifically
provided. The term "TIA" shall specifically include any amendments or
revisions to the Trust Indenture Act of 1939 which may be enacted from time
to time.

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

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

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

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

Section of Sale and
Term Servicing Agreement
- - ---- -------------------
<S> <C>
AFL. . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.1
Aggregate Principal Balance. . . . . . . . . . . . . . . Section 1.1
APR. . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.1
Available Funds. . . . . . . . . . . . . . . . . . . . . Section 1.1
Backup Servicer. . . . . . . . . . . . . . . . . . . . . Section 1.1
Class A-1 Final Scheduled Distribution Date. . . . . . . Section 1.1
Class A-2 Final Scheduled Distribution Date. . . . . . . Section 1.1
Class A-3 Final Scheduled Distribution Date. . . . . . . Section 1.1
Class A-4 Final Scheduled Distribution Date. . . . . . . Section 1.1
Class A-5 Final Scheduled Distribution Date. . . . . . . Section 1.1
Class A-1 Holdback Amount. . . . . . . . . . . . . . . . Section 1.1
Class A-1 Holdback Subaccount. . . . . . . . . . . . . . Section 1.1
Class A-1 Prepayment Amount. . . . . . . . . . . . . . . Section 1.1
Class A-2 Prepayment Amount. . . . . . . . . . . . . . . Section 1.1
Class A-3 Prepayment Amount. . . . . . . . . . . . . . . Section 1.1
Class A-4 Prepayment Amount. . . . . . . . . . . . . . . Section 1.1
Class A-5 Prepayment Amount. . . . . . . . . . . . . . . Section 1.1
Class A-1 Prepayment Premium . . . . . . . . . . . . . . Section 1.1
Class A-2 Prepayment Premium . . . . . . . . . . . . . . Section 1.1
Class A-3 Prepayment Premium . . . . . . . . . . . . . . Section 1.1
Class A-4 Prepayment Premium . . . . . . . . . . . . . . Section 1.1
Class A-5 Prepayment Premium . . . . . . . . . . . . . . Section 1.1
Collateral Agent . . . . . . . . . . . . . . . . . . . . Section 1.1
Collateral Insurance . . . . . . . . . . . . . . . . . . Section 1.1
Collection Account . . . . . . . . . . . . . . . . . . . Section 1.1
Custodian. . . . . . . . . . . . . . . . . . . . . . . . Section 1.1
Dealer . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.1
Dealer Agreement . . . . . . . . . . . . . . . . . . . . Section 1.1
Dealer Assignment. . . . . . . . . . . . . . . . . . . . Section 1.1
Distribution Date. . . . . . . . . . . . . . . . . . . . Section 1.1
Draw Date. . . . . . . . . . . . . . . . . . . . . . . . Section 1.1
Eligible Account . . . . . . . . . . . . . . . . . . . . Section 1.1
Eligible Investments . . . . . . . . . . . . . . . . . . Section 1.1
Financed Vehicle . . . . . . . . . . . . . . . . . . . . Section 1.1

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Force-Placed Insurance . . . . . . . . . . . . . . . . . Section 1.1
Funding Period . . . . . . . . . . . . . . . . . . . . . Section 1.1
Initial Receivables. . . . . . . . . . . . . . . . . . . Section 1.1
Insurance Agreement. . . . . . . . . . . . . . . . . . . Section 1.1
Insurance Agreement Event of Default . . . . . . . . . . Section 1.1
Insurer Default. . . . . . . . . . . . . . . . . . . . . Section 1.1
Liquidation Proceeds . . . . . . . . . . . . . . . . . . Section 1.1
Lockbox Bank . . . . . . . . . . . . . . . . . . . . . . Section 1.1
Monthly Period . . . . . . . . . . . . . . . . . . . . . Section 1.1
Moody's. . . . . . . . . . . . . . . . . . . . . . . . . Section 1.1
Note Distribution Account. . . . . . . . . . . . . . . . Section 1.1
Note Majority. . . . . . . . . . . . . . . . . . . . . . Section 1.1
Noteholders' Interest Distributable Amount . . . . . . . Section 1.1
Noteholders' Percentage. . . . . . . . . . . . . . . . . Section 1.1
Noteholders' Principal Distributable Amount. . . . . . . Section 1.1
Obligor. . . . . . . . . . . . . . . . . . . . . . . . . Section 1.1
Pre-Funded Amount. . . . . . . . . . . . . . . . . . . . Section 1.1
Pre-Funding Account. . . . . . . . . . . . . . . . . . . Section 4.1
Purchase Agreements. . . . . . . . . . . . . . . . . . . Section 1.1
Purchased Receivable . . . . . . . . . . . . . . . . . . Section 1.1
Receivable . . . . . . . . . . . . . . . . . . . . . . . Section 1.1
Reserve Account. . . . . . . . . . . . . . . . . . . . . Section 1.1
Security Insurer . . . . . . . . . . . . . . . . . . . . Section 1.1
Seller . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.1
Servicer . . . . . . . . . . . . . . . . . . . . . . . . Section 1.1
Servicer Termination Event . . . . . . . . . . . . . . . Section 1.1
Standard & Poor's. . . . . . . . . . . . . . . . . . . . Section 1.1
Subsequent Receivables . . . . . . . . . . . . . . . . . Section 1.1
Subsequent Transfer Date . . . . . . . . . . . . . . . . Section 1.1
Trust Accounts . . . . . . . . . . . . . . . . . . . . . Section 1.1
Trust Agreement. . . . . . . . . . . . . . . . . . . . . Section 1.1

</TABLE>

SECTION 1.02. INCORPORATION BY REFERENCE OF TRUST INDENTURE
ACT. Whenever this Indenture refers to a provision of the TIA, the provision
is incorporated by reference in and made a part of this Indenture. The
following TIA terms used in this Indenture have the following meanings:

"Commission" means the Securities and Exchange Commission.

"indenture securities" means the Notes.

"indenture security holder" means a Noteholder.

"indenture to be qualified" means this Indenture.

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<PAGE>

"indenture trustee" or "institutional trustee" means the Trustee.

"obligor" on the indenture securities means the Issuer and any other
obligor on the indenture securities.

All other TIA terms used in this Indenture that are defined
by the TIA, defined by TIA reference to another statute or defined by
Commission rule have the meaning assigned to them by such definitions.

SECTION 1.03. RULES OF CONSTRUCTION. Unless otherwise
specified:

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

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

(iii) "or" is not exclusive;

(iv) "including" means including without limitation;

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

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

ARTICLE II

THE NOTES

SECTION 2.01. FORM. The Class A-1 Notes, the Class A-2
Notes, the Class A-3 Notes, the Class A-4 Notes and the Class A-5 Notes, in
each case together with the Trustee's certificate of authentication, shall be
in substantially the forms set forth in Exhibits C-1, C-2, C-3, C-4 and C-5,
respectively, with such appropriate insertions, omissions, substitutions and
other variations as are required or permitted by this Indenture and may have
such letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may, consistently herewith, be determined by
the officers executing such Notes, as evidenced by their execution of the
Notes. Any portion of the text of any Note may be set forth on the reverse
thereof, with an appropriate reference thereto on the face of the Note.

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<PAGE>

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

Each Note shall be dated the date of its authentication. The
terms of the Notes set forth in Exhibits C-1, C-2, C-3, C-4 and C-5, are part
of the terms of this Indenture.

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

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

The Trustee shall upon receipt of the Note Policy and Issuer
Order authenticate and deliver Class A-1 Notes for original issue in an
aggregate principal amount of $60,000,000, Class A-2 Notes for original issue
in an aggregate principal amount of $153,000,000, Class A-3 Notes for
original issue in an aggregate principal amount of $65,000,000, Class A-4
Notes in an aggregate principal amount of $105,000,000 and Class A-5 Notes in
an aggregate principal amount of $167,000,000. The aggregate principal
amount of the Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes, the
Class A-4 Notes and the Class A-5 Notes outstanding at any time may not
exceed that amount except as provided in Section 2.05.

Each Note shall be dated the date of its authentication. The
Notes shall be issuable as registered Notes in the minimum denomination of
$1,000 and in integral multiples thereof.

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

SECTION 2.03. TEMPORARY NOTES. Pending the preparation of
definitive Notes, the Issuer may execute, and upon receipt of an Issuer Order
the Trustee shall authenticate and deliver, temporary Notes which are
printed, lithographed, typewritten, mimeographed or otherwise produced, of
the tenor of the definitive Notes in lieu of which they are issued and with
such variations not inconsistent with the terms of this Indenture as the
officers executing such Notes may determine, as evidenced by their execution
of such Notes.

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<PAGE>

If temporary Notes are issued, the Issuer will cause
definitive Notes to be prepared without unreasonable delay. After the
preparation of definitive Notes, the temporary Notes shall be exchangeable
for definitive Notes upon surrender of the temporary Notes at the office or
agency of the Issuer to be maintained as provided in Section 3.02, without
charge to the Holder. Upon surrender for cancellation of any one or more
temporary Notes, the Issuer shall execute and the Trustee shall authenticate
and deliver in exchange therefor a like principal amount of definitive Notes
of authorized denominations. Until so exchanged, the temporary Notes shall
in all respects be entitled to the same benefits under this Indenture as
definitive Notes.

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

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

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

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

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

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<PAGE>

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

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

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

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

Upon the issuance of any replacement Note under this Section,
the Issuer or the Trustee may require the payment by the Holder of such Note
of a sum sufficient to cover any tax

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<PAGE>

or other governmental charge that may be imposed in relation thereto and any
other reasonable expenses (including the fees and expenses of the Trustee or
the Note Registrar) connected therewith.

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

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

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

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

(a) The Notes shall accrue interest as provided in the
forms of the Class A-1 Note, the Class A-2 Note, the Class A-3 Note, the
Class A-4 Note and the Class A-5 Note set forth in Exhibits C-1, C-2, C-3,
C-4 and C-5, respectively, and such interest shall be payable on each Payment
Date as specified therein, subject to Section 3.01. Any installment of
interest or principal, if any, payable on any Note which is punctually paid
or duly provided for by the Issuer on the applicable Payment Date shall be
paid to the Person in whose name such Note (or one or more Predecessor Notes)
is registered on the Record Date, by check mailed first-class, postage
prepaid to such Person's address as it appears on the Note Register on such
Record Date, except that, unless Definitive Notes have been issued pursuant
to Section 2.11, with respect to Notes registered on the Record Date in the
name of the nominee of the Depository, payment will be made by wire transfer
in immediately available funds to the account designated by such nominee and
except for (i) the final installment of principal payable with respect to
such Note on a Payment Date and (ii) the Redemption Price for any Note called
for redemption pursuant to Section 10.01(a), which shall be payable as
provided below. The funds represented by any such checks returned undelivered
shall be held in accordance with Section 3.03.

(b) The principal of each Note shall be payable in
installments on each Payment Date as provided in the forms of the Class A-1
Note, the Class A-2 Note, the Class A-3 Note, the Class A-4 Note and the
Class A-5 Note set forth in Exhibits C-1, C-2, C-3, C-4

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<PAGE>

and C-5, respectively. Notwithstanding the foregoing, the entire unpaid
principal amount of the Notes shall be due and payable, if not previously
paid, on the date on which an Event of Default shall have occurred and be
continuing, so long as an Insurer Default shall not have occurred and be
continuing or, if an Insurer Default shall have occurred and be continuing,
on the date on which an Event of Default shall have occurred and be
continuing and the Trustee or a Note Majority have declared the Notes to be
immediately due and payable in the manner provided in Section 5.02. All
principal payments on a class of Notes shall be made pro rata to the
Noteholders of such Class entitled thereto. The Trustee shall notify the
Person in whose name a Note is registered at the close of business on the
Record Date preceding the Payment Date for which the Trustee has received
notice from the Issuer that the Issuer expects that the final installment of
principal of and interest on such Note will be paid. Such notice shall be
mailed no later than five days prior to such final Payment Date and shall
specify that such final installment will be payable only upon presentation
and surrender of such Note and shall specify the place where such Note may be
presented and surrendered for payment of such installment. Notices in
connection with redemptions of Notes shall be mailed to Noteholders as
provided in Section 10.02.

(c) Promptly following the date on which all principal of
and interest on the Notes has been paid in full and the Notes have been
surrendered to the Trustee, the Trustee shall, if the Security Insurer has
paid any amount in respect of the Notes under the Note Policy or otherwise
which has not been reimbursed to it, deliver such surrendered Notes to the
Security Insurer.

SECTION 2.08. CANCELLATION. Subject to Section 2.07(c), all
Notes surrendered for payment, registration of transfer, exchange or
redemption shall, if surrendered to any Person other than the Trustee, be
delivered to the Trustee and shall be promptly canceled by the Trustee.
Subject to Section 2.07(c), the Issuer may at any time deliver to the Trustee
for cancellation any Notes previously authenticated and delivered hereunder
which the Issuer may have acquired in any manner whatsoever, and all Notes so
delivered shall be promptly canceled by the Trustee. No Notes shall be
authenticated in lieu of or in exchange for any Notes canceled as provided in
this Section, except as expressly permitted by this Indenture. Subject to
Section 2.07(c), all canceled Notes may be held or disposed of by the Trustee
in accordance with its standard retention or disposal policy as in effect at
the time unless the Issuer shall direct by an Issuer Order that they be
destroyed or returned to it, provided that such Issuer Order is timely and
the Notes have not been previously disposed of by the Trustee.

SECTION 2.09. BOOK-ENTRY NOTES. The Notes, upon original
issuance, will be issued in the form of a typewritten Note or Notes
representing the Book-Entry Notes, to be delivered to The Depository Trust
Company, the initial Depository, by, or on behalf of, the Issuer. Such Note
shall initially be registered on the Note Register in the name of Cede & Co.,
the nominee of the initial Depository, and no Note Owner will receive a
Definitive Note representing such Note Owner's interest in such Note, except
as provided in Section 2.11.

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<PAGE>

Unless and until definitive, fully registered Notes (the "Definitive Notes")
have been issued to Note Owners pursuant to Section 2.11:

(i) the provisions of this Section shall be in full force
and effect;

(ii) the Note Registrar and the Trustee shall be entitled to
deal with the Depository for all purposes of this Indenture (including
the payment of principal of and interest on the Notes and the giving of
instructions or directions hereunder) as the sole holder of the Notes,
and shall have no obligation to the Note Owners;

(iii) to the extent that the provisions of this Section
conflict with any other provisions of this Indenture, the provisions of
this Section shall control;

(iv) the rights of Note Owners shall be exercised only
through the Depository and shall be limited to those established by law
and agreements between such Note Owners and the Depository and/or the
Depository Participants. Pursuant to the Depository Agreement, unless
and until Definitive Notes are issued pursuant to Section 2.11, the
initial Depository will make book-entry transfers among the Depository
Participants and receive and transmit payments of principal of and
interest on the Notes to such Depository Participants;

(v) whenever this Indenture requires or permits actions to
be taken based upon instructions or directions of Holders of Notes
evidencing a specified percentage of the Outstanding Amount of the
Notes, the Depository shall be deemed to represent such percentage only
to the extent that it has received instructions to such effect from Note
Owners and/or Depository Participants owning or representing,
respectively, such required percentage of the beneficial interest in the
Notes and has delivered such instructions to the Trustee; and

(vi) Note Owners may receive copies of any reports sent to
Noteholders pursuant to this Indenture, upon written request, together
with a certification that they are Note Owners and payment of
reproduction and postage expenses associated with the distribution of
such reports, from the Trustee at the Corporate Trust Office.

SECTION 2.10. NOTICES TO DEPOSITORY. Whenever a notice or
other communication to the Noteholders is required under this Indenture,
unless and until Definitive Notes shall have been issued to Note Owners
pursuant to Section 2.11, the Trustee shall give all such notices and
communications specified herein to be given to Holders of the Notes to the
Depository and shall have no obligation to the Note Owners.

SECTION 2.11. DEFINITIVE NOTES. If (i) the Administrator
advises the Trustee in writing that the Depository is no longer willing or
able properly to discharge its responsibilities with respect to the Notes,
and the Administrator is unable to locate a qualified successor, (ii) the
Administrator at its option advises the Trustee in writing that it elects to
terminate the book-entry

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<PAGE>

system through the Depository or (iii) after the occurrence of an Event of
Default, a Note Majority advises the Depository in writing that the
continuation of a book-entry system through the Depository is no longer in
the best interests of the Note Owners, then the Depository shall notify all
Note Owners and the Trustee of the occurrence of any such event and of the
availability of Definitive Notes to Note Owners requesting the same. Upon
surrender to the Trustee of the Note or Notes representing the Book-Entry
Notes by the Depository, accompanied by registration instructions, the Issuer
shall execute and the Trustee shall authenticate the Definitive Notes in
accordance with the instructions of the Depository. None of the Issuer, the
Note Registrar or the Trustee shall be liable for any delay in delivery of
such instructions and may conclusively rely on, and shall be protected in
relying on, such instructions. Upon the issuance of Definitive Notes, the
Trustee shall recognize the Holders of the Definitive Notes as Noteholders.

ARTICLE III

COVENANTS

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

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

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

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<PAGE>

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

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

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

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

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

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

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

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

Subject to applicable laws with respect to escheat of funds,
any money held by the Trustee or any Paying Agent in trust for the payment of
any amount due with respect to any Note

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<PAGE>

and remaining unclaimed for two years after such amount has become due and
payable shall be discharged from such trust and upon Issuer Request with the
consent of the Security Insurer (unless an Insurer Default shall have
occurred and be continuing) shall be deposited by the Trustee in the
Collection Account; and the Holder of such Note shall thereafter, as an
unsecured general creditor, look only to the Issuer for payment thereof, and
all liability of the Trustee or such Paying Agent with respect to such trust
money shall thereupon cease; PROVIDED, HOWEVER, that if such money or any
portion thereof had been previously deposited by the Security Insurer or the
Indenture Collateral Agent with the Trustee for the payment of principal or
interest on the Notes, to the extent any amounts are owing to the Security
Insurer, such amounts shall be paid promptly to the Security Insurer upon
receipt of a written request by the Security Insurer to such effect; and
PROVIDED, FURTHER, that the Trustee or such Paying Agent, before being
required to make any such repayment, may at the expense of the Issuer cause
to be published once, in a newspaper published in the English language,
customarily published on each Business Day and of general circulation in The
City of New York, notice that such money remains unclaimed and that, after a
date specified therein, which shall not be less than 30 days from the date of
such publication, any unclaimed balance of such money then remaining will be
repaid to or for the account of the Issuer. The Trustee may also adopt and
employ, at the expense of the Issuer, any other reasonable means of
notification of such repayment (including, but not limited to, mailing notice
of such repayment to Holders whose Notes have been called but have not been
surrendered for redemption or whose right to or interest in moneys due and
payable but not claimed is determinable from the records of the Trustee or of
any Paying Agent, at the last address of record for each such Holder).

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

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

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

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<PAGE>

(ii) maintain or preserve the lien and security interest (and
the priority thereof) in favor of the Indenture Collateral Agent for the
benefit of the Issuer Secured Parties created by this Indenture or carry
out more effectively the purposes hereof;

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

(iv) enforce any of the Indenture Collateral;

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

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

The Issuer hereby designates the Indenture Collateral Agent its agent and
attorney-in-fact to execute any financing statement, continuation statement
or other instrument required by the Indenture Collateral Agent pursuant to
this Section; PROVIDED, HOWEVER, that the Servicer shall be responsible for
filing any such financing statement or continuation statement.

SECTION 3.06. OPINIONS AS TO TRUST ESTATE.

(a) On the Closing Date and on each Subsequent Transfer
Date, the Issuer shall furnish to the Trustee, the Indenture Collateral Agent
and the Security Insurer an Opinion of Counsel either stating that, in the
opinion of such counsel, such action has been taken with respect to the
recording and filing of this Indenture, any indentures supplemental hereto,
and any other requisite documents, and with respect to the execution and
filing of any financing statements and continuation statements, as are
necessary to perfect and make effective the first priority lien and security
interest in favor of the Indenture Collateral Agent, for the benefit of the
Issuer Secured Parties, created by this Indenture and reciting the details of
such action, or stating that, in the opinion of such counsel, no such action
is necessary to make such lien and security interest effective.

(b) On or before April 30 in each calendar year,
beginning in 1999, the Issuer shall furnish to the Trustee, the Indenture
Collateral Agent and the Security Insurer an Opinion of Counsel with respect
to each jurisdiction in which the Receivables are located or a Uniform
Commercial Code financing statement has been filed by the Issuer either
stating that, in the opinion of such counsel, such action has been taken with
respect to the recording, filing, re-recording and refiling of this
Indenture, any indentures supplemental hereto and any other requisite
documents and with respect to the execution and filing of any financing
statements and continuation statements as is necessary to maintain the first
priority lien and security interest created by this Indenture and reciting
the details of such action or stating that in the opinion of

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such counsel no such action is necessary to maintain such lien and security
interest. Such Opinion of Counsel shall also describe the recording, filing,
re-recording and refiling of this Indenture, any indentures supplemental
hereto and any other requisite documents and the execution and filing of any
financing statements and continuation statements that will, in the opinion of
such counsel, be required to maintain the lien and security interest of this
Indenture until April 30 in the following calendar year.

SECTION 3.07. PERFORMANCE OF OBLIGATIONS; SERVICING OF
RECEIVABLES.

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

(b) The Issuer may contract with other Persons acceptable
to the Security Insurer (so long as no Insurer Default shall have occurred
and be continuing) to assist it in performing its duties under this
Indenture, and any performance of such duties by a Person identified to the
Trustee and the Security Insurer in an Officers' Certificate of the Issuer
shall be deemed to be action taken by the Issuer. Initially, the Issuer has
contracted with the Servicer and the Administrator to assist the Issuer in
performing its duties under this Indenture. The Owner Trustee shall not be
responsible for the action or inaction of the Servicer or the Administrator.

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

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

(e) If an Insurer Default shall have occurred and be
continuing and if the Issuer has given notice of termination to the Servicer
of the Servicer's rights and powers pursuant to Section 8.2 of the Sale and
Servicing Agreement, as promptly as possible thereafter,

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the Issuer shall appoint a successor servicer in accordance with Section 8.3
of the Sale and Servicing Agreement.

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

(g) The Issuer agrees that it will not waive timely
performance or observance by the Servicer, the Backup Servicer, the Seller or
AFL of their respective duties under the Related Documents (x) without the
prior consent of the Security Insurer (unless an Insurer Default shall have
occurred and be controlling) or (y) if the effect thereof would adversely
affect the Holders of the Notes.

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

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

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

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

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SECTION 3.09. ANNUAL STATEMENT AS TO COMPLIANCE. The Issuer
will deliver to the Trustee and the Security Insurer, within 120 days after
the end of each fiscal year of the Issuer (commencing with the fiscal year
ended December 31, 1999), an Officers' Certificate stating, as to the
Authorized Officer signing such Officer's Certificate, that

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

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

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

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

(i) the Person (if other than the Issuer) formed by or
surviving such consolidation or merger shall be a Person organized and
existing under the laws of the United States of America or any State and
shall expressly assume, by an indenture supplemental hereto, executed
and delivered to the Trustee, in form and substance satisfactory to the
Trustee and the Security Insurer (so long as no Insurer Default shall
have occurred and be continuing), the due and punctual payment of the
principal of and interest on all Notes and the performance or observance
of every agreement and covenant of this Indenture and each other Related
Document on the part of the Issuer to be performed or observed, all as
provided herein;

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

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

(iv) the Issuer, at its own expense, shall have received an
Opinion of Counsel which shall be delivered to and shall be satisfactory
to the Trustee and the Security Insurer (so long as no Insurer Default
shall have occurred and be continuing) to the effect that such
transaction will not have any material adverse tax consequence to the
Trust, the Security Insurer or any Noteholder;

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

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

(vii) so long as no Insurer Default shall have occurred and be
continuing, the Issuer shall have given the Security Insurer written
notice of such consolidation or merger at least 20 Business Days prior
to the consummation of such action and shall have received the prior
written approval of the Security Insurer of such consolidation or merger
and the Issuer or the Person (if other than the Issuer) formed by or
surviving such consolidation or merger has a net worth, immediately
after such consolidation or merger, that is (a) greater than zero and
(b) not less than the net worth of the Issuer immediately prior to
giving effect to such consolidation or merger.

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

(i) the Person that acquires by conveyance or transfer the
properties and assets of the Issuer shall (A) be a United States citizen
or a Person organized and existing under the laws of the United States
of America or any State, (B) expressly assume, by an indenture
supplemental hereto, executed and delivered to the Trustee, in form and
substance satisfactory to the Trustee and the Security Insurer (so long
as no Insurer Default shall have occurred and be continuing), the due
and punctual payment of the principal of and interest on all Notes and
the performance or observance of every agreement and covenant of this
Indenture and each Related Document on the part of the Issuer to be
performed or observed, all as provided herein, (C) expressly agree by
means of such supplemental indenture that all right, title and interest
so conveyed or transferred shall be subject and subordinate to the
rights of Holders of the Notes, (D) unless otherwise provided in such
supplemental indenture, expressly agree to indemnify, defend and hold
harmless the Issuer against and from any loss, liability or expense
arising under or related to this Indenture and the Notes and
(E) expressly agree by means of such supplemental indenture that such
Person (or if a group of Persons, then one specified Person) shall make
all filings with the Commission (and any other appropriate Person)
required by the Exchange Act in connection with the Notes;

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

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

(iv) the Issuer shall have received an Opinion of Counsel
which shall be delivered to and shall be satisfactory to the Trustee and
the Security Insurer (so long as no Insurer Default shall have occurred
and be continuing) to the effect that such transaction will not have any
material adverse tax consequence to the Trust, the Security Insurer, any
Noteholder;

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

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

(vii) so long as no Insurer Default shall have occurred and be
continuing, the Issuer shall have given the Security Insurer written
notice of such conveyance or transfer of properties or assets at least
20 Business Days prior to the consummation of such action and shall have
received the prior written approval of the Security Insurer of such
conveyance or transfer and the Person acquiring by conveyance or
transfer the properties or assets of the Issuer has a net worth,
immediately after such conveyance or transfer, that is (a) greater than
zero and (b) not less than the net worth of the Issuer immediately prior
to giving effect to such conveyance or transfer.

SECTION 3.11. SUCCESSOR OR TRANSFEREE.

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

(b) Upon a conveyance or transfer of all the assets and
properties of the Issuer pursuant to Section 3.10(b), Arcadia Automobile
Receivables Trust, 1999-A will be released from every covenant and agreement
of this Indenture to be observed or performed on the part of the Issuer with
respect to the Notes immediately upon the delivery of written notice to the
Trustee stating that Arcadia Automobile Receivables Trust, 1999-A is to be so
released.

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SECTION 3.12. NO OTHER BUSINESS. The Issuer shall not
engage in any business other than financing, purchasing, owning, selling and
managing the Receivables in the manner contemplated by this Indenture and the
Related Documents and activities incidental thereto. After the Funding
Period, the Issuer shall not fund the purchase of any new Receivables.

SECTION 3.13. NO BORROWING. The Issuer shall not issue,
incur, assume, guarantee or otherwise become liable, directly or indirectly,
for any Indebtedness except for (i) the Notes, (ii) obligations owing from
time to time to the Security Insurer under the Insurance Agreement and (iii)
any other Indebtedness permitted by or arising under the Related Documents.
The proceeds of the Notes shall be used exclusively to fund the Issuer's
purchase of the Receivables and the other assets specified in the Sale and
Servicing Agreement, to fund the Pre-Funding Account, the Reserve Account and
the Spread Account and to pay the Issuer's organizational, transactional and
start-up expenses.

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

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

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

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

SECTION 3.18. NOTICE OF EVENTS OF DEFAULT. The Issuer
agrees to give the Trustee, the Security Insurer and the Rating Agencies
prompt written notice of each Event of Default hereunder, each default on the
part of the Servicer or the Seller of its obligations under

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the Sale and Servicing Agreement and each default on the part of AFL of its
obligations under the Purchase Agreements.

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

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

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

SECTION 3.22. REMOVAL OF ADMINISTRATOR. If an Insurer
Default shall have occurred and be continuing, so long as any Notes are
issued and outstanding, the Issuer shall not remove the Administrator without
cause unless the Rating Agency Condition shall have been satisfied in
connection with such removal.

SECTION 3.23. INCOME TAX CHARACTERIZATION. For purposes of
federal income, state and local income and franchise and any other income
taxes, the Issuer will treat the Notes as indebtedness.

ARTICLE IV

SATISFACTION AND DISCHARGE

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

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(A) either

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

(2) all Notes not theretofore delivered to the Trustee for
cancellation

(i) have become due and payable, or

(ii) will become due and payable at the Final
Scheduled Distribution Date within one year, or

(iii) are to be called for redemption within one year
under arrangements satisfactory to the Trustee for the giving of
notice of redemption by the Trustee in the name, and at the
expense, of the Issuer,

and the Issuer, in the case of (i), (ii) or (iii) above, has irrevocably
deposited or caused to be irrevocably deposited with the Indenture
Collateral Agent as part of the Trust Estate cash or direct obligations
of or obligations guaranteed by the United States of America (which will
mature prior to the date such amounts are payable), in trust in an
Eligible Account in the name of the Indenture Collateral Agent for such
purpose, in an amount sufficient to pay and discharge the entire
indebtedness on such Notes not theretofore delivered to the Trustee for
cancellation when due to the Final Scheduled Distribution Date or
Redemption Date (if Notes shall have been called for redemption pursuant
to Section 10.01(a)), as the case may be;

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

(C) the Issuer has delivered to the Trustee, the Indenture
Collateral Agent and the Security Insurer an Officers' Certificate, an
Opinion of Counsel and (if required by the TIA, the Trustee, the
Indenture Collateral Agent and the Security Insurer) an Independent
Certificate from a firm of certified public accountants, each meeting
the applicable requirements of Section 11.01(a) and each stating that
all conditions precedent herein provided for relating to the
satisfaction and discharge of this Indenture have been complied with and
the Rating Agency Condition has been satisfied.

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

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

SECTION 4.04. RELEASE OF TRUST ESTATE. The Indenture
Collateral Agent shall, on or after the Termination Date, release any
remaining portion of the Trust Estate from the lien created by this Indenture
and deposit in the Collection Account any funds then on deposit in any other
Trust Account. The Indenture Collateral Agent shall release property from the
lien created by this Indenture pursuant to this Section 4.04 only upon
receipt of an Issuer Request accompanied by an Officer's Certificate, an
Opinion of Counsel and (if required by the TIA) Independent Certificates in
accordance with TIA Sections 314(c) and 314(d)(1) meeting the applicable
requirements of Section 11.01.

ARTICLE V

REMEDIES

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

(i) default in the payment of any interest on any Note when
the same becomes due and payable, and such default shall continue for a
period of five days (solely for purposes of this clause, a payment on
the Notes funded by the Security Insurer or the Collateral Agent
pursuant to the Spread Account Agreement shall be deemed to be a payment
made by the Issuer); or

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

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this clause, a payment on the Notes funded by the Security Insurer or
the Collateral Agent pursuant to the Spread Account Agreement, shall be
deemed to be a payment made by the Issuer); or

(iii) so long as an Insurer Default shall not have occurred
and be continuing, an Insurance Agreement Indenture Cross Default shall
have occurred; provided, however, that the occurrence of an Insurance
Agreement Indenture Cross Default may not form the basis of an Event of
Default unless the Security Insurer shall, upon prior written notice to
the Rating Agencies, have delivered to the Issuer and the Trustee and
not rescinded a written notice specifying that such Insurance Agreement
Indenture Cross Default constitutes an Event of Default under the
Indenture; or

(iv) so long as an Insurer Default shall have occurred and be
continuing, default in the observance or performance of any covenant or
agreement of the Issuer made in this Indenture (other than a covenant or
agreement, a default in the observance or performance of which is
elsewhere in this Section specifically dealt with), or any
representation or warranty of the Issuer made in this Indenture or in
any certificate or other writing delivered pursuant hereto or in
connection herewith proving to have been incorrect in any material
respect as of the time when the same shall have been made, and such
default shall continue or not be cured, or the circumstance or condition
in respect of which such misrepresentation or warranty was incorrect
shall not have been eliminated or otherwise cured, for a period of 30
days after there shall have been given, by registered, express or
certified mail, to the Issuer by the Trustee or to the Issuer and the
Trustee by the Holders of at least 25% of the Outstanding Amount of the
Notes, a written notice specifying such default or incorrect
representation or warranty and requiring it to be remedied and stating
that such notice is a "Notice of Default" hereunder; or

(v) so long as an Insurer Default shall have occurred and be
continuing, the commencement of an involuntary case against the Issuer
under any applicable Federal or state bankruptcy, insolvency or other
similar law now or hereafter in effect, and such case is not dismissed
within 60 days; or

(vi) so long as an Insurer Default shall have occurred and be
continuing, (A) the commencement by the Issuer of a voluntary case under
any applicable Federal or state bankruptcy, insolvency or other similar
law now or hereafter in effect, (B) the entry of an order for relief in
an involuntary case against the Issuer under any such law, (C) the
consent by the Issuer to the entry of any such order for relief, (D) the
consent by the Issuer to the appointment or taking possession by a
receiver, liquidator, assignee, custodian, trustee, sequestrator or
similar official of the Issuer or for any substantial part of the Trust
Estate, (E) the making by the Issuer of any general assignment for the
benefit of creditors, (F) the failure by the Issuer generally to pay its
debts as such debts become due, or (G) the taking of action by the
Issuer in furtherance of any of the foregoing.

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

SECTION 5.02. RIGHTS UPON EVENT OF DEFAULT.

(a) If an Insurer Default shall not have occurred and be
continuing and an Event of Default shall have occurred and be continuing, the
Notes shall become immediately due and payable at par, together with accrued
interest thereon. If an Event of Default shall have occurred and be
continuing, the Controlling Party may exercise any of the remedies specified
in Section 5.04(a). In the event of any acceleration of any Notes by
operation of this Section 5.02, the Trustee shall continue to be entitled to
make claims under the Note Policy pursuant to Section 5.18 hereof for
Scheduled Payments on the Notes. Payments under the Note Policy following
acceleration of any Notes shall be applied by the Trustee:

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

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

(b) In the event any Notes are accelerated due to an
Event of Default, the Security Insurer shall have the right (in addition to
its obligation to pay Scheduled Payments on the Notes in accordance with the
Note Policy), but not the obligation, to make payments under the Note Policy
or otherwise of interest and principal due on such Notes, in whole or in
part, on any date or dates following such acceleration as the Security
Insurer, in its sole discretion, shall elect.

(c) If an Insurer Default shall have occurred and be
continuing and an Event of Default shall have occurred and be continuing, the
Trustee in its discretion may, or if so requested in writing by Holders
holding Notes representing at least 66-2/3% of the aggregate outstanding
principal amount of the Notes shall, upon prior written notice to the Rating
Agencies, declare by written notice to the Issuer that the Notes become,
whereupon they shall become, immediately due and payable at par, together
with accrued interest thereon. Notwithstanding anything to the contrary in
this paragraph (c), if an Event of Default specified in Section 5.01(v) or
(vi) shall occur and be continuing when an Insurer Default has occurred and
is continuing, the Notes shall become immediately due and payable at par,
together with accrued interest thereon.

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

(a) The Issuer covenants that if any Notes are
accelerated following the occurrence of an Event of Default, the Issuer will,
upon demand of the Trustee, pay to it, for the benefit of the Holders of such
Notes, the whole amount then due and payable on such Notes for principal and
interest, with interest upon the overdue principal, and, to the extent
payment at such rate of interest shall be legally enforceable, upon overdue
installments of interest, at the applicable Interest Rate and in addition
thereto such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements, indemnified amounts and advances of the Trustee and its agents
and counsel.
(b) Each Issuer Secured Party hereby irrevocably and
unconditionally appoints the Controlling Party as the true and lawful
attorney-in-fact of such Issuer Secured Party for so long as such Issuer
Secured Party is not the 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 Issuer Secured Party such acts,
things and deeds for or on behalf of and in the name of such Issuer Secured
Party under this Indenture (including specifically under Section 5.04) and
under the Related Documents which such Issuer 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
under the Related Documents and, without limitation, following the occurrence
of an Event of Default, exercise full right, power and authority to take, or
defer from taking, any and all acts with respect to the administration,
maintenance or disposition of the Trust Estate.

(c) If an Event of Default occurs and is continuing, the
Trustee may in its discretion but with the consent of the Controlling Party
(except as provided in Section 5.03(d) below), proceed to protect and enforce
its rights and the rights of the Noteholders, by such appropriate Proceedings
as the Trustee shall deem most effective to protect and enforce any such
rights, whether for the specific enforcement of any covenant or agreement in
this Indenture or in aid of the exercise of any power granted herein, or to
enforce any other proper remedy or legal or equitable right vested in the
Trustee by this Indenture or by law.

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

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without the consent of the Controlling Party to the extent such actions (x)
are taken only to enforce to Issuer's obligations to redeem the principal
amount of Notes and make payment of the Noteholders' Prepayment Premium
required under Section 10.01(b) and (y) are taken only against the portion of
the Indenture Collateral, if any, consisting of the Pre-Funding Account, the
Reserve Account, any investments therein and any proceeds thereof.

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

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

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

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

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

and any trustee, receiver, liquidator, custodian or other similar official in
any such Proceeding is hereby authorized by each of such Noteholders to make
payments to the Trustee, and, in the event that the Trustee shall consent to
the making of payments directly to such Noteholders, to

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pay to the Trustee such amounts as shall be sufficient to cover reasonable
compensation to the Trustee, each predecessor Trustee and their respective
agents, attorneys and counsel, and all other expenses and liabilities
incurred, and all advances made, by the Trustee and each predecessor Trustee
except as a result of negligence or bad faith.

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

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

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

SECTION 5.04. REMEDIES. (a) If an Event of Default shall
have occurred and be continuing, the Controlling Party may (subject to
Section 5.05):

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

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

(iii) exercise any remedies of a secured party under the UCC
and any other remedy available to the Trustee and take any other
appropriate action to protect and enforce the rights and remedies of the
Issuer Secured Parties; and

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

(A) if the Security Insurer is the Controlling
Party, the Security Insurer may not sell or otherwise liquidate
the Trust Estate following an Insurance Agreement Indenture
Cross Default unless

(I) such Insurance Agreement Indenture Cross
Default arises from a claim being made on the Note
Policy or from the insolvency of the Trust or the
Seller, or

(II) the proceeds of such sale or liquidation
distributable to the Noteholders are sufficient to
discharge in full all amounts then due and unpaid upon
such Notes for principal and interest; or

(B) if the Trustee is the Controlling Party, the
Trustee may not sell or otherwise liquidate the Trust Estate
following an Event of Default unless

(I) such Event of Default is of the type
described in Section 5.01(i) or (ii), or

(II) either

(x) the Holders of 100% of the
Outstanding Amount of the Notes consent thereto,

(y) the proceeds of such sale or
liquidation distributable to the Noteholders are
sufficient to discharge in full all amounts then
due and unpaid upon such Notes for principal and
interest, or

(z) the Trustee determines that the
Trust Estate will not continue to provide
sufficient funds for the payment of principal of
and interest on the Notes as they would have
become due if the Notes had not been declared
due and payable, and the Trustee provides prior
written notice to the Rating Agencies and
obtains the consent of Holders of 66-2/3% of the
Outstanding Amount of the Notes.

In determining such sufficiency or insufficiency with respect to
clause (y) and (z), the Trustee may, but need not, obtain and
rely upon an opinion of an Independent investment banking or
accounting firm of national reputation as to the feasibility

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of such proposed action and as to the sufficiency of the Trust
Estate for such purpose.

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

SECTION 5.06. PRIORITIES.

(a) If the Trustee collects any money or property
pursuant to this Article V (excluding any payments made under the Note
Policy), or if the Indenture Collateral Agent delivers any money or property
in respect of liquidation of the Trust Estate to the Trustee pursuant to
Section 5.04(a)(iv), the Trustee shall pay as promptly as practicable out the
money or property in the following order:

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

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

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

FOURTH: amounts due and owing and required to be distributed to
the Security Insurer pursuant to priority (vi) of Section 4.6 of the
Sale and Servicing Agreement and not previously distributed; and

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FIFTH: to the Collateral Agent to be applied as provided in the
Spread Account Agreement;

provided that any amounts collected from the Pre-Funding Account or the
Reserve Account shall be paid, FIRST, for amounts due and unpaid on the Notes
for principal and premium, if any, for distribution to Noteholders in
accordance with Section 10.01(b) and, SECOND, in accordance with priorities
ONE through FIFTH above; PROVIDED, HOWEVER, that the Issuer's obligation to
pay the Class A-1 Prepayment Premium, the Class A-2 Prepayment Premium, the
Class A-3 Prepayment Premium, the Class A-4 Prepayment Premium or the Class
A-5 Prepayment Premium shall, as set forth in Section 2.4(d) of the Sale and
Servicing Agreement, be limited solely to funds which are received by the
Issuer from AFL pursuant to Section 6.2 of the Purchase Agreement as
liquidated damages for the failure of AFL to deliver Subsequent Receivables
and no other assets of the Issuer will be available to pay the Class A-1
Prepayment Premium, the Class A-2 Prepayment Premium, the Class A-3
Prepayment Premium, the Class A-4 Prepayment Premium or the Class A-5
Prepayment Premium under the circumstances.

(b) The Trustee may fix a record date and payment date
for any payment to Noteholders pursuant to this Section. At least 15 days
before such record date the Issuer shall mail to each Noteholder and the
Trustee a notice that states the record date, the payment date and the amount
to be paid.

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

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

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

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

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

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

(vi) an Insurer Default shall have occurred and be
continuing;

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

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

SECTION 5.08. UNCONDITIONAL RIGHTS OF NOTEHOLDERS TO RECEIVE
PRINCIPAL AND INTEREST. Notwithstanding any other provisions in this
Indenture, the Holder of any Note shall have the right, which is absolute and
unconditional, to receive payment of the principal of and interest on such
Note on or after the respective due dates thereof expressed in such Note or
in this Indenture (or, in the case of redemption, on or after the Redemption
Date) and to institute suit for the enforcement of any such payment, and such
right shall not be impaired without the consent of such Holder; PROVIDED,
HOWEVER, that so long as an Insurer Default shall not have occurred and be
continuing, no such suit shall be instituted.

SECTION 5.09. RESTORATION OF RIGHTS AND REMEDIES. If the
Controlling Party or any Noteholder has instituted any Proceeding to enforce
any right or remedy under this Indenture and such Proceeding has been
discontinued or abandoned for any reason or has been determined adversely to
the Trustee or to such Noteholder, then and in every such case the Issuer,
the Trustee and the Noteholders 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 Trustee and the
Noteholders shall continue as though no such Proceeding had been instituted.

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

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

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and as often as may be deemed expedient, by the Trustee or by the
Noteholders, as the case may be.

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

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

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

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

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

SECTION 5.13. WAIVER OF PAST DEFAULTS.

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

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

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

SECTION 5.15. WAIVER OF STAY OR EXTENSION LAWS. The Issuer
covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, or plead or in any manner whatsoever, claim or take the
benefit or advantage of, any stay or extension law wherever enacted, now or
at any time hereafter in force, that may affect the covenants or the
performance of this Indenture; and the Issuer (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantages of any such
law, and covenants that it will not hinder, delay or impede the execution of
any power herein granted to the Trustee, but will suffer and permit the
execution of every such power as though no such law had been enacted.

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

SECTION 5.17. PERFORMANCE AND ENFORCEMENT OF CERTAIN
OBLIGATIONS.

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

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administrative actions or proceedings to compel or secure performance by the
Seller or the Servicer of each of their obligations under the Sale and
Servicing Agreement.

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

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

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

SECTION 5.18. CLAIMS UNDER NOTE POLICY.

(a) In the event that the Trustee has delivered a
Deficiency Notice with respect to any Determination Date pursuant to Section
5.2 of the Sale and Servicing Agreement, the Trustee shall on the related
Draw Date determine the Note Policy Claim Amount (as defined below) for the
related Payment Date. If the Note Policy Claim Amount for such Payment Date
is greater than zero, the Trustee shall furnish to the Security Insurer no
later than 12:00 noon New York City time on the related Draw Date a completed
Notice of Claim in the amount of the Note Policy Claim Amount. Amounts paid
by the Security Insurer pursuant to a claim submitted

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under this Section 5.18(a) shall be deposited by the Trustee into the Note
Distribution Account for payment to Noteholders on the related Payment Date.
The "Note Policy Claim Amount" for any Payment Date other than the Class A-1
Final Scheduled Distribution Date shall equal the lesser of (i) the sum of
the Noteholders' Interest Distributable Amount and the Noteholders' Principal
Distributable Amount for such Payment Date, and (ii) the excess, if any, of
the amount required to be distributed pursuant to clauses (i) - (v) of
Section 4.6 of the Sale and Servicing Agreement (without giving effect to the
limitation of the Distribution Amount specified in each such clause) over the
Distribution Amount with respect to such Payment Date. The "Note Policy
Claim Amount" with respect to the Class A-1 Final Scheduled Distribution Date
shall equal the excess, if any, of (i) the amount required to be distributed
pursuant to clauses (i) - (vi) of Section 4.6 of the Sale and Servicing
Agreement (without giving effect to the limitation of the Distribution Amount
specified in each such clause) over (ii) the sum of (A) the Distribution
Amount with respect to such Payment Date, plus (B) the amount, if any,
withdrawn from the Class A-1 Holdback Subaccount and deposited in the Note
Distribution Account pursuant to Section 5.1(b) of the Sale and Servicing
Agreement.

(b) Any notice delivered by the Trustee to the Security
Insurer pursuant to subsection 5.18(a) shall specify the Note Policy Claim
Amount claimed under the Note Policy and shall constitute a "Notice of Claim"
under the Note Policy. In accordance with the provisions of the Note Policy,
the Security Insurer is required to pay to the Trustee the Note Policy Claim
Amount properly claimed thereunder by 12:00 noon, New York City time, on the
later of (i) the third Business Day following receipt on a Business Day of
the Notice of Claim, and (ii) the applicable Payment Date. Any payment made
by the Security Insurer under the Note Policy shall be applied solely to the
payment of the Notes, and for no other purpose.

(c) The Trustee shall (i) receive as attorney-in-fact of
each Noteholder any Note Policy Claim Amount from the Security Insurer and
(ii) deposit the same in the Note Distribution Account for distribution to
Noteholders as provided in Section 3.01 or Section 5.02 of this Indenture.
Any and all Note Policy Claim Amounts disbursed by the Trustee from claims
made under the Note Policy shall not be considered payment by the Trust or
from the Spread Account with respect to such Notes, and shall not discharge
the obligations of the Trust with respect thereto. The Security Insurer
shall, to the extent it makes any payment with respect to the Notes, become
subrogated to the rights of the recipients of such payments to the extent of
such payments. Subject to and conditioned upon any payment with respect to
the Notes by or on behalf of the Security Insurer, the Trustee shall assign
to the Security Insurer all rights to the payment of interest or principal
with respect to the Notes which are then due for payment to the extent of all
payments made by the Security Insurer, and the Security Insurer may exercise
any option, vote, right, power or the like with respect to the Notes to the
extent that it has made payment pursuant to the Note Policy. To evidence
such subrogation, the Note Registrar shall note the Security Insurer's rights
as subrogee upon the register of Noteholders upon receipt from the Security
Insurer of proof of payment by the Security Insurer of any Noteholders'
Interest Distributable Amount or Noteholders' Principal Distributable Amount.
The foregoing

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subrogation shall in all cases be subject to the rights of the Noteholders to
receive all Scheduled Payments in respect of the Notes.
(d) The Trustee shall keep a complete and accurate record
of all funds deposited by the Security Insurer into the Collection Account
and the allocation of such funds to payment of interest on and principal paid
in respect of any Note. The Security Insurer shall have the right to inspect
such records at reasonable times upon one Business Day's prior notice to the
Trustee.

(e) The Trustee shall be entitled to enforce on behalf of
the Noteholders the obligations of the Security Insurer under the Note
Policy. Notwithstanding any other provision of this Agreement or any Related
Document, the Noteholders are not entitled to institute proceedings directly
against the Security Insurer.

SECTION 5.19. PREFERENCE CLAIMS.

(a) In the event that the Trustee has received a
certified copy of an order of the appropriate court that any Noteholders'
Interest Distributable Amount or Noteholders' Principal Distributable Amount
paid on a Note has been avoided in whole or in part as a preference payment
under applicable bankruptcy law, the Trustee shall so notify the Security
Insurer, shall comply with the provisions of the Note Policy to obtain
payment by the Security Insurer of such avoided payment, and shall, at the
time it provides notice to the Security Insurer, notify Holders of the Notes
by mail that, in the event that any Noteholder's payment is so recoverable,
such Noteholder will be entitled to payment pursuant to the terms of the Note
Policy. The Trustee shall furnish to the Security Insurer its records
evidencing the payments of principal of and interest on Notes, if any, which
have been made by the Trustee and subsequently recovered from Noteholders,
and the dates on which such payments were made. Pursuant to the terms of the
Note Policy, the Security Insurer will make such payment on behalf of the
Noteholder to the receiver, conservator, debtor-in-possession or trustee in
bankruptcy named in the Order (as defined in the Note Policy) and not to the
Trustee or any Noteholder directly (unless a Noteholder has previously paid
such payment to the receiver, conservator, debtor-in-possession or trustee in
bankruptcy, in which case the Security Insurer will make such payment to the
Trustee for distribution to such Noteholder upon proof of such payment
reasonably satisfactory to the Security Insurer).

(b) The Trustee shall promptly notify the Security
Insurer of any proceeding or the institution of any action (of which the
Trustee has actual knowledge) seeking the avoidance as a preferential
transfer under applicable bankruptcy, insolvency, receivership,
rehabilitation or similar law (a "Preference Claim") of any distribution made
with respect to the Notes. Each Holder, by its purchase of Notes, and the
Trustee hereby agree that so long as an Insurer Default shall not have
occurred and be continuing, the Security Insurer may at any time during the
continuation of any proceeding relating to a Preference Claim direct all
matters relating to such Preference Claim including, without limitation, (i)
the direction of any appeal of any order relating to any Preference Claim and
(ii) the posting of any surety, supersedeas or

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performance bond pending any such appeal at the expense of the Security
Insurer, but subject to reimbursement as provided in the Insurance Agreement.
In addition, and without limitation of the foregoing, as set forth in
Section 5.18(c), the Security Insurer shall be subrogated to, and each
Noteholder and the Trustee hereby delegate and assign, to the fullest extent
permitted by law, the rights of the Trustee and each Noteholder in the
conduct of any proceeding with respect to a Preference Claim, including,
without limitation, all rights of any party to an adversary proceeding action
with respect to any court order issued in connection with any such Preference
Claim.

ARTICLE VI

THE TRUSTEE AND THE INDENTURE COLLATERAL AGENT

SECTION 6.01. DUTIES OF TRUSTEE.

(a) If an Event of Default of which a Responsible Officer
of the Trustee shall have actual knowledge has occurred and is continuing,
the Trustee shall exercise the rights and powers vested in it by this
Indenture and in the same degree of care and skill in their exercise as a
prudent person would exercise or use under the circumstances in the conduct
of such person's own affairs.

(b) Except during the continuance of an Event of Default
of which a Responsible Officer of the Trustee shall have actual knowledge:

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

(ii) prior to the occurrence of a Event of Default of which a
Responsible Officer of the Trustee shall have actual knowledge, and
after the curing of all such Events of Default which may have occurred,
(A) the duties and obligations of the Trustee shall be determined solely
by the express provisions of this Agreement, (B) the Trustee shall not
be liable except for the performance of such duties and obligations as
are specifically set forth in this Agreement, (C) no implied covenants
or obligations shall be read into this Agreement against the Trustee and
(D) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon all resolutions, statements,
reports, documents, orders, certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture; PROVIDED,
HOWEVER, that the Trustee shall examine the certificates and opinions to
determine whether or not they conform to the requirements of this
Indenture and, if applicable, the Spread Account Agreement and the
Trustee's other Related Documents. If any such instrument is found not
to conform in any material respect to the

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requirements of this Agreement, the Trustee shall notify the
Noteholders of such instrument in the event the Trustee, after so
requesting, does not receive a satisfactorily corrected document.

(c) The Trustee may not be relieved from liability in its
individual capacity from liability to the Noteholders for its willful
misconduct, negligence or bad faith in connection with the distribution of
amounts from the Note Distribution Account in accordance with the terms
hereof, or for its willful misconduct, negligence or bad faith in the
performance of its duties as Trustee hereunder, except that:

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

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

(iii) the Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 5.12 or relating to the
time, method and place of conducting any proceeding for any remedy
available to the Trustee, or executing or omitting to execute any power
conferred upon the Trustee, under this Agreement.

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

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

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

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

(h) Every provision of this Indenture relating to the
conduct or affecting the liability of or affording protection to the Trustee
shall be subject to the provisions of this Section and to the provisions of
the TIA.

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(i) The Trustee shall, upon one Business Day's prior
notice to the Trustee, permit any representative of the Security Insurer,
during the Trustee's normal business hours, to examine all books of account,
records, reports and other papers of the Trustee relating to the Notes, to
make copies and extracts therefrom and to discuss the Trustee's affairs and
actions, as such affairs and actions relate to the Trustee's duties with
respect to the Notes, with the Trustee's officers and employees responsible
for carrying out the Trustee's duties with respect to the Notes.

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

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

(l) The Trustee shall, and hereby agrees that it will,
hold the Note Policy in trust, and will hold any proceeds of any claim on the
Note Policy in trust solely for the use and benefit of the Noteholders.

(m) Without limiting the generality of this Section 6.01,
the Trustee shall have no duty (i) to see to any recording, filing or
depositing of this Indenture or any agreement referred to herein or any
financing statement evidencing a security interest in the Financed Vehicles,
or to see to the maintenance of any such recording or filing or depositing or
to any recording, refiling or redepositing of any thereof, (ii) to see to any
insurance of the Financed Vehicles or Obligors or to effect or maintain any
such insurance, (iii) to see to the payment or discharge of any tax,
assessment or other governmental charge or any Lien or encumbrance of any
kind owing with respect to, assessed or levied against any part of the Trust,
(iv) to confirm or verify the contents of any reports or certificates
delivered to the Trustee pursuant to this Indenture or the Sale and Servicing
Agreement believed by the Trustee to be genuine and to have been signed or
presented by the proper party or parties, or (v) to inspect the Financed
Vehicles at any time or ascertain or inquire as to the performance of
observance of any of the Issuer's, the Seller's or the Servicer's
representations, warranties or covenants or the Servicer's duties and
obligations as Servicer and as custodian of the Receivable Files under the
Agreement.

(n) The Trustee shall not be required to take notice or
be deemed to have notice or knowledge of an Event of Default or any other
default under this Agreement unless a Responsible Officer of the Trustee
shall have received written notice thereof. In the absence of receipt of
such notice, the Trustee may conclusively assume that there is no Event of
Default or other such default.

SECTION 6.02. RIGHTS OF TRUSTEE.

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

(b) Other than with respect to actions required to be
taken by the Trustee pursuant to Section 5.18 and 5.19, before the Trustee
acts or refrains from acting, it may require an Officers' Certificate (with
respect to factual matters) or an Opinion of Counsel, as applicable, which
shall not be at the expense of the Trustee. The Trustee shall not be liable
for any action it takes or omits to take in good faith in reliance on the
Officers' Certificate or Opinion of Counsel, as applicable, or as directed by
the requisite amount of Note Owners as provided herein.

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

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

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

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

(g) The Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
consent, order, approval, bond or other paper or document, unless requested
in writing to do so by the Security Insurer (so long as no Insurer Default
shall have occurred and be continuing) or (if an Insurer Default shall have
occurred and be continuing) by the Holders of Notes evidencing not less than
25% of the Outstanding Amount thereof; PROVIDED, HOWEVER, that

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if the payment within a reasonable time to the Trustee of the costs, expenses
or liabilities likely to be incurred by it in the making of such
investigation is, in the opinion of the Trustee, not reasonably assured to
the Trustee by the security afforded to it by the terms of this Indenture or
the Sale and Servicing Agreement, the Trustee may require reasonable
indemnity against such cost, expense or liability as a condition to so
proceeding; the reasonable expense of every such examination shall be paid by
the Person making such request, or, if paid by the Trustee, shall be
reimbursed by the Person making such request upon demand.

(h) The right of the Trustee to perform any discretionary
act enumerated in this Agreement shall not be construed as a duty, and the
Trustee shall not be answerable for other than its negligence or willful
misconduct in the performance of such act.

(i) The Trustee shall not be required to give any bond or
surety in respect of the execution of the Trust or the Trust Estate created
hereby or the powers granted hereunder.

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

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

SECTION 6.05. NOTICE OF DEFAULTS. If a Default occurs and
is continuing and if it is known to a Responsible Officer of the Trustee, the
Trustee shall mail to each Noteholder and the Security Insurer notice of the
Default within 90 days after it occurs. Except in the case of a Default in
payment of principal of or interest on any Note (including payments pursuant
to the mandatory redemption provisions of such Note), the Trustee may
withhold the notice if and so long as a committee of its Responsible Officers
in good faith determines that withholding the notice is in the interests of
Noteholders.

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

SECTION 6.07. COMPENSATION AND INDEMNITY.

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(a) AFL in a separate letter agreement (the "Letter
Agreement") has covenanted and agreed to pay to the Trustee, and the Trustee
shall be entitled to, certain annual fees, which shall not be limited by any
law on compensation of a trustee of an express trust. In the Letter
Agreement, AFL has also agreed to reimburse the Trustee for all reasonable
out-of-pocket expenses incurred or made by it, including costs of collection,
in addition to the compensation for its services. Such expenses shall
include the reasonable compensation and expenses, disbursements and advances
of the Trustee's agents, counsel, accountants and experts. AFL has also
agreed to indemnify the Trustee and any director, officer, employee or agent
of the Trustee against any and all loss, liability or expense (including
attorneys' fees) incurred by it in connection with the administration of this
trust and the performance of its duties hereunder.

(b) If notwithstanding the provisions of the Letter
Agreement, AFL fails to pay any fee, expense or indemnified amount due to the
Trustee pursuant to the terms of the Letter Agreement, the Trustee shall be
entitled to a distribution in respect of such amount pursuant of Section
4.6(ii) of the Sale and Servicing Agreement. If notwithstanding the
provisions of the Letter Agreement, AFL fails to make any payment or
reimbursement due to the Trustee for any expense or claim for indemnification
to which the Trustee is entitled pursuant to the terms of the Letter
Agreement, the Trustee shall be entitled to a distribution in respect of such
amount pursuant to priority SIXTH of Section 3.03(b) of the Spread Account
Agreement. The Issuer's payment obligations to the Trustee pursuant to this
Section shall survive the discharge of this Indenture. When the Trustee
incurs expenses after the occurrence of a Default specified in Section
5.01(v) or (vi) with respect to the Issuer, the expenses are intended to
constitute expenses of administration under Title 11 of the United States
Code or any other applicable Federal or state bankruptcy, insolvency or
similar law. Notwithstanding anything else set forth in this Indenture or
the Related Documents, the Trustee agrees that the obligations of the Issuer
(but not AFL) to the Trustee hereunder and under the Related Documents shall
be recourse to the Trust Estate only. In addition, the Trustee agrees that
its recourse to the Issuer, the Trust Estate, the Seller and amounts held
pursuant of the Spread Account Agreement shall be limited to the right to
receive the distributions referred to in the first two sentences of this
Section 6.07(b).

SECTION 6.08. REPLACEMENT OF TRUSTEE. The Trustee may
resign at any time by so notifying the Issuer and the Security Insurer. The
Issuer may, with the consent of the Security Insurer, and, at the request of
the Security Insurer shall, remove the Trustee, unless an Insurer Default
shall have occurred and be continuing) if:

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

(ii) a court having jurisdiction in the premises in respect
of the Trustee in an involuntary case or proceeding under federal or
state banking or bankruptcy laws, as now or hereafter constituted, or
any other applicable federal or state bankruptcy, insolvency or other
similar law, shall have entered a decree or order granting relief or
appointing a receiver, liquidator, assignee, custodian, trustee,
conservator, sequestrator (or similar

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official) for the Trustee or for any substantial part of the Trustee's
property, or ordering the winding-up or liquidation of the Trustee's
affairs;

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

(iv) the Trustee commences a voluntary case under any federal
or state banking or bankruptcy laws, as now or hereafter constituted, or
any other applicable federal or state bankruptcy, insolvency or other
similar law, or consents to the appointment of or taking possession by a
receiver, liquidator, assignee, custodian, trustee, conservator,
sequestrator (or other similar official) for the Trustee or for any
substantial part of the Trustee's property, or makes any assignment for
the benefit of creditors or fails generally to pay its debts as such
debts become due or takes any corporate action in furtherance of any of
the foregoing;

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

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

If the Trustee resigns or is removed or if a vacancy exists
in the office of Trustee for any reason (the Trustee in such event being
referred to herein as the retiring Trustee), the Issuer shall promptly
appoint a successor Trustee acceptable to the Security Insurer (so long as an
Insurer Default shall not have occurred and be continuing). If the Issuer
fails to appoint such a successor Trustee, the Security Insurer may appoint a
successor Trustee.

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

If a successor Trustee does not take office within 60 days
after the retiring Trustee resigns or is removed, the retiring Trustee, the
Security Insurer (provided that no Insurer Default shall have occurred and be
continuing), the Issuer or the Holders of a majority in Outstanding Amount of
the Notes may petition any court of competent jurisdiction for the
appointment of a successor Trustee.

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

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

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

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

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

(a) Notwithstanding any other provisions of this
Indenture, at any time, for the purpose of meeting any legal requirement of
any jurisdiction in which any part of the Trust may at the time be located,
the Trustee, with the consent of the Security Insurer (so long as an Insurer
Default shall not have occurred and be continuing), shall have the power and
may execute and deliver all instruments to appoint one or more Persons to act
as a co-trustee or co-trustees, or separate trustee or separate trustees, of
all or any part of the Trust, and to vest in such Person or Persons, in such
capacity and for the benefit of the Noteholders, such title to the Trust, or
any part hereof, and, subject to the other provisions of this Section, such
powers, duties, obligations, rights and trusts as the Trustee may consider
necessary or desirable. No co-trustee or separate trustee hereunder shall be
required to meet the terms of eligibility as a successor Trustee under
Section 6.11 and no notice to Noteholders of the appointment of any
co-trustee or separate trustee shall be required under Section 6.08 hereof.

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

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

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

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

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

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

SECTION 6.11. ELIGIBILITY; DISQUALIFICATION. The Trustee
shall at all times satisfy the requirements of TIA Section 310(a). The
Trustee shall have a combined capital and surplus of at least $50,000,000 as
set forth in its most recent published annual report of condition. The
Trustee shall provide copies of such reports to the Security Insurer upon
request. The Trustee shall comply with TIA Section 310(b), including the
optional provision permitted by the second sentence of TIA Section
310(b)(9); PROVIDED, HOWEVER, that there shall be excluded from the operation

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of TIA Section 310(b)(1) any indenture or indentures under which other
securities of the Issuer are outstanding if the requirements for such
exclusion set forth in TIA Section 310(b)(1) are met.

SECTION 6.12. PREFERENTIAL COLLECTION OF CLAIMS AGAINST
ISSUER. The Trustee shall comply with TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). A Trustee who has
resigned or been removed shall be subject to TIA Section 311(a) to the extent
indicated.

SECTION 6.13. APPOINTMENT AND POWERS. Subject to the terms
and conditions hereof, each of the Issuer Secured Parties hereby appoints
Norwest Bank Minnesota, National Association, as the Indenture Collateral
Agent with respect to the Indenture Collateral, and Norwest Bank Minnesota,
National Association, hereby accepts such appointment and agrees to act as
Indenture Collateral Agent with respect to the Indenture Collateral for the
Issuer Secured Parties, to maintain custody and possession of such Indenture
Collateral (except as otherwise provided hereunder) and to perform the other
duties of the Indenture Collateral Agent in accordance with the provisions of
this Indenture. Each Issuer Secured Party hereby authorizes the Indenture
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
Indenture Collateral Agent by the terms hereof, together with such actions,
rights, remedies, powers and privileges as are reasonably incidental thereto.
The Indenture Collateral Agent shall act upon and in compliance with the
written instructions of the Controlling Party delivered pursuant to this
Indenture promptly following receipt of such written instructions; provided
that the Indenture Collateral Agent shall not act in accordance with any
instructions (i) which are not authorized by, or in violation of the
provisions of, this Indenture, (ii) which are in violation of any applicable
law, rule or regulation or (iii) for which the Indenture Collateral Agent has
not received reasonable indemnity. Receipt of such instructions shall not be
a condition to the exercise by the Indenture Collateral Agent of its express
duties hereunder, except where this Indenture provides that the Indenture
Collateral Agent is permitted to act only following and in accordance with
such instructions.

SECTION 6.14. PERFORMANCE OF DUTIES. The Indenture
Collateral Agent shall have no duties or responsibilities except those
expressly set forth in this Indenture and the other Related Documents to
which the Indenture Collateral Agent is a party or as directed by the
Controlling Party in accordance with this Indenture. The Indenture
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. The Indenture Collateral Agent shall, and hereby agrees
that it will, perform all of the duties and obligations required of it under
the Sale and Servicing Agreement.
SECTION 6.15. LIMITATION ON LIABILITY. Neither the
Indenture 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 Indenture Collateral
Agent shall be liable for its negligence, bad faith or willful misconduct;
nor shall the Indenture Collateral Agent be responsible for the validity,
effectiveness, value, sufficiency or enforceability

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against the Issuer of this Indenture or any of the Indenture Collateral (or
any part thereof). Notwithstanding any term or provision of this Indenture,
the Indenture Collateral Agent shall incur no liability to Issuer or the
Issuer Secured Parties for any action taken or omitted by the Indenture
Collateral Agent in connection with the Indenture Collateral, except for the
negligence or willful misconduct on the part of the Indenture Collateral
Agent, and, further, shall incur no liability to the Issuer Secured Parties
except for negligence or willful misconduct in carrying out its duties to the
Issuer Secured Parties. Subject to Section 6.16, the Indenture 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 Indenture Collateral Agent to be
genuine and to have been duly executed by the appropriate signatory, and
(absent actual knowledge to the contrary) the Indenture Collateral Agent
shall not be required to make any independent investigation with respect
thereto. The Indenture 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 Related Documents. The Indenture 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 Indenture Collateral Agent shall not be under
any obligation to exercise any of the remedial rights or powers vested in it
by this Indenture or to follow any direction from the Controlling Party
unless it shall have received reasonable security or indemnity satisfactory
to the Indenture Collateral Agent against the costs, expenses and liabilities
which might be incurred by it.

SECTION 6.16. RELIANCE UPON DOCUMENTS. In the absence of
bad faith or negligence on its part, the Indenture 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 6.17. SUCCESSOR INDENTURE COLLATERAL AGENT.

(a) MERGER. Any Person into which the Indenture
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
Indenture Collateral Agent is a party, shall (provided it is otherwise
qualified to serve as the Indenture Collateral Agent hereunder) be and become
a successor Indenture Collateral Agent hereunder and be vested with all of
the title to and interest in the Indenture 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

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is necessary to perfect, or continue the perfection of, the security interest
of the Issuer Secured Parties in the Indenture Collateral.

(b) RESIGNATION. The Indenture Collateral Agent and any
successor Indenture Collateral Agent may resign at any time by so notifying
the Issuer and the Security Insurer.

(c) REMOVAL. The Indenture 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 Indenture
Collateral Agent, the other Issuer Secured Party and the Issuer. A temporary
successor may be removed at any time to allow a successor Indenture
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 Indenture Collateral Agent and the acceptance in
writing by such successor Indenture Collateral Agent of such appointment and
of its obligation to perform its duties hereunder in accordance with the
provisions hereof, and (ii) receipt by the Controlling Party of an Opinion of
Counsel to the effect described in Section 3.06.

(d) ACCEPTANCE BY SUCCESSOR. The Controlling Party shall
have the sole right to appoint each successor Indenture Collateral Agent.
Every temporary or permanent successor Indenture Collateral Agent appointed
hereunder shall execute, acknowledge and deliver to its predecessor and to
the Trustee, each Issuer Secured Party and the Issuer 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 Indenture Collateral to the successor
Indenture Collateral Agent, 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 Issuer
Secured Party or the Issuer, 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
Issuer or an Issuer Secured Party is reasonably required by a successor
Indenture 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 Indenture Collateral Agent, any and
all such written instruments shall, at the request of the temporary or
permanent successor Indenture Collateral Agent, be forthwith executed,
acknowledged and delivered by the Trustee or the Issuer, as the case may be.
The designation of any successor Indenture Collateral Agent and the
instrument or instruments removing any Indenture Collateral Agent and
appointing a successor hereunder, together with all other instruments
provided for herein, shall be maintained with the records relating to the
Indenture Collateral and, to the extent required by applicable law, filed or
recorded by the successor Indenture Collateral Agent in each place where such
filing or recording is necessary to effect the transfer of the Indenture
Collateral to the successor Indenture Collateral Agent or to protect or
continue the perfection of the security interests granted hereunder.

SECTION 6.18. COMPENSATION AND INDEMNITY.

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(a) AFL in a separate Letter Agreement has covenanted and
agreed to pay to the Indenture Collateral Agent, and the Indenture Collateral
Agent shall be entitled to, certain annual fees, which shall not be limited
by any law on compensation of an Indenture Collateral Agent of an express
trust. In such Letter Agreement, AFL has also agreed to reimburse the
Indenture Collateral Agent for all reasonable out-of-pocket expenses incurred
or made by it, including costs of collection, in addition to the compensation
for its services. Such expenses shall include the reasonable compensation
and expenses, disbursements, indemnified amounts and advances of the
Indenture Collateral Agent's agents, counsel, accountants and experts. AFL
has also agreed to indemnify the Indenture Collateral Agent and any director,
officer, employee or agent of the Indenture Collateral Agent against any and
all loss, liability or expense (including attorneys' fees) incurred by it in
connection with the administration of this trust and the performance of its
duties hereunder.

(b) If notwithstanding the provisions of the Letter
Agreement or this Agreement, AFL fails to pay any fee expense or indemnified
amount due to the Indenture Collateral Agent pursuant to the terms of the
Letter Agreement or this Agreement, the Indenture Collateral Agent shall be
entitled to a distribution in respect of such amount pursuant to Section
4.6(ii) of the Sale and Servicing Agreement. If notwithstanding the
provisions of the Letter Agreement or this Agreement, AFL fails to make any
payment or reimbursement due to the Indenture Collateral Agent for any
expense or claim for indemnification to which the Indenture Collateral Agent
is entitled pursuant to the terms of the Letter Agreement or this Agreement,
the Indenture Collateral Agent shall be entitled to a distribution in respect
of such amount pursuant to priority SIXTH of Section 3.03(b) of the Spread
Account Agreement. The Issuer's payment obligations to the Indenture
Collateral Agent pursuant to this Section shall survive the discharge of this
Indenture. When the Indenture Collateral Agent incurs expenses after the
occurrence of a Default specified in Section 5.01(v) or (vi) with respect to
the Issuer, the expenses are intended to constitute expenses of
administration under Title 11 of the United States Code or any other
applicable Federal or state bankruptcy, insolvency or similar law.
Notwithstanding anything else set forth in this Indenture or the Related
Documents, the Indenture Collateral Agent agrees that the obligations of the
Issuer to the Indenture Collateral Agent hereunder and under the Related
Documents shall be recourse to the Trust Estate only. In addition, the
Indenture Collateral Agent agrees that its recourse to the Issuer, the Trust
Estate, the Seller and amounts held pursuant to the Spread Account Agreement
shall be limited to the right to receive the distributions referred to in the
first two sentences of this Section 6.18.
SECTION 6.19. REPRESENTATIONS AND WARRANTIES OF THE
INDENTURE COLLATERAL AGENT. The Indenture Collateral Agent represents and
warrants to the Issuer and to each Issuer Secured Party as follows:

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

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

(c) DUE AUTHORIZATION. The execution and delivery by the
Indenture Collateral Agent of this Indenture and the other Transaction
Documents to which it is a party, and the performance by the Indenture
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 Indenture Collateral Agent, or the performance
by the Indenture Collateral Agent, of this Indenture and such other Related
Documents.

(d) VALID AND BINDING INDENTURE. The Indenture
Collateral Agent has duly executed and delivered this Indenture and each
other Related Document to which it is a party, and each of this Indenture and
each such other Related Document constitutes the legal, valid and binding
obligation of the Indenture Collateral Agent, enforceable against the
Indenture 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 6.20. WAIVER OF SETOFFS. The Indenture Collateral
Agent hereby expressly waives any and all rights of setoff that the Indenture
Collateral Agent may otherwise at any time have under applicable law with
respect to any Trust Account and agrees that amounts in the Trust Accounts
shall at all times be held and applied solely in accordance with the
provisions hereof.

SECTION 6.21. CONTROL BY THE CONTROLLING PARTY. The
Indenture Collateral Agent shall comply with notices and instructions given
by the Issuer only if accompanied by the written consent of the Controlling
Party, except that if any Event of Default shall have occurred and be
continuing, the Indenture Collateral Agent shall act upon and comply with
notices and instructions given by the Controlling Party alone in the place
and stead of the Issuer.

ARTICLE VII

NOTEHOLDERS' LISTS AND REPORTS

SECTION 7.01. ISSUER TO FURNISH TRUSTEE NAMES AND ADDRESSES
TO NOTEHOLDERS. The Issuer will furnish or cause to be furnished to the
Trustee (a) not more than five days after the earlier of (i) each Record Date
and (ii) three months after the last Record Date, a list, in such form as the
Trustee may reasonably require, of the names and addresses of the Holders of
Notes as of such Record Date, (b) at such other times as the Trustee may
request in writing, within 30

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days after receipt by the Issuer of any such request, a list of similar form
and content as of a date not more than 10 days prior to the time such list is
furnished; PROVIDED, HOWEVER, that so long as the Trustee is the Note
Registrar, no such list shall be required to be furnished. The Trustee or,
if the Trustee is not the Note Registrar, the Issuer shall furnish to the
Security Insurer in writing on an annual basis on each March 31 and at such
other times as the Security Insurer may request a copy of the list.

SECTION 7.02. PRESERVATION OF INFORMATION; COMMUNICATIONS TO
NOTEHOLDERS.

(a) The Trustee shall preserve, in as current a form as
is reasonably practicable, the names and addresses of the Holders of Notes
contained in the most recent list furnished to the Trustee as provided in
Section 7.01 and the names and addresses of Holders of Notes received by the
Trustee in its capacity as Note Registrar. The Trustee may destroy any list
furnished to it as provided in such Section 7.01 upon receipt of a new list
so furnished.

(b) Noteholders may communicate pursuant to TIA Section
312(b) with other Noteholders with respect to their rights under this
Indenture or under the Notes.

SECTION 7.03. REPORTS BY ISSUER.

(a) The Issuer shall:

(i) file with the Trustee, within 15 days after the Issuer
is required to file the same with the Commission, copies of the annual
reports and of the information, documents and other reports (or copies
of such portions of any of the foregoing as the Commission may from time
to time by rules and regulations prescribe) which the Issuer may be
required to file with the Commission pursuant to Section 13 or 15(d) of
the Exchange Act;

(ii) file with the Trustee and the Commission in accordance
with rules and regulations prescribed from time to time by the
Commission such additional information, documents and reports with
respect to compliance by the Issuer with the conditions and covenants of
this Indenture as may be required from time to time by such rules and
regulations; and

(iii) supply to the Trustee (and the Trustee shall transmit by
mail to all Noteholders described in TIA Section 313(c)) such summaries
of any information, documents and reports required to be filed by the
Issuer pursuant to clauses (i) and (ii) of this Section 7.03(a) as may
be required by rules and regulations prescribed from time to time by the
Commission.

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(b) Unless the Issuer otherwise determines, the fiscal
year of the Issuer shall end on December 31 of each year.

SECTION 7.04. REPORTS BY TRUSTEE. If required by TIA
Section 313(a), within 60 days after each March 31, beginning with March 31,
2000, the Trustee shall mail to the Security Insurer and each Noteholder as
required by TIA Section 313(c) a brief report dated as of such date that
complies with TIA Section 313(a). The Trustee also shall comply with TIA
Section 313(b).

A copy of each report at the time of its mailing to
Noteholders shall be filed by the Trustee with the Commission and each stock
exchange, if any, on which the Notes are listed. The Issuer shall notify the
Trustee if and when the Notes are listed on any stock exchange.

ARTICLE VIII

ACCOUNTS, DISBURSEMENTS AND RELEASES

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

SECTION 8.02. TRUST ACCOUNTS.

(a) On or prior to the Closing Date, the Issuer shall
cause the Servicer to establish and maintain, in the name of the Trustee, for
the benefit of the Noteholders, the Trust Accounts as provided in Section 4.1
of the Sale and Servicing Agreement.

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

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

(ii) any amounts deposited in the Note Distribution Account
with respect to the Class A-1 Prepayment Amount, the Class A-2
Prepayment Amount, the Class A-3 Prepayment Amount, the Class A-4
Prepayment Amount and the Class A-5 Prepayment Amount or the Class A-1
Prepayment Premium, the Class A-2 Prepayment Premium, the Class A-3
Prepayment Premium, the Class A-4 Prepayment Premium and the Class A-5
Prepayment Premium shall be distributed to the Holders of the Class A-1
Notes, the Class A-2 Notes, the Class A-3 Notes, the Class A-4 Notes and
the Class A-5 Notes, respectively;

(iii) to the Holders of the Class A-1 Notes in reduction of
the Outstanding Amount of the Class A-1 Notes until the Outstanding
Amount of the Class A-1 Notes is reduced to zero;

(iv) to the Holders of the Class A-2 Notes in reduction of
the Outstanding Amount of the Class A-2 Notes until the Outstanding
Amount of the Class A-2 Notes is reduced to zero;

(v) to the Holders of the Class A-3 Notes in reduction of
the Outstanding Amount of the Class A-3 Notes until the Outstanding
Amount of the Class A-3 Notes is reduced to zero;

(vi) to the Holders of the Class A-4 Notes in reduction of
the Outstanding Amount of the Class A-4 Notes until the Outstanding
Amount of the Class A-4 Notes is reduced to zero; and

(vii) to the Holders of the Class A-5 Notes in reduction of
the Outstanding Amount of the Class A-5 Notes until the Outstanding
Amount of the Class A-5 Notes is reduced to zero.

SECTION 8.03. GENERAL PROVISIONS REGARDING ACCOUNTS.

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

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

ARTICLE IX

SUPPLEMENTAL INDENTURES

SECTION 9.01. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF
NOTEHOLDERS.

(a) Without the consent of the Holders of any Notes but
with the consent of the Security Insurer (unless an Insurer Default shall
have occurred and be continuing) and with prior notice to the Rating
Agencies, the Issuer and the Trustee, when authorized by an Issuer Order, at
any time and from time to time, may enter into one or more indentures
supplemental hereto (which shall conform to the provisions of the Trust
Indenture Act as in force at the date of the execution thereof), in form
satisfactory to the Trustee, for any of the following purposes:

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

(ii) to evidence the succession, in compliance with the
applicable provisions hereof, of another Person to the Issuer, and the
assumption by any such successor of the covenants of the Issuer herein
and in the Notes contained;

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

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

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

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

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(vii) to modify, eliminate or add to the provisions of this
Indenture to such extent as shall be necessary to effect the
qualification of this Indenture under the TIA or under any similar
Federal statute hereafter enacted and to add to this Indenture such
other provisions as may be expressly required by the TIA.

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

(b) The Issuer and the Trustee, when authorized by an
Issuer Order, may, also without the consent of any of the Holders of the
Notes but with the consent of the Security Insurer (unless an Insurer Default
shall have occurred and be continuing) and with prior notice to the Rating
Agencies, enter into an indenture or indentures supplemental hereto for the
purpose of adding any provisions to, or changing in any manner or eliminating
any of the provisions of, this Indenture or of modifying in any manner the
rights of the Holders of the Notes under this Indenture; PROVIDED, HOWEVER,
that such action shall not, as evidenced by an Opinion of Counsel, adversely
affect in any material respect the interests of any Noteholder.

SECTION 9.02. SUPPLEMENTAL INDENTURES WITH CONSENT OF
NOTEHOLDERS. The Issuer and the Trustee, when authorized by an Issuer Order,
also may, with prior notice to the Rating Agencies, with the consent of the
Security Insurer (unless an Insurer Default shall have occurred and be
continuing) and with the consent of the Holders of not less than a majority
of the Outstanding Amount of the Notes, by Act of such Holders delivered to
the Issuer and the Trustee, enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to, or changing
in any manner or eliminating any of the provisions of, this Indenture or of
modifying in any manner the rights of the Holders of the Notes under this
Indenture; PROVIDED, HOWEVER, that, subject to the express rights of the
Security Insurer under the Related Documents, including its rights to agree
to certain modifications of the Receivables pursuant to Section 3.2 of the
Sale and Servicing Agreement and its rights referred to in Section 5.02(c),
no such supplemental indenture shall, without the consent of the Holder of
each Outstanding Note affected thereby:

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

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

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

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

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

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

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

The Trustee may in its discretion determine whether or not
any Notes would be affected by any supplemental indenture, and any such
determination shall be conclusive upon the Holders of all Notes, whether
theretofore or thereafter authenticated and delivered hereunder. The Trustee
shall not be liable for any such determination made in good faith.

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

Promptly after the execution by the Issuer and the Trustee of
any supplemental indenture pursuant to this Section, the Trustee shall mail
to the Holders of the Notes to which

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such amendment or supplemental indenture relates a notice setting forth in
general terms the substance of such supplemental indenture. Any failure of
the Trustee to mail such notice, or any defect therein, shall not, however,
in any way impair or affect the validity of any such supplemental indenture.

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

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

SECTION 9.05. CONFORMITY WITH TRUST INDENTURE ACT. Every
amendment of this Indenture and every supplemental indenture executed
pursuant to this Article IX shall conform to the requirements of the Trust
Indenture Act as then in effect so long as this Indenture shall then be
qualified under the Trust Indenture Act.

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

ARTICLE X

REDEMPTION OF NOTES

SECTION 10.01. REDEMPTION.

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(a) In the event that the Seller or the Servicer
pursuant to Section 9.1(a) of the Sale and Servicing Agreement purchases the
corpus of the Trust, the Notes are subject to redemption in whole, but not in
part, on the Payment Date on which such repurchase occurs, for a purchase
price equal to the Redemption Price; PROVIDED, HOWEVER, that the Issuer has
available funds sufficient to pay the Redemption Price. The Seller, the
Servicer or the Issuer shall furnish the Trustee, Owner Trustee, Security
Insurer and the Rating Agencies with written notice of such redemption. If
the Notes are to be redeemed pursuant to this Section 10.01(a), the Servicer
or the Issuer shall furnish notice of such election to the Trustee not later
than 25 days prior to the Redemption Date, and the Issuer shall deposit with
the Trustee in the Note Distribution Account the Redemption Price of the
Notes to be redeemed, whereupon all such Notes shall be due and payable on
the Redemption Date upon the furnishing of a notice complying with Section
10.02 to each Holder of the Notes.

(b) In the event that on the Payment Date on or
immediately following the last day of the Funding Period, any portion of the
Pre-Funded Amount remains on deposit in the Pre-Funding Account after giving
effect to the purchase of all Subsequent Receivables, including any such
purchase on such Redemption Date, each class of Notes will be redeemed in
part, on a pro rata basis, in an aggregate principal amount equal to the
Class A-1 Prepayment Amount, the Class A-2 Prepayment Amount, the Class A-3
Prepayment Amount, the Class A-4 Prepayment Amount and the Class A-5
Prepayment Amount, as applicable.

If the Pre-Funded Amount at the end of the Pre-Funding Period
exceeds $100,000, the Issuer shall also pay to the Holders of each class of
Notes, on a pro rata basis, on the Redemption Date the Class A-1 Prepayment
Premium, the Class A-2 Prepayment Premium, the Class A-3 Prepayment Premium,
the Class A-4 Prepayment Premium and the Class A-5 Prepayment Premium, as
applicable; PROVIDED, HOWEVER, that the Issuer's obligation to pay the Class
A-1 Prepayment Premium, the Class A-2 Prepayment Premium, the Class A-3
Prepayment Premium, the Class A-4 Prepayment Premium or the Class A-5
Prepayment Premium shall, as set forth in Section 2.4(d) of the Sale and
Servicing Agreement, be limited solely to funds which are received by the
Issuer from AFL pursuant to Section 6.2 of the Purchase Agreement as
liquidated damages for the failure of AFL to deliver Subsequent Receivables
and no other assets of the Issuer will be available to pay the Class A-1
Prepayment Premium, the Class A-2 Prepayment Premium, the Class A-3
Prepayment Premium, the Class A-4 Prepayment Premium or the Class A-5
Prepayment Premium, under any circumstances.

(c) In the event that the assets of the Trust are sold
pursuant to Section 9.2 of the Trust Agreement, the proceeds of such sale
shall be distributed as provided in Section 5.06. If amounts are to be paid
to Noteholders pursuant to this Section 10.01(c), the Servicer or the Issuer
shall, to the extent practicable, furnish written notice of such event to the
Trustee and the Owner Trustee not later than 25 days prior to the Redemption
Date whereupon all such amounts shall be payable on the Redemption Date.

SECTION 10.02. FORM OF REDEMPTION NOTICE.

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(a) Notice of redemption under Section 10.01(a) shall be
given by the Trustee by first-class mail, postage prepaid, mailed not less
than five days prior to the applicable Redemption Date to each Holder of
Notes, as of the close of business on the Record Date with respect to the
Payment Date immediately preceding the applicable Redemption Date, at such
Holder's address appearing in the Note Register.

All notices of redemption shall state:

(i) the Redemption Date;

(ii) the Redemption Price; and

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

Notice of redemption of the Notes shall be given by the
Trustee in the name and at the expense of the Issuer. Failure to give notice
of redemption, or any defect therein, to any Holder of any Note shall not
impair or affect the validity of the redemption of any other Note.

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

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

ARTICLE XI

MISCELLANEOUS

SECTION 11.01. COMPLIANCE CERTIFICATES AND OPINIONS, ETC.

(a) Upon any application or request by the Issuer to the
Trustee or the Indenture Collateral Agent to take any action under any
provision of this Indenture, the Issuer shall furnish to the Trustee or the
Indenture Collateral Agent, as the case may be, and to the Security Insurer
if the application or request is made to the Indenture Collateral Agent (i)
an Officers' Certificate stating that all conditions precedent, if any,
provided for in this Indenture relating to the proposed action have been
complied with, (ii) an Opinion of Counsel stating that

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in the opinion of such counsel all such conditions precedent, if any, have
been complied with and (iii) (if required by the TIA) an Independent
Certificate from a firm of certified public accountants meeting the
applicable requirements of this Section, except that, in the case of any such
application or request as to which the furnishing of such documents is
specifically required by any provision of this Indenture, no additional
certificate or opinion need be furnished.

Every certificate or opinion with respect to compliance with
a condition or covenant provided for in this Indenture shall include:

(i) a statement that each signatory of such certificate or
opinion has read or has caused to be read such covenant or condition and
the definitions herein relating thereto;

(ii) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;

(iii) a statement that, in the opinion of each such signatory,
such signatory has made such examination or investigation as is
necessary to enable such signatory to express an informed opinion as to
whether or not such covenant or condition has been complied with; and

(iv) a statement as to whether, in the opinion of each such
signatory, such condition or covenant has been complied with.

(b) (i) Prior to the deposit of any Indenture Collateral or
other property or securities with the Indenture Collateral Agent that is
to be made the basis for the release of any property subject to the lien
created by this Indenture, the Issuer shall, in addition to any
obligation imposed in Section 11.01(a) or elsewhere in this Indenture,
furnish to the Indenture Collateral Agent and the Security Insurer (so
long as no Insurer Default shall have occurred and be continuing) an
Officers' Certificate certifying or stating the opinion of each person
signing such certificate as to the fair value (within 90 days of such
deposit) to the Issuer of the Indenture Collateral or other property or
securities to be so deposited.

(ii) Whenever the Issuer is required to furnish to the
Indenture Collateral Agent and the Security Insurer an Officers'
Certificate certifying or stating the opinion of any signer thereof as
to the matters described in clause (i) above, the Issuer shall also
deliver to the Indenture Collateral Agent and the Security Insurer an
Independent Certificate as to the same matters, if the fair value to the
Issuer of the property to be so deposited and of all other such property
made the basis of any such withdrawal or release since the commencement
of the then-current fiscal year of the Issuer, as set forth in the
certificates delivered pursuant to clause (i) above and this clause
(ii), is 10% or more of

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the Outstanding Amount of the Notes, but such a certificate need not be
furnished with respect to any property so deposited, if the fair value
thereof to the Issuer as set forth in the related Officers' Certificate
is less than $25,000 or less than one percent of the Outstanding Amount
of the Notes.

(iii) Other than with respect to any release described in
clause (A) or (B) of Section 11.01(b)(v), whenever any property or
securities are to be released from the lien created by this Indenture,
the Issuer shall also furnish to the Indenture Collateral Agent and the
Security Insurer (so long as no Insurer Default shall have occurred and
be continuing) an Officers' Certificate certifying or stating the
opinion of each person signing such certificate as to the fair value
(within 90 days of such release) of the property or securities proposed
to be released and stating that in the opinion of such person the
proposed release will not impair the security created by this Indenture
in contravention of the provisions hereof.

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

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

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

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

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

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

SECTION 11.03. ACTS OF NOTEHOLDERS.

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

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

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

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

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

(b) the Issuer by the Trustee or by any Noteholder shall be
sufficient for every purpose hereunder if in writing and mailed,
first-class, postage prepaid, to the Issuer addressed to: Arcadia
Automobile Receivables Trust, 1999-A, in care of Wilmington Trust
Company, as Owner Trustee, Rodney Square North, 1100 North Market
Street, Wilmington, Delaware 19890, Attention: Corporate Trust
Administration, or at any other address previously furnished in writing
to the Trustee by Issuer. The Issuer shall promptly transmit any notice
received by it from the Noteholders to the Trustee, or

(c) the Security Insurer by the Issuer or the Trustee shall
be sufficient for any purpose hereunder if in writing and mailed by
registered mail or personally delivered or telexed or telecopied to the
recipient as follows:

To the Security Insurer: Financial Security Assurance Inc.
350 Park Avenue
New York, NY 10022
Attention: Surveillance Department
Telex No.: (212) 688-3101
Confirmation: (212) 826-0100
Telecopy Nos.: (212) 339-3518 or
(212) 339-3529

(In each case in which notice or other communication to the Security Insurer
refers to an Event of Default, a claim on the Note Policy or with respect to
which failure on the part of the Security Insurer 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 the General Counsel and
the Head -- Financial Guaranty Group "URGENT MATERIAL ENCLOSED.")

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

SECTION 11.05 NOTICES TO NOTEHOLDERS; WAIVER. Where this
Indenture provides for notice to Noteholders of any event, such notice shall
be sufficiently given (unless otherwise herein expressly provided) if in
writing and mailed, first-class, postage prepaid to each Noteholder affected
by such event, at his address as it appears on the Note Register, not later
than the latest date, and not earlier than the earliest date, prescribed for
the giving of such notice. In any case where notice to Noteholders is given
by mail, neither the failure to mail such notice nor any defect in any notice
so mailed to any particular Noteholder shall affect the sufficiency of such
notice with respect to other Noteholders, and any notice that is mailed in
the manner herein provided shall conclusively be presumed to have been duly
given.

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

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

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

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

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SECTION 11.07. CONFLICT WITH TRUST INDENTURE ACT. If any
provision hereof limits, qualifies or conflicts with another provision hereof
that is required to be included in this indenture by any of the provisions of
the Trust Indenture Act, such required provision shall control.

The provisions of TIA Sections 310 through 317 that impose
duties on any Person (including the provisions automatically deemed included
herein unless expressly excluded by this Indenture) are a part of and govern
this Indenture, whether or not physically contained herein.

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

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

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

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

SECTION 11.11. BENEFITS OF INDENTURE. The Security Insurer
and its successors and assigns shall be a third-party beneficiary to the
provisions of this Indenture, and shall be entitled to rely upon and directly
to enforce such provisions of this Indenture so long as no Insurer Default
shall have occurred and be continuing. Nothing in this Indenture or in the
Notes, express or implied, shall give to any Person, other than the parties
hereto and their successors hereunder, and the Noteholders, and any other
party secured hereunder, and any other Person with an ownership interest in
any part of the Trust Estate, any benefit or any legal or equitable right,
remedy or claim under this Indenture. The Security Insurer may disclaim any
of its rights and powers under this Indenture (in which case the Indenture
Trustee may exercise such right or power hereunder), but not its duties and
obligations under the Note Policy, upon delivery of a written notice to the
Trustee.

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

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

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

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

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

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

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

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

SECTION 11.20. NO SUBSTANTIVE REVIEW OF COMPLIANCE
DOCUMENTS. Other than as set forth in this Agreement, any reports,
information or other documents provided to the Indenture Collateral Agent or
the Trustee are for purposes only of enabling the sending party to comply
with its document delivery requirements hereunder, and such party's receipt
of any such information shall not constitute actual or constructive notice of
any information contained therein or determinable from any information
contained therein, including the Issuer's, the Seller's or the Servicer's
compliance with any of its covenants, representations or warranties hereunder.

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

ARCADIA AUTOMOBILE RECEIVABLES
TRUST, 1999-A

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

By /s/ Thomas P. Laskaris
-------------------------------------------
Name: Thomas P. Laskaris
Title: Vice President

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

By /s/ Eileen R. O'Connor
-------------------------------------------
Name: Eileen R. O'Connor
Title: Corporate Trust Officer

<PAGE>

SALE AND SERVICING AGREEMENT

Dated as of March 1, 1999

among

ARCADIA AUTOMOBILE RECEIVABLES TRUST, 1999-A
Issuer

ARCADIA RECEIVABLES FINANCE CORP.
Seller

ARCADIA FINANCIAL LTD.
In its individual capacity and as Servicer

and

NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION
Backup Servicer

<PAGE>
TABLE OF CONTENTS

Page
----
<S> <C>
ARTICLE I DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
SECTION 1.1. Definitions. . . . . . . . . . . . . . . . . . . . . . . . . .1
SECTION 1.2. Usage of Terms . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 1.3. Calculations . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 1.4. Section References . . . . . . . . . . . . . . . . . . . . . 23
SECTION 1.5. No Recourse. . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 1.6. Material Adverse Effect. . . . . . . . . . . . . . . . . . . 23

ARTICLE II CONVEYANCE OF RECEIVABLES . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 2.1. Conveyance of Initial Receivables. . . . . . . . . . . . . . 24
SECTION 2.2. Custody of Receivable Files. . . . . . . . . . . . . . . . . 24
SECTION 2.3. Conditions to Acceptance by Owner Trustee. . . . . . . . . . 26
SECTION 2.4. Conveyance of Subsequent Receivables . . . . . . . . . . . . 26
SECTION 2.5. Representations and Warranties of Seller . . . . . . . . . . 29
SECTION 2.6. Repurchase of Receivables Upon Breach of Warranty. . . . . . 31
SECTION 2.7. Nonpetition Covenant . . . . . . . . . . . . . . . . . . . . 32
SECTION 2.8. Collecting Lien Certificates Not Delivered on the
Closing Date or Subsequent Transfer Date . . . . . . . . . . 32
SECTION 2.9. Trust's Assignment of Administrative Receivables and
Warranty Receivables . . . . . . . . . . . . . . . . . . . . 32

ARTICLE III ADMINISTRATION AND SERVICING OF RECEIVABLES. . . . . . . . . . . . . 33
SECTION 3.1. Duties of the Servicer . . . . . . . . . . . . . . . . . . . 33
SECTION 3.2. Collection of Receivable Payments; Modifications of
Receivables; Lockbox Agreements. . . . . . . . . . . . . . . 34
SECTION 3.3. Realization Upon Receivables . . . . . . . . . . . . . . . . 37
SECTION 3.4. Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 3.5. Maintenance of Security Interests in Vehicles. . . . . . . . 39
SECTION 3.6. Covenants, Representations, and Warranties of Servicer . . . 40
SECTION 3.7. Purchase of Receivables Upon Breach of Covenant. . . . . . . 42
SECTION 3.8. Total Servicing Fee; Payment of Certain Expenses by
Servicer . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 3.9. Servicer's Certificate . . . . . . . . . . . . . . . . . . . 43
SECTION 3.10. Annual Statement as to Compliance; Notice of Servicer
Termination Event. . . . . . . . . . . . . . . . . . . . . . 44
SECTION 3.11. Annual Independent Accountants' Report . . . . . . . . . . . 45
SECTION 3.12. Access to Certain Documentation and Information Regarding
Receivables. . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 3.13. Monthly Tape . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 3.14. Retention and Termination of Servicer. . . . . . . . . . . . 47
SECTION 3.15. Fidelity Bond. . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 3.16. Duties of the Servicer under the Indenture . . . . . . . . . 47

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<PAGE>

SECTION 3.17. Duties of the Servicer under the Insurance Agreement . . . . 48
SECTION 3.18. Certain Duties of the Servicer under the Trust Agreement . . 49

ARTICLE IV DISTRIBUTIONS; STATEMENTS TO NOTEHOLDERS. . . . . . . . . . . . . . . 50
SECTION 4.1. Trust Accounts . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 4.2. Collections. . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 4.3. Application of Collections . . . . . . . . . . . . . . . . . 54
SECTION 4.4. Monthly Advances . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 4.5. Additional Deposits. . . . . . . . . . . . . . . . . . . . . 56
SECTION 4.6. Distributions. . . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 4.7. Pre-Funding Account. . . . . . . . . . . . . . . . . . . . . 57
SECTION 4.8. Net Deposits . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 4.9. Statements to Noteholders. . . . . . . . . . . . . . . . . . 59
SECTION 4.10. Indenture Trustee as Agent . . . . . . . . . . . . . . . . . 60
SECTION 4.11. Eligible Accounts. . . . . . . . . . . . . . . . . . . . . . 60

ARTICLE V THE RESERVE ACCOUNT; THE SPREAD ACCOUNT. . . . . . . . . . . . . . . . 60
SECTION 5.1. Withdrawals from the Reserve Account . . . . . . . . . . . . 60
SECTION 5.2. Withdrawals from Spread Account. . . . . . . . . . . . . . . 61

ARTICLE VI THE SELLER. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 6.1. Liability of Seller. . . . . . . . . . . . . . . . . . . . . 62
SECTION 6.2. Merger or Consolidation of, or Assumption of the
Obligations of, Seller; Amendment of Certificate
of Incorporation . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 6.3. Limitation on Liability of Seller and Others . . . . . . . . 63
SECTION 6.4. Seller May Own Notes . . . . . . . . . . . . . . . . . . . . 63

ARTICLE VII THE SERVICER . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 7.1. Liability of Servicer; Indemnities . . . . . . . . . . . . . 63
SECTION 7.2. Merger or Consolidation of, or Assumption of the
Obligations of, the Servicer or Backup Servicer. . . . . . . 65
SECTION 7.3. Limitation on Liability of Servicer, Backup Servicer
and Others . . . . . . . . . . . . . . . . . . . . . . . . . 66
SECTION 7.4. Delegation of Duties . . . . . . . . . . . . . . . . . . . . 66
SECTION 7.5. Servicer and Backup Servicer Not to Resign . . . . . . . . . 66
SECTION 7.6. Advancing Obligations of Successor Servicer. . . . . . . . . 67

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<PAGE>

ARTICLE VIII SERVICER TERMINATION EVENTS . . . . . . . . . . . . . . . . . . . . 67
SECTION 8.1. Servicer Termination Event . . . . . . . . . . . . . . . . . 67
SECTION 8.2. Consequences of a Servicer Termination Event . . . . . . . . 69
SECTION 8.3. Appointment of Successor . . . . . . . . . . . . . . . . . . 70
SECTION 8.4. Notification to Noteholders. . . . . . . . . . . . . . . . . 71
SECTION 8.5. Waiver of Past Defaults. . . . . . . . . . . . . . . . . . . 71

ARTICLE IX TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
SECTION 9.1. Optional Purchase of All Receivables; Liquidation of
Trust Estate . . . . . . . . . . . . . . . . . . . . . . . . 72

ARTICLE X MISCELLANEOUS PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . 73
SECTION 10.1. Amendment. . . . . . . . . . . . . . . . . . . . . . . . . . 73
SECTION 10.2. Protection of Title to Trust Property. . . . . . . . . . . . 74
SECTION 10.3. Governing Law. . . . . . . . . . . . . . . . . . . . . . . . 76
SECTION 10.4. Severability of Provisions . . . . . . . . . . . . . . . . . 76
SECTION 10.5. Assignment . . . . . . . . . . . . . . . . . . . . . . . . . 76
SECTION 10.6. Third-Party Beneficiaries. . . . . . . . . . . . . . . . . . 77
SECTION 10.7. Disclaimer by Security Insurer . . . . . . . . . . . . . . . 77
SECTION 10.8. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . 77
SECTION 10.9. Intention of Parties . . . . . . . . . . . . . . . . . . . . 77
SECTION 10.10. Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . 77
SECTION 10.11. Limitation of Liability. . . . . . . . . . . . . . . . . . . 78

</TABLE>

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<PAGE>

SCHEDULES
<S> <C>

Schedule A -- Representations and Warranties of Seller and AFL

Schedule B -- Servicing Policies and Procedures

EXHIBITS

Exhibit A -- Schedule of Initial Receivables

Exhibit B -- Form of Custodian Agreement (AFL)

Exhibit C -- Form of Spread Account Agreement

Exhibit D -- Form of Receivables Purchase Agreement

Exhibit E -- Form of Servicer's Certificate

Exhibit F -- Form of Subsequent Transfer Agreement

</TABLE>

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<PAGE>

THIS SALE AND SERVICING AGREEMENT, dated as of March 1, 1999, is
made among Arcadia Automobile Receivables Trust, 1999-A (the "Issuer"), Arcadia
Receivables Finance Corp., a Delaware corporation, as Seller (the "Seller"),
Arcadia Financial Ltd., a Minnesota corporation, in its individual capacity and
as Servicer (in its individual capacity, "AFL"; in its capacity as Servicer, the
"Servicer"), and Norwest Bank Minnesota, National Association, a national
banking association, as Backup Servicer (the "Backup Servicer").

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

ARTICLE I

DEFINITIONS

SECTION 1.1. DEFINITIONS. All terms defined in the Spread
Account Agreement, the Indenture or the Trust Agreement (each as defined below)
shall have the same meaning in this Agreement. Whenever capitalized and used in
this Agreement, the following words and phrases, unless the context otherwise
requires, shall have the following meanings:

ACCOUNTANTS' REPORT: The report of a firm of nationally
recognized independent accountants described in Section 3.11.

ACCOUNTING DATE: With respect to a Distribution Date, the last
day of the Monthly Period immediately preceding such Distribution Date.

ACTUAL FUNDS: With respect to a Distribution Date, the sum of
(i) Available Funds for such Distribution Date, plus (ii) the portion of the
Reserve Amount, if any, deposited pursuant to Section 5.1(a) into the Collection
Account with respect to such Distribution Date.

ADDITION NOTICE: With respect to any transfer of Subsequent
Receivables to the Trust pursuant to Section 2.4, a notice, which shall be given
not later than 15 days prior to the related Subsequent Transfer Date, of the
Seller's designation of Subsequent Receivables to be transferred to the Issuer
and the aggregate Principal Balance of such Subsequent Receivables.

ADMINISTRATIVE RECEIVABLE: With respect to any Monthly Period,
a Receivable which the Servicer is required to purchase pursuant to Section 3.7
or which the Servicer has elected to purchase pursuant to Section 3.4(c).

AFFILIATE: With respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under direct or
indirect common control with such specified Person. For the purposes of this
definition, "control" when used with respect to any specified Person, means
the power to direct the management and policies of such Person, directly or
indirectly,

<PAGE>

whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.

AFL: Arcadia Financial Ltd., a Minnesota corporation.

AGGREGATE PRINCIPAL BALANCE: With respect to any Determination
Date, the sum of the Principal Balances (computed as of the related Accounting
Date) for all Receivables (other than (i) any Receivable that became a
Liquidated Receivable during the related Monthly Period and (ii) any Receivable
that became a Purchased Receivable as of the immediately preceding Accounting
Date).

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

AMOUNT FINANCED: With respect to a Receivable, the aggregate
amount advanced under such Receivable toward the purchase price of the Financed
Vehicle and related costs, including amounts advanced in respect of accessories,
insurance premiums, service and warranty contracts, other items customarily
financed as part of retail automobile installment sale contracts or promissory
notes, and related costs. The term "Amount Financed" shall not include any
Insurance Add-On Amounts.

ANNUAL PERCENTAGE RATE OR APR: With respect to a Receivable,
the rate per annum of finance charges stated in such Receivable as the "annual
percentage rate" (within the meaning of the Federal Truth-in-Lending Act). If
after the Closing Date, the rate per annum with respect to a Receivable as of
the Closing Date is reduced as a result of (i) an insolvency proceeding
involving the Obligor or (ii) pursuant to the Soldiers' and Sailors' Civil
Relief Act of 1940, Annual Percentage Rate or APR shall refer to such reduced
rate.

ASSUMED REINVESTMENT RATE: 2.5% per annum.

AVAILABLE FUNDS: With respect to any Determination Date, the
sum of (i) the Collected Funds for such Determination Date, (ii) all Purchase
Amounts deposited in the Collection Account as of the related Deposit Date,
(iii) all Monthly Advances made by the Servicer as of the related Deposit Date,
and (iv) all net income from investments of funds in the Trust Accounts during
the related Monthly Period.

BACKUP SERVICER: Norwest Bank Minnesota, National Association,
or its successor in interest pursuant to Section 8.2, or such Person as shall
have been appointed as Backup Servicer or successor Servicer pursuant to Section
8.3.

BASIC SERVICING FEE: With respect to any Monthly Period, the
fee payable to the Servicer for services rendered during such Monthly Period,
which shall be equal to one-twelfth of the Basic Servicing Fee Rate multiplied
by the Aggregate Principal Balance as of the Determination Date falling in such
Monthly Period.

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<PAGE>

BASIC SERVICING FEE RATE: 1.25% per annum.

BOA PURCHASE AGREEMENT: The Amended and Restated Purchase
Agreement and Assignment, date as of July 21, 1998, between AFL and the Seller.

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

CLASS A-1 FINAL SCHEDULED DISTRIBUTION DATE: March 15, 2000 (or,
if such day is not a Business Day, the next succeeding Business Day thereafter).

CLASS A-1 HOLDBACK AMOUNT: As of any Subsequent Transfer Date,
an amount equal to 2.5% of the amount, if any, by which the applicable "Target
Original Pool Balance" specified below is greater than the Original Pool Balance
after giving effect to the transfer of Subsequent Receivables on such Subsequent
Transfer Date:

SUBSEQUENT TRANSFER DATE TARGET ORIGINAL POOL BALANCE
------------------------ ----------------------------
<S> <C>
April 15, 1999 $475,590,633.99

May 15, 1999 $550,000,000.00

</TABLE>

CLASS A-1 HOLDBACK SUBACCOUNT: The subaccount of the Reserve
Account, the funds in which shall consist of all Class A-1 Holdback Amounts
deposited therein during the Funding Period, other than investment earnings
thereon. Any funds in the Class A-1 Holdback Subaccount shall be withdrawn
on the Class A-1 Final Scheduled Distribution Date and distributed as
specified in Section 5.1(b).

CLASS A-1 INTEREST CARRYOVER SHORTFALL: With respect to any
Distribution Date, the excess of the Class A-1 Interest Distributable Amount
for the preceding Distribution Date over the amount in respect of interest on
the Class A-1 Notes that was actually deposited in the Note Distribution
Account on such preceding Distribution Date, plus interest on the amount of
interest due but not paid to Class A-1 Noteholders on the preceding
Distribution Date, to the extent permitted by law, at the Class A-1 Interest
Rate from such preceding Distribution Date to but excluding the current
Distribution Date.

CLASS A-1 INTEREST DISTRIBUTABLE AMOUNT: With respect to any
Distribution Date, the sum of the Class A-1 Monthly Interest Distributable
Amount for such Distribution Date and the Class A-1 Interest Carryover
Shortfall for such Distribution Date.

CLASS A-1 INTEREST RATE: 4.960% per annum.

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<PAGE>

CLASS A-1 MONTHLY INTEREST DISTRIBUTABLE AMOUNT: With
respect to any Distribution Date, the product of (x) the Class A-1 Interest
Rate, (y) a fraction, the numerator of which is the number of days elapsed
from and including the most recent date to which interest has been paid (or,
in the case of the first Distribution Date, interest accrued for 29 days,
which is the number of days elapsed from and including the Closing Date to
but excluding April 15, 1999) to but excluding such Distribution Date and the
denominator of which is 360 and (z) the outstanding principal balance of the
Class A-1 Notes on the immediately preceding Distribution Date (or, in the
case of the first Distribution Date, on the Closing Date), after giving
effect to all payments of principal to Class A-1 Noteholders on or prior to
such immediately preceding Distribution Date (or, in the case of the first
Distribution Date, on the Closing Date).

CLASS A-1 PREPAYMENT AMOUNT: As of the Distribution Date on
or immediately following the last day of the Funding Period, after giving
effect to any transfer of Subsequent Receivables on such date, an amount
equal to the Class A-1 Noteholders' pro rata share (based on the respective
current outstanding principal balance of each class of Notes) of the
Pre-Funded Amount as of such Distribution Date.

CLASS A-1 PREPAYMENT PREMIUM: An amount computed by the
Servicer equal to the excess, if any, discounted as described below, of (i)
the amount of interest that would accrue on the Class A-1 Prepayment Amount
at the Class A-1 Interest Rate during the period commencing on and including
the Distribution Date on which the Class A-1 Prepayment Amount is required to
be deposited in the Note Distribution Account pursuant to Section 4.7 to but
excluding June 16, 1999 over (ii) the amount of interest that would have
accrued on the Class A-1 Prepayment Amount over the same period at a per
annum rate of interest equal to the bond equivalent yield to maturity on the
Determination Date preceding such Distribution Date on 3 month London
Interbank Offered Rate ("LIBOR") due June 16, 1999. Such excess shall be
discounted to present value to such Distribution Date at the yield described
in clause (ii) above.

CLASS A-2 FINAL SCHEDULED DISTRIBUTION DATE: January 15, 2002
(or, if such day is not a Business Day, the next succeeding Business Day
thereafter).

CLASS A-2 INTEREST CARRYOVER SHORTFALL: With respect to any
Distribution Date, the excess of the Class A-2 Interest Distributable Amount
for the preceding Distribution Date, over the amount in respect of interest
on the Class A-2 Notes that was actually deposited in the Note Distribution
Account on such preceding Distribution Date, plus interest on the amount of
interest due but not paid to Class A-2 Noteholders on the preceding
Distribution Date, to the extent permitted by law, at the Class A-2 Interest
Rate from such preceding Distribution Date to but excluding the current
Distribution Date.

CLASS A-2 INTEREST DISTRIBUTABLE AMOUNT: With respect to any
Distribution Date, the sum of the Class A-2 Monthly Interest Distributable
Amount for such Distribution Date and the Class A-2 Interest Carryover
Shortfall for such Distribution Date.

CLASS A-2 INTEREST RATE: 5.373% per annum.

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<PAGE>

CLASS A-2 MONTHLY INTEREST DISTRIBUTABLE AMOUNT: With
respect to any Distribution Date, the product of (x) the Class A-2 Interest
Rate, (y) a fraction, the numerator of which is the number of days elapsed
from and including the most recent date to which interest has been paid (or,
in the case of the first Distribution Date, interest accrued for 29 days,
which is the number of days elapsed from and including the Closing Date to
but excluding April 15, 1999) to but excluding such Distribution Date and
the denominator of which is 360 and (z) the outstanding principal balance of
the Class A-2 Notes on the immediately preceding Distribution Date (or, in
the case of the first Distribution Date, on the Closing Date), after giving
effect to all payments of principal to Class A-2 Noteholders on or prior to
such immediately preceding Distribution Date (or, in the case of the first
Distribution Date, on the Closing Date).

CLASS A-2 PREPAYMENT AMOUNT: As of the Distribution Date on
or immediately following the last day of the Funding Period, after giving
effect to any transfer of Subsequent Receivables on such date, an amount
equal to the Class A-2 Noteholders' pro rata share (based on the respective
current outstanding principal balance of each class of Notes) of the
Pre-Funded Amount as of such Distribution Date.

CLASS A-2 PREPAYMENT PREMIUM: An amount computed by the
Servicer equal to the excess, if any, discounted as described below, of (i)
the amount of interest that would accrue on the Class A-2 Prepayment Amount
at the Class A-2 Interest Rate during the period commencing on and including
the Distribution Date on which the Class A-2 Prepayment Amount is required to
be deposited in the Note Distribution Account pursuant to Section 4.7 to but
excluding February 28, 2000 over (ii) the amount of interest that would have
accrued on the Class A-2 Prepayment Amount over the same period at a per
annum rate of interest equal to the yield to maturity on the Determination
Date preceding such Distribution Date on the 11 month Eurodollar Synthetic
Forward due February 28, 2000. Such excess shall be discounted to present
value to such Distribution Date at the yield described in clause (ii) above.

CLASS A-3 FINAL SCHEDULED DISTRIBUTION DATE: September 15,
2002 (or, if such day is not a Business Day, the next succeeding Business Day
thereafter).

CLASS A-3 INTEREST CARRYOVER SHORTFALL: With respect to any
Distribution Date, the excess of the Class A-3 Interest Distributable Amount
for the preceding Distribution Date over the amount in respect of interest on
the Class A-3 Notes that was actually deposited in the Note Distribution
Account on such preceding Distribution Date, plus interest on the amount of
interest due but not paid to Class A-3 Noteholders on the preceding
Distribution Date, to the extent permitted by law, at the Class A-3 Interest
Rate from such preceding Distribution Date to but excluding the current
Distribution Date.

CLASS A-3 INTEREST DISTRIBUTABLE AMOUNT: With respect to any
Distribution Date, the sum of the Class A-3 Monthly Interest Distributable
Amount for such Distribution Date and the Class A-3 Interest Carryover
Shortfall for such Distribution Date.

CLASS A-3 INTEREST RATE: 5.750% per annum.

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<PAGE>

CLASS A-3 MONTHLY INTEREST DISTRIBUTABLE AMOUNT: With
respect to any Distribution Date, 30 days of interest (or, in the case of the
first Distribution Date, interest accrued for 28 days, which is the number of
days elapsed from and including the Closing Date to but excluding April 15,
1999, assuming that the last day of each month is the 30th) at the Class A-3
Interest Rate on the outstanding principal balance of the Class A-3 Notes on
the immediately preceding Distribution Date (or, in the case of the first
Distribution Date, on the Closing Date), after giving effect to all payments
of principal to Class A-3 Noteholders on or prior to such immediately
preceding Distribution Date (or, in the case of the first Distribution Date,
on the Closing Date).

CLASS A-3 PREPAYMENT AMOUNT: As of the Distribution Date on
or immediately following the last day of the Funding Period, after giving
effect to any transfer of Subsequent Receivables on such date, an amount
equal to the Class A-3 Noteholders' pro rata share (based on the respective
current outstanding principal balance of each class of Notes) of the
Pre-Funded Amount as of such Distribution Date.

CLASS A-3 PREPAYMENT PREMIUM: An amount computed by the
Servicer equal to the excess, if any, discounted as described below, of (i)
the amount of interest that would accrue on the Class A-3 Prepayment Amount
at the Class A-3 Interest Rate during the period commencing on and including
the Distribution Date on which the Class A-3 Prepayment Amount is required to
be deposited in the Note Distribution Account pursuant to Section 4.7 to but
excluding November 30, 2000, over (ii) the amount of interest that would have
accrued on the Class A-3 Prepayment Amount over the same period at a per
annum rate of interest equal to the yield to maturity on the Determination
Date preceding such Distribution Date on the 5.625% U.S. Treasury Note due
November 30,2000. Such excess shall be discounted to present value to such
Distribution Date at the yield described in clause (ii) above.

CLASS A-4 FINAL SCHEDULED DISTRIBUTION DATE: August 15, 2003
(or, if such day is not a Business Day, the next succeeding Business Day
thereafter).

CLASS A-4 INTEREST CARRYOVER SHORTFALL: With respect to any
Distribution Date, the excess of the Class A-4 Interest Distributable Amount
for the preceding Distribution Date over the amount in respect of interest on
the Class A-4 Notes that was actually deposited in the Note Distribution
Account on such preceding Distribution Date, plus interest on the amount of
interest due but not paid to Class A-4 Noteholders on the preceding
Distribution Date, to the extent permitted by law, at the Class A-4 Interest
Rate from such preceding Distribution Date to but excluding the current
Distribution Date.

CLASS A-4 INTEREST DISTRIBUTABLE AMOUNT: With respect to any
Distribution Date, the sum of the Class A-4 Monthly Interest Distributable
Amount for such Distribution Date and the Class A-4 Interest Carryover
Shortfall for such Distribution Date.

CLASS A-4 INTEREST RATE: 5.940% per annum.

CLASS A-4 MONTHLY INTEREST DISTRIBUTABLE AMOUNT: With
respect to any Distribution Date, 30 days of interest (or, in the case of the
first Distribution Date, interest

-6-

<PAGE>

accrued for 28 days, which is the number of days elapsed from and including
the Closing Date to but excluding April 15, 1999, assuming that the last day
of each month is the 30th) at the Class A-4 Interest Rate on the outstanding
principal balance of the Class A-4 Notes on the immediately preceding
Distribution Date (or, in the case of the first Distribution Date, on the
Closing Date), after giving effect to all payments of principal to Class A-4
Noteholders on or prior to such immediately preceding Distribution Date.

CLASS A-4 PREPAYMENT AMOUNT: As of the Distribution Date on
or immediately following the last day of the Funding Period, after giving
effect to any transfer of Subsequent Receivables on such date, an amount
equal to the Class A-4 Noteholders' pro rata share (based on the respective
current outstanding principal balance of each class of Notes) of the
Pre-Funded Amount as of such Distribution Date.

CLASS A-4 PREPAYMENT PREMIUM: An amount computed by the
Servicer equal to the excess, if any, discounted as described below, of (i)
the amount of interest that would accrue on the Class A-4 Prepayment Amount
at the Class A-4 Interest Rate during the period commencing on and including
the Distribution Date on which the Class A-4 Prepayment Amount is required to
be deposited in the Note Distribution Account pursuant to Section 4.7 to but
excluding July 31, 2001, over (ii) the amount of interest that would have
accrued on the Class A-4 Prepayment Amount over the same period at a per
annum rate of interest equal to the yield to maturity on the Determination
Date preceding such Distribution Date on the 6.625% U.S. Treasury Note due
July 31, 2001. Such excess shall be discounted to present value to such
Distribution Date at the yield described in clause (ii) above.

CLASS A-5 FINAL SCHEDULED DISTRIBUTION DATE: December 15,
2006 (or, if such day is not a Business Day, the next succeeding Business Day
thereafter).

CLASS A-5 INTEREST CARRYOVER SHORTFALL: With respect to any
Distribution Date, the excess of the Class A-5 Interest Distributable Amount
for the preceding Distribution Date over the amount in respect of interest on
the Class A-5 Notes that was actually deposited in the Note Distribution
Account on such preceding Distribution Date, plus interest on the amount of
interest due but not paid to Class A-5 Noteholders on the preceding
Distribution Date, to the extent permitted by law, at the Class A-5 Interest
Rate from such preceding Distribution Date to but excluding the current
Distribution Date.

CLASS A-5 INTEREST DISTRIBUTABLE AMOUNT: With respect to any
Distribution Date, the sum of the Class A-5 Monthly Interest Distributable
Amount for such Distribution Date and the Class A-5 Interest Carryover
Shortfall for such Distribution Date.

CLASS A-5 INTEREST RATE: 6.120% per annum.

CLASS A-5 MONTHLY INTEREST DISTRIBUTABLE AMOUNT: With
respect to any Distribution Date, 30 days of interest (or, in the case of the
first Distribution Date, interest accrued for 28 days, which is the number of
days elapsed from and including the Closing Date to but excluding April 15,
1999, assuming that the last day of each month is the 30th) at the Class A-5
Interest Rate on the outstanding principal balance of the Class A-5 Notes on
the immediately preceding Distribution Date (or, in the case of the

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<PAGE>

first Distribution Date, on the Closing Date), after giving effect to all
payments of principal to Class A-5 Noteholders on or prior to such
immediately preceding Distribution Date.

CLASS A-5 PREPAYMENT AMOUNT: As of the Distribution Date on
or immediately following the last day of the Funding Period, after giving
effect to any transfer of Subsequent Receivables on such date, an amount
equal to the Class A-5 Noteholders' pro rata share (based on the respective
current outstanding principal balance of each class of Notes) of the
Pre-Funded Amount as of such Distribution Date.

CLASS A-5 PREPAYMENT PREMIUM: An amount computed by the
Servicer equal to the excess, if any, discounted as described below, of (i)
the amount of interest that would accrue on the Class A-5 Prepayment Amount
at the Class A-5 Interest Rate during the period commencing on and including
the Distribution Date on which the Class A-5 Prepayment Amount is required to
be deposited in the Note Distribution Account pursuant to Section 4.7 to but
excluding September 30, 2002, over (ii) the amount of interest that would
have accrued on the Class A-5 Prepayment Amount over the same period at a per
annum rate of interest equal to the yield to maturity on the Determination
Date preceding such Distribution Date on the 5.875% U.S. Treasury Note due
September 30, 2002. Such excess shall be discounted to present value to such
Distribution Date at the yield described in clause (ii) above.

CLOSING DATE: March 17, 1999.

CLOSING DATE PURCHASE AGREEMENT: The Receivables Purchase
Agreement and Assignment, dated as of March 1, 1999, between AFL and the
Seller.

COLLATERAL AGENT: The Collateral Agent named in the Spread
Account Agreement, and any successor thereto pursuant to the terms of the
Spread Account Agreement.

COLLATERAL INSURANCE: The insurance policy maintained by the
Servicer, or indemnification obligation of the Servicer in lieu of such
insurance policy, pursuant to Section 3.4(e).

COLLECTED FUNDS: With respect to any Determination Date, the
amount of funds in the Collection Account representing collections on the
Receivables during the related Monthly Period, including all Liquidation
Proceeds collected during the related Monthly Period (but excluding any
Monthly Advances and any Purchase Amounts).

COLLECTION ACCOUNT: The account designated as the Collection
Account in, and which is established and maintained pursuant to, Section
4.1(a).

COLLECTION RECORDS: All manually prepared or computer
generated records relating to collection efforts or payment histories with
respect to the Receivables.

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COMPUTER TAPE: The computer tape generated on behalf of the
Seller which provides information relating to the Receivables and which was
used by the Seller and AFL in selecting the Receivables conveyed to the Trust
hereunder.

CORPORATE TRUST OFFICE: With respect to the Owner Trustee,
the principal office of the Owner Trustee at which at any particular time its
corporate trust business shall be administered, which office at the Closing
Date is located at Rodney Square North, 1100 North Market Street, Wilmington,
Delaware 19890; the telecopy number for the Corporate Trust Administration of
the Owner Trustee on the date of the execution of this Agreement is (302)
651-8882; with respect to the Indenture Trustee, the principal office of the
Indenture Trustee at which at any particular time its corporate trust
business shall be administered, which office is located at Sixth Street and
Marquette Avenue, Minneapolis, Minnesota 55479-0070, Attention: Corporate
Trust Services--Asset Backed Administration; the telecopy number for the
Corporate Trust Services of the Indenture Trustee on the date of execution of
this Agreement is (612) 667-3539.

CRAM DOWN LOSS: With respect to a Receivable, if a court of
appropriate jurisdiction in an insolvency proceeding shall have issued an
order reducing the amount owed on a Receivable or otherwise modifying or
restructuring the Scheduled Payments to be made on a Receivable, an amount
equal to the excess of the Principal Balance of such Receivable immediately
prior to such order over the Principal Balance of such Receivable as so
reduced or the net present value (using as the discount rate the higher of
the contract rate or the rate of interest, if any, specified by the court in
such order) of the Scheduled Payments as so modified or restructured. A
"Cram Down Loss" shall be deemed to have occurred on the date of issuance of
such order.

CREDIT ENHANCEMENT FEE: With respect to any Distribution
Date, the amount to be paid to the Security Insurer pursuant to Section
4.6(vi) and the amount to which the Seller is entitled pursuant to Section
4.6(vii).

CUSTODIAN: AFL and any other Person named from time to time
as custodian in any Custodian Agreement acting as agent for the Trust, which
Person must be (so long as an Insurer Default shall not have occurred and be
continuing) acceptable to the Security Insurer.

CUSTODIAN AGREEMENT: Any Custodian Agreement from time to
time in effect between the Custodian named therein and the Trust,
substantially in the form of Exhibit B hereto, as the same may be amended,
supplemented or otherwise modified from time to time in accordance with the
terms thereof, which Custodian Agreement and any amendments, supplements or
modifications thereto shall (so long as an Insurer Default shall not have
occurred and be continuing) be acceptable to the Security Insurer.

DEALER: A seller of new or used automobiles or light trucks
that originated one or more of the Receivables and sold the respective
Receivable, directly or indirectly, to AFL under an existing agreement
between such seller and AFL.

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DEALER AGREEMENT: An agreement between AFL and a Dealer
relating to the sale of retail installment sale contracts and installment
notes to AFL and all documents and instruments relating thereto.

DEALER ASSIGNMENT: With respect to a Receivable, the
executed assignment executed by a Dealer conveying such Receivable to AFL.

DEFICIENCY CLAIM AMOUNT: As defined in Section 5.2(a).

DEFICIENCY CLAIM DATE: With respect to any Distribution
Date, the fourth Business Day immediately preceding such Distribution Date.

DEFICIENCY NOTICE: As defined in Section 5.2(a).

DEPOSIT DATE: With respect to any Monthly Period, the
Business Day immediately preceding the related Determination Date.

DETERMINATION DATE: With respect to any Monthly Period, the
sixth Business Day immediately preceding the related Distribution Date.

DISTRIBUTION AMOUNT: With respect to a Distribution Date,
the sum of (i) the Actual Funds for such Distribution Date, and (ii) the
Deficiency Claim Amount, if any, received by the Indenture Trustee with
respect to such Distribution Date.

DISTRIBUTION DATE: The 15th day of each calendar month, or
if such 15th day is not a Business Day, the next succeeding Business Day,
commencing April 15, 1999, to and including the Final Scheduled Distribution
Date.

DRAW DATE: With respect to any Distribution Date, the third
Business Day immediately preceding such Distribution Date.

ELECTRONIC LEDGER: The electronic master record of the
retail installment sales contracts or installment loans of AFL.

ELIGIBLE ACCOUNT: (i) A segregated trust account that is
maintained with the corporate trust department of a depository institution
acceptable to the Security Insurer (so long as an Insurer Default shall not
have occurred and be continuing), or (ii) a segregated direct deposit account
maintained with a depository institution or trust company organized under the
laws of the United States of America, or any of the States thereof, or the
District of Columbia, having a certificate of deposit, short term deposit or
commercial paper rating of at least "A-1+" by Standard & Poor's and "P-1" by
Moody's and (so long as an Insurer Default shall not have occurred and be
continuing) acceptable to the Security Insurer.

ELIGIBLE INVESTMENTS: Any one or more of the following types
of investments:

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(a) (i) direct interest-bearing obligations of, and
interest-bearing obligations guaranteed as to timely payment of principal and
interest by, the United States or any agency or instrumentality of the United
States, the obligations of which are backed by the full faith and credit of
the United States; and (ii) direct interest-bearing obligations of, and
interest-bearing obligations guaranteed as to timely payment of principal and
interest by, the Federal National Mortgage Association or the Federal Home
Loan Mortgage Corporation, but only if, at the time of investment, such
obligations are assigned a rating in the highest credit rating category by
each Rating Agency;

(b) demand or time deposits in, certificates of deposit
of, or bankers' acceptances issued by any depository institution or trust
company organized under the laws of the United States or any State and
subject to supervision and examination by federal and/or State banking
authorities (including, if applicable, the Indenture Trustee, the Owner
Trustee or any agent of either of them acting in their respective commercial
capacities); provided that the short-term unsecured debt obligations of such
depository institution or trust company at the time of such investment, or
contractual commitment providing for such investment, are assigned a rating
in the highest credit rating category by each Rating Agency;

(c) repurchase obligations pursuant to a written
agreement (i) with respect to any obligation described in clause (a) above,
where the Indenture Trustee has taken actual or constructive delivery of such
obligation in accordance with Section 4.1, and (ii) entered into with the
corporate trust department of a depository institution or trust company
organized under the laws of the United States or any State thereof, the
deposits of which are insured by the Federal Deposit Insurance Corporation
and the short-term unsecured debt obligations of which are rated "A-1+" by
Standard & Poor's and "P-1" by Moody's (including, if applicable, the
Indenture Trustee, the Owner Trustee or any agent of either of them acting in
their respective commercial capacities);

(d) securities bearing interest or sold at a discount
issued by any corporation incorporated under the laws of the United States or
any State whose long-term unsecured debt obligations are assigned a rating in
the highest credit rating category by each Rating Agency at the time of such
investment or contractual commitment providing for such investment; PROVIDED,
HOWEVER, that securities issued by any particular corporation will not be
Eligible Investments to the extent that an investment therein will cause the
then outstanding principal amount of securities issued by such corporation
and held in the Trust Accounts to exceed 10% of the Eligible Investments held
in the Trust Accounts (with Eligible Investments held in the Trust Accounts
valued at par);

(e) commercial paper that (i) is payable in United States
dollars and (ii) is rated in the highest credit rating category by each
Rating Agency;

(f) units of money market funds rated in the highest
credit rating category by each Rating Agency; provided that all Eligible
Investments shall be held in the name of the Indenture Trustee; or

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(g) any other demand or time deposit, obligation,
security or investment as may be acceptable to the Rating Agencies and the
Security Insurer, as evidenced by the prior written consent of the Security
Insurer, as may from time to time be confirmed in writing to the Indenture
Trustee by the Security Insurer; PROVIDED, HOWEVER, that securities issued by
any entity (except as provided in paragraph (a)) will not be Eligible
Investments to the extent that an investment therein will cause the then
outstanding principal amount of securities issued by such entity and held in
the Pre-Funding Account to exceed $25 million (with Eligible Investments held
in the Pre-Funding Account valued at par), unless and for so long as such
securities are acceptable to the Rating Agencies and the Security Insurer, as
evidenced by the prior written consent of the Security Insurer, as may from
time to time be confirmed in writing to the Indenture Trustee by the Security
Insurer.

Eligible Investments may be purchased by or through the Indenture Trustee or
any of its Affiliates. No Eligible Investment shall have an "r" highlighter
affixed to the rating of Standard & Poor's.

ELIGIBLE SERVICER: AFL, the Backup Servicer or another
Person which at the time of its appointment as Servicer (i) is servicing a
portfolio of motor vehicle retail installment sales contracts and/or motor
vehicle installment loans, (ii) is legally qualified and has the capacity to
service the Receivables, (iii) has demonstrated the ability professionally
and competently to service a portfolio of motor vehicle retail installment
sales contracts and/or motor vehicle installment loans similar to the
Receivables with reasonable skill and care, and (iv) is qualified and
entitled to use, pursuant to a license or other written agreement, and agrees
to maintain the confidentiality of, the software which the Servicer uses in
connection with performing its duties and responsibilities under this
Agreement or otherwise has available software which is adequate to perform
its duties and responsibilities under this Agreement.

FINAL SCHEDULED DISTRIBUTION DATE: With respect to each
class of Notes, the Class A-1 Final Scheduled Distribution Date, the Class
A-2 Final Scheduled Distribution Date, the Class A-3 Final Scheduled
Distribution Date, the Class A-4 Final Scheduled Distribution Date and the
Class A-5 Final Scheduled Distribution Date, respectively.

FINANCED VEHICLE: A new or used automobile or light truck,
together with all accessories thereto, securing or purporting to secure an
Obligor's indebtedness under a Receivable.

FORCE-PLACED INSURANCE: The meaning set forth in Section
3.4(b).

FUNDING PERIOD: The period beginning on the Closing Date and
ending on the first to occur of (a) the Distribution Date on which the
Pre-Funded Amount (after giving effect to any reduction in the Pre-Funded
Amount in connection with the transfer of Subsequent Receivables to the Trust
on such Distribution Date) is less than $100,000, (b) the date on which an
Event of Default or a Servicer Termination Event occurs, (c) the date on
which an Insolvency Event occurs with respect to AFL and (d) the close of
business on the Distribution Date occurring in May 1999.

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INDENTURE: The Indenture, dated as of March 1, 1999, among
the Trust, the Indenture Trustee and the Indenture Collateral Agent, as the
same may be amended and supplemented from time to time.

INDENTURE COLLATERAL AGENT: The Person acting as Indenture
Collateral Agent under the Indenture, its successors in interest and any
successor Indenture Collateral Agent under the Indenture.

INDENTURE TRUSTEE: The Person acting as Trustee under the
Indenture, its successors in interest and any successor Trustee under the
Indenture.

INDEPENDENT ACCOUNTANTS: As defined in Section 3.11(a).

INITIAL CUTOFF DATE: March 5, 1999.

INITIAL CUTOFF DATE PRINCIPAL BALANCE: $401,181,267.98.

INITIAL RECEIVABLES: The Receivables listed on the Schedule
of Initial Receivables on the Closing Date.

INSOLVENCY EVENT: With respect to a specified Person, (a)
the commencement of an involuntary case against such Person under the federal
bankruptcy laws, as now or hereinafter in effect, or another present or
future federal or state bankruptcy, insolvency or similar law, and such case
is not dismissed within 60 days; or (b) the filing of a decree or entry of an
order for relief by a court having jurisdiction in the premises in respect of
such Person or any substantial part of its property in an involuntary case
under any applicable Federal or state bankruptcy, insolvency or other similar
law now or hereafter in effect, or appointing a receiver, liquidator,
assignee, custodian, trustee, sequestrator or similar official for such
Person or for any substantial part of its property, or ordering the
winding-up or liquidation of such Person's affairs; or (c) the commencement
by such Person of a voluntary case under any applicable Federal or state
bankruptcy, insolvency or other similar law now or hereafter in effect, or
the consent by such Person to the entry of an order for relief in an
involuntary case under any such law, or the consent by such Person to the
appointment of or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official for such Person or for
any substantial part of its property, or the making by such Person of any
general assignment for the benefit of creditors, or the failure by such
Person generally to pay its debts as such debts become due, or the taking of
action by such Person in furtherance of any of the foregoing.

INSURANCE ADD-ON AMOUNT: The premium charged to the Obligor
in the event that the Servicer obtains Force-Placed Insurance pursuant to
Section 3.4.

INSURANCE AGREEMENT: The Insurance and Indemnity Agreement,
dated as of March 17, 1999, among the Security Insurer, the Trust, the Seller
and AFL.

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INSURANCE AGREEMENT EVENT OF DEFAULT: An "Event of Default"
as defined in the Insurance Agreement.

INSURANCE POLICY: With respect to a Receivable, any
insurance policy benefitting the holder of the Receivable providing loss or
physical damage, credit life, credit disability, theft, mechanical breakdown
or similar coverage with respect to the Financed Vehicle or the Obligor.

INSURER DEFAULT: The occurrence and continuance of any of the
following:

(a) the Security Insurer shall have failed to make a
payment required under the Note Policy;

(b) The Security Insurer 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 the Security
Insurer 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 the Security Insurer (or the taking of possession of all
or any material portion of the property of the Security Insurer).

LIEN: Any security interest, lien, charge, pledge,
preference, equity or encumbrance of any kind, including tax liens,
mechanics' liens and any liens that attach by operation of law.

LIEN CERTIFICATE: With respect to a Financed Vehicle, an
original certificate of title, certificate of lien or other notification
issued by the Registrar of Titles of the applicable state to a secured party
which indicates that the lien of the secured party on the Financed Vehicle is
recorded on the original certificate of title. In any jurisdiction in which
the original certificate of title is required to be given to the Obligor, the
term "Lien Certificate" shall mean only a certificate or notification issued
to a secured party.

LIQUIDATED RECEIVABLE: With respect to any Monthly Period, a
Receivable as to which (i) 91 days have elapsed since the Servicer
repossessed the related Financed Vehicle, (ii) the Servicer has determined in
good faith that all amounts it expects to recover have been received, or
(iii) all or any portion of a Scheduled Payment shall have become more than
180 days past due.

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LIQUIDATION PROCEEDS: With respect to a Liquidated
Receivable, all amounts realized with respect to such Receivable (other than
amounts withdrawn from the Spread Account or the Reserve Account and drawings
under the Note Policy) net of (i) reasonable expenses incurred by the
Servicer in connection with the collection of such Receivable and the
repossession and disposition of the Financed Vehicle and (ii) amounts that
are required to be refunded to the Obligor on such Receivable; PROVIDED,
HOWEVER, that the Liquidation Proceeds with respect to any Receivable shall
in no event be less than zero.

LOCKBOX ACCOUNT: The segregated account maintained on behalf
of the Trust by the Lockbox Bank in accordance with Section 3.2(d).

LOCKBOX AGREEMENT: The Agency Agreement, dated as of
November 13, 1992 by and among Harris Trust and Savings Bank, AFL, Shawmut
Bank, N.A., as Trustee, Saturn Financial Services, Inc. and the Program
Parties (as defined therein), taken together with the Retail Lockbox
Agreement, dated as of November 13, 1992, among such parties, and the
Counterpart to Agency Agreement and Retail Lockbox Agreement, dated as of
March 17, 1999, among Harris Trust and Savings Bank, AFL, the Trust, the
Indenture Trustee and the Security Insurer, as such agreements may be amended
from time to time, unless the Indenture Trustee hereunder shall cease to be a
Program Party thereunder, or such agreement shall be terminated in accordance
with its terms, in which event "Lockbox Agreement" shall mean such other
agreement, in form and substance acceptable to the Security Insurer, or if an
Insurer Default shall have occurred and be continuing, to a Note Majority,
among the Servicer, the Trust, the Indenture Trustee and the Lockbox Bank.

LOCKBOX BANK: A depository institution named by the Servicer
and, so long as an Insurer Default shall not have occurred and be continuing,
acceptable to the Security Insurer, or, if an Insurer Default shall have
occurred and be continuing, to a Note Majority.

MONTHLY ADVANCE: The amount that the Servicer is required to
advance on any Receivable pursuant to Section 4.4(a).

MONTHLY PERIOD: With respect to a Distribution Date, the
calendar month preceding the month in which such Distribution Date occurs
(such calendar month being referred to as the "related" Monthly Period with
respect to such Distribution Date). With respect to an Accounting Date, the
calendar month in which such Accounting Date occurs is referred to herein as
the "related" Monthly Period to such Accounting Date.

MONTHLY RECORDS: All records and data maintained by the
Servicer with respect to the Receivables, including the following with
respect to each Receivable: the account number; the identity of the
originating Dealer; Obligor name; Obligor address; Obligor home phone number;
Obligor business phone number; original Principal Balance; original term;
Annual Percentage Rate; current Principal Balance; current remaining term;
origination date; first payment date; final scheduled payment date; next
payment due date; date of most recent payment; new/used classification;
collateral description; days currently delinquent; number of contract
extensions (months) to date; amount, if any, of Force-Placed Insurance
payable monthly;

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amount of the Scheduled Payment; current Insurance Policy expiration date;
and past due late charges, if any.

MOODY'S: Moody's Investors Service, Inc., or any successor
thereto.

NOTE DISTRIBUTION ACCOUNT: The account designated as such,
established and maintained pursuant to Section 4.1(c).

NOTE MAJORITY: As to each class of Notes, Holders of Notes
representing a majority of the outstanding principal balance of such class of
Notes.

NOTE POLICY: The financial guaranty insurance policy issued
by the Security Insurer to the Indenture Trustee on behalf of the Noteholders.

NOTE POOL FACTOR: With respect to any Distribution Date and
each class of Notes, an eight-digit decimal figure equal to the outstanding
principal balance of such class of Notes as of such Distribution Date (after
giving effect to all distributions on such date) divided by the original
outstanding principal balance of such class of Notes as of the Closing Date.

NOTEHOLDERS' INTEREST DISTRIBUTABLE AMOUNT: With respect to
any Distribution Date, the sum of the Class A-1 Interest Distributable
Amount, the Class A-2 Interest Distributable Amount, the Class A-3 Interest
Distributable Amount, the Class A-4 Interest Distributable Amount and the
Class A-5 Interest Distributable Amount.

NOTEHOLDERS' MONTHLY PRINCIPAL DISTRIBUTABLE AMOUNT: With
respect to any Distribution Date, 100% of the Principal Distribution Amount.

NOTEHOLDERS' PRINCIPAL CARRYOVER SHORTFALL: As of the close
of business on any Distribution Date, the excess of the sum of the
Noteholders' Monthly Principal Distributable Amount and any outstanding
Noteholders' Principal Carryover Shortfall from the immediately preceding
Distribution Date over the amount in respect of principal that is actually
deposited in the Note Distribution Account on such immediately preceding
Distribution Date.

NOTEHOLDERS' PRINCIPAL DISTRIBUTABLE AMOUNT: With respect to
any Distribution Date (other than the Final Scheduled Distribution Date with
respect to any class of Notes), the sum of the Noteholders' Monthly Principal
Distributable Amount for such Distribution Date and any Noteholders'
Principal Carryover Shortfall as of the close of the preceding Distribution
Date. The Noteholders' Principal Distributable Amount on the Final Scheduled
Distribution Date for any class of Notes will equal the sum of (i) the
Noteholders' Monthly Principal Distributable Amount for such Distribution
Date, (ii) the Noteholders' Principal Carryover Shortfall as of the close of
the preceding Distribution Date, and (iii) the excess of the outstanding
principal balance of such class of Notes, if any, over the amounts in clauses
(i) and (ii). In no event may the Noteholders' Principal Distributable
Amount for any Distribution Date exceed the outstanding principal balance of
the Notes immediately prior to such Distribution Date.

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NOTES: The Class A-1 Notes, the Class A-2 Notes, the Class
A-3 Notes, the Class A-4 Notes and the Class A-5 Notes.

OBLIGOR: The purchaser or the co-purchasers of the Financed
Vehicle and any other Person or Persons who are primarily or secondarily
obligated to make payments under a Receivable.

OPINION OF COUNSEL: A written opinion of counsel acceptable
in form and substance and from counsel acceptable to the Owner Trustee and,
if such opinion or a copy thereof is required to be delivered to the
Indenture Trustee or the Security Insurer, to the Indenture Trustee or the
Security Insurer, as applicable.

ORIGINAL POOL BALANCE: As of any date, the sum of the
Initial Cutoff Date Principal Balance plus the aggregate Principal Balance
(as of the related Subsequent Cutoff Date) of all Subsequent Receivables sold
to the Trust on any Subsequent Transfer Date.

OUTSTANDING MONTHLY ADVANCES: With respect to a Receivable
and a Determination Date, the sum of all Monthly Advances made on any
Determination Date prior to such Determination Date relating to that
Receivable which have not been reimbursed pursuant to Section 4.6(i) or
Section 4.8.

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

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

PRE-FUNDED AMOUNT: As of any date, $148,818,732.02 minus the
aggregate Principal Balance (as of the related Subsequent Cutoff Date) of all
Subsequent Receivables sold to the Trust on or prior to such date.

PRE-FUNDING ACCOUNT: The account designated as the
Pre-Funding Account in, and which is established and maintained pursuant to,
Section 4.1(b).

PREFERENCE CLAIM: The meaning specified in Section 5.4(b).

PRINCIPAL BALANCE: With respect to any Receivable, as of any
date, the Amount Financed minus (i) that portion of all amounts received on
or prior to such date and allocable to principal in accordance with the terms
of the Receivable, and (ii) any Cram Down Loss in respect of such Receivable.

PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date, the amount equal to the sum of the following amounts with
respect to the related Monthly Period, in each

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case computed with respect to each Receivable in accordance with the method
specified in the related retail installment sale contract or promissory note:
(i) that portion of all collections on Receivables (other than Liquidated
Receivables and Purchased Receivables) allocable to principal, including all
full and partial principal prepayments, (ii) the Principal Balance (as of the
related Accounting Date) of all Receivables that became Liquidated
Receivables during the related Monthly Period (other than Purchased
Receivables), (iii) the Principal Balance of all Receivables that became
Purchased Receivables as of the related Accounting Date, and, in the sole
discretion of the Security Insurer, provided no Insurer Default shall have
occurred and be continuing, the Principal Balance as of the related
Accounting Date of all Receivables that were required to be purchased as of
the related Accounting Date but were not so purchased, and (iv) the aggregate
amount of Cram Down Losses that shall have occurred during the related
Monthly Period.

PURCHASE AGREEMENTS: (i) The Closing Date Purchase Agreement
and (ii) one or more Assignment Agreements pursuant to the BOA Purchase
Agreement, pursuant to which, together, AFL transferred the Initial
Receivables to the Seller.

PURCHASE AMOUNT: With respect to a Receivable, the Principal
Balance and all accrued and unpaid interest on the Receivable (without regard
to any Monthly Advances that may have been made with respect to the
Receivable) as of the Accounting Date on which the obligation to purchase
such Receivable arises.

PURCHASED RECEIVABLE: As of any Accounting Date, any
Receivable (including any Liquidated Receivable) that became a Warranty
Receivable or Administrative Receivable as of such Accounting Date (or which
AFL or the Servicer has elected to purchase as of an earlier Accounting Date,
as permitted by Section 2.6 or 3.7), and as to which the Purchase Amount has
been deposited in the Collection Account by the Seller, AFL or the Servicer,
as applicable, on or before the related Deposit Date.

RATING AGENCY: Each of Moody's and Standard & Poor's, so
long as such Persons maintain a rating on the Notes; and if either Moody's or
Standard & Poor's no longer maintains a rating on the Notes, such other
nationally recognized statistical rating organization selected by the Seller
and (so long as an Insurer Default shall not have occurred and be continuing)
acceptable to the Security Insurer.

RATING AGENCY CONDITION: With respect to any action, that
each Rating Agency shall have been given 10 days' prior notice thereof and
that each of the Rating Agencies shall have notified the Seller, the
Servicer, the Security Insurer, the Owner Trustee and the Indenture Trustee
in writing that such action will not result in a reduction or withdrawal of
the then current rating of the Notes.

RECEIVABLE: A retail installment sale contract or promissory
note (and related security agreement) for a new or used automobile or light
truck (and all accessories thereto) that is included in the Schedule of
Receivables, and all rights and obligations under such a contract, but not
including (i) any Liquidated Receivable (other than for purposes of
calculating

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Noteholders' Distributable Amounts hereunder and for the purpose of
determining the obligations pursuant to Section 2.6 and 3.7 to purchase
Receivables), or (ii) any Purchased Receivable on or after the Accounting
Date immediately preceding the Deposit Date on which payment of the Purchase
Amount is made in connection therewith pursuant to Section 4.5.

RECEIVABLE FILE: The documents, electronic entries,
instruments and writings listed in Section 2.2 pertaining to a particular
Receivable.

REFERENCE BANKS: Three major banks in the London interbank
market selected by the Servicer.

REGISTRAR OF TITLES: With respect to any state, the
governmental agency or body responsible for the registration of, and the
issuance of certificates of title relating to, motor vehicles and liens
thereon.

RELATED DOCUMENTS: The Trust Agreement, the Indenture, the
Notes, the Purchase Agreements, each Subsequent Purchase Agreement, each
Subsequent Transfer Agreement, the Custodian Agreement, the Note Policy, the
Spread Account Agreement, the Insurance Agreement, the Lockbox Agreement, the
Depository Agreement, the Stock Pledge Agreement and the Underwriting
Agreement among the Seller, AFL and the underwriters of the Notes. The
Related Documents executed by any party are referred to herein as "such
party's Related Documents," "its Related Documents" or by a similar
expression.

REPURCHASE EVENTS: The occurrence of a breach of any of
AFL's, the Seller's or the Servicer's representations and warranties in this
Agreement or in the Purchase Agreement or in any Subsequent Purchase
Agreement which requires the repurchase of a Receivable by AFL or the Seller
pursuant to Section 2.6 or by the Servicer pursuant to Section 3.7.

REQUIRED DEPOSIT RATING: A rating on short-term unsecured
debt obligations of "P-1" by Moody's and at least "A-1+" by Standard & Poor's
(or such other rating as may be acceptable to the Rating Agencies and, so
long as an Insurer Default shall not have occurred and be continuing, the
Security Insurer) so as to not affect the rating on the Notes.

REQUISITE RESERVE AMOUNT: As of the Closing Date,
$795,575.47 and as of any Distribution Date or Subsequent Transfer Date
thereafter during the Funding Period an amount equal to the difference between

(a) the product of (x) the weighted average of the
Class A-1 Interest Rate, the Class A-2 Interest Rate, the Class A-3
Interest Rate, the Class A-4 Interest Rate and the Class A-5 Interest
Rate (based on the outstanding principal balance of the Class A-1 Notes,
the Class A-2 Notes, the Class A-3 Notes, the Class A-4 Notes and the
Class A-5 Notes on such date), divided by 360, (y) the Pre-Funded Amount
on such date and (z) the number of days until the Distribution Date in
May 1999, and

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(b) the product of (x) the Assumed Reinvestment
Rate, divided by 360, (y) the Pre-Funded Amount on such date and (z) the
number of days until the Distribution Date in May 1999.

The Requisite Reserve Amount for any Subsequent Transfer Date (i) shall be
calculated after taking into account the transfer of Subsequent Receivables
to the Trust on such Subsequent Transfer Date (unless such Subsequent
Transfer Date does not coincide with a Distribution Date and does not occur
between a Distribution Date and the related Determination Date) and (ii) (A)
if such Subsequent Transfer Date does not coincide with a Distribution Date
but occurs between a Distribution Date and the related Determination Date,
shall be calculated as of the Distribution Date immediately following such
Subsequent Transfer Date as if such Subsequent Transfer Date occurred on such
Distribution Date, (B) if such Subsequent Transfer Date coincides with a
Distribution Date, shall be calculated as of such Distribution Date or (C) if
such Subsequent Transfer Date does not coincide with a Distribution Date and
does not occur between a Distribution Date and the related Determination
Date, shall be calculated as of the immediately preceding Distribution Date
(or as of the Closing Date, if such Subsequent Transfer Date occurs before
the Determination Date in May 1999) as if such Subsequent Transfer Date
occurred on such immediately preceding Distribution Date (or the Closing
Date).

RESERVE ACCOUNT: The account designated as the Reserve
Account in, and which is established and maintained pursuant to, Section
4.1(d), including the Class A-1 Holdback Subaccount.

RESERVE AMOUNT: As of any date of determination, the amount
on deposit in the Reserve Account (other than the amount on deposit in the
Class A-1 Holdback Subaccount) on such date.

RESPONSIBLE OFFICER: When used with respect to the Owner
Trustee, any officer of the Owner Trustee assigned by the Owner Trustee to
administer its corporate trust affairs relating to the Trust. When used with
respect to the Indenture Trustee, any officer assigned to Corporate Trust
Services (or any successor thereto), including any Vice President, Assistant
Vice President, Trust Officer, any Assistant Secretary, any trust officer or
any other officer of the Indenture Trustee customarily performing functions
similar to those performed by any of the above designated officers and having
direct responsibility for the administration of the Trust. When used with
respect to any other Person that is not an individual, the President, any
Vice-President or Assistant Vice-President or the Controller of such Person,
or any other officer or employee having similar functions.

SCHEDULE OF INITIAL RECEIVABLES: The schedule of all retail
installment sales contracts and promissory notes sold and transferred to the
Trust pursuant to this Agreement which is attached hereto as Schedule A.

SCHEDULE OF RECEIVABLES: The Schedule of Initial Receivables
attached hereto as Schedule A as supplemented by each Schedule of Subsequent
Receivables attached as Schedule A to each Subsequent Transfer Agreement.

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SCHEDULE OF REPRESENTATIONS: The Schedule of Representations
and Warranties attached hereto as Schedule B.

SCHEDULE OF SUBSEQUENT RECEIVABLES: The schedule of all
retail installment sales contracts and promissory notes sold and transferred
to the Trust pursuant to a Subsequent Transfer Agreement which is attached as
Schedule A to such Subsequent Transfer Agreement, which Schedule of
Subsequent Receivables shall supplement the Schedule of Initial Receivables.

SCHEDULED PAYMENT: With respect to any Monthly Period for
any Receivable, the amount set forth in such Receivable as required to be
paid by the Obligor in such Monthly Period. If after the Closing Date, the
Obligor's obligation under a Receivable with respect to a Monthly Period has
been modified so as to differ from the amount specified in such Receivable as
a result of (i) the order of a court in an insolvency proceeding involving
the Obligor, (ii) pursuant to the Soldiers' and Sailors' Civil Relief Act of
1940 or (iii) modifications or extensions of the Receivable permitted by
Section 3.2(b), the Scheduled Payment with respect to such Monthly Period
shall refer to the Obligor's payment obligation with respect to such Monthly
Period as so modified.

SECURITY INSURER: Financial Security Assurance Inc., a
monoline insurance company incorporated under the laws of the State of New
York, or any successor thereto, as issuer of the Note Policy.

SELLER: Arcadia Receivables Finance Corp., a Delaware
corporation, or its successor in interest pursuant to Section 6.2.

SERVICER: Arcadia Financial Ltd., its successor in interest
pursuant to Section 8.2 or, after any termination of the Servicer upon a
Servicer Termination Event, the Backup Servicer or any other successor
Servicer.

SERVICER EXTENSION NOTICE: The notice delivered pursuant to
Section 3.14.

SERVICER TERMINATION EVENT: An event described in Section
8.1.

SERVICER'S CERTIFICATE: With respect to each Determination
Date, a certificate, completed by and executed on behalf of the Servicer, in
accordance with Section 3.9, substantially in the form attached hereto as
Exhibit E.

SPREAD ACCOUNT: The Spread Account established and
maintained pursuant to the Spread Account Agreement.

SPREAD ACCOUNT ADDITIONAL DEPOSIT: With respect to any
transfer of Subsequent Receivables to the Trust pursuant to Section 2.4, the
amount required to be deposited in the Spread Account pursuant to the terms
of the Spread Account Agreement.

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SPREAD ACCOUNT AGREEMENT: The Spread Account Agreement,
dated as of March 25, 1993, as thereafter amended and restated, among the
Seller, AFL, the Security Insurer, the Collateral Agent and the trustees
specified therein, as the same may be amended, supplemented or otherwise
modified in accordance with the terms thereof.

STANDARD & POOR'S: Standard & Poor's Ratings Services, a
division of The McGraw-Hill Companies, Inc., or any successor thereto.

STOCK PLEDGE AGREEMENT: The Stock Pledge Agreement, dated as
of March 25, 1993, as thereafter amended and restated, among the Security
Insurer, AFL and the Collateral Agent, as the same may be amended,
supplemented or otherwise modified in accordance with the terms thereof

SUBCOLLECTION ACCOUNT: The account designated as the
Subcollection Account in, and which is established and maintained pursuant to
Section 4.2(a).

SUBSEQUENT CUTOFF DATE: With respect to any Subsequent
Receivables, the date specified in the related Subsequent Transfer Agreement,
which may in no event be later than the Subsequent Transfer Date.

SUBSEQUENT PURCHASE AGREEMENT: With respect to any
Subsequent Receivables, either (i) the agreement between AFL and the Seller
pursuant to which AFL transferred the Subsequent Receivables to the Seller,
the form of which is attached to the Purchase Agreement as Exhibit A, or (ii)
one or more Assignment Agreements pursuant to the BOA Purchase Agreement,
pursuant to which AFL transferred the Subsequent Receivables to the Seller.

SUBSEQUENT RECEIVABLES: All Receivables sold and transferred
to the Trust pursuant to Section 2.4.

SUBSEQUENT TRANSFER AGREEMENT: With respect to any
Subsequent Receivables, the related agreement described in Section 2.4.

SUBSEQUENT TRANSFER DATE: Any date during the Funding Period
on which Subsequent Receivables are transferred to the Trust pursuant to
Section 2.4.

SUPPLEMENTAL SERVICING FEE: With respect to any Monthly
Period, all administrative fees, expenses and charges paid by or on behalf of
Obligors, including late fees, collected on the Receivables during such
Monthly Period.

TELERATE PAGE 3750: The display page currently so designated
on the Dow Jones Telerate Service (or such other page as may replace that
page on that service for the purpose of displaying comparable rates or
prices).

TOTAL SERVICING FEE: The sum of the Basic Servicing Fee and
the Supplemental Servicing Fee.

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TRUST: Arcadia Automobile Receivables Trust, 1999-A.

TRUST ACCOUNTS: The meaning specified in 4.1(e).

TRUST AGREEMENT: The Trust Agreement dated as of March 1,
1999, among the Seller, the Security Insurer and the Owner Trustee, as the
same may be amended and supplemented from time to time.

UCC: The Uniform Commercial Code as in effect in the
relevant jurisdiction.

WARRANTY RECEIVABLE: With respect to any Monthly Period, a
Receivable which AFL has become obligated to repurchase pursuant to Section
2.6.

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

SECTION 1.3. CALCULATIONS. All calculations of the amount
of interest accrued on the Notes and all calculations of the amount of the
Basic Servicing Fee shall be made on the basis of a 360-day year consisting
of twelve 30-day months, except that calculations of interest accrued on the
Class A-1 Notes and the Class A-2 Notes shall be made on the basis of actual
days elapsed in a 360-day year. All references to the Principal Balance of a
Receivable as of an Accounting Date shall refer to the close of business on
such day.

SECTION 1.4. SECTION REFERENCES. All references to
Articles, Sections, paragraphs, subsections, exhibits and schedules shall be
to such portions of this Agreement unless otherwise specified.

SECTION 1.5. NO RECOURSE. No recourse may be taken,
directly or indirectly, under this Agreement or any certificate or other
writing delivered in connection herewith or therewith, against any
stockholder, officer, or director, as such, of the Seller, AFL, the Servicer,
the Indenture Trustee, the Backup Servicer or the Owner Trustee or of any
predecessor or successor of the Seller, AFL, the Servicer, the Indenture
Trustee, the Backup Servicer or the Owner Trustee.

SECTION 1.6. MATERIAL ADVERSE EFFECT. Whenever a
determination is to be made under this Agreement as to whether a given event,
action, course of conduct or set of facts or circumstances could or would
have a material adverse effect on the Trust or the Noteholders (or any
similar or analogous determination), such determination shall be made without
taking into account the insurance provided by the Note Policy.

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ARTICLE II

CONVEYANCE OF RECEIVABLES

SECTION 2.1. CONVEYANCE OF INITIAL RECEIVABLES. Subject to
the terms and conditions of this Agreement, the Seller, pursuant to the
mutually agreed upon terms contained herein, hereby sells, transfers,
assigns, and otherwise conveys to the Trust, without recourse (but without
limitation of its obligations in this Agreement), all of the right, title and
interest of the Seller in and to the Initial Receivables, all monies at any
time paid or payable thereon or in respect thereof after the Initial Cutoff
Date (including amounts due on or before the Initial Cutoff Date but received
by AFL or the Seller after the Initial Cutoff Date), an assignment of
security interests of AFL in the related Financed Vehicles, the Insurance
Policies and any proceeds from any Insurance Policies relating to the Initial
Receivables, the Obligors or the related Financed Vehicles, including rebates
of premiums, all Collateral Insurance and any Force-Placed Insurance relating
to the Initial Receivables, an assignment of the rights of AFL or the Seller
against Dealers with respect to the Initial Receivables under the Dealer
Agreements and the Dealer Assignments, all items contained in the related
Receivable Files, any and all other documents that AFL keeps on file in
accordance with its customary procedures relating to the Initial Receivables,
the Obligors or the related Financed Vehicles, an assignment of the rights of
the Seller under the Purchase Agreements, property (including the right to
receive future Liquidation Proceeds) that secures an Initial Receivable and
that has been acquired by or on behalf of the Trust pursuant to liquidation
of such Receivable, all funds on deposit from time to time in the Trust
Accounts and all investments therein and proceeds thereof, and all proceeds
of the foregoing. It is the intention of the Seller that the transfer and
assignment contemplated by this Agreement and each Subsequent Transfer
Agreement shall constitute a sale of the Receivables and other Trust Property
from the Seller to the Trust and the beneficial interest in and title to the
Receivables and the other Trust Property shall not be part of the Seller's
estate in the event of the filing of a bankruptcy petition by or against the
Seller under any bankruptcy law. In the event that, notwithstanding the
intent of the Seller, the transfer and assignment contemplated hereby and
each Subsequent Transfer Agreement is held not to be a sale, this Agreement
and each Subsequent Transfer Agreement shall constitute a grant of a security
interest to the Trust in the property referred to in this Section 2.1 or
transferred to the Trust pursuant to the related Subsequent Transfer
Agreement.

SECTION 2.2. CUSTODY OF RECEIVABLE FILES.

(a) In connection with the sale, transfer and assignment
of the Receivables and the other Trust Property to the Trust pursuant to this
Agreement and each Subsequent Transfer Agreement, and simultaneously with the
execution and delivery of this Agreement, the Trust shall enter into the
Custodian Agreement with the Custodian, dated as of the Closing Date,
pursuant to which the Owner Trustee, on behalf of the Trust, shall revocably
appoint the Custodian, and the Custodian shall accept such appointment, to
act as the agent of the Trust as Custodian of the following documents or
instruments in its possession which shall be delivered to the Custodian as
agent of the Trust on or before the Closing Date (with respect to each
Initial

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Receivable) or the applicable Subsequent Transfer Date (with respect to each
Subsequent Receivable):

(i) The fully executed original of the Receivable
(together with any agreements modifying the Receivable, including
without limitation any extension agreements) or a microfiche copy
thereof;

(ii) Documents evidencing or related to any Insurance
Policy, or copies (including but not limited to microfiche copies)
thereof;

(iii) The original credit application, or a copy
thereof, of each Obligor, fully executed by each such Obligor on AFL's
customary form, or on a form approved by AFL, for such application; and

(iv) The original certificate of title (when
received) and otherwise such documents, if any, that AFL keeps on file
in accordance with its customary procedures indicating that the Financed
Vehicle is owned by the Obligor and subject to the interest of AFL as
first lienholder or secured party (including any Lien Certificate
received by AFL), or, if such original certificate of title has not yet
been received, a copy of the application therefor, showing AFL as
secured party.

In connection with the grant of the security interest in the
Trust Estate to the Issuer Secured Parties pursuant to the Indenture, the
Trust agrees that from and after the Closing Date through the date of release
of such security interest pursuant to the terms of the Indenture, the
Custodian shall not be acting as agent of the Trust, but rather shall be
acting as agent of the Issuer Secured Parties.

The Indenture Trustee may act as the Custodian, in which case
the Indenture Trustee shall be deemed to have assumed the obligations of the
Custodian specified in the Custodian Agreement.

(b) Upon payment in full on any Receivable, the Servicer
will notify the Custodian by certification of an officer of the Servicer
(which certification shall include a statement to the effect that all amounts
received in connection with such payments which are required to be deposited
in the Collection Account pursuant to Section 3.1 have been so deposited) and
shall request delivery of the Receivable and Receivable File to the Servicer.
From time to time as appropriate for servicing and enforcing any Receivable,
the Custodian shall, upon written request of an officer of the Servicer and
delivery to the Custodian of a receipt signed by such officer, cause the
original Receivable and the related Receivable File to be released to the
Servicer. The Servicer's receipt of a Receivable and/or Receivable File
shall obligate the Servicer to return the original Receivable and the related
Receivable File to the Custodian when its need by the Servicer has ceased
unless the Receivable shall be repurchased as described in Section 2.6 or 3.7.

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SECTION 2.3. CONDITIONS TO ACCEPTANCE BY OWNER TRUSTEE. As
conditions to Owner Trustee's execution and delivery of the Notes on behalf
of the Trust on the Closing Date, the Owner Trustee shall have received the
following on or before the Closing Date:

(a) The Schedule of Initial Receivables certified by
the President, Controller or Treasurer of the Seller;

(b) The acknowledgment of the Custodian that it
holds the Receivable File relating to each Initial Receivable;

(c) Copies of resolutions of the Board of Directors
of the Seller approving the execution, delivery and performance of this
Agreement, the Related Documents and the transactions contemplated
hereby and thereby, certified by a Secretary or an Assistant Secretary
of the Seller;

(d) Copies of resolutions of the Board of Directors
of AFL approving the execution, delivery and performance of this
Agreement, the Related Documents and the transactions contemplated
hereby and thereby, certified by a Secretary or an Assistant Secretary
of AFL;

(e) Evidence that all filings (including, without
limitation, UCC filings) required to be made by any Person and actions
required to be taken or performed by any Person in any jurisdiction
(other than those actions to be taken with respect to Subsequent
Receivables pursuant to Section 2.4) to give the Owner Trustee a first
priority perfected lien on, or ownership interest in, the Receivables
and the other Trust Property have been made, taken or performed; and

(f) An executed copy of the Spread Account Agreement
and evidence of the deposit of $795,575.47 in the Reserve Account.

SECTION 2.4. CONVEYANCE OF SUBSEQUENT RECEIVABLES.

(a) Subject to the conditions set forth in paragraph (b)
below, the Seller, pursuant to the mutually agreed upon terms contained herein
and pursuant to one or more Subsequent Transfer Agreements, shall sell,
transfer, assign, and otherwise convey to the Trust, without recourse (but
without limitation of its obligations in this Agreement), all of the right,
title and interest of the Seller in and to the Subsequent Receivables, all
monies at any time paid or payable thereon or in respect thereof after the
related Subsequent Cutoff Date (including amounts due on or before the related
Subsequent Cutoff Date but received by AFL or the Seller after the related
Subsequent Cutoff Date), an assignment of security interests of AFL in the
related Financed Vehicles, the Insurance Policies and any proceeds from any
Insurance Policies relating to the Subsequent Receivables, the Obligors or the
related Financed Vehicles, including rebates of premiums, all Collateral
Insurance and any Force-Placed Insurance relating to the Subsequent Receivables,
rights of AFL or the Seller against Dealers with respect to the Subsequent
Receivables under the Dealer Agreements and the Dealer Assignments, all items
contained in the

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Receivable Files relating to the Subsequent Receivables, any and all other
documents that AFL keeps on file in accordance with its customary procedures
relating to the Subsequent Receivables, the Obligors or the related Financed
Vehicles, the rights of the Seller under the related Subsequent Purchase
Agreement, property (including the right to receive future Liquidation
Proceeds) that secures a Subsequent Receivable and that has been acquired by
or on behalf of the Trust pursuant to liquidation of such Subsequent
Receivable, and all proceeds of the foregoing.

(b) The Seller shall transfer to the Trust the Subsequent
Receivables and the other property and rights related thereto described in
paragraph (a) above only upon the satisfaction of each of the following
conditions on or prior to the related Subsequent Transfer Date:

(i) The Seller shall have provided the Owner
Trustee, the Indenture Trustee, the Security Insurer and the Rating
Agencies with a timely Addition Notice and shall have provided any
information reasonably requested by any of the foregoing with respect to
the Subsequent Receivables;

(ii) the Funding Period shall not have terminated;

(iii) the Security Insurer (so long as an Insurer
Default shall not have occurred and be continuing) shall in its sole and
absolute discretion have given its prior written approval of the
transfer of such Subsequent Receivables to the Trust;

(iv) the Seller shall have delivered to the Owner
Trustee and the Indenture Trustee a duly executed written assignment
(including an acceptance by the Indenture Trustee and the Owner Trustee)
in substantially the form of Exhibit G (the "Subsequent Transfer
Agreement"), which shall include a Schedule of Subsequent Receivables
listing the Subsequent Receivables and shall specify the Spread Account
Additional Deposit, if any, the Requisite Reserve Amount, and the Class
A-1 Holdback Amount, if any, as of or for such Subsequent Transfer Date;

(v) the Seller shall have delivered to the Custodian
the Receivable Files relating to the Subsequent Receivables, and the
Custodian shall have delivered to the Seller, the Owner Trustee, the
Security Insurer and the Indenture Collateral Agent an acknowledgment of
receipt of such Receivable Files;

(vi) the Seller shall, to the extent required by
Section 4.1, have deposited in the Collection Account collections in
respect of the Subsequent Receivables;

(vii) as of each Subsequent Transfer Date, neither AFL
nor the Seller shall be insolvent nor shall either of them have been
made insolvent by such transfer nor shall either of them be aware of any
pending insolvency;

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(viii) the applicable Spread Account Additional Deposit
for such Subsequent Transfer Date shall have been made pursuant to the
Spread Account Agreement.

(ix) the Reserve Amount on such Subsequent Transfer
Date, after taking into account any transfers of funds from the Reserve
Account to the Depositor in respect of the sale of the Subsequent
Receivables to the Trust, shall be no less than the Requisite Reserve
Amount for such Subsequent Transfer Date;

(x) each Rating Agency shall have notified the
Security Insurer that following such transfer the Notes will be rated in
the highest short-term or long-term rating category, as applicable, by
such Rating Agency;

(xi) such addition will not result in a material
adverse tax consequence to the Trust or the Noteholders as evidenced by
an Opinion of Counsel to be delivered by the Seller;

(xii) the Seller shall have delivered to the Owner
Trustee and the Indenture Trustee an Officer's Certificate confirming
the satisfaction of each condition precedent specified in this
paragraph (b);

(xiii) the Seller shall have delivered to the Rating
Agencies and to the Security Insurer one or more Opinions of Counsel
with respect to the transfer of the Subsequent Receivables substantially
in the form of the Opinions of Counsel delivered to such Persons on the
Closing Date;

(xiv) (A) the Receivables in the Trust, including the
Subsequent Receivables to be conveyed to the Trust on the Subsequent
Transfer Date, shall meet the following criteria (based on the
characteristics of the Initial Receivables on the Initial Cutoff Date
and the Subsequent Receivables on each related Subsequent Cutoff Date):
(1) the weighted average APR of such Receivables will not be less than
16.29%, (2) the weighted average remaining term of such Receivables will
not be greater than 68 months nor less than 60 months, (3) not more than
90% of the Aggregate Principal Balance of such Receivables will
represent loans secured by used Financed Vehicles, (4) not more than 4%
of the Aggregate Principal Balance of such Receivables will be
attributable to Receivables with an APR in excess of 21%, (5) not more
than 0.25% of the Aggregate Principal Balance of such Receivables will
represent loans in excess of $50,000.00, (6) not more than 3% of the
Aggregate Principal Balance of such Receivables will represent loans
with original terms greater than 72 months and (7) not more than 2.0% of
the Aggregate Principal Balance of such Receivables will represent loans
secured by Financed Vehicles that previously secured a loan originated
by AFL with an obligor other than the current Obligor, and (B) the
Trust, the Owner Trustee, the Indenture Trustee and the Security Insurer
shall have received written confirmation from a firm of certified
independent public accountants as to the satisfaction of such criteria;

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(xv) the Seller shall have taken any action necessary
or, if requested by the Security Insurer, advisable to maintain the
first perfected ownership interest of the Trust in the Trust Property
and the first perfected security interest of the Indenture Collateral
Agent in the Indenture Collateral; and

(xvi) no selection procedures adverse to the interests
of the Noteholders shall have been utilized in selecting the Subsequent
Receivables.

(c) On such Subsequent Transfer Date, if all the
conditions specified in paragraph (b) above have been satisfied, the Trust
shall accept the transfer of such Subsequent Receivables and shall pay to the
Seller from the Pre-Funding Account an amount equal to (i) the Principal
Balance as of the related Subsequent Cutoff Date of the Subsequent
Receivables transferred to the Trust as of such date, minus (ii) the Spread
Account Additional Deposit, if any, for such Subsequent Transfer Date, minus
(iii) the amount, if any, by which the Requisite Reserve Amount for such
Subsequent Transfer Date exceeds the Reserve Amount as of such Subsequent
Transfer Date, and minus (iv) the Class A-1 Holdback Amount, if any, for such
Subsequent Transfer Date.

(d) The Seller covenants to transfer to the Trust
pursuant to paragraph (a) above Subsequent Receivables with an aggregate
Principal Balance equal to approximately $148,818,732.02; PROVIDED, HOWEVER,
that the sole remedy of the Trust, the Owner Trustee, the Indenture Trustee
or the Noteholders with respect to a failure of such covenant shall be to
enforce the provisions of Sections 2.3(c) and 6.2 of the Closing Date
Purchase Agreement, Section 2.4(c) hereof (with respect to Class A-1 Holdback
Amounts) and Section 4.7(c) hereof, Section 10.01(b) of the Indenture and
Section 5.2 of the Trust Agreement with respect to payment of the Class A-1
Prepayment Premium, Class A-2 Prepayment Premium, Class A-3 Prepayment
Premium, Class A-4 Prepayment Premium and Class A-5 Prepayment Premium.

SECTION 2.5. REPRESENTATIONS AND WARRANTIES OF SELLER. By
its execution of this Agreement and each Subsequent Transfer Agreement, the
Seller makes the following representations and warranties on which the Trust
relies in accepting the Receivables and the other Trust Property in trust and
on which the Owner Trustee relies in issuing on behalf of the Trust, Notes
and upon which the Security Insurer relies in issuing the Note Policy.
Unless otherwise specified, such representations and warranties speak as of
the Closing Date or Subsequent Transfer Date, as appropriate, but shall
survive the sale, transfer, and assignment of the Receivables to the Trust.

(a) SCHEDULE OF REPRESENTATIONS. The
representations and warranties set forth on the Schedule of
Representations are true and correct.

(b) ORGANIZATION AND GOOD STANDING. The Seller has
been duly organized and is validly existing as a corporation in good
standing under the laws of the State of Delaware, with power and
authority to own its properties and to conduct its business as such
properties are currently owned and such business is currently conducted,

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and had at all relevant times, and now has, power, authority and legal
right to acquire, own and sell the Receivables and the other property
transferred to the Trust.

(c) DUE QUALIFICATION. The Seller is duly qualified
to do business as a foreign corporation in good standing, and has
obtained all necessary licenses and approvals, in all jurisdictions in
which the ownership or lease of its property or the conduct of its
business requires such qualification.

(d) POWER AND AUTHORITY. The Seller has the power
and authority to execute and deliver this Agreement and its Related
Documents and to carry out its terms and their terms, respectively; the
Seller has full power and authority to sell and assign the Trust
Property to be sold and assigned to and deposited with the Trust by it
and has duly authorized such sale and assignment to the Trust by all
necessary corporate action; and the execution, delivery and performance
of this Agreement and the Seller's Related Documents have been duly
authorized by the Seller by all necessary corporate action.

(e) VALID SALE; BINDING OBLIGATIONS. This Agreement
and the related Subsequent Transfer Agreement, if any, effects a valid
sale, transfer and assignment of the Receivables and the other Trust
Property, enforceable against the Seller and creditors of and purchasers
from the Seller; and this Agreement and the related Subsequent Transfer
Agreement, if any, and the Seller's Related Documents, when duly
executed and delivered, shall constitute legal, valid and binding
obligations of the Seller enforceable in accordance with their
respective terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization or other similar laws affecting the
enforcement of creditors' rights generally and by equitable limitations
on the availability of specific remedies, regardless of whether such
enforceability is considered in a proceeding in equity or at law.

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

(g) NO PROCEEDINGS. There are no proceedings or
investigations pending or, to the Seller's knowledge, threatened against
the Seller or AFL, before any court, regulatory body, administrative
agency or other tribunal or governmental

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instrumentality having jurisdiction over the Seller or its properties
(A) asserting the invalidity of this Agreement or any of the Related
Documents, (B) seeking to prevent the issuance of the Notes or the
consummation of any of the transactions contemplated by this Agreement
or any of the Related Documents, (C) seeking any determination or ruling
that might materially and adversely affect the performance by the Seller
of its obligations under, or the validity or enforceability of, this
Agreement or any of the Related Documents, or (D) seeking to adversely
affect the federal income tax or other federal, state or local tax
attributes of the Notes.

(h) CHIEF EXECUTIVE OFFICE. The chief executive
office of the Seller is at 7825 Washington Avenue South, Suite 410,
Minneapolis, MN 55439-2435.

(i) REGISTRATION STATEMENT. No stop order
suspending the effectiveness of the Registration Statement relating to
the Notes has been issued, and no proceeding for that purpose has been
instituted or is threatened by the Securities and Exchange Commission.

(j) FILINGS. Since the effective date of the
Registration Statement relating to the Notes, there has occurred no
event required to be set forth in an amendment or supplement to the
Registration Statement or Prospectus that has not been so set forth, and
there has been no document required to be filed under the Securities
Exchange Act of 1934, as amended, and the rules and regulations of the
Securities and Exchange Commission thereunder that upon such filing
would be deemed to be incorporated by reference in the Prospectus that
has not been so filed.

SECTION 2.6. REPURCHASE OF RECEIVABLES UPON BREACH OF
WARRANTY. Concurrently with the execution and delivery of this Agreement or
the applicable Subsequent Transfer Agreement, as appropriate, AFL and the
Seller have entered into the Purchase Agreements or Subsequent Purchase
Agreement, as applicable, the rights of the Seller under which have been
assigned by the Seller to the Trust. Under the Purchase Agreements and each
Subsequent Purchase Agreement, if applicable, AFL has made the same
representations and warranties to the Seller with respect to the Receivables
as those made by Seller pursuant to the Schedule of Representations, upon
which the Owner Trustee has relied in accepting the Trust Property in trust
and executing the Notes and upon which the Security Insurer has relied in
issuing the Note Policy and upon which the Indenture Trustee has relied in
authenticating the Notes. Upon discovery by any of AFL, the Seller, the
Servicer, the Security Insurer, the Indenture Trustee or the Owner Trustee of
a breach of any of the representations and warranties contained in Section
2.5 that materially and adversely affects the interests of the Noteholders,
the Security Insurer or the Trust in any Receivable (including any Liquidated
Receivable), the party discovering such breach shall give prompt written
notice to the others; PROVIDED, HOWEVER, that the failure to give any such
notice shall not affect any obligation of AFL or the Seller. As of the
second Accounting Date (or, at AFL's election, the first Accounting Date)
following its discovery or its receipt of notice of any breach of the
representations and warranties set forth on the Schedule of Representations
that materially and adversely affects the interests of the Noteholders, the
Security Insurer or the Trust in any Receivable (including any Liquidated

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Receivable), AFL shall, unless such breach shall have been cured in all
material respects, purchase such Receivable from the Trust and, on or before
the related Deposit Date, AFL shall pay the Purchase Amount to the Owner
Trustee pursuant to Section 4.5. The obligations of the Seller with respect
to any such breach of representations and warranties shall be limited to
taking any and all actions necessary to enable the Owner Trustee to enforce
directly the obligations of AFL under the Purchase Agreement or Subsequent
Purchase Agreement, as applicable. It is understood and agreed that, except
as set forth in this Section 2.6, the obligation of AFL to repurchase any
Receivable as to which a breach has occurred and is continuing shall, if such
obligation is fulfilled, constitute the sole remedy against AFL or the Seller
for such breach available to the Security Insurer or the Indenture Trustee on
behalf of the Noteholders.

In addition to the foregoing and notwithstanding whether the
related Receivable shall have been purchased by the Seller or AFL, AFL shall
indemnify the Owner Trustee, the Indenture Trustee, the Backup Servicer, the
Collateral Agent, the Security Insurer, the Trust and the Noteholders against
all costs, expenses, losses, damages, claims and liabilities, including
reasonable fees and expenses of counsel, which may be asserted against or
incurred by any of them as a result of third party claims arising out of the
events or facts giving rise to such breach.

SECTION 2.7. NONPETITION COVENANT. None of the Seller, the
Servicer, the Owner Trustee (in its individual capacity or on behalf of the
Trust), the Backup Servicer nor AFL shall petition or otherwise invoke the
process of any court or government authority for the purpose of commencing or
sustaining a case against the Trust under any federal or state bankruptcy,
insolvency or similar law or appointing a receiver, liquidator, assignee,
trustee, custodian, sequestrator or other similar official of the Trust or
any substantial part of its property, or ordering the winding up or
liquidation of the affairs of the Trust.

SECTION 2.8. COLLECTING LIEN CERTIFICATES NOT DELIVERED ON
THE CLOSING DATE OR SUBSEQUENT TRANSFER DATE. In the case of any Receivable
in respect of which written evidence from the Dealer selling the related
Financed Vehicle that the Lien Certificate for such Financed Vehicle showing
AFL as first lienholder has been applied for from the Registrar of Titles was
delivered to the Custodian on the Closing Date or Subsequent Transfer Date,
as appropriate, in lieu of a Lien Certificate, the Servicer shall use its
best efforts to collect such Lien Certificate from the Registrar of Titles as
promptly as practicable. If such Lien Certificate showing AFL as first
lienholder is not received by the Custodian within 180 days after the Closing
Date or Subsequent Transfer Date, as appropriate, then the representation and
warranty in Paragraph 18 of the Schedule of Representations in respect of
such Receivable shall be deemed to have been incorrect in a manner that
materially and adversely affects the Noteholders, the Security Insurer and
the Trust.

SECTION 2.9. TRUST'S ASSIGNMENT OF ADMINISTRATIVE
RECEIVABLES AND WARRANTY RECEIVABLES. With respect to all Administrative
Receivables and all Warranty Receivables purchased by the Servicer, the
Seller or AFL, the Owner Trustee shall take any and all actions reasonably
requested by the Seller, AFL or Servicer, at the expense of the requesting
party, to assign, without recourse, representation or warranty, to the
Seller, AFL or the Servicer, as applicable, all the Trust's right, title and
interest in and to such purchased Receivable, all monies

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due thereon, the security interests in the related Financed Vehicles,
proceeds from any Insurance Policies, proceeds from recourse against Dealers
on such Receivables and the interests of the Trust in certain rebates of
premiums and other amounts relating to the Insurance Policies and any
documents relating thereto, such assignment being an assignment outright and
not for security; and the Seller, AFL or the Servicer, as applicable, shall
thereupon own such Receivable, and all such security and documents, free of
any further obligation to the Owner Trustee, the Trust, the Indenture
Trustee, the Security Insurer, the Indenture Collateral Agent or the
Noteholders with respect thereto.

ARTICLE III

ADMINISTRATION AND SERVICING OF RECEIVABLES

SECTION 3.1. DUTIES OF THE SERVICER. The Servicer is hereby
authorized to act as agent for the Trust and in such capacity shall manage,
service, administer and make collections on the Receivables, and perform the
other actions required by the Servicer under this Agreement. The Servicer
agrees that its servicing of the Receivables shall be carried out in
accordance with customary and usual procedures of institutions which service
motor vehicle retail installment sales contracts and, to the extent more
exacting, the degree of skill and attention that the Servicer exercises from
time to time with respect to all comparable motor vehicle receivables that it
services for itself or others. In performing such duties, so long as AFL is
the Servicer, it shall comply with the policies and procedures attached
hereto as Schedule B. The Servicer's duties shall include, without
limitation, collection and posting of all payments, responding to inquiries
of Obligors on the Receivables, investigating delinquencies, sending payment
coupons to Obligors, reporting any required tax information to Obligors,
policing the collateral, complying with the terms of the Lockbox Agreement,
accounting for collections and furnishing monthly and annual statements to
the Owner Trustee, the Indenture Trustee and the Security Insurer with
respect to distributions, monitoring the status of Insurance Policies with
respect to the Financed Vehicles and performing the other duties specified
herein. The Servicer shall also administer and enforce all rights and
responsibilities of the holder of the Receivables provided for in the Dealer
Agreements (and shall maintain possession of the Dealer Agreements, to the
extent it is necessary to do so), the Dealer Assignments and the Insurance
Policies, to the extent that such Dealer Agreements, Dealer Assignments and
Insurance Policies relate to the Receivables, the Financed Vehicles or the
Obligors. To the extent consistent with the standards, policies and
procedures otherwise required hereby, the Servicer shall follow its customary
standards, policies, and procedures and shall have full power and authority,
acting alone, to do any and all things in connection with such managing,
servicing, administration and collection that it may deem necessary or
desirable. Without limiting the generality of the foregoing, the Servicer is
hereby authorized and empowered by the Owner Trustee to execute and deliver,
on behalf of the Trust, any and all instruments of satisfaction or
cancellation, or of partial or full release or discharge, and all other
comparable instruments, with respect to the Receivables and with respect to
the Financed Vehicles; PROVIDED, HOWEVER, that notwithstanding the foregoing,
the Servicer shall not, except pursuant to an order from a court of competent
jurisdiction, release an Obligor from payment of any unpaid amount under any
Receivable or waive the right to collect the unpaid

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balance of any Receivable from the Obligor, except that the Servicer may
forego collection efforts if the amount subject to collection is DE MINIMIS
and if it would forego collection in accordance with its customary
procedures. The Servicer is hereby authorized to commence, in its own name
or in the name of the Trust (provided the Servicer has obtained the Owner
Trustee's consent, which consent shall not be unreasonably withheld), a legal
proceeding to enforce a Receivable pursuant to Section 3.3 or to commence or
participate in any other legal proceeding (including, without limitation, a
bankruptcy proceeding) relating to or involving a Receivable, an Obligor or a
Financed Vehicle. If the Servicer commences or participates in such a legal
proceeding in its own name, the Trust shall thereupon be deemed to have
automatically assigned such Receivable to the Servicer solely for purposes of
commencing or participating in any such proceeding as a party or claimant,
and the Servicer is authorized and empowered by the Owner Trustee to execute
and deliver in the Servicer's name any notices, demands, claims, complaints,
responses, affidavits or other documents or instruments in connection with
any such proceeding. The Owner Trustee shall furnish the Servicer with any
powers of attorney and other documents which the Servicer may reasonably
request and which the Servicer deems necessary or appropriate and take any
other steps which the Servicer may deem necessary or appropriate to enable
the Servicer to carry out its servicing and administrative duties under this
Agreement.

SECTION 3.2. COLLECTION OF RECEIVABLE PAYMENTS; MODIFICATIONS
OF RECEIVABLES; LOCKBOX AGREEMENTS.

(a) Consistent with the standards, policies and
procedures required by this Agreement, the Servicer shall make reasonable
efforts to collect all payments called for under the terms and provisions of
the Receivables as and when the same shall become due, and shall follow such
collection procedures as it follows with respect to all comparable automobile
receivables that it services for itself or others and otherwise act with
respect to the Receivables, the Dealer Agreements, the Dealer Assignments,
the Insurance Policies and the other Trust Property in such manner as will,
in the reasonable judgment of the Servicer, maximize the amount to be
received by the Trust with respect thereto. The Servicer is authorized in
its discretion to waive any prepayment charge, late payment charge or any
other similar fees that may be collected in the ordinary course of servicing
any Receivable.

(b) The Servicer may at any time agree to a modification,
amendment or extension of a Receivable in order to (i) change the Obligor's
regular due date to a date within the Monthly Period in which such due date
occurs, (ii) re-amortize the scheduled payments on the Receivable following a
partial prepayment of principal and (iii) grant extensions on a Receivable,
provided that the Servicer shall not be permitted to extend the monthly
payments on a Receivable more than two times in any twelve-month period, and
provided further that the aggregate period of all extensions on a Receivable
shall not exceed six months.

(c) The Servicer may grant payment extensions or
deferrals on, or other modifications or amendments to, a Receivable (in
addition to those modifications permitted by Section 3.2(b)) in accordance
with its customary procedures if the Servicer believes in good faith that
such extension, deferral, modification or amendment is necessary to avoid a
default on such

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Receivable, will maximize the amount to be received by the Trust with respect
to such Receivable, and is otherwise in the best interests of the Trust;
PROVIDED, HOWEVER, that:

(i) In no event may a Receivable be extended beyond
the Monthly Period immediately preceding the Final Scheduled
Distribution Date;

(ii) So long as an Insurer Default shall not have
occurred and be continuing, the Servicer shall not amend or modify a
Receivable (except as provided in Section 3.2(b)) without the consent of
the Security Insurer;

(iii) So long as an Insurer Default shall not have
occurred and be continuing, the Aggregate Principal Balance of
Receivables which have been extended during any Monthly Period (A) shall
not exceed 6.5% of the Aggregate Principal Balance of Receivables during
such Monthly Period (computed as of the Accounting Date immediately
prior to the first day of the related Monthly Period) and (B) shall not
exceed 4.0% of the average of the Aggregate Principal Balance of
Receivables for such Monthly Period and the three prior Monthly Periods
(computed as of the Accounting Date immediately prior to the first day
of the related Monthly Period);

(iv) So long as an Insurer Default shall not have
occurred and be continuing, the Aggregate Principal Balance of
Receivables for which payment deferrals have been granted during any
Monthly Period (A) shall not exceed 3.0% of the Aggregate Principal
Balance of Receivables during such Monthly Period (computed as of the
Accounting Date immediately prior to the first day of the related
Monthly Period) and (B) shall not exceed 2.0% of the average of the
Aggregate Principal Balance of Receivables for such Monthly Period and
the three prior Monthly Periods (computed as of the Accounting Date
immediately prior to the first day of the related Monthly Period);

(v) No such extension, modification or amendment
shall be granted if such action, when aggregated with all previous
extensions, modifications and amendments of Receivables, would have the
effect of causing any Notes to be deemed to have been exchanged for
other Notes within the meaning of Section 1001 of the Internal Revenue
Code of 1986, as amended, or any proposed, temporary or final Treasury
Regulations issued thereunder; and

(vi) If an Insurer Default shall have occurred and be
continuing, the Servicer may not extend or modify any Receivable (other
than as permitted by Section 3.2(b)).

(d) The Servicer shall use its reasonable best efforts to
cause Obligors to make all payments on the Receivables, whether by check or
by direct debit of the Obligor's bank account, to be made directly to one or
more Lockbox Banks, acting as agent for the Trust pursuant to a Lockbox
Agreement. Amounts received by a Lockbox Bank in respect of the Receivables
may initially be deposited into a demand deposit account maintained by the
Lockbox Bank as agent for the Trust and for other owners of automobile
receivables serviced by

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the Servicer. The Servicer shall use its reasonable best efforts to cause
any Lockbox Bank to deposit all payments on the Receivables in the Lockbox
Account no later than the Business Day after receipt, and to cause all
amounts credited to the Lockbox Account on account of such payments to be
transferred to the Collection Account no later than the second Business Day
after receipt of such payments. The Lockbox Account shall be a demand
deposit account held by the Lockbox Bank, or at the request of the Security
Insurer (unless an Insurer Default shall have occurred and be continuing) an
Eligible Account satisfying clause (i) of the definition thereof.

Prior to the Closing Date and each Subsequent Transfer Date,
as applicable, the Servicer shall have notified each Obligor that makes its
payments on the Receivables by check to make such payments thereafter
directly to the Lockbox Bank (except in the case of Obligors that have
already been making such payments to the Lockbox Bank), and shall have
provided each such Obligor with a supply of mailing address labels in order
to enable such Obligors to make such payments directly to the Lockbox Bank
for deposit into the Lockbox Account, and the Servicer will continue, not
less often than every three months, to so notify those Obligors who have
failed to make payments to the Lockbox Bank. If and to the extent requested
by the Security Insurer (unless an Insurer Default shall have occurred and be
continuing), the Servicer shall request each Obligor that makes payment on
the Receivables by direct debit of such Obligor's bank account, to execute a
new authorization for automatic payment which in the judgment of the Security
Insurer is sufficient to authorize direct debit by the Lockbox Bank on behalf
of the Trust. If at any time the Lockbox Bank is unable to directly debit an
Obligor's bank account that makes payment on the Receivables by direct debit
and if such inability is not cured within 15 days or cannot be cured by
execution by the Obligor of a new authorization for automatic payment, the
Servicer shall notify such Obligor that it cannot make payment by direct
debit and must thereafter make payment by check.

Notwithstanding any Lockbox Agreement, or any of the
provisions of this Agreement relating to the Lockbox Agreement, the Servicer
shall remain obligated and liable to the Owner Trustee, Indenture Trustee and
Noteholders for servicing and administering the Receivables and the other
Trust Property in accordance with the provisions of this Agreement without
diminution of such obligation or liability by virtue thereof.

In the event the Servicer shall for any reason no longer be
acting as such, the successor Servicer shall thereupon assume all of the
rights and obligations of the outgoing Servicer under the Lockbox Agreement.
In such event, the successor Servicer shall be deemed to have assumed all of
the outgoing Servicer's interest therein and to have replaced the outgoing
Servicer as a party to each such Lockbox Agreement to the same extent as if
such Lockbox Agreement had been assigned to the successor Servicer, except
that the outgoing Servicer shall not thereby be relieved of any liability or
obligations on the part of the outgoing Servicer to the Lockbox Bank under
such Lockbox Agreement. The outgoing Servicer shall, upon request of the
Owner Trustee but at the expense of the outgoing Servicer, deliver to the
successor Servicer all documents and records relating to each such Agreement
and an accounting of amounts collected and held by the Lockbox Bank and
otherwise use its best efforts to effect the orderly and efficient transfer
of any Lockbox Agreement to the successor Servicer. In the event that the
Security Insurer (so long as an Insurer Default shall not have occurred and
be continuing) or a Note

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Majority (if an Insurer Default shall have occurred and be continuing) elects
to change the identity of the Lockbox Bank, the outgoing Servicer, at its
expense, shall cause the Lockbox Bank to deliver, at the direction of the
Security Insurer (so long as an Insurer Default shall not have occurred and
be continuing) or a Note Majority (if an Insurer Default shall have occurred
and be continuing) to the Owner Trustee or a successor Lockbox Bank, all
documents and records relating to the Receivables and all amounts held (or
thereafter received) by the Lockbox Bank (together with an accounting of such
amounts) and shall otherwise use its best efforts to effect the orderly and
efficient transfer of the lockbox arrangements and the Servicer shall notify
the Obligors to make payments to the Lockbox established by the successor.

(e) The Servicer shall remit all payments by or on behalf
of the Obligors received directly by the Servicer to the Subcollection
Account or to the Lockbox Bank for deposit into the Collection Account
without deposit into any intervening account as soon as practicable, but in
no event later than the Business Day after receipt thereof.

SECTION 3.3. REALIZATION UPON RECEIVABLES.

(a) Consistent with the standards, policies and
procedures required by this Agreement, the Servicer shall use its best
efforts to repossess (or otherwise comparably convert the ownership of) and
liquidate any Financed Vehicle securing a Receivable with respect to which
the Servicer has determined that payments thereunder are not likely to be
resumed, as soon as is practicable after default on such Receivable but in no
event later than the date on which all or any portion of a Scheduled Payment
has become 91 days delinquent. The Servicer is authorized to follow such
customary practices and procedures as it shall deem necessary or advisable,
consistent with the standard of care required by Section 3.1, which practices
and procedures may include reasonable efforts to realize upon any recourse to
Dealers, the sale of the related Financed Vehicle at public or private sale,
the submission of claims under an Insurance Policy and other actions by the
Servicer in order to realize upon such a Receivable. The foregoing is subject
to the provision that, in any case in which the Financed Vehicle shall have
suffered damage, the Servicer shall not expend funds in connection with any
repair or towards the repossession of such Financed Vehicle unless it shall
determine in its discretion that such repair and/or repossession shall
increase the proceeds of liquidation of the related Receivable by an amount
greater than the amount of such expenses. All amounts received upon
liquidation of a Financed Vehicle shall be remitted directly by the Servicer
to the Subcollection Account without deposit into any intervening account as
soon as practicable, but in no event later than the Business Day after
receipt thereof. The Servicer shall be entitled to recover all reasonable
expenses incurred by it in the course of repossessing and liquidating a
Financed Vehicle into cash proceeds, but only out of the cash proceeds of
such Financed Vehicle, any deficiency obtained from the Obligor or any
amounts received from the related Dealer, which amounts may be retained by
the Servicer (and shall not be required to be deposited as provided in
Section 3.2(e)) to the extent of such expenses. The Servicer shall pay on
behalf of the Trust any personal property taxes assessed on repossessed
Financed Vehicles; the Servicer shall be entitled to reimbursement of any
such tax from Liquidation Proceeds with respect to such Receivable.

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(b) If the Servicer elects to commence a legal proceeding
to enforce a Dealer Agreement or Dealer Assignment, the act of commencement
shall be deemed to be an automatic assignment from the Trust to the Servicer
of the rights under such Dealer Agreement and Dealer Assignment for purposes
of collection only. If, however, in any enforcement suit or legal
proceeding, it is held that the Servicer may not enforce a Dealer Agreement
or Dealer Assignment on the grounds that it is not a real party in interest
or a Person entitled to enforce the Dealer Agreement or Dealer Assignment,
the Owner Trustee, at the Servicer's expense, or the Seller, at the Seller's
expense, shall take such steps as the Servicer deems necessary to enforce the
Dealer Agreement or Dealer Assignment, including bringing suit in its name or
the name of the Seller or of the Indenture Collateral Agent for the benefit
of the Issuer Secured Parties. All amounts recovered shall be remitted
directly by the Servicer as provided in Section 3.2(e).

SECTION 3.4. INSURANCE.

(a) The Servicer shall require that each Financed Vehicle
be insured by the Insurance Policies referred to in Paragraph 24 of the
Schedule of Representations and Warranties and shall monitor the status of
such physical loss and damage insurance coverage thereafter, in accordance
with its customary servicing procedures. Each Receivable requires the
Obligor to maintain such physical loss and damage insurance, naming AFL and
its successors and assigns as additional insureds, and permits the holder of
such Receivable to obtain physical loss and damage insurance at the expense
of the Obligor if the Obligor fails to maintain such insurance. If the
Servicer shall determine that an Obligor has failed to obtain or maintain a
physical loss and damage Insurance Policy covering the related Financed
Vehicle which satisfies the conditions set forth in clause (1)(A) of such
Paragraph 24 (including, without limitation, during the repossession of such
Financed Vehicle) the Servicer shall enforce the rights of the holder of the
Receivable under the Receivable to require the Obligor to obtain such
physical loss and damage insurance.

(b) The Servicer may, if an Obligor fails to obtain or
maintain a physical loss and damage Insurance Policy, obtain insurance with
respect to the related Financed Vehicle and advance on behalf of such
Obligor, as required under the terms of the insurance policy, the premiums
for such insurance (such insurance being referred to herein as "Force-Placed
Insurance"). All policies of Force-Placed Insurance shall be endorsed with
clauses providing for loss payable to the Owner Trustee. Any cost incurred
by the Servicer in maintaining such Force-Placed Insurance shall only be
recoverable out of premiums paid by the Obligors or Liquidation Proceeds with
respect to the Receivable, as provided in Section 3.4(c).

(c) In connection with any Force-Placed Insurance
obtained hereunder, the Servicer may, in the manner and to the extent
permitted by applicable law, require the Obligors to repay the entire premium
to the Servicer. In no event shall the Servicer include the amount of the
premium in the Amount Financed under the Receivable. For all purposes of
this Agreement, the Insurance Add-On Amount with respect to any Receivable
having Force-Placed Insurance will be treated as a separate obligation of the
Obligor and will not be added to the Principal Balance of such Receivable,
and amounts allocable thereto will not be available for distribution on the
Notes. The Servicer shall retain and separately administer the right to
receive payments

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from Obligors with respect to Insurance Add-On Amounts or rebates of
Force-Placed Insurance premiums. If an Obligor makes a payment with respect
to a Receivable having Force-Placed Insurance, but the Servicer is unable to
determine whether the payment is allocable to the Receivable or to the
Insurance Add-On Amount, the payment shall be applied first to any unpaid
Scheduled Payments and then to the Insurance Add-On Amount. Liquidation
Proceeds on any Receivable will be used first to pay the Principal Balance
and accrued interest on such Receivable and then to pay the related Insurance
Add-On Amount. If an Obligor under a Receivable with respect to which the
Servicer has placed Force-Placed Insurance fails to make scheduled payments
of such Insurance Add-On Amount as due, and the Servicer has determined that
eventual payment of the Insurance Add-On Amount is unlikely, the Servicer
may, but shall not be required to, purchase such Receivable from the Trust
for the Purchase Amount on any subsequent Deposit Date. Any such Receivable,
and any Receivable with respect to which the Servicer has placed Force-Placed
Insurance which has been paid in full (excluding any Insurance Add-On
Amounts) will be assigned to the Servicer.

(d) The Servicer may sue to enforce or collect upon the
Insurance Policies, in its own name, if possible, or as agent of the Trust.
If the Servicer elects to commence a legal proceeding to enforce an Insurance
Policy, the act of commencement shall be deemed to be an automatic assignment
of the rights of the Trust under such Insurance Policy to the Servicer for
purposes of collection only. If, however, in any enforcement suit or legal
proceeding it is held that the Servicer may not enforce an Insurance Policy
on the grounds that it is not a real party in interest or a holder entitled
to enforce the Insurance Policy, the Owner Trustee, on behalf of the Trust,
at the Servicer's expense, or the Seller, at the Seller's expense, shall take
such steps as the Servicer deems necessary to enforce such Insurance Policy,
including bringing suit in its name or the name of the Indenture Collateral
Agent for the benefit of the Issuer Secured Parties.

(e) The Servicer shall maintain a vendor's single
interest or other collateral protection insurance policy with respect to all
Financed Vehicles, which policy shall by its terms insure against physical
damage in the event any Obligor fails to maintain physical loss and damage
insurance with respect to the related Financed Vehicle. Costs incurred by
the Servicer in maintaining such insurance shall be paid by the Servicer.
The Servicer will cause itself to be named as named insured and the Owner
Trustee to be named a loss payee under all such policies. The Servicer may,
with the consent of the Security Insurer, elect not to maintain such
insurance policy but in such event will be obligated to indemnify the Trust
against any losses arising from an Obligor's failure to maintain physical
loss and damage insurance with respect to the related Financed Vehicle.

SECTION 3.5. MAINTENANCE OF SECURITY INTERESTS IN VEHICLES.

(a) Consistent with the policies and procedures required
by this Agreement, the Servicer shall take such steps as are necessary to
maintain perfection of the security interest created by each Receivable in
the related Financed Vehicle on behalf of the Trust, including but not
limited to obtaining the execution by the Obligors and the recording,
registering, filing, re-recording, re-filing, and re-registering of all
security agreements, financing statements and continuation statements as are
necessary to maintain the security interest granted by the Obligors

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under the respective Receivables. The Owner Trustee hereby authorizes the
Servicer, and the Servicer agrees, to take any and all steps necessary to
re-perfect such security interest on behalf of the Trust as necessary because
of the relocation of a Financed Vehicle or for any other reason. In the
event that the assignment of a Receivable to the Owner Trustee on behalf of
the Trust is insufficient, without a notation on the related Financed
Vehicle's certificate of title, or without fulfilling any additional
administrative requirements under the laws of the state in which the Financed
Vehicle is located, to perfect a security interest in the related Financed
Vehicle in favor of the Trust, the Servicer hereby agrees that the Servicer's
designation as the secured party on the certificate of title is in its
capacity as agent of the Trust.

(b) Upon the occurrence of an Insurance Agreement Event
of Default, the Security Insurer may (so long as an Insurer Default shall not
have occurred and be continuing) instruct the Owner Trustee and the Servicer
to take or cause to be taken, or, if an Insurer Default shall have occurred,
upon the occurrence of a Servicer Termination Event, the Owner Trustee and
the Servicer shall take or cause to be taken such action as may, in the
opinion of counsel to the Security Insurer (or, if an Insurer Default shall
have occurred and be continuing, counsel to the Owner Trustee), be necessary
to perfect or re-perfect the security interests in the Financed Vehicles
securing the Receivables in the name of the Trust by amending the title
documents of such Financed Vehicles or by such other reasonable means as may,
in the opinion of counsel to the Security Insurer or the Owner Trustee (as
applicable), be necessary or prudent. AFL hereby agrees to pay all expenses
related to such perfection or re-perfection and to take all action necessary
therefor. In addition, prior to the occurrence of an Insurance Agreement
Event of Default, the Security Insurer may (unless an Insurer Default shall
have occurred and be continuing) instruct the Owner Trustee and the Servicer
to take or cause to be taken such action as may, in the opinion of counsel to
the Security Insurer, be necessary to perfect or re-perfect the security
interest in the Financed Vehicles underlying the Receivables in the name of
the Trust, including by amending the title documents of such Financed
Vehicles or by such other reasonable means as may, in the opinion of counsel
to the Security Insurer, be necessary or prudent; PROVIDED, HOWEVER, that
(unless an Insurer Default shall have occurred and be continuing) if the
Security Insurer requests that the title documents be amended prior to the
occurrence of an Insurance Agreement Event of Default, the out-of-pocket
expenses of the Servicer or the Owner Trustee in connection with such action
shall be reimbursed to the Servicer or the Owner Trustee, as applicable, by
the Security Insurer.

SECTION 3.6. COVENANTS, REPRESENTATIONS, AND WARRANTIES OF
SERVICER. By its execution and delivery of this Agreement, the Servicer
makes the following representations, warranties and covenants on which the
Owner Trustee relies in accepting the Receivables in trust and issuing the
Notes on behalf of the Trust, on which the Indenture Trustee relies in
authenticating the Notes and on which the Security Insurer relies in issuing
the Note Policy.

(a) The Servicer covenants as follows:

(i) LIENS IN FORCE. The Financed Vehicle
securing each Receivable shall not be released in whole or in
part from the security interest

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granted by the Receivable, except upon payment in full of the
Receivable or as otherwise contemplated herein;

(ii) NO IMPAIRMENT. The Servicer shall do
nothing to impair the rights of the Trust, the Noteholders in
the Receivables, the Dealer Agreements, the Dealer Assignments,
the Insurance Policies or the other Trust Property; and

(iii) NO AMENDMENTS. The Servicer shall not
extend or otherwise amend the terms of any Receivable, except in
accordance with Section 3.2.

(b) The Servicer represents, warrants and covenants
as of the Closing Date as to itself:

(i) ORGANIZATION AND GOOD STANDING. The
Servicer has been duly organized and is validly existing and in
good standing under the laws of its jurisdiction of
organization, with power, authority and legal right to own its
properties and to conduct its business as such properties are
currently owned and such business is currently conducted, and
had at all relevant times, and now has, power, authority and
legal right to enter into and perform its obligations under this
Agreement;

(ii) DUE QUALIFICATION. The Servicer is duly
qualified to do business as a foreign corporation in good
standing, and has obtained all necessary licenses and approvals,
in all jurisdictions in which the ownership or lease of property
or the conduct of its business (including the servicing of the
Receivables as required by this Agreement) requires or shall
require such qualification;

(iii) POWER AND AUTHORITY. The Servicer has
the power and authority to execute and deliver this Agreement
and its Related Documents and to carry out its terms and their
terms, respectively, and the execution, delivery and performance
of this Agreement and the Servicer's Related Documents have been
duly authorized by the Servicer by all necessary corporate
action;

(iv) BINDING OBLIGATION. This Agreement and
the Servicer's Related Documents shall constitute legal, valid
and binding obligations of the Servicer enforceable in
accordance with their respective terms, except as enforceability
may be limited by bankruptcy, insolvency, reorganization, or
other similar laws affecting the enforcement of creditors'
rights generally and by equitable limitations on the
availability of specific remedies, regardless of whether such
enforceability is considered in a proceeding in equity or at
law;

(v) NO VIOLATION. The consummation of the
transactions contemplated by this Agreement and the Servicer's
Related Documents, and the

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fulfillment of the terms of this Agreement and the Servicer's
Related Documents, shall not conflict with, result in any breach
of any of the terms and provisions of, or constitute (with or
without notice or lapse of time) a default under, the articles
of incorporation or bylaws of the Servicer, or any indenture,
agreement, mortgage, deed of trust or other instrument to which
the Servicer is a party or by which it is bound, or result in
the creation or imposition of any Lien upon any of its
properties pursuant to the terms of any such indenture,
agreement, mortgage, deed of trust or other instrument, other
than this Agreement, or violate any law, order, rule or
regulation applicable to the Servicer of any court or of any
federal or state regulatory body, administrative agency or
other governmental instrumentality having jurisdiction over
the Servicer or any of its properties;

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

(vii) NO CONSENTS. The Servicer is not
required to obtain the consent of any other party or any
consent, license, approval or authorization, or registration or
declaration with, any governmental authority, bureau or agency
in connection with the execution, delivery, performance,
validity or enforceability of this Agreement;

(viii) COLLATERAL INSURANCE. The Collateral
Insurance is in full force and effect.

SECTION 3.7. PURCHASE OF RECEIVABLES UPON BREACH OF
COVENANT. Upon discovery by any of the Servicer, the Security Insurer, the
Owner Trustee or the Indenture Trustee of a breach of any of the covenants
set forth in Sections 3.5(a) or 3.6(a), the party discovering such breach
shall give prompt written notice to the others; PROVIDED, HOWEVER, that the
failure to give any such notice shall not affect any obligation of the
Servicer. As of the second Accounting Date following its discovery or
receipt of notice of any breach of any covenant set forth in Sections 3.5(a)
or 3.6(a) which materially and adversely affects the interests of the
Noteholders, the Trust or the Security Insurer in any Receivable (including
any Liquidated Receivable) (or, at the Servicer's election, the first
Accounting Date so following), the Servicer shall, unless it shall have cured
such breach in all material respects, purchase from the Trust the Receivable
affected by such breach and, on the related Deposit Date, the Servicer shall
pay the

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related Purchase Amount. It is understood and agreed that the obligation of
the Servicer to purchase any Receivable (including any Liquidated Receivable)
with respect to which such a breach has occurred and is continuing shall, if
such obligation is fulfilled, constitute the sole remedy against the Servicer
for such breach available to the Security Insurer, the Noteholders, or the
Indenture Trustee on behalf of Noteholders; PROVIDED, HOWEVER, that the
Servicer shall indemnify the Owner Trustee, the Backup Servicer, the
Collateral Agent, the Security Insurer, the Trust, the Indenture Trustee and
the Noteholders against all costs, expenses, losses, damages, claims and
liabilities, including reasonable fees and expenses of counsel, which may be
asserted against or incurred by any of them as a result of third party claims
arising out of the events or facts giving rise to such breach.

SECTION 3.8. TOTAL SERVICING FEE; PAYMENT OF CERTAIN
EXPENSES BY SERVICER. On each Distribution Date, the Servicer shall be
entitled to receive out of the Collection Account the Basic Servicing Fee and
any Supplemental Servicing Fee for the related Monthly Period pursuant to
Section 4.6. The Servicer shall be required to pay all expenses incurred by
it in connection with its activities under this Agreement (including taxes
imposed on the Servicer, expenses incurred in connection with distributions
and reports to Noteholders and the Security Insurer and all other fees and
expenses of the Trust, including taxes levied or assessed against the Trust,
and claims against the Trust in respect of indemnification, unless such fees,
expenses or claims in respect of indemnification are expressly stated to be
for the account of AFL or not to be for the account of the Servicer). The
Servicer shall be liable for the fees and expenses of the Owner Trustee, the
Administrator, the Indenture Collateral Agent, the Indenture Trustee, the
Custodian, the Backup Servicer, the Collateral Agent, the Lockbox Bank (and
any fees under the Lockbox Agreement) and the Independent Accountants.
Notwithstanding the foregoing, if the Servicer shall not be AFL, a successor
to AFL as Servicer permitted by Section 7.2 or an Affiliate of any of the
foregoing, such Servicer shall not be liable for taxes levied or assessed
against the Trust or claims against the Trust in respect of indemnification.

SECTION 3.9. SERVICER'S CERTIFICATE. No later than 10:00
a.m. New York City time on each Determination Date, the Servicer shall
deliver to the Owner Trustee, the Indenture Trustee, the Backup Servicer, the
Security Insurer, the Collateral Agent and each Rating Agency a Servicer's
Certificate executed by a Responsible Officer of the Servicer containing,
among other things, (i) all information necessary to enable the Indenture
Trustee to make any withdrawal and deposit required by Section 5.1, to give
any notice required by Section 5.2, to make the distributions required by
Sections 4.6 and 4.7(b), to make the withdrawals, distributions and
deliveries required by Section 4.7(a) and to determine the amount to which
the Servicer is entitled to be reimbursed or has been reimbursed during the
related Monthly Period for Monthly Advances pursuant to Section 4.4(c), (ii)
all information necessary to enable the Indenture Trustee to send the
statements to Noteholders required by Section 4.9, (iii) a listing of all
Warranty Receivables and Administrative Receivables purchased as of the
related Deposit Date, identifying the Receivables so purchased, and (iv) all
information necessary to enable the Indenture Trustee to reconcile all
deposits to, and withdrawals from, the Collection Account for the related
Monthly Period and Distribution Date, including the accounting required by
Section 4.8. Receivables purchased by the Servicer or by the Seller or AFL
on the related Deposit Date and each Receivable which became a Liquidated
Receivable or which was paid in full during the

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related Monthly Period shall be identified by account number (as set forth in
the Schedule of Receivables). A copy of such certificate may be obtained by
any Noteholder (or by a Note Owner, upon certification that such Person is a
Note Owner and payment of any expenses associated with the distribution
thereof) by a request in writing to the Indenture Trustee addressed to the
Corporate Trust Office. In addition to the information set forth in the
preceding sentence, the Servicer's Certificate delivered to the Security
Insurer, the Collateral Agent and the Indenture Trustee on the Determination
Date shall also contain the following information: (a) the Delinquency Ratio,
Average Delinquency Ratio, Cumulative Default Rate and Cumulative Net Loss
Rate for such Determination Date; (b) whether any Trigger Event has occurred
as of such Determination Date; (c) whether any Trigger Event that may have
occurred as of a prior Determination Date is Deemed Cured as of such
Determination Date; (d) whether to the knowledge of the Servicer an Insurance
Agreement Event of Default has occurred, (e) if AFL shall be the Servicer,
whether a Capture Event shall have occurred and be continuing, and (f) if AFL
shall be the Servicer, whether any Capture Event specified in any prior
Servicer's Certificate has been cured by a permanent waiver, effective in
accordance with the terms of the Purchase Agreements.

SECTION 3.10. ANNUAL STATEMENT AS TO COMPLIANCE; NOTICE OF
SERVICER TERMINATION EVENT.

(a) The Servicer shall deliver to the Owner Trustee, the
Indenture Trustee, the Backup Servicer, the Security Insurer and each Rating
Agency, on or before March 31 (or 90 days after the end of the Servicer's
fiscal year, if other than December 31) of each year, beginning on March 31,
2000, an officer's certificate signed by any Responsible Officer of the
Servicer, dated as of December 31 (or other applicable date) of the
immediately preceding year, stating that (i) a review of the activities of
the Servicer during the preceding 12-month period (or such other period as
shall have elapsed from the Closing Date to the date of the first such
certificate) and of its performance under this Agreement has been made under
such officer's supervision, and (ii) to such officer's knowledge, based on
such review, the Servicer has fulfilled all its obligations under this
Agreement throughout such period, or, if there has been a default in the
fulfillment of any such obligation, specifying each such default known to
such officer and the nature and status thereof.

(b) The Servicer shall deliver to the Owner Trustee, the
Indenture Trustee, the Backup Servicer, the Security Insurer, the Collateral
Agent, and each Rating Agency, promptly after having obtained knowledge
thereof, but in no event later than two Business Days thereafter, written
notice in an officer's certificate of any event which with the giving of
notice or lapse of time, or both, would become a Servicer Termination Event
under Section 8.1(a). The Seller or the Servicer shall deliver to the Owner
Trustee, the Indenture Trustee, the Backup Servicer, the Security Insurer,
the Collateral Agent, the Servicer or the Seller (as applicable) and each
Rating Agency promptly after having obtained knowledge thereof, but in no
event later than two Business Days thereafter, written notice in an officer's
certificate of any event which with the giving of notice or lapse of time, or
both, would become a Servicer Termination Event under any other clause of
Section 8.1.

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SECTION 3.11. ANNUAL INDEPENDENT ACCOUNTANTS' REPORT.

(a) The Servicer shall cause a firm of nationally
recognized independent certified public accountants (the "Independent
Accountants"), who may also render other services to the Servicer or to the
Seller, to deliver to the Owner Trustee, the Indenture Trustee, the Backup
Servicer, the Security Insurer and each Rating Agency, on or before March 31
(or 90 days after the end of the Servicer's fiscal year, if other than
December 31) of each year, beginning on March 31, 2000, with respect to the
twelve months ended the immediately preceding December 31 (or other
applicable date) (or such other period as shall have elapsed from the Closing
Date to the date of such certificate), a statement (the "Accountant's
Report") addressed to the Board of Directors of the Servicer, to the Owner
Trustee, the Indenture Trustee, the Backup Servicer and to the Security
Insurer, to the effect that such firm has audited the financial statements of
the Servicer and issued its report thereon and that such audit was made in
accordance with generally accepted auditing standards, and accordingly
included such tests of the accounting records and such other auditing
procedures as such firm considered necessary in the circumstances, including
procedures as determined by the Independent Accountants related to (1) the
documents and records concerning the servicing of automobile installment
sales contracts under pooling and servicing agreements and sale and servicing
agreements substantially similar one to another (such statement to have
attached thereto a schedule setting forth the pooling and servicing
agreements and sale and servicing agreements covered thereby, including this
Agreement); and (2) the delinquency and loss statistics relating to the
Servicer's portfolio of automobile installment sales contracts; and except as
described in the statement, disclosed no exceptions or errors in the records
relating to automobile and light truck loans serviced for others that, in the
firm's opinion, generally accepted auditing standards requires such firm to
report. The Accountants' Report shall further state that (1) a review in
accordance with agreed upon procedures was made of three randomly selected
Servicer's Certificates for each Trust and (2) except as disclosed in the
Report, no exceptions or errors in the Servicer's Certificates so examined
were found.

(b) The Accountants' Report shall also indicate that the
firm is independent of the Seller and the Servicer within the meaning of the
Code of Professional Ethics of the American Institute of Certified Public
Accountants.

(c) A copy of the Accountants' Report may be obtained by
any Noteholder (or by any Note Owner, upon certification that such Person is
a Note Owner and payment of any expenses associated with the distribution
thereof) by a request in writing to the Indenture Trustee addressed to the
Corporate Trust Office.

SECTION 3.12. ACCESS TO CERTAIN DOCUMENTATION AND
INFORMATION REGARDING RECEIVABLES. The Servicer shall provide to
representatives of the Owner Trustee, Indenture Trustee, the Backup Servicer
and the Security Insurer reasonable access to the documentation regarding the
Receivables. The Servicer shall provide such access to any Noteholder (or
Note Owner) only in such cases where the Servicer is required by applicable
statutes or regulations (whether applicable to the Servicer or to such
Noteholder or Note Owner) to permit such Noteholder (or Note Owner) to review
such documentation. In each case, such access shall be

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afforded without charge but only upon reasonable request and during normal
business hours. Nothing in this Section shall derogate from the obligation
of the Servicer to observe any applicable law prohibiting disclosure of
information regarding the Obligors, and the failure of the Servicer to
provide access as provided in this Section as a result of such obligation
shall not constitute a breach of this Section. Any Noteholder (or Note
Owner), by its acceptance of a Note (or by acquisition of its beneficial
interest therein), as applicable, shall be deemed to have agreed to keep
confidential and not to use for its own benefit any information obtained by
it pursuant to this Section, except as may be required by applicable law.

SECTION 3.13. MONTHLY TAPE. On or before the third Business
Day, but in no event later than the fifth calendar day, of each month, the
Servicer will deliver to the Indenture Trustee and the Backup Servicer a
computer tape and a diskette (or any other electronic transmission acceptable
to the Indenture Trustee and the Backup Servicer) in a format acceptable to
the Indenture Trustee and the Backup Servicer containing the information with
respect to the Receivables as of the preceding Accounting Date necessary for
preparation of the Servicer's Certificate relating to the immediately
succeeding Determination Date and necessary to determine the application of
collections as provided in Section 4.3. The Backup Servicer shall use such
tape or diskette (or other electronic transmission acceptable to the
Indenture Trustee and the Backup Servicer) to verify the Servicer's
Certificate delivered by the Servicer (based on the information contained in
such tape or diskette), and the Backup Servicer shall certify to the Security
Insurer that it has verified the Servicer's Certificate in accordance with
this Section 3.13 and shall notify the Servicer and the Security Insurer of
any discrepancies, in each case, on or before the second Business Day
following the Determination Date. In the event that the Backup Servicer
reports any discrepancies, the Servicer and the Backup Servicer shall attempt
to reconcile such discrepancies prior to the related Deficiency Claim Date,
but in the absence of a reconciliation, the Servicer's Certificate shall
control for the purpose of calculations and distributions with respect to the
related Distribution Date. In the event that the Backup Servicer and the
Servicer are unable to reconcile discrepancies with respect to a Servicer's
Certificate by the related Distribution Date, the Servicer shall cause the
Independent Accountants, at the Servicer's expense, to audit the Servicer's
Certificate and, prior to the third Business Day, but in no event later than
the fifth calendar day, of the following month, reconcile the discrepancies.
The effect, if any, of such reconciliation shall be reflected in the
Servicer's Certificate for such next succeeding Determination Date. In
addition, the Servicer shall, if so requested by the Security Insurer (unless
an Insurer Default shall have occurred and be continuing) deliver to the
Backup Servicer its Collection Records and its Monthly Records within one
Business Day of demand therefor and a computer tape containing as of the
close of business on the date of demand all of the data maintained by the
Servicer in computer format in connection with servicing the Receivables.
Other than the duties specifically set forth in this Agreement, the Backup
Servicer shall have no obligations hereunder, including, without limitation,
to supervise, verify, monitor or administer the performance of the Servicer.
The Backup Servicer shall have no liability for any actions taken or omitted
by the Servicer. The duties and obligations of the Backup Servicer shall be
determined solely by the express provisions of this Agreement and no implied
covenants or obligations shall be read into this Agreement against the Backup
Servicer.

SECTION 3.14. RETENTION AND TERMINATION OF SERVICER. The
Servicer hereby covenants and agrees to act as such under this Agreement for
an initial term, commencing on the

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Closing Date and ending on June 30, 1999, which term shall be extendible by
the Security Insurer for successive quarterly terms ending on each successive
September 30, December 31, March 31 and June 30 (or, pursuant to revocable
written standing instructions from time to time to the Servicer, the
Indenture Trustee and the Owner Trustee, for any specified number of terms
greater than one), until the termination of the Trust. Each such notice
(including each notice pursuant to standing instructions, which shall be
deemed delivered at the end of successive quarterly terms for so long as such
instructions are in effect) (a "Servicer Extension Notice") shall be
delivered by the Security Insurer to the Owner Trustee, the Indenture Trustee
and the Servicer. The Servicer hereby agrees that, as of the date hereof and
upon its receipt of any such Servicer Extension Notice, the Servicer shall
become bound, for the initial term beginning on the Closing Date and for the
duration of the term covered by such Servicer Extension Notice, to continue
as the Servicer subject to and in accordance with the other provisions of
this Agreement. Until such time as an Insurer Default shall have occurred
and be continuing, the Indenture Trustee agrees that if as of the fifteenth
day prior to the last day of any term of the Servicer the Indenture Trustee
shall not have received any Servicer Extension Notice from the Security
Insurer, the Indenture Trustee will, within five days thereafter, give
written notice of such non-receipt to the Owner Trustee, the Security Insurer
and the Servicer.

SECTION 3.15. FIDELITY BOND. The Servicer shall maintain a
fidelity bond in such form and amount as is customary for entities acting as
custodian of funds and documents in respect of consumer contracts on behalf
of institutional investors.

SECTION 3.16. DUTIES OF THE SERVICER UNDER THE INDENTURE.
The Servicer shall, and hereby agrees that it will, perform on behalf of the
Trust and the Owner Trustee the following duties of the Trust or the Owner
Trustee, as applicable, under the Indenture (references are to the applicable
Sections in the Indenture):

(a) the direction to the Paying Agents, if any, to
deposit moneys with the Indenture Trustee (Section 3.03);

(b) the obtaining and preservation of the Issuer's
qualification to do business in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of the Indenture, the Notes, the Indenture Collateral and
each other instrument and agreement included in the Trust Estate
(Section 3.04);

(c) the preparation of all supplements, amendments,
financing statements, continuation statements, instruments of further
assurance and other instruments, in accordance with Section 3.05 of the
Indenture, necessary to protect the Trust Estate (Section 3.05);

(d) the delivery of the Opinion of Counsel on the
Closing Date and the annual delivery of Opinions of Counsel, in
accordance with Section 3.06 of the Indenture, as to the Trust Estate,
and the annual delivery of the Officers' Certificate and certain other
statements, in accordance with Section 3.09 of the Indenture, as to
compliance with the Indenture (Sections 3.06 and 3.09);

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(e) the preparation and obtaining of documents and
instruments required for the release of the Issuer from its obligations
under the Indenture (Section 3.10(b));

(f) the monitoring of the Issuer's obligations as to
the satisfaction and discharge of the Indenture and the preparation of
an Officers' Certificate and the obtaining of the Opinion of Counsel and
the Independent Certificate relating thereto (Section 4.01);

(g) the preparation of any written instruments
required to confirm more fully the authority of any co-trustee or
separate trustee and any written instruments necessary in connection
with the resignation or removal of any co-trustee or separate trustee
(Sections 6.08 and 6.10);

(h) the opening of one or more accounts in the
Trust's name, the preparation of Issuer Orders, Officers' Certificates
and Opinions of Counsel and all other actions necessary with respect to
investment and reinvestment of funds in the Trust Accounts (Sections
8.02 and 8.03);

(i) the preparation of Trust Orders and the
obtaining of Opinions of Counsel with respect to the execution of
supplemental indentures (Sections 9.01, 9.02 and 9.03);

(j) the preparation of all Officers' Certificates,
Opinions of Counsel and Independent Certificates with respect to any
requests by the Issuer to the Indenture Trustee or the Indenture
Collateral Agent to take any action under the Indenture (Section
11.01(a));

(k) the preparation and delivery of Officers'
Certificates and the obtaining of Independent Certificates, if
necessary, for the release of property from the lien of the Indenture
(Section 11.01(b)); and

(l) the recording of the Indenture, if applicable
(Section 11.15).

In addition to the duties of the Servicer set forth above, the Servicer
shall, and hereby agrees that it will, prepare, distribute and file any
reports required by Section 313(b) of the Trust Indenture Act of 1939, as
amended, as a result of any transfer of Subsequent Receivables. Such
distribution and filing is to be effected by the Servicer's distribution and
filing of the Servicer's Certificate.

SECTION 3.17. DUTIES OF THE SERVICER UNDER THE INSURANCE
AGREEMENT. The Servicer shall, and hereby agrees that it will, perform on
behalf of the Trust and the Owner Trustee the following duties of the Trust
under the Insurance Agreement (references are to the applicable Sections in
the Insurance Agreement):

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(a) the maintenance of books and records of accounts
of the Trust's assets and business and the furnishing to the Security
Insurer of reports, certificates, statements, financial statements or
notices furnished to the Indenture Trustee or the Noteholders pursuant
to the Related Documents (Section 2.02(b));

(b) the delivery to the Security Insurer and, upon
request, any Noteholder, of certificates with respect to compliance
with, and other matters under, the Related Documents (Section 2.02(c));

(c) the filing of financing statements, assignments
or other instruments, and amendments or continuation statements relating
thereto to preserve and protect fully the lien and security interest in,
and all rights of the Indenture Trustee and the Security Insurer with
respect to, the Trust Estate (Section 2.02(f));

(d) the maintenance of licenses, permits, charters
and registrations of the Trust material to the performance by the Trust
of its obligations under the Insurance Agreement and the Related
Documents (Section 2.02(g));

(e) the provision to the Security Insurer of
executed original copies of the documents executed in connection with
the closing of the offering of the Notes (Section 2.02(k)); and

(f) the taking of actions 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 (Section 2.02(l)).

SECTION 3.18. CERTAIN DUTIES OF THE SERVICER UNDER THE TRUST
AGREEMENT. The Servicer shall, and hereby agrees that it will, monitor the
Trust's compliance with all applicable provisions of state and federal
securities laws, notify the Trust and the Administrator (as defined in the
Trust Agreement) of any actions to be taken by the Trust necessary for
compliance with such laws and prepare on behalf of the Trust and the
Administrator all notices, filings or other documents or instruments required
to be filed under such laws.

ARTICLE IV

DISTRIBUTIONS; STATEMENTS TO NOTEHOLDERS

SECTION 4.1. TRUST ACCOUNTS.

(a) The Servicer shall establish the Collection Account
in the name of the Indenture Collateral Agent for the benefit of the Issuer
Secured Parties (as defined in the Indenture). The Collection Account shall
be an Eligible Account and initially shall be a segregated trust account
established with the Indenture Collateral Agent and maintained with the
Indenture Collateral Agent.

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(b) The Servicer shall establish the Pre-Funding Account
in the name of the Indenture Collateral Agent for the benefit of the Issuer
Secured Parties. The Pre-Funding Account shall be an Eligible Account and
initially shall be a segregated trust account established with the Indenture
Collateral Agent and maintained with the Indenture Collateral Agent.

(c) The Servicer shall establish the Note Distribution
Account in the name of the Indenture Collateral Agent for the benefit of the
Issuer Secured Parties. The Note Distribution Account shall be an Eligible
Account and initially shall be a segregated trust account established with
the Indenture Collateral Agent and maintained with the Indenture Collateral
Agent.

(d) The Servicer shall establish the Reserve Account
(including the Class A-1 Holdback Subaccount) in the name of the Indenture
Collateral Agent for the benefit of the Issuer Secured Parties. The Reserve
Account shall be an Eligible Account and initially shall be a segregated
trust account established with the Indenture Collateral Agent and maintained
with the Indenture Collateral Agent.

(e) All amounts held in the Collection Account, the
Pre-Funding Account, the Note Distribution Account and the Reserve Account
(collectively, the "Trust Accounts") shall, to the extent permitted by
applicable laws, rules and regulations, be invested, as directed in writing
by the Servicer, in Eligible Investments that, in the case of amounts held in
the Collection Account, the Note Distribution Account and the Reserve
Account, mature not later than one Business Day prior to the Distribution
Date for the Monthly Period to which such amounts relate, and, in the case of
amounts held in the Pre-Funding Account, mature in such amounts and on such
dates, not later than one Business Day prior to the last day of the Funding
Period, as the Servicer may direct in writing; PROVIDED, HOWEVER, that the
amounts held in the Trust Accounts shall be invested by the Indenture
Collateral Agent on behalf of the Trust in overnight or next-day funds in
such Eligible Investments as may be acceptable to the Rating Agencies and the
Security Insurer (which initially shall be the Indenture Collateral Agent's
U.S. Government Fund and, from time to time, shall include such other
proprietary Eligible Investments of the Indenture Collateral Agent as shall
be confirmed in writing by the Security Insurer to the Indenture Collateral
Agent) for the period of time from the Business Day prior to the Distribution
Date or the end of the Funding Period, as applicable, until such Distribution
Date or the end of the Funding Period, as applicable. Any such written
direction shall certify that any such investment is authorized by this
Section 4.1. Investments in Eligible Investments shall be made in the name
of the Indenture Collateral Agent on behalf of the Trust, and such
investments shall not be sold or disposed of prior to their maturity. Any
investment of funds in the Trust Accounts shall be made in Eligible
Investments held by a financial institution in accordance with the following
requirements:

(i) all Eligible Investments shall be held in an account
with such financial institution in the name of the Indenture Collateral
Agent;

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(ii) all Eligible Investments held in such account shall be
delivered to the Indenture Collateral Agent in the following manner:

(A) with respect to bankers' acceptances, commercial
paper, negotiable certificates of deposit and other obligations
that constitute "instruments" within the meaning of Section
9-105(1)(i) of the UCC (other than certificated securities) and
are susceptible of physical delivery, transferred to the
Indenture Collateral Agent by physical delivery to the Indenture
Collateral Agent, indorsed to, or registered in the name of, the
Indenture Collateral Agent or its nominee or indorsed in blank;
or such additional or alternative procedures as may hereafter
become appropriate to effect the complete transfer of ownership
of any such Eligible Investments to the Indenture Collateral
Agent free of any adverse claims, consistent with changes in
applicable law or regulations or the interpretation thereof;

(B) with respect to a "certificated security" (as
defined in Section 8-102(a)(4) of the UCC), transferred:

(1) by physical delivery of such
certificated security to the Indenture Collateral Agent,
provided that if the certificated security is in
registered form, it shall be indorsed to, or registered
in the name of, the Indenture Collateral Agent or
indorsed in blank;

(2) by physical delivery of such
certificated security in registered form to a
"securities intermediary" (as defined in Section
8-102(a)(14) of the UCC) acting on behalf of the
Indenture Collateral Agent if the certificated security
has been specially indorsed to the Indenture Collateral
Agent by an effective indorsement.

(C) with respect to any security issued by the U.S.
Treasury, the Federal Home Loan Mortgage Corporation or by the
Federal National Mortgage Association that is a book-entry
security held through the Federal Reserve System pursuant to
Federal book entry regulations, the following procedures, all in
accordance with applicable law, including applicable federal
regulations and Articles 8 and 9 of the UCC: book-entry
registration of such property to an appropriate book-entry
account maintained with a Federal Reserve Bank by a securities
intermediary which is also a "depositary" pursuant to applicable
federal regulations and issuance by such securities intermediary
of a deposit advice or other written confirmation of such
book-entry registration to the Indenture Collateral Agent of the
purchase by the securities intermediary on behalf of the
Indenture Collateral Agent of such book-entry security; the
making by such securities intermediary of entries in its books
and records identifying such book-entry security held through
the Federal Reserve System pursuant to Federal book-entry
regulations as belonging to the Indenture Collateral Agent and
indicating that such securities intermediary holds such
book-entry security solely as agent

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for the Indenture Collateral Agent; or such additional or
alternative procedures as may hereafter become appropriate to
effect complete transfer of ownership of any such Eligible
Investments to the Indenture Collateral Agent free of any
adverse claims, consistent with changes in applicable law
or regulations or the interpretation thereof;

(D) with respect to any "uncertificated security"
(as defined in Section 8-102(a)(18) of the UCC) that is not
governed by clause (C) above, transferred:

(1)(A) by registration to the Indenture
Collateral Agent as the registered owner thereof, on the
books and records of the issuer thereof, or

(B) by another Person (not a securities
intermediary) either becomes the registered owner of the
uncertificated security on behalf of the Indenture
Collateral Agent, or having become the registered owner
acknowledges that it holds for the Indenture Collateral
Agent; or

(2) by the issuer thereof having agreed that
it will comply with instructions originated by the
Indenture Collateral Agent without further consent of
the registered owner thereof;

(E) with respect to any "security entitlement" (as
defined in Section 8-102(a)(17) of the UCC):

(1) if a securities intermediary
(A) indicates by book entry that a "financial asset" (as
defined in Section 8-102(a)(9) of the UCC) has been
credited to the Indenture Collateral Agent's "securities
account" (as defined in Section 8-501(a) of the UCC),
(B) receives a financial asset (as so defined) from the
Indenture Collateral Agent or acquires a financial asset
for the Indenture Collateral Agent, and in either case,
accepts it for credit to the Indenture Collateral
Agent's securities account (as so defined), (C) becomes
obligated under other law, regulation or rule to credit
a financial asset to the Indenture Collateral Agent's
securities account, or (D) has agreed that it will
comply with "entitlement orders" (as defined in Section
8-102(a)(8) of the UCC) originated by the Indenture
Collateral Agent, without further consent by the
"entitlement holder" (as defined in Section 8-102(a)(7)
of the UCC), of a confirmation of the purchase and the
making by such securities intermediary of entries on its
books and records identifying as belonging to the
Indenture Collateral Agent of (I) a specific
certificated security in the securities intermediary's
possession, (II) a quantity of securities that
constitute or are part of a fungible bulk of
certificated securities in the securities intermediary's
possession, or (III) a quantity of securities that
constitute or are part of a fungible bulk of securities
shown on the account of the securities intermediary on
the books of another securities intermediary.

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(F) in each case of delivery contemplated pursuant
to clauses (A) through (E) of subsection (ii) hereof, the
Indenture Collateral Agent shall make appropriate notations on
its records, and shall cause the same to be made on the records
of its nominees, indicating that such Eligible Investment is
held in trust pursuant to and as provided in this Indenture.

Any cash held by the Indenture Collateral Agent shall not be considered a
"financial asset" for purposes of this Section 4.1(e). Subject to the other
provisions hereof, the Indenture 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 Indenture Collateral Agent or its agent, together with each document of
transfer, if any, necessary to transfer title to such investment to the
Indenture Collateral Agent in a manner which complies with this Section 4.1.
All interest, dividends, gains upon sale and other income from, or earnings on,
investments of funds in the Trust Accounts shall be deposited in the Collection
Account and distributed on the next Distribution Date pursuant to Section 4.6.
The Servicer shall deposit in the applicable Trust Account an amount equal to
any net loss on such investments immediately as realized.

(f) On the Closing Date, the Servicer shall deposit in the
Collection Account (i) all Scheduled Payments and prepayments of Initial
Receivables received by the Servicer after the Initial Cutoff Date and on or
prior to the Business Day immediately preceding the Closing Date or received by
the Lockbox Bank after the Initial Cutoff Date and on or prior to the second
Business Day immediately preceding the Closing Date and (ii) all Liquidation
Proceeds and proceeds of Insurance Policies realized in respect of a Financed
Vehicle and applied by the Servicer after the Initial Cutoff Date. On each
Subsequent Transfer Date, the Servicer shall deposit in the Collection Account
(x) all Scheduled Payments and prepayments of the related Subsequent Receivables
received by the Servicer after the related Subsequent Cutoff Date and on or
prior to the Business Day immediately preceding the related Subsequent Transfer
Date or received by the Lockbox Bank after the related Subsequent Cutoff Date
and on or prior to the second Business Day immediately preceding the related
Subsequent Transfer Date and (y) all Liquidation Proceeds and proceeds of
Insurance Policies related in respect of a Financed Vehicle and applied by the
Servicer after the related Subsequent Cutoff Date.

SECTION 4.2. COLLECTIONS.

(a) The Servicer shall establish the Subcollection Account
in the name of the Indenture Trustee for the benefit of the Noteholders. The
Subcollection Account shall be an Eligible Account satisfying clause (ii) of the
definition of "Eligible Account," and shall initially be established with the
Lockbox Bank. The Servicer shall remit directly to the Subcollection Account
without deposit into any intervening account all payments by or on behalf of the
Obligors on the Receivables and all Liquidation Proceeds received by the
Servicer, in each case, as soon as practicable, but in no event later than the
Business Day after receipt thereof. Within two days of deposit of payments into
the Subcollection Account, the Servicer shall cause the Lockbox Bank to transfer
all amounts credited to the Subcollection Account on account of such

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payments to the Collection Account. Amounts in the Subcollection Account
shall not be invested. Notwithstanding the foregoing, the Servicer may
utilize an alternative remittance schedule acceptable to the Servicer if the
Security Insurer consents in writing (so long as an Insurer Default shall not
have occurred and be continuing) and the Servicer provides to the Indenture
Trustee written confirmation from each Rating Agency that such alternative
remittance schedule will not result in the downgrading or withdrawal by the
Rating Agency of the rating then assigned to the Notes.

(b) Notwithstanding the provisions of subsection (a)
hereof, the Servicer will be entitled to be reimbursed from amounts on
deposit in the Collection Account with respect to a Monthly Period for
amounts previously deposited in the Collection Account but later determined
by the Servicer or the Lockbox Bank to have resulted from mistaken deposits
or postings or checks returned for insufficient funds. The amount to be
reimbursed hereunder shall be paid to the Servicer on the related
Distribution Date pursuant to Section 4.6(iii) upon certification by the
Servicer of such amounts and the provision of such information to the
Indenture Trustee and the Security Insurer as may be necessary in the opinion
of the Indenture Trustee and the Security Insurer to verify the accuracy of
such certification. In the event that the Security Insurer has not received
evidence satisfactory to it of the Servicer's entitlement to reimbursement
pursuant to this Section 4.2(b), the Security Insurer shall (unless an
Insurer Default shall have occurred and be continuing) give the Indenture
Trustee notice to such effect, following receipt of which the Indenture
Trustee shall not make a distribution to the Servicer in respect of such
amount pursuant to Section 4.6, or if the Servicer prior thereto has been
reimbursed pursuant to Section 4.6 or Section 4.8, the Indenture Trustee
shall withhold such amounts from amounts otherwise distributable to the
Servicer on the next succeeding Distribution Date.

SECTION 4.3. APPLICATION OF COLLECTIONS. For the purposes
of this Agreement, all collections for a Monthly Period shall be applied by
the Servicer as follows:

(a) With respect to each Receivable, payments by or
on behalf of the Obligor thereof (other than of Supplemental Servicing
Fees with respect to such Receivable, to the extent collected) shall be
applied to interest and principal with respect to such Receivable in
accordance with the terms of such Receivable. With respect to each
Liquidated Receivable, Liquidation Proceeds shall be applied to interest
and principal with respect to such Receivable in accordance with the
terms of such Receivable, and then to any Insurance Add-On Amount due
and payable with respect to such Receivable. The Servicer shall not be
entitled to any Supplemental Servicing Fees with respect to a Liquidated
Receivable.

(b) With respect to each Receivable that has become
a Purchased Receivable on any Deposit Date, the Purchase Amount shall be
applied, for purposes of this Agreement only, to interest and principal
on the Receivable in accordance with the terms of the Receivable as if
the Purchase Amount had been paid by the Obligor on the Accounting Date.
The Servicer shall not be entitled to any Supplemental Servicing Fees
with respect to such a Receivable. Nothing contained herein shall
relieve any Obligor of any obligation relating to any Receivable.

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(c) All amounts collected that are payable to the
Servicer as Supplemental Servicing Fees hereunder shall be deposited in
the Collection Account and paid to the Servicer in accordance with
Section 4.6(iii).

(d) All payments by or on behalf of an Obligor
received with respect to any Purchased Receivable after the Accounting
Date immediately preceding the Deposit Date on which the Purchase Amount
was paid by the Seller, AFL or the Servicer shall be paid to the Seller,
AFL or the Servicer, respectively, and shall not be included in the
Available Funds.

SECTION 4.4. MONTHLY ADVANCES.

(a) If with respect to a Receivable, the amount deposited
into the Collection Account during a Monthly Period in respect of such
Receivable and allocable to interest (determined in accordance with Section
4.3) is less than an amount of interest equal to interest accrued on such
Receivable (for the number of calendar days in such Monthly Period)
(calculated according to the method specified in the related retail
installment sale contract or promissory note at the APR on the Principal
Balance of such Receivable as of the Accounting Date preceding such
Distribution Date), the Servicer shall make a Monthly Advance equal to the
amount of such shortfall; PROVIDED, HOWEVER, that the Servicer shall not be
required to make a Monthly Advance with respect to a Receivable extended
pursuant to Section 3.2(b) for any Monthly Period during which no Scheduled
Payment is due according to the terms of such extension; and PROVIDED
FURTHER, that the Servicer shall not be required to make a Monthly Advance
with respect to a Receivable that is less than 31 days delinquent.

(b) On or before each Determination Date and prior to the
delivery of the Servicer's Certificate for such Determination Date pursuant
to Section 3.9, the Servicer shall deposit in the Collection Account the
aggregate amount of Monthly Advances required for the related Monthly Period
in immediately available funds (subject to Section 4.8).

(c) The Servicer shall be entitled to be reimbursed for
Outstanding Monthly Advances with respect to a Receivable pursuant to Section
4.6(i) or pursuant to Section 4.8 from the following sources with respect to
such Receivable on any day subsequent to the Distribution Date in respect of
which such Monthly Advance was made: (i) subsequent payments by or on behalf
of the Obligor with respect to such Receivable, (ii) collections of
Liquidation Proceeds with respect to such Receivable if such Receivable
becomes a Liquidated Receivable and (iii) payment of any Purchase Amount with
respect to such Receivable if such Receivable becomes a Purchased Receivable.
If any Receivable shall become a Liquidated Receivable and the Servicer
shall not have been fully reimbursed for Outstanding Monthly Advances with
respect to such Receivable from the sources of funds previously described in
this paragraph, the Servicer shall be entitled to reimbursement from
collections on Receivables other than the Receivable in respect of which such
Outstanding Monthly Advance shall have been made.

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SECTION 4.5. ADDITIONAL DEPOSITS. On or before each Deposit
Date, the Servicer or AFL shall deposit in the Collection Account the
aggregate Purchase Amounts with respect to Administrative Receivables and
Warranty Receivables, respectively. All such deposits of Purchase Amounts
shall be made in immediately available funds. On or before each Draw Date,
the Indenture Trustee shall deposit in the Collection Account any amounts
delivered to the Indenture Trustee by the Collateral Agent.

SECTION 4.6. DISTRIBUTIONS. On each Distribution Date, the
Indenture Trustee shall (based on the information contained in the Servicer's
Certificate delivered on the related Determination Date) distribute the
following amounts and in the order of priority specified below. Within each
order of priority, amounts shall be deemed withdrawn first from Available
Funds, second from the Reserve Account and third from any Deficiency Claim
Amounts.

(i) first, from the Distribution Amount, (A) to the
Trust for payment of any taxes due and unpaid with respect to the Trust,
to the extent such taxes have not been previously paid by AFL or by the
Servicer pursuant to Section 3.8, and (B) then to the Servicer, the
amount of Outstanding Monthly Advances for which the Servicer is
entitled to be reimbursed pursuant to Section 4.4(c) and for which the
Servicer has not previously been reimbursed pursuant to Section 4.8;

(ii) second, from the Distribution Amount then
remaining on deposit in the Collection Account, to the Owner Trustee,
any accrued and unpaid fees of the Owner Trustee in accordance with the
Trust Agreement and including amounts with respect to which the
Administrator is entitled to be reimbursed pursuant to the
Administration Agreement; to the Indenture Trustee, any accrued and
unpaid fees of the Indenture Trustee in accordance with the Indenture;
to any Lockbox Bank, Custodian, Backup Servicer, Collateral Agent,
Indenture Collateral Agent or Administrator (including the Owner Trustee
or Indenture Trustee if acting in any such additional capacity), any
accrued and unpaid fees (in each case, to the extent such Person has not
previously received such amount from the Servicer or AFL), to the Backup
Servicer, any transition expenses (not to exceed $100,000) in accordance
with Section 8.3; PROVIDED, HOWEVER, in the event that the rating
assigned by Standard & Poor's to the claims-paying ability of the
Security Insurer is not AAA, the accrued and unpaid fees of the Owner
Trustee, the Indenture Trustee, the Backup Servicer, the Collateral
Agent, the Indenture Collateral Agent and the Administrator shall be
distributed pursuant to this clause (ii) to the extent such fees are not
in excess of the amount (the "Servicer Fee Threshold") obtained by
dividing (x) .20% of the Aggregate Principal Balance by (y) twelve, and
any accrued and unpaid fees in excess of the Servicer Fee Threshold
remaining to be distributed pursuant to this clause (ii) shall not be
distributed pursuant to this clause (ii) but shall be distributed after
the distributions to be made pursuant to clause (v) below but before the
distributions to be made pursuant to clause (vi) below;

(iii) third, from the Distribution Amount then
remaining on deposit in the Collection Account, to the Servicer, the
Basic Servicing Fee for the related Monthly Period, any Supplemental
Servicing Fees for the related Monthly Period, and any

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amounts specified in Section 4.2(b), to the extent the Servicer has not
reimbursed itself in respect of such amounts pursuant to Section 4.8;

(iv) fourth, from the Distribution Amount then
remaining on deposit in the Collection Account, to the Note Distribution
Account, an amount equal to the Noteholders' Interest Distributable
Amount for such Distribution Date;

(v) fifth, from the Distribution Amount then
remaining on deposit in the Collection Account, to the Note Distribution
Account, an amount equal to the Noteholders' Principal Distributable
Amount for such Distribution Date;

(vi) sixth, from the Distribution Amount then
remaining on deposit in the Collection Account, to the Security Insurer,
to the extent of any amounts owing to the Security Insurer under the
Insurance Agreement and not paid, whether or not AFL is also obligated
to pay such amounts, such amounts representing a portion of the Credit
Enhancement Fee otherwise payable on a subordinated basis to the Seller;
and

(vii) seventh, any remaining Available Funds to the
Collateral Agent for deposit in the Spread Account, such amounts
representing a portion of the Credit Enhancement Fee payable on a
subordinated basis to the Seller.

SECTION 4.7. PRE-FUNDING ACCOUNT.

(a) On the Closing Date, the Indenture Trustee will
deposit, on behalf of the Seller, in the Pre-Funding Account $148,818,732.02
from the proceeds of the sale of the Notes. On each Subsequent Transfer
Date, the Servicer shall instruct the Indenture Trustee in writing:

(i) to withdraw from the Pre-Funding Account the
Spread Account Additional Deposit, if any, on such Subsequent Transfer
Date, and to deliver such funds to the Collateral Agent for deposit in
the Spread Account,

(ii) to withdraw from the Pre-Funding Account the
amount, if any, by which the Requisite Reserve Amount for such
Subsequent Transfer Date exceeds the Reserve Amount, and to deposit such
funds in the Reserve Account,

(iii) to withdraw from the Pre-Funding Account the
Class A-1 Holdback Amount, if any, for such Subsequent Transfer Date,
and to deposit such funds in the Class A-1 Holdback Subaccount,

(iv) to withdraw from the Pre-Funding Account the
amount, if any, on deposit therein in excess of the remaining Pre-Funded
Amount, after giving effect to the withdrawals specified in clauses
(i) - (iii) above, and to distribute such amount to or upon the order of
the Seller upon satisfaction of the conditions set forth in Section 2.4
with respect to such transfer, and

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(v) to withdraw from the Reserve Account an amount
equal to the excess, if any, of the Reserve Amount (after giving effect
to withdrawals from the Reserve Account pursuant to Section 5.1 on the
immediately following Distribution Date, if such Subsequent Transfer
Date falls between a Determination Date and the related Distribution
Date) over the Requisite Reserve Amount for such Subsequent Transfer
Date and to distribute such amount to or upon the order of the
Depositor.

(b) If (x) the Pre-Funded Amount has not been reduced to
zero on the Distribution Date on or immediately following the end of the
Funding Period) or (y) the Pre-Funded Amount has been reduced to $100,000 or
less on any Distribution Date, in either case after giving effect to any
reductions in the Pre-Funded Amount on such Distribution Date pursuant to
paragraph (a) above, the Servicer shall provide written instructions to the
Indenture Trustee to withdraw from the Pre-Funding Account on such
Distribution Date an amount equal to the sum of the Class A-1 Prepayment
Amount, the Class A-2 Prepayment Amount, the Class A-3 Prepayment Amount, the
Class A-4 Prepayment Amount and the Class A-5 Prepayment Amount and deposit
such amount in the Note Distribution Account. Any remaining funds on deposit
in the Pre-Funding Account shall be distributed to the Depositor. If the
funds on deposit in the Pre-Funding Account are less than the amount
described above, then the Servicer shall provide written instructions to the
Indenture Trustee to withdraw the funds on deposit in the Pre-Funding Account
and deposit such funds in the Note Distribution Account and Collection
Account, pro rata in accordance with the amount specified above.

(c) If the Pre-Funded Amount is greater than $100,000 at
the end of the Funding Period, the Seller will deposit into the Note
Distribution Account an amount equal to the sum of the Class A-1 Prepayment
Premium, the Class A-2 Prepayment Premium, the Class A-3 Prepayment Premium,
the Class A-4 Prepayment Premium and the Class A-5 Prepayment Premium;
PROVIDED, HOWEVER, that the obligation of the Seller to make the deposits
referred to in this sentence is expressly limited to the extent of the amount
of Liquidated Damages (as defined in the Closing Date Purchase Agreement)
paid to the Seller by AFL and by the Seller to the Trust.

SECTION 4.8. NET DEPOSITS. Subject to payment by the
Servicer of amounts otherwise payable pursuant to Section 4.6(ii) and
provided that no Servicer Termination Event shall have occurred and be
continuing with respect to such Servicer, the Servicer may make the
remittances to be made by it pursuant to Sections 4.2, 4.4 and 4.5 net of
amounts (which amounts may be netted prior to any such remittance for a
Monthly Period) to be distributed to it pursuant to Sections 3.8, 4.2(b) and
4.6(i); PROVIDED, HOWEVER, that the Servicer shall account for all of such
amounts in the related Servicer's Certificate as if such amounts were
deposited and distributed separately; and, PROVIDED, FURTHER, that if an
error is made by the Servicer in calculating the amount to be deposited or
retained by it, with the result that an amount less than required is
deposited in the Collection Account, the Servicer shall make a payment of the
deficiency to the Collection Account, immediately upon becoming aware, or
receiving notice from the Indenture Trustee, of such error.

SECTION 4.9. STATEMENTS TO NOTEHOLDERS.

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(a) On each Distribution Date, the Indenture Trustee
shall include with each distribution to each Noteholder, the Servicer's
Certificate (which statement shall also have been provided to the Security
Insurer and to each Rating Agency by the Servicer) delivered on the related
Determination Date pursuant to Section 3.9, setting forth for the Monthly
Period relating to such Payment Date the following information with respect
to each class of Notes:

(i) the amount of such distribution allocable to
principal;

(ii) the amount of such distribution allocable to
interest;

(iii) the amount of such distribution payable out of
amounts withdrawn from the Reserve Account, the Class A-1 Holdback
Subaccount, the Spread Account or pursuant to a claim on the Note
Policy;

(iv) the outstanding principal balance of the Notes
(after giving effect to distributions made on such Distribution Date);

(v) the Class A-1 Interest Carryover Shortfall, the
Class A-2 Interest Carryover Shortfall, the Class A-3 Interest Carryover
Shortfall, the Class A-4 Interest Carryover Shortfall, the Class A-5
Interest Carryover Shortfall, and the Noteholders' Principal Carryover
Shortfall, if any, and the change in such amounts from the preceding
statement;

(vi) the amount of fees paid by the Trust with
respect to such Monthly Period;

(vii) for Payment Dates during the Funding Period, the
remaining Pre-Funded Amount, the remaining Reserve Amount and the amount
on deposit in the Class A-1 Holdback Subaccount;

(viii) for the Payment Date on or immediately following
the end of the Funding Period, the Class A-1 Prepayment Amount, the
Class A-2 Prepayment Amount, the Class A-3 Prepayment Amount, Amount,
the Class A-4 Prepayment Amount, the Class A-5 Prepayment Amount, the
Class A-1 Prepayment Premium, the Class A-2 Prepayment Premium, the
Class A-3 Prepayment Premium, the Class A-4 Prepayment Premium and the
Class A-5 Prepayment Premium, if any, and the remaining Reserve Amount
that has not been distributed pursuant to Section 4.6 or to the
Depositor; and

(ix) the Note Pool Factor with respect to each class
of Notes (after giving effect to distributions made on such Payment
Date).

Each amount set forth pursuant to subclauses (i) through (iv) above may be
expressed as a dollar amount per $1,000 of original principal balance of a
Note.

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(b) Note Owners may obtain copies of the statements
delivered by the Indenture Trustee pursuant to subsection (b) above upon
written request to the Indenture Trustee at its Corporate Trust Office
(together with a certification that such Person is a Note Owner and payment
of any expenses associated with the distribution thereof).

SECTION 4.10. INDENTURE TRUSTEE AS AGENT. The Indenture
Trustee, in holding all funds in the Trust Accounts and in making
distributions as provided in this Agreement, shall act solely on behalf of
and as agent for the Noteholders.

SECTION 4.11. ELIGIBLE ACCOUNTS. Any account which is
required to be established as an Eligible Account pursuant to this Agreement
and which ceases to be an Eligible Account shall within five Business Days
(or such longer period, not to exceed 30 days, as to which each Rating Agency
and the Security Insurer may consent) be established as a new account which
shall be an Eligible Account and any cash and/or any investments shall be
transferred to such new account.

ARTICLE V

THE RESERVE ACCOUNT; THE SPREAD ACCOUNT

SECTION 5.1. WITHDRAWALS FROM THE RESERVE ACCOUNT.

(a) In the event that the Servicer's Certificate with
respect to any Determination Date shall state that the amount of Available
Funds with respect to such Determination Date is less than the sum of the
amounts payable on the related Distribution Date pursuant to clauses (i)
through (vii) of Section 4.6, then on the Draw Date immediately preceding
such Distribution Date, the Indenture Trustee, in accordance with written
instructions, shall (i) withdraw amounts on deposit in the Reserve Account,
other than any funds in the Class A-1 Holdback Subaccount (up to the amount
by which the amounts payable on the related Distribution Date pursuant to
clauses (i) through (vii) of Section 4.6 exceed the amount of Available Funds
with respect to such Determination Date) and (ii) deposit the amounts so
withdrawn from the Reserve Account into the Collection Account. On each
Distribution Date, any funds on deposit in the Reserve Account (other than
funds on deposit in the Class A-1 Holdback Subaccount) in excess of the
Requisite Reserve Amount (after giving effect to any withdrawals on the
immediately preceding Draw Date as described above) shall be paid to the
Depositor.

(b) In the event that the Servicer's Certificate with
respect to the Determination Date related to the Class A-1 Final Scheduled
Distribution Date shall state that the unpaid principal balance of the Class
A-1 Notes (after giving effect to the distribution of the Available Funds
pursuant to clauses (i) - (v) of Section 4.6 for such Distribution Date), is
greater than zero, then on the Draw Date immediately preceding such
Distribution Date the Indenture Trustee, in accordance with written
instructions, shall withdraw an amount equal to such unpaid principal balance
from funds on deposit in the Class A-1 Holdback Subaccount (or the amount of
funds on deposit in the Class A-1 Holdback Subaccount, if less) and deposit
such funds in the

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Note Distribution Account for distribution to the Class A-1 Noteholders on
such Distribution Date. Funds in the Class A-1 Holdback Subaccount shall not
be available to pay any other amounts. Any funds remaining in the Class A-1
Holdback Subaccount, after withdrawal of any such amount on the Class A-1
Final Scheduled Distribution Date, shall be released to the Depositor.

SECTION 5.2. WITHDRAWALS FROM SPREAD ACCOUNT.

(a) In the event that the Servicer's Certificate with
respect to any Determination Date shall state that the Deficiency Claim
Amount (as defined below) with respect to the related Distribution Date is
greater than zero, then on the Deficiency Claim Date immediately preceding
such Distribution Date, the Indenture Trustee shall deliver to the Collateral
Agent, the Security Insurer, the Fiscal Agent, if any, the Owner Trustee and
the Servicer, by hand delivery, telex or facsimile transmission, a written
notice (a "Deficiency Notice"). Such Deficiency Notice shall direct the
Collateral Agent to remit such Deficiency Claim Amount (to the extent of the
funds available to be distributed pursuant to the Spread Account Agreement)
to the Indenture Trustee for deposit in the Collection Account. The
"Deficiency Claim Amount" with respect to any Distribution Date shall equal
the excess, if any, of

(i) the amount required to be distributed pursuant
to clauses (i) - (vi) of Section 4.6 (without giving effect to the
limitation of the Distribution Amount specified in each such clause)
over

(ii) the sum of (A) the Actual Funds with respect to
such Distribution Date, plus (B) if such Distribution Date is the Class
A-1 Final Scheduled Distribution Date, the amount, if any, withdrawn
from the Class A-1 Holdback Subaccount and deposited in the Note
Distribution Account pursuant to Section 5.1(b).

(b) any Deficiency Notice shall be delivered by 10:00
a.m., New York City time, on the fourth Business Day preceding such
Distribution Date. The amounts distributed by the Collateral Agent to the
Indenture Trustee pursuant to a Deficiency Notice shall be deposited by the
Indenture Trustee into the Collection Account pursuant to Section 4.5.

ARTICLE VI

THE SELLER

SECTION 6.1. LIABILITY OF SELLER.

(a) The Seller shall be liable hereunder only to the extent
of the obligations in this Agreement specifically undertaken by the Seller and
the representations made by the Seller.

SECTION 6.2. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF
THE OBLIGATIONS OF, SELLER; AMENDMENT OF CERTIFICATE OF INCORPORATION.

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(a) The Seller shall not merge or consolidate with any
other Person or permit any other Person to become the successor to the
Seller's business without (so long as an Insurer Default shall not have
occurred and be continuing) the prior written consent of the Security
Insurer. The certificate of incorporation of any corporation (i) into which
the Seller may be merged or consolidated, (ii) resulting from any merger or
consolidation to which the Seller shall be a party, or (iii) succeeding to
the business of Seller, shall contain provisions relating to limitations on
business and other matters substantively identical to those contained in the
Seller's certificate of incorporation. Any such successor corporation shall
execute an agreement of assumption of every obligation of the Seller under
this Agreement and each Related Document and, whether or not such assumption
agreement is executed, shall be the successor to the Seller under this
Agreement without the execution or filing of any document or any further act
on the part of any of the parties to this Agreement. The Seller shall
provide prompt notice of any merger, consolidation or succession pursuant to
this Section 6.2 to the Owner Trustee, the Indenture Trustee, the Security
Insurer and the Rating Agencies. Notwithstanding the foregoing, the Seller
shall not merge or consolidate with any other Person or permit any other
Person to become a successor to the Seller's business, unless (x) immediately
after giving effect to such transaction, no representation or warranty made
pursuant to Section 2.5 shall have been breached (for purposes hereof, such
representations and warranties shall speak as of the date of the consummation
of such transaction) and no event that, after notice or lapse of time, or
both, would become a Servicer Termination Event shall have occurred and be
continuing, (y) the Seller shall have delivered to the Owner Trustee, the
Indenture Trustee and the Security Insurer an officer's certificate and an
Opinion of Counsel each stating that such consolidation, merger or succession
and such agreement of assumption comply with this Section 6.2 and that all
conditions precedent, if any, provided for in this Agreement relating to such
transaction have been complied with, and (z) the Seller shall have delivered
to the Owner Trustee, the Indenture Trustee and the Security Insurer an
Opinion of Counsel, stating that, in the opinion of such counsel, either (A)
all financing statements and continuation statements and amendments thereto
have been executed and filed that are necessary to preserve and protect the
interest of the Trust in the Trust Property and reciting the details of the
filings or (B) no such action shall be necessary to preserve and protect such
interest.

(b) The Seller hereby agrees that it shall not (i) take
any action prohibited by Article XVI of its certificate of incorporation or
(ii) without the prior written consent of the Owner Trustee and the Indenture
Trustee and (so long as an Insurer Default shall not have occurred and be
continuing) the Security Insurer and without giving prior written notice to
the Rating Agencies, amend Article III, Article IX, Article XIV or Article
XVI of its certificate of incorporation.

SECTION 6.3. LIMITATION ON LIABILITY OF SELLER AND OTHERS.
The Seller and any director or officer or employee or agent of the Seller may
rely in good faith on the advice of counsel or on any document of any kind
prima facie properly executed and submitted by any Person respecting any
matters arising under this Agreement. The Seller shall not be under any
obligation to appear in, prosecute or defend any legal action that is not
incidental to its
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obligations as Seller of the Receivables under this Agreement and that in its
opinion may involve it in any expense or liability.

SECTION 6.4. SELLER MAY OWN NOTES. Each of the Seller and any
Affiliate of the Seller may in its individual or any other capacity become the
owner or pledgee of Notes with the same rights as it would have if it were not
the Seller or an Affiliate thereof except as otherwise specifically provided
herein or in the Related Documents. Notes so owned by or pledged to the Seller
or such Affiliate shall have an equal and proportionate benefit under the
provisions of this Agreement or any Related Document, without preference,
priority, or distinction as among all of the Notes, provided that any Notes
owned by the Seller or any Affiliate thereof, during the time such Notes are
owned by them, shall be without voting rights for any purpose set forth in this
Agreement or any Related Document. The Seller shall notify the Owner Trustee,
the Indenture Trustee and the Security Insurer promptly after it or any of its
Affiliates become the owner or pledgee of a Note.

ARTICLE VII

THE SERVICER

SECTION 7.1. LIABILITY OF SERVICER; INDEMNITIES.

(a) The Servicer (in its capacity as such and, in the
case of AFL, without limitation of its obligations under the Purchase
Agreement) shall be liable hereunder only to the extent of the obligations in
this Agreement specifically undertaken by the Servicer and the
representations made by the Servicer.

(b) The Servicer shall defend, indemnify and hold
harmless the Trust, the Owner Trustee, the Indenture Trustee, the Backup
Servicer, the Security Insurer, their respective officers, directors, agents
and employees, and the Noteholders from and against any and all costs,
expenses, losses, damages, claims and liabilities, including reasonable fees
and expenses of counsel and expenses of litigation arising out of or
resulting from the use, ownership or operation by the Servicer or any
Affiliate thereof of any Financed Vehicle.

(c) The Servicer shall indemnify, defend and hold
harmless the Trust, the Owner Trustee, the Indenture Trustee, the Backup
Servicer, the Security Insurer, their respective officers, directors, agents
and employees and the Noteholders from and against any taxes that may at any
time be asserted against the Trust, the Owner Trustee, the Indenture Trustee,
the Backup Servicer, the Security Insurer or the Noteholders with respect to
the transactions contemplated in this Agreement, including, without
limitation, any sales, gross receipts, withholding, general corporation,
tangible personal property, privilege or license taxes (but not including (i)
income taxes on fees and expenses payable to the Owner Trustee, the Indenture
Trustee, the Backup Servicer or the Security Insurer, (ii) income taxes
arising out of distributions on the Notes or (iii) transfer taxes arising in
connection with transfers of Notes).

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(d) The Servicer shall indemnify, defend and hold
harmless the Trust, the Owner Trustee, the Indenture Trustee, the Backup
Servicer, the Security Insurer, their respective officers, directors, agents
and employees and the Noteholders from and against any and all costs,
expenses, losses, claims, damages, and liabilities to the extent that such
cost, expense, loss, claim, damage, or liability arose out of, or was imposed
upon the Trust, the Owner Trustee, the Indenture Trustee, the Backup
Servicer, the Security Insurer or the Noteholders through the breach of this
Agreement, the negligence, willful misfeasance, or bad faith of the Servicer
in the performance of its duties under this Agreement or by reason of
reckless disregard of its obligations and duties under this Agreement.

(e) The Servicer shall indemnify, defend, and hold
harmless the Owner Trustee, in its individual capacity, its officers,
directors, agents and employees, from and against all costs, taxes (other
than income taxes on fees and expenses payable to the Owner Trustee),
expenses, losses, claims, damages and liabilities arising out of or incurred
in connection with the acceptance or performance of the trusts and duties
contained in the Trust Agreement and the Related Documents, except to the
extent that such cost, taxes (other than income taxes), expense, loss, claim,
damage or liability (A) is due to the willful misfeasance or gross negligence
of the Owner Trustee, or (B) arises from the Owner Trustee's breach of any of
its representations or warranties set forth in Section 6.2 of the Trust
Agreement; PROVIDED, HOWEVER, that amounts payable under this paragraph shall
be increased by the amount of income taxes actually paid by the Owner Trustee
in respect of any indemnity payment unless the Owner Trustee received or can
reasonably be expected to receive a tax deduction for the related loss or
cost.

(f) Indemnification under this Article shall include,
without limitation, reasonable fees and expenses of counsel and expenses of
litigation. If the Servicer has made any indemnity payments pursuant to this
Article and the recipient thereafter collects any of such amounts from
others, the recipient shall promptly repay such amounts collected to the
Servicer, without interest.

(g) AFL, in its individual capacity, hereby acknowledges
that the indemnification provisions in the Purchase Agreement benefiting the
Trust, the Owner Trustee, the Indenture Trustee, the Backup Servicer and the
Security Insurer are enforceable by each hereunder.

SECTION 7.2. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF
THE OBLIGATIONS OF, THE SERVICER OR BACKUP SERVICER.

(a) The Servicer shall not merge or consolidate with any
other person, convey, transfer or lease substantially all its assets as an
entirety to another Person, or permit any other Person to become the
successor to the Servicer's business unless, after the merger, consolidation,
conveyance, transfer, lease or succession, the successor or surviving entity
shall be an Eligible Servicer and shall be capable of fulfilling the duties
of the Servicer contained in this Agreement. Any corporation (i) into which
the Servicer may be merged or consolidated, (ii) resulting from any merger or
consolidation to which the Servicer shall be a party, (iii) which acquires by
conveyance, transfer, or lease substantially all of the assets of the
Servicer, or (iv) succeeding to

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the business of the Servicer, in any of the foregoing cases shall execute an
agreement of assumption to perform every obligation of the Servicer under
this Agreement and, whether or not such assumption agreement is executed,
shall be the successor to the Servicer under this Agreement without the
execution or filing of any paper or any further act on the part of any of the
parties to this Agreement, anything in this Agreement to the contrary
notwithstanding; PROVIDED, HOWEVER, that nothing contained herein shall be
deemed to release the Servicer from any obligation. The Servicer shall
provide notice of any merger, consolidation or succession pursuant to this
Section 7.2(a) to the Owner Trustee, the Indenture Trustee, the Security
Insurer and each Rating Agency. Notwithstanding the foregoing, the Servicer
shall not merge or consolidate with any other Person or permit any other
Person to become a successor to the Servicer's business, unless (x)
immediately after giving effect to such transaction, no representation or
warranty made pursuant to Section 3.6 shall have been breached (for purposes
hereof, such representations and warranties shall speak as of the date of the
consummation of such transaction) and no event that, after notice or lapse of
time, or both, would become an Insurance Agreement Event of Default shall
have occurred and be continuing, (y) the Servicer shall have delivered to the
Owner Trustee, the Indenture Trustee and the Security Insurer an Officer's
Certificate and an Opinion of Counsel each stating that such consolidation,
merger or succession and such agreement of assumption comply with this
Section 7.2(a) and that all conditions precedent, if any, provided for in
this Agreement relating to such transaction have been complied with, and (z)
the Servicer shall have delivered to the Owner Trustee, the Indenture Trustee
and the Security Insurer an Opinion of Counsel, stating that, in the opinion
of such counsel, either (A) all financing statements and continuation
statements and amendments thereto have been executed and filed that are
necessary to preserve and protect the interest of the Owner Trustee in the
Trust Property and reciting the details of the filings or (B) no such action
shall be necessary to preserve and protect such interest.

(b) Any corporation (i) into which the Backup Servicer
may be merged or consolidated, (ii) resulting from any merger or
consolidation to which the Backup Servicer shall be a party, (iii) which
acquires by conveyance, transfer or lease substantially all of the assets of
the Backup Servicer, or (iv) succeeding to the business of the Backup
Servicer, in any of the foregoing cases shall execute an agreement of
assumption to perform every obligation of the Backup Servicer under this
Agreement and, whether or not such assumption agreement is executed, shall be
the successor to the Backup Servicer under this Agreement without the
execution or filing of any paper or any further act on the part of any of the
parties to this Agreement, anything in this Agreement to the contrary
notwithstanding; PROVIDED, HOWEVER, that nothing contained herein shall be
deemed to release the Backup Servicer from any obligation.

SECTION 7.3. LIMITATION ON LIABILITY OF SERVICER, BACKUP
SERVICER AND OTHERS.

(a) Neither the Servicer, the Backup Servicer nor any of
the directors or officers or employees or agents of the Servicer or Backup
Servicer shall be under any liability to the Trust, or the Noteholders,
except as provided in this Agreement, for any action taken or for refraining
from the taking of any action pursuant to this Agreement; PROVIDED, HOWEVER,
that this provision shall not protect the Servicer, the Backup Servicer or
any such person against any liability that would otherwise be imposed by
reason of a breach of this Agreement or willful

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misfeasance, bad faith or negligence (excluding errors in judgment) in the
performance of duties, by reason of reckless disregard of obligations and
duties under this Agreement or any violation of law by the Servicer, Backup
Servicer or such person, as the case may be; PROVIDED FURTHER, that this
provision shall not affect any liability to indemnify the Owner Trustee and
the Indenture Trustee for costs, taxes, expenses, claims, liabilities, losses
or damages paid by the Owner Trustee or the Indenture Trustee, each in its
individual capacity. The Servicer, the Backup Servicer and any director,
officer, employee or agent of the Servicer or Backup Servicer may rely in
good faith on the advice of counsel or on any document of any kind PRIMA
FACIE properly executed and submitted by any Person respecting any matters
arising under this Agreement.

(b) The Backup Servicer shall not be liable for any
obligation of the Servicer contained in this Agreement, and the Owner
Trustee, the Indenture Trustee, the Seller, the Security Insurer and the
Noteholders shall look only to the Servicer to perform such obligations.

SECTION 7.4. DELEGATION OF DUTIES. The Servicer may
delegate duties under this Agreement to an Affiliate of AFL with the prior
written consent of the Security Insurer, the Indenture Trustee, the Owner
Trustee and the Backup Servicer. The Servicer also may at any time perform
the specific duty of repossession of Financed Vehicles through
sub-contractors who are in the business of servicing automotive receivables
and may perform other specific duties through such sub-contractors with the
prior written consent of the Security Insurer (unless an Insurer Default
shall have occurred and be continuing), PROVIDED, HOWEVER, that no such
delegation or sub-contracting duties by the Servicer shall relieve the
Servicer of its responsibility with respect to such duties. So long as no
Insurer Default shall have occurred and be continuing, neither AFL or any
party acting as Servicer hereunder shall appoint any subservicer hereunder
without the prior written consent of the Security Insurer, the Indenture
Trustee, the Owner Trustee and the Backup Servicer.

SECTION 7.5. SERVICER AND BACKUP SERVICER NOT TO RESIGN.
Subject to the provisions of Section 7.2, neither the Servicer nor the Backup
Servicer shall resign from the obligations and duties imposed on it by this
Agreement as Servicer or Backup Servicer except upon a determination that by
reason of a change in legal requirements the performance of its duties under
this Agreement would cause it to be in violation of such legal requirements
in a manner which would have a material adverse effect on the Servicer or the
Backup Servicer, as the case may be, and the Security Insurer (so long as an
Insurer Default shall not have occurred and be continuing) or Note Majority
(if an Insurer Default shall have occurred and be continuing) does not elect
to waive the obligations of the Servicer or the Backup Servicer, as the case
may be, to perform the duties which render it legally unable to act or to
delegate those duties to another Person. Any such determination permitting
the resignation of the Servicer or Backup Servicer shall be evidenced by an
Opinion of Counsel to such effect delivered and reasonably acceptable to the
Owner Trustee, the Indenture Trustee and the Security Insurer (unless an
Insurer Default shall have occurred and be continuing). No resignation of
the Servicer shall become effective until, so long as no Insurer Default
shall have occurred and be continuing, the Backup Servicer or an entity
acceptable to the Security Insurer shall have

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assumed the responsibilities and obligations of the Servicer or, if an
Insurer Default shall have occurred and be continuing, the Backup Servicer or
a successor Servicer that is an Eligible Servicer shall have assumed the
responsibilities and obligations of the Servicer. No resignation of the
Backup Servicer shall become effective until, so long as no Insurer Default
shall have occurred and be continuing, an entity acceptable to the Security
Insurer shall have assumed the responsibilities and obligations of the Backup
Servicer or, if an Insurer Default shall have occurred and be continuing, a
Person that is an Eligible Servicer shall have assumed the responsibilities
and obligations of the Backup Servicer; PROVIDED, HOWEVER, that in the event
a successor Backup Servicer is not appointed within 60 days after the Backup
Servicer has given notice of its resignation and has provided the Opinion of
Counsel required by this Section 7.5, the Backup Servicer may petition a
court for its removal.

SECTION 7.6. ADVANCING OBLIGATIONS OF SUCCESSOR SERVICER. The
successor Servicer, if Norwest Bank Minnesota, National Association, its
successors or assigns, shall have no obligation to perform any repurchase or
advancing obligations, if any, of the Servicer hereunder.

ARTICLE VIII

SERVICER TERMINATION EVENTS

SECTION 8.1. SERVICER TERMINATION EVENT. For purposes of this
Agreement, each of the following shall constitute a "Servicer Termination
Event":

(a) Any failure by the Servicer to deliver to the
Indenture Trustee for distribution to Noteholders any proceeds or
payment required to be so delivered under the terms of this Agreement
(or, if AFL is the Servicer, the Purchase Agreement) that continues
unremedied for a period of two Business Days (one Business Day with
respect to payment of Purchase Amounts) after written notice is received
by the Servicer from the Indenture Trustee or (unless an Insurer Default
shall have occurred and be continuing) the Security Insurer or after
discovery of such failure by a Responsible Officer of the Servicer; or

(b) Failure by the Servicer to deliver to the
Indenture Trustee, the Owner Trustee and (so long as an Insurer Default
shall not have occurred and be continuing) the Security Insurer the
Servicer's Certificate by the fourth Business Day prior to the
Distribution Date, or failure on the part of the Servicer to observe its
covenants and agreements set forth in Section 7.2(a); or

(c) Failure on the part of the Servicer duly to
observe or perform in any material respect any other covenants or
agreements of the Servicer set forth in this Agreement (or, if AFL is
the Servicer, the Purchase Agreement), which failure (i) materially and
adversely affects the rights of Noteholders (determined without regard
to the availability of funds under the Note Policy), or of the Security
Insurer (unless an Insurer Default shall have occurred and be
continuing), and (ii) continues unremedied for a period of 30 days after
the date on which written notice of such failure, requiring the

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same to be remedied, shall have been given to the Servicer by the Owner
Trustee, the Indenture Trustee or the Security Insurer (or, if an
Insurer Default shall have occurred and be continuing, any Noteholder);
or

(d) (i) The commencement of an involuntary case
under the federal bankruptcy laws, as now or hereinafter in effect, or
another present or future federal or state bankruptcy, insolvency or
similar law and such case is not dismissed within 60 days; or (ii) the
entry of a decree or order for relief by a court or regulatory authority
having jurisdiction in respect of the Servicer or the Seller in an
involuntary case under the federal bankruptcy laws, as now or hereafter
in effect, or another present or future, federal or state, bankruptcy,
insolvency or similar law, or appointing a receiver, liquidator,
assignee, trustee, custodian, sequestrator or other similar official of
the Servicer or the Seller or of any substantial part of their
respective properties or ordering the winding up or liquidation of the
affairs of the Servicer or the Seller; or

(e) The commencement by the Servicer or the Seller
of a voluntary case under the federal bankruptcy laws, as now or
hereafter in effect, or any other present or future, federal or state,
bankruptcy, insolvency or similar law, or the consent by the Servicer or
the Seller to the appointment of or taking possession by a receiver,
liquidator, assignee, trustee, custodian, sequestrator or other similar
official of the Servicer or the Seller or of any substantial part of its
property or the making by the Servicer or the Seller of an assignment
for the benefit of creditors or the failure by the Servicer or the
Seller generally to pay its debts as such debts become due or the taking
of corporate action by the Servicer or the Seller in furtherance of any
of the foregoing; or

(f) Any representation, warranty or statement of the
Servicer or the Seller made in this Agreement or any certificate, report
or other writing delivered pursuant hereto shall prove to be incorrect
in any material respect as of the time when the same shall have been
made (excluding, however, any representation or warranty set forth in
Section 2.5(a)), and the incorrectness of such representation, warranty
or statement has a material adverse effect on the Trust and, within 30
days after written notice thereof shall have been given to the Servicer
or the Seller by the Owner Trustee, the Indenture Trustee or the
Security Insurer (or, if an Insurer Default shall have occurred and be
continuing, a Noteholder), the circumstances or condition in respect of
which such representation, warranty or statement was incorrect shall not
have been eliminated or otherwise cured; or

(g) So long as an Insurer Default shall not have
occurred and be continuing, the Security Insurer shall not have
delivered a Servicer Extension Notice pursuant to Section 3.14 (in which
case the Servicer Termination Event will be deemed to have occurred as
of the last day of the term of the most recent Servicer Extension Notice
received); or

(h) So long as an Insurer Default shall not have
occurred and be continuing, an Insurance Agreement Event of Default
shall have occurred; or

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(i) A claim is made under the Note Policy.

SECTION 8.2. CONSEQUENCES OF A SERVICER TERMINATION EVENT.
If a Servicer Termination Event shall occur and be continuing, the Security
Insurer (or, if an Insurer Default shall have occurred and be continuing,
either the Indenture Trustee, the Owner Trustee, or a Note Majority), by
notice given in writing to the Servicer (and to the Indenture Trustee, the
Backup Servicer and the Owner Trustee if given by the Security Insurer or the
Noteholders) may terminate all of the rights and obligations of the Servicer
under this Agreement. On or after (i) the receipt by the Servicer of such
written notice, or (ii) the receipt by the Backup Servicer (or any alternate
successor servicer appointed by the Security Insurer pursuant to Section
8.3(b)) of written notice from the Security Insurer that the Security Insurer
is not extending the Servicer's term pursuant to Section 3.14, all authority,
power, obligations and responsibilities of the Servicer under this Agreement,
whether with respect to the Notes or the Trust Property or otherwise, shall
be terminated and automatically shall pass to, be vested in and become
obligations and responsibilities of the Backup Servicer (or such other
successor Servicer appointed by the Security Insurer); PROVIDED, HOWEVER,
that the successor Servicer shall have no liability with respect to any
obligation which was required to be performed by the terminated Servicer
prior to the date that the successor Servicer becomes the Servicer or any
claim of a third party based on any alleged action or inaction of the
terminated Servicer. The successor Servicer is authorized and empowered by
this Agreement to execute and deliver, on behalf of the terminated Servicer,
as attorney-in-fact or otherwise, any and all documents and other instruments
and to do or accomplish all other acts or things necessary or appropriate to
effect the purposes of such notice of termination, whether to complete the
transfer and endorsement of the Receivables and the other Trust Property and
related documents to show the Owner Trustee as lienholder or secured party on
the related Lien Certificates, or otherwise. The terminated Servicer agrees
to cooperate with the successor Servicer in effecting the termination of the
responsibilities and rights of the terminated Servicer under this Agreement,
including, without limitation, the transfer to the successor Servicer for
administration by it of all cash amounts that shall at the time be held by
the terminated Servicer for deposit, or have been deposited by the terminated
Servicer, in the Collection Account or thereafter received with respect to
the Receivables and the delivery to the successor Servicer of all Receivable
Files, Monthly Records and Collection Records and a computer tape in readable
form as of the most recent Business Day containing all information necessary
to enable the successor Servicer or a successor Servicer to service the
Receivables and the other Trust Property. If requested by the Security
Insurer (unless an Insurer Default shall have occurred and be continuing),
the successor Servicer shall terminate the Lockbox Agreement and direct the
Obligors to make all payments under the Receivables directly to the successor
Servicer (in which event the successor Servicer shall process such payments
in accordance with Section 3.2(e)), or to a lockbox established by the
successor Servicer at the direction of the Security Insurer (unless an
Insurer Default shall have occurred and be continuing), at the successor
Servicer's expense. In addition to any other amounts that are then payable
to the terminated Servicer under this Agreement, the terminated Servicer
shall then be entitled to receive out of Available Funds reimbursements for
any Outstanding Monthly Advances (in accordance with Section 4.4(c)) made
during the period prior to the notice pursuant to this Section 8.2 which
terminates the obligation and rights of the terminated Servicer under this
Agreement. The Owner Trustee, the Indenture Trustee and the successor
Servicer may set

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off and deduct any amounts owed by the terminated Servicer from any amounts
payable to the terminated Servicer pursuant to the preceding sentence. The
terminated Servicer shall grant the Owner Trustee, the Indenture Trustee, the
successor Servicer and the Security Insurer reasonable access to the
terminated Servicer's premises at the terminated Servicer's expense.

SECTION 8.3. APPOINTMENT OF SUCCESSOR.

(a) On and after (i) the time the Servicer receives a
notice of termination pursuant to Section 8.2, or (ii) the resignation of the
Servicer pursuant to Section 7.5, or (iii) the receipt by the Backup Servicer
(or any alternate successor servicer appointed by the Security Insurer
pursuant to Section 8.3(b)) of written notice from the Security Insurer that
the Security Insurer is not extending the Servicer's term pursuant to Section
3.14, the Backup Servicer (unless the Security Insurer shall have exercised
its option pursuant to Section 8.3(b) to appoint an alternate successor
Servicer) shall be the successor in all respects to the Servicer in its
capacity as servicer under this Agreement and the transactions set forth or
provided for in this Agreement, and shall be subject to all the
responsibilities, restrictions, duties, liabilities and termination
provisions relating thereto placed on the Servicer by the terms and
provisions of this Agreement. The Owner Trustee and such successor shall
take such action, consistent with this Agreement, as shall be necessary to
effectuate any such succession. If a successor Servicer is acting as
Servicer hereunder, it shall be subject to termination under Section 8.2 upon
the occurrence of any Servicer Termination Event applicable to it as Servicer
and shall serve from term to term as provided in Section 3.14.

(b) The Security Insurer may (so long as an Insurer
Default shall not have occurred and be continuing) exercise at any time its
right to appoint as Backup Servicer or as successor to the Servicer a Person
other than the Person serving as Backup Servicer at the time, and (without
limiting its obligations under the Note Policy) shall have no liability to
the Owner Trustee, the Indenture Trustee, AFL, the Seller, the Person then
serving as Backup Servicer, any Noteholders, any Note Owner or any other
Person if it does so. Notwithstanding the above, if the Backup Servicer shall
be legally unable or unwilling to act as Servicer and an Insurer Default
shall have occurred and be continuing, the Backup Servicer, the Indenture
Trustee, a Note Majority or the Owner Trustee may petition a court of
competent jurisdiction to appoint any Eligible Servicer as the successor to
the Servicer. Pending appointment pursuant to the preceding sentence, the
Backup Servicer shall act as successor Servicer unless it is legally unable
to do so, in which event the outgoing Servicer shall continue to act as
Servicer until a successor has been appointed and accepted such appointment.
Subject to Section 7.5, no provision of this Agreement shall be construed as
relieving the Backup Servicer of its obligation to succeed as successor
Servicer upon the termination of the Servicer pursuant to Section 8.2 or the
resignation of the Servicer pursuant to Section 7.5. If upon the termination
of the Servicer pursuant to Section 8.2 or the resignation of the Servicer
pursuant to Section 7.5, the Security Insurer appoints a successor Servicer
other than the Backup Servicer, the Backup Servicer shall not be relieved of
its duties as Backup Servicer hereunder.

(c) Any successor Servicer shall be entitled to such
compensation (whether payable out of the Collection Account or otherwise) as
the Servicer would have been entitled to

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under the Agreement if the Servicer had not resigned or been terminated
hereunder, except that the Basic Servicing Fee Rate for such successor
Servicer shall be calculated on a pro rata basis at the rate of 1.00% per
annum for all loans originated under AFL's "Premier" program and 1.50% per
annum for all loans originated under AFL's "Classic" program. If any
successor Servicer is appointed as a result of the Backup Servicer's refusal
(in contravention of the terms of this Agreement) to act as Servicer although
it is legally able to do so, the Security Insurer and such successor Servicer
may agree on reasonable additional compensation to be paid to such successor
Servicer by the Backup Servicer, which additional compensation shall be paid
by the Backup Servicer in its individual capacity and solely out of its own
funds. If any successor Servicer is appointed for any reason other than the
Backup Servicer's refusal to act as Servicer although legally able to do so,
the Security Insurer and such successor Servicer may agree on additional
compensation to be paid to such successor Servicer, which additional
compensation shall be payable as provided in the Spread Account Agreement.
If the Backup Servicer is the successor Servicer, the Backup Servicer shall
be entitled to reimbursement, pursuant to Section 4.6(ii), of reasonable
transition expenses, not in excess of $100,000, incurred in acting as
successor Servicer. In addition, any successor Servicer shall be entitled to
reimbursement, as provided in the Spread Account Agreement, of reasonable
transition expenses incurred in acting as successor Servicer.

SECTION 8.4. NOTIFICATION TO NOTEHOLDERS. Upon any
termination of, or appointment of a successor to, the Servicer pursuant to
this Article VIII, the Indenture Trustee shall give prompt written notice
thereof to Noteholders at their respective addresses appearing in the Note
Register.

SECTION 8.5. WAIVER OF PAST DEFAULTS. The Security Insurer
(or, if an Insurer Default shall have occurred and be continuing, a Note
Majority) may, on behalf of all Holders of Notes, waive any default by the
Servicer in the performance of its obligations hereunder and its
consequences. Upon any such waiver of a past default, such default shall
cease to exist, and any Servicer Termination Event arising therefrom shall be
deemed to have been remedied for every purpose of this Agreement. No such
waiver shall extend to any subsequent or other default or impair any right
consequent thereon. Nothing in this Section 8.5 shall preclude the Security
Insurer (or, if an Insurer Default shall have occurred and be continuing, a
Note Majority) from waiving any default for a period of time or subject to
any contingency or from waiving some but not all of the consequences of such
default.

ARTICLE IX

TERMINATION

SECTION 9.1. OPTIONAL PURCHASE OF ALL RECEIVABLES; LIQUIDATION
OF TRUST ESTATE.

(a) On each Determination Date as of which the Aggregate
Principal Balance is less than 10% of the Original Pool Balance, the Servicer
and the Seller each shall have the

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option to purchase the corpus of the Trust (with the consent of the Security
Insurer, if a claim has previously been made under the Note Policy or if such
purchase would result in a claim on the Note Policy or if such purchase would
result in any amount owing to the Security Insurer remaining unpaid);
PROVIDED, HOWEVER, that the amount to be paid for such purchase (as set forth
in the following sentence) shall be sufficient to pay the full amount of
principal, premium, if any, and interest then due and payable on the Notes.
To exercise such option, the Servicer or the Seller, as the case may be,
shall pay the aggregate Purchase Amounts for the Receivables, plus the
appraised value of any other property (including the right to receive any
future recoveries) held as part of the Trust, such appraisal to be conducted
by an appraiser mutually agreed upon by the Servicer or the Seller, as the
case may be, and the Security Insurer (or the Indenture Trustee, if an
Insurer Default shall have accrued and be continuing), and shall succeed to
all interests in and to the Trust Property. The fees and expenses related to
such appraisal shall be paid by the party exercising the option to purchase.
The party exercising such option to repurchase shall deposit the aggregate
Purchase Amounts for the Receivables and the amount of the appraised value of
any other property held as part of the Trust into the Collection Account, and
the Indenture Trustee shall distribute the amounts so deposited in accordance
with Section 4.6.

(b) Upon any sale of the assets of the Trust pursuant to
Section 8.2 of the Trust Agreement, the Owner Trustee shall instruct the
Indenture Trustee in writing to deposit the proceeds from such sale after all
payments and reserves therefrom have been made (the "Insolvency Proceeds") in
the Collection Account. On the Distribution Date on which the Insolvency
Proceeds are deposited in the Collection Account (or, if such proceeds are
not so deposited on a Distribution Date, on the Distribution Date immediately
following such deposit), the Owner Trustee shall instruct the Indenture
Trustee in writing to make the following deposits (after the application on
such Distribution Date of the Available Funds) from the Insolvency Proceeds:

(i) to the Note Distribution Account, any portion of
the Noteholders' Interest Distributable Amount not otherwise deposited
into the Note Distribution Account on such Distribution Date;

(ii) to the Note Distribution Account, the Class A-1
Prepayment Premium, Class A-2 Prepayment Premium, Class A-3 Prepayment
Premium, Class A-4 Prepayment Premium and Class A-5 Prepayment Premium
(only to the extent of the amount of Liquidated Damages (as defined in
the Purchase Agreement) received by the Trust from the Seller); and

(iii) to the Note Distribution Account, the
outstanding principal balance of the Notes (after giving effect to the
reduction in the outstanding principal balance of the Notes to result
from the deposits otherwise made in the Note Distribution Account on
such Distribution Date).

Any Insolvency Proceeds remaining after the deposits described above shall be
paid, first, to the Security Insurer, to the extent of any amounts owing to
the Security Insurer under the Insurance Agreement and not paid, whether or
not AFL is obligated to pay such amounts, and second to the Collateral Agent
for deposit in the Spread Account.

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(c) Notice of any termination of the Trust shall be given
by the Servicer to the Owner Trustee and the Indenture Trustee as soon as
practicable after the Servicer has received notice thereof.

ARTICLE X

MISCELLANEOUS PROVISIONS

SECTION 10.1. AMENDMENT.

(a) This Agreement may be amended by the Seller, the
Servicer and the Trust, with the prior written consent of the Indenture
Trustee and the Security Insurer (so long as an Insurer Default shall not
have occurred and be continuing) but without the consent of any of the
Noteholders, (i) to cure any ambiguity, (ii) to correct or supplement any
provisions in this Agreement or (iii) for the purpose of adding any provision
to or changing in any manner or eliminating any provision of this Agreement
or of modifying in any manner the rights of the Noteholders; PROVIDED,
HOWEVER, that such action shall not, as evidenced by an Opinion of Counsel,
adversely affect in any material respect the interests of the Noteholders.

(b) This Agreement may also be amended from time to time
by the Seller, the Servicer and the Trust with the prior written consent of
the Indenture Trustee and the Security Insurer (so long as an Insurer Default
shall not have occurred and be continuing) and with the consent of a Note
Majority (which consent of any Holder of a Note given pursuant to this
Section or pursuant to any other provision of this Agreement shall be
conclusive and binding on such Holder and on all future Holders of such Note
and of any Note issued upon the transfer thereof or in exchange thereof or in
lieu thereof whether or not notation of such consent is made upon the Note)
for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Agreement, or of modifying in any
manner the rights of the Holders of Notes; PROVIDED, HOWEVER, that, subject
to the express rights of the Security Insurer under the Related Documents,
including its rights to agree to certain modifications of the Receivables
pursuant to Section 3.2 and its rights to cause the Indenture Collateral
Agent to liquidate the Collateral under the circumstances and subject to the
provisions of Section 5.04 of the Indenture, no such amendment shall (a)
increase or reduce in any manner the amount of, or accelerate or delay the
timing of, collections of payments on Receivables or distributions required
to be made on any Note or the Class A-1 Interest Rate, Class A-2 Interest
Rate, Class A-3 Interest Rate, Class A-4 Interest Rate or Class A-5 Interest
Rate, (b) amend any provisions of Section 4.6 in such a manner as to affect
the priority of payment of interest, principal or premium to Noteholders, or
(c) reduce the aforesaid percentage required to consent to any such amendment
or any waiver hereunder, without the consent of the Holders of all Notes then
outstanding.

(c) Prior to the execution of any such amendment or
consent, the Owner Trustee shall furnish written notification of the
substance of such amendment or consent to each Rating Agency.

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(d) Promptly after the execution of any such amendment or
consent, the Owner Trustee shall furnish written notification of the
substance of such amendment or consent to the Indenture Trustee.

(e) It shall not be necessary for the consent of
Noteholders pursuant to Section 10.1(b) to approve the particular form of any
proposed amendment or consent, but it shall be sufficient if such consent
shall approve the substance thereof. The manner of obtaining such consents
(and any other consents of Noteholders provided for in this Agreement) and of
evidencing the authorization of the execution thereof by Noteholders shall be
subject to such reasonable requirements as the Indenture Trustee may
prescribe, including the establishment of record dates.

(f) Prior to the execution of any amendment to this
Agreement, the Owner Trustee shall be entitled to receive and rely upon an
Opinion of Counsel stating that the execution of such amendment is authorized
or permitted by this Agreement, in addition to the Opinion of Counsel
referred to in Section 10.2(i). The Owner Trustee may, but shall not be
obligated to, enter into any such amendment which affects the Owner Trustee's
own rights, duties or immunities under this Agreement or otherwise.

SECTION 10.2. PROTECTION OF TITLE TO TRUST PROPERTY.

(a) The Servicer shall execute and file such financing
statements and cause to be executed and filed such continuation and other
statements, all in such manner and in such places as may be required by law
fully to preserve, maintain and protect the interest of the Trust, the Owner
Trustee and the Indenture Collateral Agent in the Trust Property and in the
proceeds thereof. The Servicer shall deliver (or cause to be delivered) to
the Owner Trustee, the Indenture Collateral Agent and the Security Insurer
file-stamped copies of, or filing receipts for, any document filed as
provided above, as soon as available following such filing.

(b) Neither the Seller, the Servicer nor the Trust shall
change its name, identity or corporate structure in any manner that would,
could or might make any financing statement or continuation statement filed
by the Seller in accordance with paragraph (a) above seriously misleading
within the meaning of Section 9-402(7) of the UCC, unless it shall have given
the Owner Trustee, the Indenture Trustee and the Security Insurer (so long as
an Insurer Default shall not have occurred and be continuing) at least 60
days' prior written notice thereof, and shall promptly file appropriate
amendments to all previously filed financing statements and continuation
statements.

(c) Each of the Seller, the Servicer and the Trust shall
give the Owner Trustee, the Indenture Trustee and the Security Insurer at
least 60 days' prior written notice of any relocation of its principal
executive office if, as a result of such relocation, the applicable
provisions of the UCC would require the filing of any amendment of any
previously filed financing or continuation statement or of any new financing
statement. The Servicer shall at all times maintain each office from which
it services Receivables and its principal executive office within the United
States of America.

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(d) The Servicer shall maintain accounts and records as
to each Receivable accurately and in sufficient detail to permit (i) the
reader thereof to know at any time the status of such Receivable, including
payments and recoveries made and payments owing (and the nature of each) and
(ii) reconciliation between payments or recoveries on (or with respect to)
each Receivable and the amounts from time to time deposited in the Collection
Account in respect of such Receivable.

(e) The Servicer shall maintain its computer systems so
that, from and after the time of sale under this Agreement of the Receivables
to the Trust, the Servicer's master computer records (including any backup
archives) that refer to any Receivable indicate clearly (with reference to
the particular trust) that the Receivable is owned by the Trust. Indication
of the Trust's ownership of a Receivable shall be deleted from or modified on
the Servicer's computer systems when, and only when, the Receivable has been
paid in full or repurchased by the Seller or Servicer.

(f) If at any time the Seller or the Servicer proposes to
sell, grant a security interest in, or otherwise transfer any interest in
automotive receivables to any prospective purchaser, lender or other
transferee, the Servicer shall give to such prospective purchaser, lender or
other transferee computer tapes, records or print-outs (including any
restored from backup archives) that, if they refer in any manner whatsoever
to any Receivable, indicate clearly that such Receivable has been sold and is
owned by the Trust unless such Receivable has been paid in full or
repurchased by the Seller or Servicer.

(g) The Servicer shall permit the Owner Trustee, the
Indenture Trustee, the Backup Servicer, the Security Insurer and their
respective agents, at any time to inspect, audit and make copies of and
abstracts from the Servicer's records regarding any Receivables or any other
portion of the Trust Property.

(h) The Servicer shall furnish to the Owner Trustee, the
Indenture Trustee, the Backup Servicer and the Security Insurer at any time
upon request a list of all Receivables then held as part of the Trust,
together with a reconciliation of such list to the Schedule of Receivables
and to each of the Servicer's Certificates furnished before such request
indicating removal of Receivables from the Trust. Upon request, the Servicer
shall furnish a copy of any list to the Seller. The Owner Trustee shall hold
any such list and Schedule of Receivables for examination by interested
parties during normal business hours at the Corporate Trust Office upon
reasonable notice by such Persons of their desire to conduct an examination.

(i) The Seller and the Servicer shall deliver to the
Owner Trustee, the Indenture Trustee and the Security Insurer simultaneously
with the execution and delivery of this Agreement and of each amendment
thereto and upon the occurrence of the events giving rise to an obligation to
give notice pursuant to Section 10.2(b) or (c), an Opinion of Counsel either
(a) stating that, in the opinion of such Counsel, all financing statements
and continuation statements have been executed and filed that are necessary
fully to preserve and protect the interest of the Owner Trustee and the
Indenture Collateral Agent in the Receivables and the other

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Trust Property, and reciting the details of such filings or referring to
prior Opinions of Counsel in which such details are given, or (b) stating
that, in the opinion of such counsel, no such action is necessary to preserve
and protect such interest.

(j) The Servicer shall deliver to the Owner Trustee, the
Indenture Trustee and the Security Insurer, within 90 days after the
beginning of each calendar year beginning with the first calendar year
beginning more than three months after the Closing Date, an Opinion of
Counsel, either (a) stating that, in the opinion of such counsel, all
financing statements and continuation statements have been executed and filed
that are necessary fully to preserve and protect the interest of the Trust
and the Indenture Collateral Agent in the Receivables, and reciting the
details of such filings or referring to prior Opinions of Counsel in which
such details are given, or (b) stating that, in the opinion of such counsel,
no action shall be necessary to preserve and protect such interest.

SECTION 10.3. GOVERNING LAW. This Agreement shall be
governed by and construed in accordance with the laws of the State of New
York without regard to the principles of conflicts of laws thereof and the
obligations, rights and remedies of the parties under this Agreement shall be
determined in accordance with such laws.

SECTION 10.4. SEVERABILITY OF PROVISIONS. If any one or
more of the covenants, agreements, provisions or terms of this Agreement
shall be for any reason whatsoever held invalid, then such covenants,
agreements, provisions or terms shall be deemed severable from the remaining
covenants, agreements, provisions or terms of this Agreement and shall in no
way affect the validity or enforceability of the other provisions of this
Agreement or of the Notes or the rights of the Holders thereof.

SECTION 10.5. ASSIGNMENT. Notwithstanding anything to the
contrary contained in this Agreement, except as provided in Section 7.2 or
Section 8.2 (and as provided in the provisions of the Agreement concerning
the resignation of the Servicer and the Backup Servicer), this Agreement may
not be assigned by the Seller or the Servicer without the prior written
consent of the Owner Trustee, the Indenture Trustee and the Security Insurer
(or, if an Insurer Default shall have occurred and be continuing, the Owner
Trustee, the Indenture Trustee and a Note Majority).

SECTION 10.6. THIRD-PARTY BENEFICIARIES. This Agreement
shall inure to the benefit of and be binding upon the parties hereto and
their respective successors and permitted assigns. The Security Insurer and
its successors and assigns shall be a third-party beneficiary to the
provisions of this Agreement, and shall be entitled to rely upon and directly
to enforce such provisions of this Agreement so long as no Insurer Default
shall have occurred and be continuing. Nothing in this Agreement, express or
implied, shall give to any Person, other than the parties hereto and their
successors hereunder, any benefit or any legal or equitable right, remedy or
claim under this Agreement. Except as expressly stated otherwise herein or in
the Related Documents, any right of the Security Insurer to direct, appoint,
consent to, approve of, or take any action under this Agreement, shall be a
right exercised by the Security Insurer in its sole and absolute discretion.

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SECTION 10.7. DISCLAIMER BY SECURITY INSURER. The Security
Insurer may disclaim any of its rights and powers under this Agreement (but
not its duties and obligations under the Note Policy) upon delivery of a
written notice to the Owner Trustee and the Indenture Trustee.

SECTION 10.8. COUNTERPARTS. For the purpose of facilitating
its execution and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts
shall be deemed to be an original, and all of which counterparts shall
constitute but one and the same instrument.

SECTION 10.9. INTENTION OF PARTIES. The execution and
delivery of this Agreement shall constitute an acknowledgment by the Seller,
that it is intended that the assignment and transfer herein contemplated
constitute a sale and assignment outright, and not for security, of the
Receivables and the other Trust Property, conveying good title thereto free
and clear of any Liens, from the Seller to the Trust, and that the
Receivables and the other Trust Property shall not be a part of the Seller's
estate in the event of the insolvency, receivership, conservatorship or the
occurrence of another similar event, of, or with respect to, the Seller. In
the event that such conveyance is determined to be made as security for a
loan made by the Trust to the Seller, the Seller intends that it shall have
granted to the Owner Trustee a first priority security interest in all of the
Seller's right, title and interest in and to the Trust Property conveyed to
the Trust pursuant to Sections 2.1 and 2.4 of this Agreement, and that this
Agreement shall constitute a security agreement under applicable law.

SECTION 10.10. NOTICES. All demands, notices and
communications under this Agreement shall be in writing, personally
delivered, sent by facsimile or mailed by certified mail-return receipt
requested, and shall be deemed to have been duly given upon receipt (a) in
the case of AFL, the Seller or the Servicer, at the following address:
Arcadia Receivables Finance Corp., 7825 Washington Avenue South, Suite 410,
Minneapolis, Minnesota 55439-2435, with copies to: Arcadia Financial Ltd.,
7825 Washington Avenue South, Minneapolis, Minnesota 55439-2435, Attention:
John A. Witham, (b) in the case of the Owner Trustee, Rodney Square North,
1100 North Market Street, Wilmington, Delaware 19890, Attention: Corporate
Trust Administration, (c) in the case of the Indenture Trustee and, for so
long as the Indenture Trustee is the Backup Servicer or the Collateral Agent,
at Sixth Street and Marquette Avenue, Minneapolis, Minnesota 55479-0070,
Attention: Corporate Trust Services--Asset Backed Administration, (d) in the
case of each Rating Agency, 99 Church Street, New York, New York 10007 (for
Moody's) and 26 Broadway, New York, New York 10004 (for Standard & Poor's),
Attention: Asset-Backed Surveillance, and (e) in the case of the Security
Insurer, Financial Security Assurance Inc., 350 Park Avenue, New York, New
York 10022, Attention: Surveillance Department, Telex No.: (212) 688-3103,
Confirmation: (212) 826-0100, Telecopy Nos.: (212) 339-3518, (212) 339-3529
(in each case in which notice or other communication to Financial Security
refers to an Event of Default, a claim on the Note Policy or with respect to
which failure on the part of Financial Security to respond shall be deemed to
constitute consent or acceptance, then a copy of such notice or other
communication should also be sent to the attention of the General Counsel and
the Head-Financial Guaranty Group "URGENT

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MATERIAL ENCLOSED"), or at such other address as shall be designated by any
such party in a written notice to the other parties. Any notice required or
permitted to be mailed to a Noteholder shall be given by first class mail,
postage prepaid, at the address of such Holder as shown in the Note Register,
and any notice so mailed within the time prescribed in this Agreement shall
be conclusively presumed to have been duly given, whether or not the
Noteholder receives such notice.

SECTION 10.11. LIMITATION OF LIABILITY. It is expressly
understood and agreed by the parties hereto that (a) this Agreement is
executed and delivered by Wilmington Trust Company, not individually or
personally but solely as Owner Trustee of the Trust under the Trust
Agreement, in the exercise of the powers and authority conferred and vested
in it, (b) each of the representations, undertakings and agreements herein
made on the part of the Trust is made and intended not as personal
representations, undertakings and agreements by Wilmington Trust Company but
is made and intended for the purpose for binding only the Trust, (c) nothing
herein contained shall be construed as creating any liability on Wilmington
Trust Company, individually or personally, to perform any covenant either
expressed or implied contained herein, all such liability, if any, being
expressly waived by the parties to this Agreement and by any person claiming
by, through or under them and (d) under no circumstances shall Wilmington
Trust Company be personally liable for the payment of any indebtedness or
expenses of the Trust or be liable for the breach or failure of any
obligation, representation, warranty or covenant made or undertaken by the
Trust under this Agreement or any related documents.

[SIGNATURE PAGE FOLLOWS]

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

ISSUER:
ARCADIA AUTOMOBILE RECEIVABLES
TRUST, 1999-A

By WILMINGTON TRUST COMPANY,
not in its individual capacity but solely
as Owner Trustee

By /s/ Thomas P. Laskaris
------------------------------------
Name: Thomas P. Laskaris
Title: Vice President

SELLER:
ARCADIA RECEIVABLES FINANCE CORP.

By /s/ John A. Witham
------------------------------------
Name: John A. Witham
Title: Senior Vice President and
Chief Financial Officer

ARCADIA FINANCIAL LTD.
In its individual capacity and as Servicer

By /s/ John A. Witham
------------------------------------
Name: John A. Witham
Title: Executive Vice President and
Chief Financial Officer

BACKUP SERVICER:

NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION

By /s/ Eileen R. O'Connor
------------------------------------
Name: Eileen R. O'Connor
Title: Corporate Trust Officer
Acknowledged and Accepted:
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION,
not in its individual capacity but as
Indenture Trustee

By /s/ Eileen R. O'Connor
---------------------------------
Name: Eileen R. O'Connor
Title: Corporate Trust Officer

<PAGE>

SCHEDULE A

REPRESENTATIONS AND WARRANTIES OF SELLER AND AFL

1. CHARACTERISTICS OF RECEIVABLES. Each Receivable (A)
was originated by a Dealer for the retail sale of a Financed Vehicle in the
ordinary course of such Dealer's business and such Dealer had all necessary
licenses and permits to originate Receivables in the state where such Dealer
was located, was fully and properly executed by the parties thereto, was
purchased by AFL from such Dealer under an existing Dealer Agreement with AFL
and was validly assigned by such Dealer to AFL, (B) contains customary and
enforceable provisions such as to render the rights and remedies of the
holder thereof adequate for realization against the collateral security, and
(C) is fully amortizing and provides for level monthly payments (provided
that the payment in the first Monthly Period and the final Monthly Period of
the life of the Receivable may be minimally different from the level payment)
which, if made when due, shall fully amortize the Amount Financed over the
original term.

2. NO FRAUD OR MISREPRESENTATION. Each Receivable was
originated by a Dealer and was sold by the Dealer to AFL without any fraud or
misrepresentation on the part of such Dealer in either case.

3. COMPLIANCE WITH LAW. All requirements of applicable
federal, state and local laws, and regulations thereunder (including, without
limitation, usury laws, the Federal Truth-in-Lending Act, the Equal Credit
Opportunity Act, the Fair Credit Billing Act, the Fair Credit Reporting Act,
the Fair Debt Collection Practices Act, the Federal Trade Commission Act, the
Magnuson-Moss Warranty Act, the Federal Reserve Board's Regulations "B" and
"Z", the Soldiers' and Sailors' Civil Relief Act of 1940, the Minnesota Motor
Vehicle Retail Installment Sales Act, and state adaptations of the National
Consumer Act and of the Uniform Consumer Credit Code and other consumer
credit laws and equal credit opportunity and disclosure laws) in respect of
all of the Receivables and each and every sale of Financed Vehicles, have
been complied with in all material respects, and each Receivable and the sale
of the Financed Vehicle evidenced by each Receivable complied at the time it
was originated or made and now complies in all material respects with all
applicable legal requirements.

4. ORIGINATION. Each Receivable was originated in the
United States.

5. BINDING OBLIGATION. Each Receivable represents the
genuine, legal, valid and binding payment obligation of the Obligor thereon,
enforceable by the holder thereof in accordance with its terms, except (A) as
enforceability may be limited by bankruptcy, insolvency, reorganization or
similar laws affecting the enforcement of creditors' rights generally and by
equitable limitations on the availability of specific remedies, regardless of
whether such enforceability is considered in a proceeding in equity or at law
and (B) as such Receivable may be modified by the application after the
Initial Cutoff Date or any Subsequent Cutoff Date, as the case may be, of the
Soldiers' and Sailors' Civil Relief Act of 1940, as amended; and all parties
to each Receivable had full legal capacity to execute and deliver such
Receivable and all other documents related thereto and to grant the security
interest purported to be granted thereby.

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<PAGE>

6. NO GOVERNMENT OBLIGOR. No Obligor is the United
States of America or any State or any agency, department, subdivision or
instrumentality thereof.

7. OBLIGOR BANKRUPTCY. At the Initial Cutoff Date or
each Subsequent Cutoff Date, as applicable, no Obligor had been identified on
the records of AFL as being the subject of a current bankruptcy proceeding.

8. SCHEDULE OF RECEIVABLES. The information set forth
in the Schedule of Receivables has been produced from the Electronic Ledger
and was true and correct in all material respects as of the close of business
on the Initial Cutoff Date or each Subsequent Cutoff Date, as applicable.

9. MARKING RECORDS. By the Closing Date or by each
Subsequent Transfer Date, the Seller will have caused the portions of the
Electronic Ledger relating to the Receivables to be clearly and unambiguously
marked to show that the Receivables constitute part of the Trust Property and
are owned by the Trust in accordance with the terms of the Agreement.

10. COMPUTER TAPE. The Computer Tape made available by
the Seller to the Owner Trustee on the Closing Date or on each Subsequent
Transfer Date was complete and accurate as of the Initial Cutoff Date or
Subsequent Cutoff Date, as applicable, and includes a description of the same
Receivables that are described in the Schedule of Receivables.

11. ADVERSE SELECTION. No selection procedures adverse
to the Noteholders were utilized in selecting the Receivables from those
receivables owned by AFL which met the selection criteria contained in the
Sale and Servicing Agreement.

12. CHATTEL PAPER. The Receivables constitute chattel
paper within the meaning of the UCC as in effect in the States of Minnesota
and New York.

13. ONE ORIGINAL. There is only one original executed
copy of each Receivable.

14. RECEIVABLE FILES COMPLETE. There exists a Receivable
File pertaining to each Receivable and such Receivable File contains (a) a
fully executed original of the Receivable, (b) a certificate of insurance,
application form for insurance signed by the Obligor, or a signed
representation letter from the Obligor named in the Receivable pursuant to
which the Obligor has agreed to obtain physical damage insurance for the
related financial vehicle, or copies thereof, (c) the original Lien
Certificate or application therefor and (d) a credit application signed by
the Obligor, or a copy thereof. Each of such documents which is required to
be signed by the Obligor has been signed by the Obligor in the appropriate
spaces. All blanks on any form have been properly filled in and each form
has otherwise been correctly prepared. The complete Receivable File for each
Receivable currently is in the possession of the Custodian.

15. RECEIVABLES IN FORCE. No Receivable has been
satisfied, subordinated or rescinded, and the Financed Vehicle securing each
such Receivable has not been released from

S-A-2

<PAGE>

the lien of the related Receivable in whole or in part. No provisions of any
Receivable have been waived, altered or modified in any respect since its
origination, except by instruments or documents identified in the Receivable
File. No Receivable has been modified as a result of application of the
Soldiers' and Sailors' Civil Relief Act of 1940, as amended.

16. LAWFUL ASSIGNMENT. No Receivable was originated in,
or is subject to the laws of, any jurisdiction the laws of which would make
unlawful, void or voidable the sale, transfer and assignment of such
Receivable under this Agreement or pursuant to transfers of the Notes.

17. GOOD TITLE. No Receivable has been sold,
transferred, assigned or pledged by AFL to any Person other than the Seller
or by the Seller to any Person other than the Trust; immediately prior to the
conveyance of the Receivables pursuant to the Purchase Agreement, AFL was the
sole owner of and had good and indefeasible title thereto, free and clear of
any Lien; immediately prior to the conveyance of the Receivables to the Trust
pursuant to this Agreement or any Subsequent Purchase Agreement, as
applicable, the Seller was the sole owner thereof and had good and
indefeasible title thereto, free of any Lien and, upon execution and delivery
of this Agreement or any Subsequent Purchase Agreement, as applicable, by the
Seller, the Trust shall have good and indefeasible title to and will be the
sole owner of such Receivables, free of any Lien. No Dealer has a
participation in, or other right to receive, proceeds of any Receivable.
Neither AFL nor the Seller has taken any action to convey any right to any
Person that would result in such Person having a right to payments received
under the related Insurance Policies or the related Dealer Agreements or
Dealer Assignments or to payments due under such Receivables.

18. SECURITY INTEREST IN FINANCED VEHICLE. Each
Receivable created or shall create a valid, binding and enforceable first
priority security interest in favor of AFL in the Financed Vehicle. The Lien
Certificate and original certificate of title for each Financed Vehicle show,
or if a new or replacement Lien Certificate is being applied for with respect
to such Financed Vehicle the Lien Certificate will be received within 180
days of the Closing Date or any Subsequent Transfer Date, as applicable, and
will show AFL named as the original secured party under each Receivable as
the holder of a first priority security interest in such Financed Vehicle.
With respect to each Receivable for which the Lien Certificate has not yet
been returned from the Registrar of Titles, AFL has received written evidence
from the related Dealer that such Lien Certificate showing AFL as first
lienholder has been applied for. AFL's security interest has been validly
assigned by AFL to the Seller and by the Seller to the Owner Trustee pursuant
to this Agreement or any Subsequent Transfer Agreement, as applicable.
Immediately after the sale, transfer and assignment thereof to the Trust,
each Receivable will be secured by an enforceable and perfected first
priority security interest in the Financed Vehicle in favor of the Trust as
secured party, which security interest is prior to all other liens upon and
security interests in such Financed Vehicle which now exist or may hereafter
arise or be created (except, as to priority, for any lien for taxes, labor or
materials affecting a Financed Vehicle). As of the Initial Cutoff Date or
each Subsequent Cutoff Date, as applicable, there were no Liens or claims for
taxes, work, labor or materials affecting a Financed Vehicle which are or may
be Liens prior or equal to the lien of the related Receivable.

S-A-3

<PAGE>

19. ALL FILINGS MADE. All filings (including, without
limitation, UCC filings) required to be made by any Person and actions
required to be taken or performed by any Person in any jurisdiction to give
the Trust a first priority perfected lien on, or ownership interest in, the
Receivables and the proceeds thereof and the other Trust Property have been
made, taken or performed.

20. NO IMPAIRMENT. Neither AFL nor the Seller has done
anything to convey any right to any Person that would result in such Person
having a right to payments due under the Receivable or otherwise to impair
the rights of the Trust, the Indenture Trustee and the Noteholders in any
Receivable or the proceeds thereof.

21. RECEIVABLE NOT ASSUMABLE. No Receivable is assumable
by another Person in a manner which would release the Obligor thereof from
such Obligor's obligations to the Seller with respect to such Receivable.

22. NO DEFENSES. No Receivable is subject to any right
of rescission, setoff, counterclaim or defense and no such right has been
asserted or threatened with respect to any Receivable.

23. NO DEFAULT. There has been no default, breach,
violation or event permitting acceleration under the terms of any Receivable
(other than payment delinquencies of not more than 30 days), and no condition
exists or event has occurred and is continuing that with notice, the lapse of
time or both would constitute a default, breach, violation or event
permitting acceleration under the terms of any Receivable, and there has been
no waiver of any of the foregoing. As of the Initial Cutoff Date or any
Subsequent Cutoff Date, as applicable, no Financed Vehicle had been
repossessed.

24. INSURANCE. As of the Closing Date or as of any
Subsequent Transfer Date, as applicable, each Financed Vehicle is covered by
a comprehensive and collision insurance policy (i) in an amount at least
equal to the lesser of (a) its maximum insurable value or (b) the principal
amount due from the Obligor under the related Receivable, (ii) naming AFL as
loss payee and (iii) insuring against loss and damage due to fire, theft,
transportation, collision and other risks generally covered by comprehensive
and collision coverage. Each Receivable requires the Obligor to maintain
physical loss and damage insurance, naming AFL and its successors and assigns
as additional insured parties, and each Receivable permits the holder thereof
to obtain physical loss and damage insurance at the expense of the Obligor if
the Obligor fails to do so. No Financed Vehicle was or had previously been
insured under a policy of Force-Placed Insurance on the Cutoff Date.

25. PAST DUE. At Initial Cutoff Date or any Subsequent
Cutoff Date, as applicable, no Receivable was more than 30 days past due.

26. REMAINING PRINCIPAL BALANCE. At the Initial Cutoff
Date or any Subsequent Cutoff Date, as applicable, each Receivable had a
remaining principal balance equal

S-A-4

<PAGE>

to or greater than $500.00, and the Principal Balance of each Receivable set
forth in the Schedule of Receivables is true and accurate in all material
respects.

27. FINAL SCHEDULED MATURITY DATE. No Receivable has a
final scheduled maturity later than May 31, 2006.

28. CERTAIN CHARACTERISTICS. (A) Each Initial Receivable
had a remaining maturity, as of the Initial Cutoff Date, of at least 3 months
but not more than 84 months; (B) each Initial Receivable had an original
maturity of at least 12 months but not more than 84 months; (C) each Initial
Receivable had an original principal balance of at least $3,129.00 and not
more than $49,772.31; (D) each Initial Receivable had a remaining Principal
Balance as of the Initial Cutoff Date of at least $554.48 and not more than
$49,772.31; (E) each Initial Receivable has an Annual Percentage Rate of at
least 7.50% and not more than 23.99%; (F) no Initial Receivable was more than
30 days past due as of the Initial Cutoff Date; (G) no funds have been
advanced by the Seller, the Servicer, any Dealer, or anyone acting on behalf
of any of them in order to cause any Receivable to qualify under clause (F)
above; (H) no Initial Receivable has a final scheduled payment date on or
before June 1, 1999; (I) the Principal Balance of each Receivable set forth
in Schedule of Receivables is true and accurate in all material respects as
of the Initial Cutoff Date; (J) 13.02% of the Initial Receivables, by
principal balance as of the Initial Cutoff Date, was attributable to loans
for the purchase of new Financed Vehicles and 86.98% of the Initial
Receivables was attributable to loans for the purchase of used Financed
Vehicles; (K) not more than 3.64% of the Principal Balance of the Initial
Receivables as of the Initial Cutoff Date had an Annual Percentage Rate in
excess of 21.00%; (L) none of such Receivables represented loans in excess of
$50,000.00; (M) not more than 0.05% of the Aggregate Principal Balance of
such Receivables represented loans with original terms greater than 72
months; and (N) not more than 1.21% of the Aggregate Principal Balance of
such Receivables represented loans secured by Financed Vehicles that
previously secured a loan originated by AFL with an obligor other than the
current Obligor.

S-A-5

<PAGE>

SCHEDULE B

SERVICING POLICIES AND PROCEDURES

NOTE: APPLICABLE TIME PERIODS WILL VARY BY STATE.

I. PAST DUE PAYMENT COLLECTIONS

A. Past due payment notices are generated and sent on the 9th and
15th day of delinquency.

B. The collection officer will make at least one phone call by day
10.

C. The collection officer will write a personalized collection
letter by day 15 and will have made at least two collection
phone calls.

D. The collection officer will make at least two (2) more phone
calls and write at least one (1) more letter between days 15 and
30.

E. The collection officer will send a final demand letter on or
about 31 days past due. The letter will allow 10 days to bring
the account current.

F. The collection officer will recommend either repossession, or
some form of reasonable forbearance (e.g., one extension in
exchange for a partial payment for cooperative debtors).

All phone calls and correspondence will require a brief
handwritten comment in the credit file. The date of each comment and the
officer's initials will be documented.

II. PAYMENT EXTENSIONS

Extensions of monthly payments must be granted only after careful
consideration and analysis. The extension is not to be used to mask
delinquencies, but rather assist in the collection and correction of
verifiable and legitimate customer problems. All extensions or modifications
require the prior approval of the Branch Manager. In the absence of the
Branch Manager, the Executive Vice President's or the President's approval is
required.

Possible qualifications for extensions to cooperative and
trustworthy customers include:

(a) Medical problems - verifiable;

(b) Temporary work loss - verifiable;

S-B-1

<PAGE>

(d) Bankruptcy trustee cram down.

III. REPOSSESSIONS

Repossessions of the collateral is only to be pursued after
exhausting all other collection efforts. Once the decision is made to attempt
repossession, the following process is to be utilized:

(a) Decision on repossession.

(b) If the customer is cooperative, attempt repossession by Servicer
personnel. If uncooperative or unable to locate, utilize a
third party collection agency.

(c) Once secured, complete an inventory of personal belongings and
brief condition report on the vehicle. Return the property to
the customer and obtain a signed statement of inventory receipt.

(d) If the repossession is involuntary, notify the police department
in the city where the repossession occurred.

(e) Notify the originating dealership of repossession as soon as
possible and request a refund of all rebateable dealer adds.

(f) Send written notification to the customer regarding a 10-day
notice to redeem the loan.

(g) Decide on proper method of liquidation and plan for sale after
the 10-day redemption period has expired.

(h) If consignment, set 21-day maximum term with the dealership,
after which time, if unsold, the vehicle is returned to the
Servicer.

If wholesale, contact the appropriate auction company to make
arrangements for immediate sale.

If private sale, place advertisements in the proper media and
attempt to liquidate within one week.

(i) After the collateral is liquidated, send the debtor a letter
stating the amount of deficiency. Continued collection efforts
will take the form of voluntary payments or involuntary payments
via judgment, garnishment, and levy.

IV. CHARGE OFFS

S-B-2

<PAGE>

It is the responsibility of the collection officer to diligently
pursue any and all deficiencies which result from problem accounts. All
avenues of potential collection will be pursued, ranging from cash
settlements to amortized deficiency notes to judgment and garnishment.

A complete list of all charge offs will be maintained. The list
will be categorized into "active" and "dead" accounts. A brief action plan
will be shown for each active account. Accounts will only be designated as
"dead" with the recommendation of the collection officer and approval of the
Executive Vice President. The "dead" designation will only be granted for
those accounts which hold no potential for recovery (e.g., discharged Chapter
7).

Active charge off action plans will be presented at least monthly
to the Executive Vice President. Decisions regarding pursuit of legal action
and incurring potential legal fees will need prior approval by the Executive
Vice President.

V. DEFICIENCY COLLECTIONS

(a) Establish the exact amount of the deficiency, using the
repossession worksheet. This includes all fees and per diem
interest.

(b) Attempt verbal and/or written negotiations with the debtor to
settle the deficiency.

(c) Send a certified letter to the debtor and cosigner(s) stating
that we need $X by ___________, 19__ (7-10 days), or we will
begin legal action. If no reasonable response is received move
to (d).

(d) Complete a General Claim Form. Send the form to [applicable
local court].

(e) We should receive notification of the court's decision within
one week. If we receive notice of judgment, it is possible that
the debtor will pay the court and the court will then pay the
Servicer. As this usually does not happen, proceed to exercise
on the judgment as follows:

(1) File both the Transcript of Judgment and the Affidavit
of Identification of Judgment Debtor with [appropriate
office].

(2) Order a Writ of Execution from [appropriate office].

(3) "Service" of the Writ of Execution is handled by the
Sheriff or an Attorney.

S-B-3

<PAGE>

RECEIVABLES PURCHASE AGREEMENT AND ASSIGNMENT

between

ARCADIA RECEIVABLES FINANCE CORP.
Purchaser

and

ARCADIA FINANCIAL LTD.
Seller

dated as of

March 1, 1999

<PAGE>

TABLE OF CONTENTS

PAGE
----
<S> <C>

ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
SECTION 1.1. General . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
SECTION 1.2. Specific Terms. . . . . . . . . . . . . . . . . . . . . . . . .2
SECTION 1.3. Usage of Terms. . . . . . . . . . . . . . . . . . . . . . . . .4
SECTION 1.4. Certain References. . . . . . . . . . . . . . . . . . . . . . .5
SECTION 1.5. No Recourse . . . . . . . . . . . . . . . . . . . . . . . . . .5
SECTION 1.6. Action by or Consent of Noteholders . . . . . . . . . . . . . .5
SECTION 1.7. Material Adverse Effect . . . . . . . . . . . . . . . . . . . .5

ARTICLE II CONVEYANCE OF THE INITIAL RECEIVABLES AND THE INITIAL OTHER CONVEYED
PROPERTY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
SECTION 2.1. Conveyance of the Initial Receivables and the Initial
Other Conveyed Property . . . . . . . . . . . . . . . . . . . .5
SECTION 2.2. Purchase Price of Initial Receivables . . . . . . . . . . . . .6
SECTION 2.3. Conveyance of Subsequent Receivables and Subsequent Other
Conveyed Property . . . . . . . . . . . . . . . . . . . . . . .6

ARTICLE III REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . .8
SECTION 3.1. Representations and Warranties of AFL . . . . . . . . . . . . .8
SECTION 3.2. Representations and Warranties of ARFC. . . . . . . . . . . . 10

ARTICLE IV COVENANTS OF AFL . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 4.1. Protection of Title of ARFC and the Trust . . . . . . . . . . 12
SECTION 4.2. Other Liens or Interests. . . . . . . . . . . . . . . . . . . 14
SECTION 4.3. Costs and Expenses. . . . . . . . . . . . . . . . . . . . . . 14
SECTION 4.4. Indemnification . . . . . . . . . . . . . . . . . . . . . . . 14

ARTICLE V REPURCHASES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 5.1. Repurchase of Receivables Upon Breach of Warranty . . . . . . 16
SECTION 5.2. Reassignment of Purchased Receivables . . . . . . . . . . . . 17
SECTION 5.3. Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

ARTICLE VI
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 6.1. Liability of AFL. . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 6.2. Failure of AFL to Sell Subsequent Receivables . . . . . . . . 17
SECTION 6.3. Merger or Consolidation of AFL or ARFC. . . . . . . . . . . . 18

-i-

<PAGE>

SECTION 6.4. Limitation on Liability of AFL and Others . . . . . . . . . . 19
SECTION 6.5. AFL May Own Notes . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 6.6. Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 6.7. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 6.8. Merger and Integration. . . . . . . . . . . . . . . . . . . . 20
SECTION 6.9. Severability of Provisions. . . . . . . . . . . . . . . . . . 20
SECTION 6.10. Intention of the Parties. . . . . . . . . . . . . . . . . . . 20
SECTION 6.11. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 6.12. Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 6.13 Conveyance of the Initial Receivables and the Initial
Other Conveyed Property to the Trust. . . . . . . . . . . . . 21
SECTION 6.14. Nonpetition Covenant. . . . . . . . . . . . . . . . . . . . . 21

</TABLE>

-ii-

<PAGE>

SCHEDULES

<TABLE>

<S> <C>
Schedule A -- Schedule of Initial Receivables

Schedule B -- Representations and Warranties of AFL
</TABLE>

-iii-

<PAGE>

RECEIVABLES PURCHASE AGREEMENT AND ASSIGNMENT

THIS RECEIVABLES PURCHASE AGREEMENT AND ASSIGNMENT, dated as of
March 1, 1999, executed between Arcadia Receivables Finance Corp., a Delaware
corporation, as purchaser ("ARFC"), and Arcadia Financial Ltd., a Minnesota
corporation, as seller ("AFL").

W I T N E S S E T H:

WHEREAS, ARFC has agreed to purchase from AFL and AFL, pursuant
to one or more Assignments pursuant to an Amended and Restated Receivables
Purchase Agreement and Assignment, dated as of July 21, 1998, between ARFC and
AFL (the "BOA Purchase Agreement"), has transferred to ARFC certain of the
Initial Receivables and Initial Other Conveyed Property;

WHEREAS, ARFC has agreed to purchase from AFL and AFL,
pursuant to this Agreement, is transferring to ARFC the remainder of the
Initial Receivables and Initial Other Conveyed Property; and

WHEREAS, ARFC has agreed to purchase (or has purchased) from
AFL and AFL has agreed to transfer (or has transferred) to ARFC the
Subsequent Receivables and Subsequent Other Conveyed Property in an amount
set forth herein.

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

ARTICLE I
DEFINITIONS

SECTION 1.1. GENERAL. The specific terms defined in this
Article include the plural as well as the singular. The words "herein,"
"hereof" and "hereunder" and other words of similar import refer to this
Agreement as a whole and not to any particular Article, Section or other
subdivision, and Article, Section, Schedule and Exhibit references, unless
otherwise specified, refer to Articles and Sections of and Schedules and
Exhibits to this Agreement. Capitalized terms used herein without definition
shall have the respective meanings assigned to such terms in the Sale and
Servicing Agreement, dated as of March 1, 1999, by and among Arcadia
Receivables Finance Corp. (as Seller), Arcadia Financial Ltd. (in its
individual capacity and as Servicer), Arcadia Automobile Receivables Trust,
1999-A (as Issuer) (the "Trust") and

<PAGE>

Norwest Bank Minnesota, National Association, a national banking association
(as Backup Servicer).

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

"AGREEMENT" shall mean this Receivables Purchase Agreement and
Assignment and all amendments hereof and supplements hereto.

"CLOSING DATE" means March 17, 1999.

"INDENTURE TRUSTEE" means Norwest Bank Minnesota, National
Association, a national banking association, as trustee and indenture collateral
agent under the Indenture, dated as of March 1, 1999, between the Trust, the
Indenture Trustee and the Indenture Collateral Agent.

"INITIAL OTHER CONVEYED PROPERTY" means all monies at any
time paid or payable on the Initial Receivables or in respect thereof after
the Initial Cutoff Date (including amounts due on or before the Initial
Cutoff Date but received by AFL after the Initial Cutoff Date), an assignment
of security interests in the Financed Vehicles, the Collection Account
(including all Eligible Investments therein and all proceeds therefrom), the
Subcollection Account, the Insurance Policies and any proceeds from any
Insurance Policies relating to the Initial Receivables, the Obligors or the
related Financed Vehicles, including rebates of premiums, rights under any
Collateral Insurance and any Force-Placed Insurance relating to the Initial
Receivables, an assignment of the rights of AFL against Dealers with respect
to the Initial Receivables under the Dealer Agreements and the Dealer
Assignments, all items contained in the Receivable Files relating to the
Initial Receivables, any and all other documents or electronic records that
AFL keeps on file in accordance with its customary procedures relating to the
Initial Receivables, the Obligors or the related Financed Vehicles, property
(including the right to receive future Liquidation Proceeds) that secures an
Initial Receivable and that has been acquired by or on behalf of the Trust
pursuant to liquidation of such Initial Receivable, and all proceeds of the
foregoing.

"INITIAL RECEIVABLES" means the Receivables listed on the
Schedule of Initial Receivables attached hereto as Schedule A.

"INITIAL SPREAD ACCOUNT DEPOSIT" means $0.

"INSURANCE AGREEMENT" means the Insurance and Indemnity
Agreement, dated as of March 17, 1999, among the Security Insurer, the Trust,
ARFC and AFL.

-2-

<PAGE>

"LIQUIDATED DAMAGES" means an amount equal to the sum of the
Class A-1 Prepayment Premium, the Class A-2 Prepayment Premium, the Class A-3
Prepayment Premium, the Class A-4 Prepayment Premium and the Class A-5
Prepayment Premium.

"OTHER CONVEYED PROPERTY" means the Initial Other Conveyed
Property conveyed by AFL to ARFC pursuant to this Agreement together with any
and all Subsequent Other Conveyed Property conveyed by AFL to ARFC pursuant
to each Subsequent Purchase Agreement.

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

"RELATED DOCUMENTS" means the Notes, the Custodian Agreement,
the Trust Agreement, the Administration Agreement, the Indenture, each
Subsequent Purchase Agreement, the Sale and Servicing Agreement, each
Subsequent Transfer Agreement, the Note Policy, the Spread Account Agreement,
the Insurance Agreement, the Lockbox Agreement and the Underwriting Agreement
among AFL, ARFC and the underwriters of the Notes. The Related Documents to
be executed by any party are referred to herein as "such party's Related
Documents," "its Related Documents" or by a similar expression.

"REPURCHASE EVENT" means the occurrence of a breach of any of
AFL's representations and warranties hereunder or under any Subsequent
Purchase Agreement or any other event which requires the repurchase of a
Receivable by AFL under the Sale and Servicing Agreement.

"SALE AND SERVICING AGREEMENT" means the Sale and Servicing
Agreement, dated as of March 1, 1999, executed and delivered by Arcadia
Receivables Finance Corp., as Seller, Arcadia Financial Ltd., in its
individual capacity and as Servicer, Arcadia Automobile Receivables Trust,
1999-A, as Issuer, and Norwest Bank Minnesota, National Association, as
Backup Servicer.

"SCHEDULE OF INITIAL RECEIVABLES" means the schedule of all
retail installment sales contracts and promissory notes sold and transferred
pursuant to this Agreement which is attached hereto as Schedule A.

"SCHEDULE OF RECEIVABLES" means the Schedule of Initial
Receivables attached hereto as Schedule A as supplemented by each Schedule of
Subsequent Receivables attached to each Subsequent Purchase Agreement as
Schedule A.

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

-3-

<PAGE>

"SCHEDULE OF SUBSEQUENT RECEIVABLES" means the schedule of
all retail installment sales contracts and promissory notes sold and
transferred pursuant to a Subsequent Purchase Agreement which is attached to
such Subsequent Purchase Agreement as Schedule A, which Schedule of
Subsequent Receivables shall supplement the Schedule of Initial Receivables.

"SPREAD ACCOUNT" means the Spread Account established and
maintained pursuant to the Spread Account Agreement. The Spread Account
shall in no event be deemed to be part of the Trust Property.

"SPREAD ACCOUNT AGREEMENT" means the Spread Account
Agreement, dated as of March 25, 1993, as thereafter amended and restated,
among AFL, ARFC, the Security Insurer, the Collateral Agent and the trustees
specified therein, as the same may be amended, supplemented or otherwise
modified in accordance with the terms thereof.

"SUBSEQUENT OTHER CONVEYED PROPERTY" means the Subsequent
Other Conveyed Property conveyed by AFL to ARFC pursuant to each Subsequent
Purchase Agreement.

"SUBSEQUENT RECEIVABLES" means the Receivables specified in
the Schedule of Subsequent Receivables attached as Schedule A to each
Subsequent Purchase Agreement.

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

"TRUST PROPERTY" means the property and proceeds of every
description conveyed pursuant to Section 2.5 of the Trust Agreement, Sections
2.1 and 2.4 of the Sale and Servicing Agreement and Section 2.1 hereof and
pursuant to any Subsequent Purchase Agreement and Subsequent Transfer
Agreement, together with the Trust Accounts (including all Eligible
Investments therein and all proceeds therefrom). Although ARFC has pledged
the Spread Account to the Collateral Agent pursuant to the Spread Account
Agreement, the Spread Account shall not under any circumstances be deemed to
be a part of or otherwise includable in the Trust or the Trust Property.

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

-4-

<PAGE>

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

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

SECTION 1.6. ACTION BY OR CONSENT OF NOTEHOLDERS. Whenever
any provision of this Agreement refers to action to be taken, or consented
to, by Noteholders, such provision shall be deemed to refer to Noteholders of
record as of the Record Date immediately preceding the date on which such
action is to be taken, or consent given, by Noteholders. Solely for the
purposes of any action to be taken, or consented to, by Noteholders, any Note
registered in the name of the Seller, AFL or any Affiliate thereof shall be
deemed not to be outstanding, and the related Outstanding Amount, evidenced
thereby shall not be taken into account in determining whether the requisite
Outstanding Amount necessary to effect any such action or consent has been
obtained; PROVIDED, HOWEVER, that, solely for the purpose of determining
whether the Indenture Trustee is entitled to rely upon any such action or
consent, only Notes which the Indenture Trustee knows to be so owned shall be
so disregarded.

SECTION 1.7. MATERIAL ADVERSE EFFECT. Whenever a
determination is to be made under this Agreement as to whether a given event,
action, course of conduct or set of facts or circumstances could or would
have a material adverse effect on the Trust or the Noteholders (or any
similar or analogous determination), such determination shall be made without
taking into account the funds available from claims under the Note Policy.

ARTICLE II
CONVEYANCE OF THE INITIAL RECEIVABLES
AND THE INITIAL OTHER CONVEYED PROPERTY

SECTION 2.1. CONVEYANCE OF THE INITIAL RECEIVABLES AND THE
INITIAL OTHER CONVEYED PROPERTY. Subject to the terms and conditions of this
Agreement, AFL hereby sells, transfers, assigns, and otherwise conveys to
ARFC without recourse (but without limitation of its obligations in this
Agreement), and ARFC hereby purchases, all right, title and interest of AFL
in and to the Initial Receivables and the Initial Other Conveyed Property.
AFL and ARFC acknowledge that certain of the Initial Receivables and Initial
Other Conveyed Property have previously been sold, transferred, assigned and
conveyed to ARFC pursuant to the Telluride Purchase Agreement, and AFL hereby
confirms such prior sale, transfer, assignment and conveyance. It is the
intention of AFL and ARFC that the transfer and assignment contemplated by
this Agreement shall constitute a sale of the Initial Receivables and the
Initial Other

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Conveyed Property from AFL to ARFC, conveying good title thereto free and
clear of any Liens, and the Initial Receivables and the Initial Other
Conveyed Property shall not be part of AFL's estate in the event of the
filing of a bankruptcy petition by or against AFL under any bankruptcy or
similar law.

SECTION 2.2. PURCHASE PRICE OF INITIAL RECEIVABLES.
Simultaneously with the conveyance of the Initial Receivables and the Initial
Other Conveyed Property to ARFC, ARFC has paid or caused to be paid to or
upon the order of AFL approximately $399,660,692.51 by wire transfer of
immediately available funds (representing the proceeds to ARFC from the sale
of the Initial Receivables after (i) deducting expenses of $725,000 incurred
by ARFC in connection with such sale, (ii) depositing the Pre-Funded Amount
in the Pre-Funding Account and (iii) depositing the Reserve Amount in the
Reserve Account).

SECTION 2.3. CONVEYANCE OF SUBSEQUENT RECEIVABLES AND
SUBSEQUENT OTHER CONVEYED PROPERTY.

(a) Subject to the conditions set forth in paragraph (b)
below and the terms and conditions in the related Subsequent Purchase
Agreement, in consideration of AFL's delivery on the related Subsequent
Transfer Date to or upon the order of ARFC of an amount equal to the purchase
price of the Subsequent Receivables (as set forth in the related Subsequent
Purchase Agreement), AFL hereby agrees to sell, transfer, assign, and
otherwise convey to ARFC without recourse (but without limitation of its
obligations in this Agreement and the related Subsequent Purchase Agreement),
and ARFC hereby agrees to purchase all right, title and interest of AFL in
and to the Subsequent Receivables and the Subsequent Other Conveyed Property
described in the related Subsequent Purchase Agreement.

(b) AFL shall transfer to ARFC, and ARFC shall acquire,
the Subsequent Receivables and the Subsequent Other Conveyed Property to be
transferred on any Subsequent Transfer Date only upon the satisfaction of
each of the following conditions on or prior to such Subsequent Transfer Date:

(i) ARFC shall have provided the Owner Trustee, the
Indenture Trustee, the Security Insurer and the Rating Agencies with a
timely Addition Notice and shall have provided any information
reasonably requested by any of the foregoing with respect to the
Subsequent Receivables;

(ii) the Funding Period shall not have terminated;

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(iv) ARFC shall have delivered to AFL a duly executed
Subsequent Receivables Purchase Agreement and Assignment, in
substantially the form of Exhibit A hereto (the "Subsequent Purchase
Agreement"), which shall include a Schedule of Subsequent Receivables;

(v) as of each Subsequent Transfer Date, neither AFL
nor ARFC was insolvent nor will either of them have been made insolvent
by such transfer nor is either of them aware of any pending insolvency;

(vi) each Rating Agency shall have notified the
Security Insurer that following such transfer the Notes will be rated in
the highest rating category by such Rating Agency;

(vii) such addition will not result in a material
adverse tax consequence to the Trust or the Noteholders as evidenced by
an Opinion of Counsel to be delivered by AFL;

(viii) ARFC shall have delivered to the Rating Agencies
and to the Security Insurer one or more Opinions of Counsel with respect
to the transfer of the Subsequent Receivables substantially in the form
of the Opinions of Counsel delivered to such persons on the Closing
Date;

(ix) (A) the Receivables in the Trust, including the
Subsequent Receivables to be conveyed by AFL to ARFC and, in turn, by
ARFC to the Trust on the Subsequent Transfer Date, shall meet the
following criteria (based on the characteristics of the Initial
Receivables on the Initial Cutoff Date and the Subsequent Receivables on
each related Subsequent Cutoff Date): (1) the weighted average APR of
such Receivables will not be less than 16.29%, (2) the weighted average
remaining term of such Receivables will not be more than 68 nor less
than 60 months, (3) not more than 90% of the Aggregate Principal Balance
of such Receivables will represent used Financed Vehicles, (4) not more
than 4% of the Aggregate Principal Balance of such Receivables will be
attributable to Receivables with an Annual Percentage Rate in excess of
21%, (5) not more than 0.25% of the Aggregate Principal Balance of such
Receivables will represent loans on Financed Vehicles in excess of
$50,000.00, (6) not more than 3% of the Aggregate Principal Balance of
such Receivables will represent loans with original terms greater than
72 months and (7) not more than 2.0% of the Aggregate Principal Balance
of such Receivables will represent loans secured by Financed Vehicles
that previously secured a loan originated by AFL with an obligor other
than the current Obligor, and (B) the Trust, the Owner Trustee, the
Indenture Trustee and the Security Insurer shall have received written
confirmation from a firm of certified independent public accountants as
to the satisfaction of such criteria;

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(x) AFL shall have taken any action necessary, or if
requested by the Security Insurer, advisable to maintain the first
perfected ownership interest of the Trust in the Trust Property and the
first perfected security interest of ARFC in the Subsequent Receivables
and the Subsequent Other Conveyed Property, the Trust in the Trust
Property and the first perfected security interest of the Indenture
Collateral Agent in the Indenture Collateral;

(xi) AFL is conveying Subsequent Receivables to the
Seller in substantially the order they were originated by AFL; and

(xii) no selection procedures believed by AFL to be
adverse to the interests of the Noteholders shall have been utilized in
selecting the Subsequent Receivables.

It is the intention of AFL and ARFC that the transfer and assignment
contemplated by this Agreement and the related Subsequent Purchase Agreement
shall constitute a sale of the Subsequent Receivables and the Subsequent
Other Conveyed Property from AFL to ARFC, conveying good title thereto free
and clear of any Liens, and the Subsequent Receivables and the Subsequent
Other Conveyed Property shall not be part of AFL's estate in the event of the
filing of a bankruptcy petition by or against AFL under any bankruptcy or
similar law.

(c) AFL covenants to transfer to ARFC pursuant to
paragraph (a) above Subsequent Receivables with an aggregate Principal
Balance approximately equal to $148,818,732.02; PROVIDED, HOWEVER, that the
sole remedy of ARFC with respect to a failure of such covenant shall be to
enforce the provisions of Section 6.2 of this Agreement.

ARTICLE III
REPRESENTATIONS AND WARRANTIES

SECTION 3.1. REPRESENTATIONS AND WARRANTIES OF AFL. AFL
makes the following representations and warranties, on which ARFC relies in
purchasing the Initial Receivables and the Initial Other Conveyed Property
and in transferring the Initial Receivables and the Initial Other Conveyed
Property to the Trust under the Sale and Servicing Agreement and on which the
Security Insurer will rely in issuing the Note Policy. Such representations
are made as of the execution and delivery of this Agreement, but shall
survive the sale, transfer and assignment of the Initial Receivables and the
Initial Other Conveyed Property hereunder and the sale, transfer and
assignment thereof by ARFC to the Trust under the Sale and Servicing
Agreement. AFL and ARFC agree that ARFC will assign to the Trust all of
ARFC's rights under this Agreement and that the Trust will thereafter be
entitled to enforce this Agreement against AFL in the Trust's own name.

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(a) SCHEDULE OF REPRESENTATIONS. The representations and
warranties set forth on the Schedule of Representations are true and
correct.

(b) ORGANIZATION AND GOOD STANDING. AFL has been duly
organized and is validly existing as a corporation in good standing
under the laws of the State of Minnesota, with power and authority to
own its properties and to conduct its business as such properties are
currently owned and such business is currently conducted, and had at all
relevant times, and now has, power, authority and legal right to
acquire, own and sell the Initial Receivables and the Initial Other
Conveyed Property transferred to ARFC.

(c) DUE QUALIFICATION. AFL is duly qualified to do business
as a foreign corporation in good standing, and has obtained all
necessary licenses and approvals, in all jurisdictions in which the
ownership or lease of its property or the conduct of its business
requires such qualification.

(d) POWER AND AUTHORITY. AFL has the power and authority to
execute and deliver this Agreement and its Related Documents and to
carry out its terms and their terms, respectively; AFL has full power
and authority to sell and assign the Initial Receivables and the Initial
Other Conveyed Property to be sold and assigned to and deposited with
ARFC hereunder and has duly authorized such sale and assignment to ARFC
by all necessary corporate action; and the execution, delivery and
performance of this Agreement and AFL's Related Documents have been duly
authorized by AFL by all necessary corporate action.

(e) VALID SALE; BINDING OBLIGATIONS. This Agreement and
AFL's Related Documents have been duly executed and delivered, shall
effect a valid sale, transfer and assignment of the Initial Receivables
and the Initial Other Conveyed Property, enforceable against AFL and
creditors of and purchasers from AFL; and this Agreement and AFL's
Related Documents constitute legal, valid and binding obligations of AFL
enforceable in accordance with their respective terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization
or other similar laws affecting the enforcement of creditors' rights
generally and by equitable limitations on the availability of specific
remedies, regardless of whether such enforceability is considered in a
proceeding in equity or at law.

(f) NO VIOLATION. The consummation of the transactions
contemplated by this Agreement and the Related Documents and the
fulfillment of the terms of this Agreement and the Related Documents
shall not conflict with, result in any breach of any of the terms and
provisions of or constitute (with or without notice, lapse of time or
both) a default under, the articles of incorporation or bylaws of AFL,
or any indenture, agreement, mortgage, deed of trust or other instrument
to which AFL is a party or by which it is bound, or result in the
creation or imposition of any Lien upon any of its properties pursuant
to the terms of any such indenture, agreement, mortgage, deed of trust

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or other instrument, other than this Agreement, the Spread Account
Agreement and the Sale and Servicing Agreement, or violate any law,
order, rule or regulation applicable to AFL of any court or of any
federal or state regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over AFL or any of its
properties.

(g) NO PROCEEDINGS. There are no proceedings or
investigations pending or, to AFL's knowledge, threatened against AFL,
before any court, regulatory body, administrative agency or other
tribunal or governmental instrumentality having jurisdiction over AFL or
its properties (i) asserting the invalidity of this Agreement or any of
the Related Documents, (ii) seeking to prevent the issuance of the Notes
or the consummation of any of the transactions contemplated by this
Agreement or any of the Related Documents, (iii) seeking any
determination or ruling that might materially and adversely affect the
performance by AFL of its obligations under, or the validity or
enforceability of, this Agreement or any of the Related Documents or
(iv) seeking to affect adversely the federal income tax or other
federal, state or local tax attributes of, or seeking to impose any
excise, franchise, transfer or similar tax upon, the transfer and
acquisition of the Initial Receivables and the Initial Other Conveyed
Property hereunder or under the Sale and Servicing Agreement.

(h) CHIEF EXECUTIVE OFFICE. The chief executive office of
AFL is located at 7825 Washington Avenue South, Minneapolis, MN
55439-2435.

SECTION 3.2. REPRESENTATIONS AND WARRANTIES OF ARFC. ARFC
makes the following representations and warranties, on which AFL relies in
selling, assigning, transferring and conveying the Initial Receivables and the
Initial Other Conveyed Property to ARFC hereunder. Such representations are
made as of the execution and delivery of this Agreement, but shall survive the
sale, transfer and assignment of the Initial Receivables and the Initial Other
Conveyed Property hereunder and the sale, transfer and assignment thereof by
ARFC to the Trust under the Sale and Servicing Agreement.

(a) ORGANIZATION AND GOOD STANDING. ARFC has been duly
organized and is validly existing and in good standing as a corporation
under the laws of the State of Delaware, with the power and authority to
own its properties and to conduct its business as such properties are
currently owned and such business is currently conducted, and had at all
relevant times, and has, full power, authority and legal right to
acquire and own the Initial Receivables and the Initial Other Conveyed
Property and to transfer the Initial Receivables and the Initial Other
Conveyed Property to the Trust pursuant to the Sale and Servicing
Agreement.

(b) DUE QUALIFICATION. ARFC is duly qualified to do
business as a foreign corporation in good standing, and has obtained all
necessary licenses and approvals in all jurisdictions where the failure
to do so would materially and adversely affect (i) ARFC's ability to
acquire the Initial Receivables or the Initial Other Conveyed Property,
(ii) the

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validity or enforceability of the Initial Receivables and the Initial
Other Conveyed Property or (iii) ARFC's ability to perform its
obligations hereunder and under the Related Documents.

(c) POWER AND AUTHORITY. ARFC has the power, authority and
legal right to execute and deliver this Agreement and its Related
Documents and to carry out the terms hereof and thereof and to acquire
the Initial Receivables and the Initial Other Conveyed Property
hereunder; and the execution, delivery and performance of this Agreement
and its Related Documents and all of the documents required pursuant
hereto or thereto have been duly authorized by ARFC by all necessary
action.

(d) NO CONSENT REQUIRED. ARFC is not required to obtain the
consent of any other Person, or any consent, license, approval or
authorization or registration or declaration with, any governmental
authority, bureau or agency in connection with the execution, delivery
or performance of this Agreement and the Related Documents, except for
such as have been obtained, effected or made.

(e) BINDING OBLIGATION. This Agreement and each of its
Related Documents constitutes a legal, valid and binding obligation of
ARFC, enforceable against ARFC in accordance with its terms, subject, as
to enforceability, to applicable bankruptcy, insolvency, reorganization,
conservatorship, receivership, liquidation and other similar laws and to
general equitable principles.

(f) NO VIOLATION. The execution, delivery and performance
by ARFC of this Agreement, the consummation of the transactions
contemplated by this Agreement and the Related Documents and the
fulfillment of the terms of this Agreement and the Related Documents do
not and will not conflict with, result in any breach of any of the terms
and provisions of or constitute (with or without notice or lapse of
time) a default under the certificate of incorporation or bylaws of
ARFC, or conflict with or breach any of the terms or provisions of, or
constitute (with or without notice or lapse of time) a default under,
any indenture, agreement, mortgage, deed of trust or other instrument to
which ARFC is a party or by which ARFC is bound or to which any of its
properties are subject, or result in the creation or imposition of any
Lien upon any of its properties pursuant to the terms of any such
indenture, agreement, mortgage, deed of trust or other instrument (other
than the Sale and Servicing Agreement and the Indenture), or violate any
law, order, rule or regulation, applicable to ARFC or its properties, of
any federal or state regulatory body or any court, administrative
agency, or other governmental instrumentality having jurisdiction over
ARFC or any of its properties.

(g) NO PROCEEDINGS. There are no proceedings or
investigations pending, or, to the knowledge of ARFC, threatened against
ARFC, before any court, regulatory body, administrative agency, or other
tribunal or governmental instrumentality having jurisdiction over ARFC
or its properties: (i) asserting the invalidity of this Agreement or

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any of the Related Documents, (ii) seeking to prevent the consummation
of any of the transactions contemplated by this Agreement or any of the
Related Documents, (iii) seeking any determination or ruling that might
materially and adversely affect the performance by ARFC of its
obligations under, or the validity or enforceability of, this Agreement
or any of the Related Documents or (iv) that may adversely affect the
federal or state income tax attributes of, or seeking to impose any
excise, franchise, transfer or similar tax upon, the transfer and
acquisition of the Initial Receivables and the Initial Other Conveyed
Property hereunder or the transfer of the Initial Receivables and the
Initial Other Conveyed Property to the Trust pursuant to the Sale and
Servicing Agreement.

In the event of any breach of a representation and warranty made by ARFC
hereunder, AFL covenants and agrees that it will not take any action to
pursue any remedy that it may have hereunder, in law, in equity or otherwise,
until a year and a day have passed since the later of (i) the date on which
all pass-through certificates or other similar securities issued by the
Trust, or a trust or similar vehicle formed by ARFC, have been paid in full,
or (ii) all Notes or other similar securities issued by the Trust, or a trust
or similar vehicle formed by ARFC, have been paid in full. AFL and ARFC
agree that damages will not be an adequate remedy for such breach and that
this covenant may be specifically enforced by ARFC or by the Owner Trustee on
behalf of the Trust.

ARTICLE IV
COVENANTS OF AFL

SECTION 4.1. PROTECTION OF TITLE OF ARFC AND THE TRUST.

(a) At or prior to the Closing Date or each Subsequent
Transfer Date, as the case may be, AFL shall have filed or caused to be filed
a UCC-1 financing statement, executed by AFL as seller or debtor, naming ARFC
as purchaser or secured party and describing the Initial Receivables and the
Initial Other Conveyed Property, with respect to this Agreement, and the
Subsequent Receivables and the Subsequent Other Conveyed Property, with
respect to each Subsequent Purchase Agreement, being sold by it to ARFC as
collateral, with the office of the Secretary of State of the State of
Minnesota and in such other locations as ARFC shall have required. From time
to time thereafter, AFL shall execute and file such financing statements and
cause to be executed and filed such continuation statements, all in such
manner and in such places as may be required by law fully to preserve,
maintain and protect the interest of ARFC under this Agreement and each
Subsequent Purchase Agreement and of the Trust under the Sale and Servicing
Agreement and each Subsequent Transfer Agreement in the Initial Receivables
and the Initial Other Conveyed Property and the Subsequent Receivables and
the Subsequent Other Conveyed Property, as the case may be, and in the
proceeds thereof. AFL shall deliver (or cause to be delivered) to ARFC, the
Owner Trustee, the Indenture Trustee and the Security Insurer file-stamped
copies of, or filing receipts for, any document filed as provided above, as

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soon as available following such filing. In the event that AFL fails to
perform its obligations under this subsection, ARFC or the Owner Trustee may
do so at the expense of AFL.

(b) AFL shall not change its name, identity, or corporate
structure in any manner that would, could or might make any financing
statement or continuation statement filed by AFL (or by ARFC or the Owner
Trustee on behalf of AFL) in accordance with paragraph (a) above seriously
misleading within the meaning of Section 9-402(7) of the UCC, unless it shall
have given ARFC, the Owner Trustee and the Security Insurer at least 60 days'
prior written notice thereof, and shall promptly file appropriate amendments
to all previously filed financing statements and continuation statements.

(c) AFL shall give ARFC, the Security Insurer (so long as
an Insurer Default shall not have occurred and be continuing), the Indenture
Trustee and the Owner Trustee at least 60 days' prior written notice of any
relocation of its principal executive office if, as a result of such
relocation, the applicable provisions of the UCC would require the filing of
any amendment of any previously filed financing or continuation statement or
of any new financing statement. AFL shall at all times maintain each office
from which it services Receivables and its principal executive office within
the United States of America.

(d) AFL shall maintain its computer systems so that, from
and after the time of sale under this Agreement of the Initial Receivables to
ARFC, and from and after the time of sale under each Subsequent Purchase
Agreement of the Subsequent Receivables to ARFC, and the conveyance of the
Initial Receivables and the Subsequent Receivables by ARFC to the Trust,
AFL's master computer records (including archives) that shall refer to an
Initial Receivable or Subsequent Receivable indicate clearly that such
Initial Receivable or Subsequent Receivable has been sold to ARFC and has
been conveyed by ARFC to the Trust. Indication of the Trust's ownership of
an Initial Receivable or Subsequent Receivable shall be deleted from or
modified on AFL's computer systems when, and only when, the Initial
Receivable or Subsequent Receivable shall become a Purchased Receivable or
shall have been paid in full.

(e) If at any time AFL shall propose to sell, grant a
security interest in, or otherwise transfer any interest in motor vehicle
receivables to any prospective purchaser, lender or other transferee, AFL
shall give to such prospective purchaser, lender, or other transferee
computer tapes, records, or print-outs (including any restored from archives)
that, if they shall refer in any manner whatsoever to any Initial Receivable
or Subsequent Receivable, shall indicate clearly that such Initial Receivable
or Subsequent Receivable has been sold to ARFC and is owned by the Trust.

SECTION 4.2. OTHER LIENS OR INTERESTS. Except for the
conveyances hereunder and under any Subsequent Purchase Agreement, AFL will
not sell, pledge, assign or transfer to any other Person, or grant, create,
incur, assume or suffer to exist any Lien on the Initial Receivables or the
Initial Other Conveyed Property or on the Subsequent Receivables or the
Subsequent Other Conveyed Property, or any interest therein, and AFL shall
defend the right,

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title, and interest of ARFC and the Trust in and to the Initial Receivables
and the Initial Other Conveyed Property and the Subsequent Receivables and
the Subsequent Other Conveyed Property against all claims of third parties
claiming through or under AFL.

SECTION 4.3. COSTS AND EXPENSES. AFL shall pay all
reasonable costs and disbursements in connection with the performance of its
obligations hereunder and under each Subsequent Purchase Agreement and its
Related Documents.

SECTION 4.4. INDEMNIFICATION.

(a) AFL shall defend, indemnify and hold harmless ARFC,
the Trust, the Owner Trustee, the Security Insurer, the Indenture Trustee,
the Backup Servicer and the Noteholders from and against any and all costs,
expenses, losses, damages, claims, and liabilities, arising out of or
resulting from any breach of any of AFL's representations and warranties
contained herein or in any Subsequent Purchase Agreement.

(b) AFL shall defend, indemnify and hold harmless ARFC,
the Trust, the Owner Trustee, the Indenture Trustee, the Backup Servicer and
the Noteholders from and against any and all costs, expenses, losses,
damages, claims, and liabilities, arising out of or resulting from the use,
ownership or operation by AFL or any affiliate thereof of a Financed Vehicle.

(c) AFL shall defend and indemnify ARFC, the Trust, the
Owner Trustee, the Security Insurer, the Indenture Trustee, the Backup
Servicer and the Noteholders against any and all costs, expenses, losses,
damages, claims and liabilities arising out of or resulting from any action
taken, or failed to be taken, by it in respect of any portion of the Trust
Property other than in accordance with this Agreement, each Subsequent
Purchase Agreement or the Sale and Servicing Agreement and each Subsequent
Transfer Agreement.

(d) AFL agrees to pay, and shall defend, indemnify and
hold harmless ARFC, the Trust, the Owner Trustee, the Indenture Trustee, the
Backup Servicer and the Noteholders from and against any taxes that may at
any time be asserted against ARFC, the Owner Trustee, the Indenture Trustee,
the Backup Servicer and the Noteholders with respect to the transactions
contemplated in this Agreement or in any Subsequent Purchase Agreement,
including, without limitation, any sales, gross receipts, general
corporation, tangible or intangible personal property, privilege, or license
taxes (but not including any taxes asserted with respect to, and as of the
date of, the sale, transfer and assignment of the Initial Receivables and the
Initial Other Conveyed Property or the Subsequent Receivables or Subsequent
Other Conveyed Property to ARFC and of the Trust Property to the Trust or the
issuance and original sale of the Notes, or asserted with respect to
ownership of the Initial Receivables and Initial Other Conveyed Property or
the Subsequent Receivables or Subsequent Other Conveyed Property or the Trust
Property which shall be indemnified by AFL pursuant to clause (e) below, or
federal, state or other income taxes, arising out of distributions on the
Notes or transfer taxes arising in connection with the transfer of the Notes)
and costs and expenses in defending against the same, arising by reason of
the acts

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to be performed by AFL under this Agreement or under any Subsequent Purchase
Agreement or imposed against such Persons.

(e) AFL agrees to pay, and to indemnify, defend and hold
harmless ARFC, the Trust, the Owner Trustee, the Indenture Trustee, the
Backup Servicer and the Noteholders from, any taxes which may at any time be
asserted against such Persons with respect to, and as of the date of, the
conveyance or ownership of the Initial Receivables or the Initial Other
Conveyed Property hereunder or the Subsequent Receivables or Subsequent Other
Conveyed Property under each Subsequent Purchase Agreement and the conveyance
or ownership of the Trust Property under the Sale and Servicing Agreement and
the Subsequent Transfer Agreements or the issuance and original sale of the
Notes, including, without limitation, any sales, gross receipts, personal
property, tangible or intangible personal property, privilege or license
taxes (but not including any federal or other income taxes, including
franchise taxes, arising out of the transactions contemplated hereby or
transfer taxes arising in connection with the transfer of Notes) and costs
and expenses in defending against the same, arising by reason of the acts to
be performed by AFL under this Agreement or under any Subsequent Purchase
Agreement or imposed against such Persons.

(f) AFL shall defend, indemnify, and hold harmless ARFC,
the Owner Trustee, the Security Insurer, the Indenture Trustee, the Backup
Servicer, the Trust and the Noteholders from and against any and all costs,
expenses, losses, claims, damages, and liabilities to the extent that such
cost, expense, loss, claim, damage, or liability arose out of, or was imposed
upon ARFC, the Trust, the Indenture Trustee and the Noteholders through the
negligence, willful misfeasance, or bad faith of AFL in the performance of
its duties under this Agreement or under any Subsequent Purchase Agreement or
by reason of reckless disregard of AFL's obligations and duties under this
Agreement or under any Subsequent Purchase Agreement.

(g) AFL shall indemnify, defend and hold harmless ARFC,
the Owner Trustee, the Security Insurer, the Indenture Trustee, the Backup
Servicer, the Trust and the Noteholders from and against any loss, liability
or expense incurred by reason of the violation by AFL of federal or state
securities laws in connection with the registration or the sale of the Notes.

(h) AFL shall indemnify, defend and hold harmless ARFC,
the Owner Trustee, the Security Insurer, the Indenture Trustee, the Backup
Servicer, the Trust and the Noteholders from and against any loss, liability
or expense imposed upon, or incurred by, ARFC, the Owner Trustee, the
Indenture Trustee, the Trust or the Noteholders as a result of the failure of
any Initial Receivable or Subsequent Receivable, or the sale of the related
Financed Vehicle, to comply with all requirements of applicable law.

(i) AFL shall defend, indemnify, and hold harmless ARFC
from and against all costs, expenses, losses, claims, damages, and
liabilities arising out of or incurred in connection with the acceptance or
performance of AFL's trusts and duties as Servicer under the Sale and
Servicing Agreement, except to the extent that such cost, expense, loss,
claim, damage,

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or liability shall be due to the willful misfeasance, bad faith, or
negligence (except for errors in judgment) of ARFC.

(j) AFL shall indemnify, defend and hold harmless ARFC,
the Owner Trustee, the Indenture Trustee, the Backup Servicer, the Trust and
the Noteholders from and against any loss, liability or expense imposed upon,
or incurred by, ARFC, the Owner Trustee and the Indenture Trustee, the Trust
and the Noteholders as a result of AFL's or ARFC's use of the name "Arcadia."

Indemnification under this Section 4.4 shall include
reasonable fees and expenses of counsel and expenses of litigation and shall
survive termination of the Trust. The indemnity obligations hereunder shall
be in addition to any obligation that AFL may otherwise have.

ARTICLE V
REPURCHASES

SECTION 5.1. REPURCHASE OF RECEIVABLES UPON BREACH OF
WARRANTY. Upon the occurrence of a Repurchase Event AFL shall, unless such
breach shall have been cured in all material respects, repurchase such
Receivable from the Trust and, on or before the related Deposit Date, AFL
shall pay the Purchase Amount to the Trust pursuant to Section 4.5 of the
Sale and Servicing Agreement. It is understood and agreed that, except as set
forth in Section 6.1, the obligation of AFL to repurchase any Receivable as
to which a breach has occurred and is continuing shall, if such obligation is
fulfilled, constitute the sole remedy against AFL for such breach available
to ARFC, the Security Insurer, Noteholders, or the Indenture Trustee on
behalf of Noteholders. The provisions of this Section 5.1 are intended to
grant the Owner Trustee and the Indenture Trustee a direct right against AFL
to demand performance hereunder, and in connection therewith, AFL waives any
requirement of prior demand against ARFC with respect to such repurchase
obligation. Any such purchase shall take place in the manner specified in
Section 2.6 of the Sale and Servicing Agreement. Notwithstanding any other
provision of this Agreement, any Subsequent Purchase Agreement or the Sale
and Servicing Agreement or any Subsequent Transfer Agreement to the contrary,
the obligation of AFL under this Section shall not terminate upon a
termination of AFL as Servicer under the Sale and Servicing Agreement and
shall be performed in accordance with the terms hereof notwithstanding the
failure of the Servicer or ARFC to perform any of their respective
obligations with respect to such Receivable under the Sale and Servicing
Agreement.

In addition to the foregoing and notwithstanding whether the
related Receivable shall have been purchased by AFL, AFL shall indemnify the
Owner Trustee, the Indenture Trustee, the Backup Servicer, the Security
Insurer, the Trust and the Noteholders against all costs, expenses, losses,
damages, claims and liabilities, including reasonable fees and expenses of
counsel, which may be asserted against or incurred by any of them as a result
of third party claims arising out of the events or facts giving rise to such
Repurchase Events.

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<PAGE>

SECTION 5.2. REASSIGNMENT OF PURCHASED RECEIVABLES. Upon
deposit in the Collection Account of the Purchase Amount of any Receivable
repurchased by AFL under Section 5.1, ARFC and the Owner Trustee shall take
such steps as may be reasonably requested by AFL in order to assign to AFL
all of ARFC's and the Trust's right, title and interest in and to such
Receivable and all security and documents and all Other Conveyed Property
conveyed to ARFC and the Trust directly relating thereto, without recourse,
representation or warranty, except as to the absence of liens, charges or
encumbrances created by or arising as a result of actions of ARFC or the
Owner Trustee. Such assignment shall be a sale and assignment outright, and
not for security. If, following the reassignment of a Purchased Receivable,
in any enforcement suit or legal proceeding, it is held that AFL may not
enforce any such Receivable on the ground that it shall not be a real party
in interest or a holder entitled to enforce the Receivable, ARFC and the
Owner Trustee shall, at the expense of AFL, take such steps as AFL deems
reasonably necessary to enforce the Receivable, including bringing suit in
ARFC's or the Owner Trustee's name.

SECTION 5.3. WAIVERS. No failure or delay on the part of
ARFC, or the Owner Trustee as assignee of ARFC, in exercising any power,
right or remedy under this Agreement or under any Subsequent Purchase
Agreement shall operate as a waiver thereof, nor shall any single or partial
exercise of any such power, right or remedy preclude any other or future
exercise thereof or the exercise of any other power, right or remedy.

ARTICLE VI
MISCELLANEOUS

SECTION 6.1. LIABILITY OF AFL. AFL shall be liable in
accordance herewith only to the extent of the obligations in this Agreement
or in any Subsequent Purchase Agreement specifically undertaken by AFL and
the representations and warranties of AFL.

SECTION 6.2. FAILURE OF AFL TO SELL SUBSEQUENT RECEIVABLES.
In the event that AFL shall fail to deliver and sell to ARFC any or all of
the Subsequent Receivables required under this Agreement, AFL shall be
obligated to pay to ARFC the Liquidated Damages on the Business Day
immediately preceding the Distribution Date on which the Funding Period ends
(or, if the Funding Period does not end on a Distribution Date, on the first
Distribution Date following the end of the Funding Period).

SECTION 6.3. MERGER OR CONSOLIDATION OF AFL OR ARFC. Any
corporation or other entity (i) into which AFL or ARFC may be merged or
consolidated, (ii) resulting from any merger or consolidation to which AFL or
ARFC is a party or (iii) succeeding to the business of AFL or ARFC, in the
case of ARFC, which corporation has a certificate of incorporation containing
provisions relating to limitations on business and other matters
substantively identical to those contained in ARFC's certificate of
incorporation, provided that in any of the foregoing cases such corporation
shall execute an agreement of assumption to perform every obligation of

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<PAGE>

AFL or ARFC, as the case may be, under this Agreement and each Subsequent
Purchase Agreement and, whether or not such assumption agreement is executed,
shall be the successor to AFL or ARFC, as the case may be, hereunder and
under each such Subsequent Purchase Agreement (without relieving AFL or ARFC
of its responsibilities hereunder, if it survives such merger or
consolidation) without the execution or filing of any document or any further
act by any of the parties to this Agreement or each Subsequent Purchase
Agreement. Notwithstanding the foregoing, so long as an Insurer Default
shall not have occurred and be continuing, ARFC shall not merge or
consolidate with any other Person or permit any other Person to become the
successor to ARFC's business without the prior written consent of the
Security Insurer. AFL or ARFC shall promptly inform the other party, the
Owner Trustee and the Indenture Trustee and, so long as an Insurer Default
shall not have occurred and be continuing, the Security Insurer of such
merger, consolidation or purchase and assumption. Notwithstanding the
foregoing, as a condition to the consummation of the transactions referred to
in clauses (i), (ii) and (iii) above, (x) immediately after giving effect to
such transaction, no representation or warranty made pursuant to Sections 3.1
and 3.2 and this Agreement, or similar representation or warranty made in any
Subsequent Purchase Agreement, shall have been breached (for purposes hereof,
such representations and warranties shall speak as of the date of the
consummation of such transaction) and no event that, after notice or lapse of
time, or both, would become an event of default under the Insurance
Agreement, shall have occurred and be continuing, (y) AFL or ARFC, as
applicable, shall have delivered written notice of such consolidation, merger
or purchase and assumption to the Rating Agencies prior to the consummation
of such transaction and shall have delivered to the Owner Trustee and the
Indenture Trustee an Officer's Certificate and an Opinion of Counsel each
stating that such consolidation, merger or succession and such agreement of
assumption comply with this Section 6.3 and that all conditions precedent, if
any, provided for in this Agreement, or in each Subsequent Purchase
Agreement, relating to such transaction have been complied with, and (z) AFL
or ARFC, as applicable, shall have delivered to the Owner Trustee and the
Indenture Trustee an Opinion of Counsel, stating that, in the opinion of such
counsel, either (A) all financing statements and continuation statements and
amendments thereto have been executed and filed that are necessary to
preserve and protect the interest of the Owner Trustee in the Trust Property
and reciting the details of the filings or (B) no such action shall be
necessary to preserve and protect such interest.

SECTION 6.4. LIMITATION ON LIABILITY OF AFL AND OTHERS. AFL
and any director, officer, employee or agent may rely in good faith on the
advice of counsel or on any document of any kind prima facie properly
executed and submitted by any Person respecting any matters arising under
this Agreement. AFL shall not be under any obligation to appear in, prosecute
or defend any legal action that is not incidental to its obligations under
this Agreement, any Subsequent Purchase Agreement or its Related Documents
and that in its opinion may involve it in any expense or liability.

SECTION 6.5. AFL MAY OWN NOTES. Subject to the provisions
of the Sale and Servicing Agreement, AFL and any Affiliate of AFL may in its
individual or any other capacity

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<PAGE>

become the owner or pledgee of Notes with the same rights as it would have if
it were not AFL or an Affiliate thereof.

SECTION 6.6. AMENDMENT.

(a) This Agreement and any Subsequent Purchase Agreement
may be amended by AFL and ARFC, so long as an Insurer Default shall not have
occurred and be continuing, with the prior written consent of the Security
Insurer and without the consent of the Owner Trustee, the Indenture Trustee
or any of the Noteholders (A) to cure any ambiguity or (B) to correct any
provisions in this Agreement or any such Subsequent Purchase Agreement;
PROVIDED, HOWEVER, that such action shall not, as evidenced by an Opinion of
Counsel delivered to the Owner Trustee and the Indenture Trustee, adversely
affect in any material respect the interests of any Noteholder.

(b) This Agreement may also be amended from time to time
by AFL and ARFC, so long as an Insurer Default shall not have occurred and be
continuing, with the prior written consent of the Security Insurer, the Owner
Trustee and the Indenture Trustee and a Note Majority, for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Agreement, or of modifying in any manner the rights of the
Noteholders; PROVIDED, HOWEVER, that no such amendment shall (i) increase or
reduce in any manner the amount of, or accelerate or delay the timing of,
collections of payments on Receivables, distributions that shall be required
to be made on any Note or the Note Interest Rate or (ii) reduce the aforesaid
percentage required to consent to any such amendment or any waiver hereunder,
without the consent of the Holders of all Notes then outstanding.

(c) Prior to the execution of any such amendment or
consent, AFL shall have furnished written notification of the substance of
such amendment or consent to each Rating Agency.

(d) Promptly after the execution of any such amendment or
consent, the Owner Trustee or the Indenture Trustee, as applicable, shall
furnish written notification of the substance of such amendment or consent to
each Noteholder.

(e) It shall not be necessary for the consent of
Noteholders pursuant to this Section to approve the particular form of any
proposed amendment or consent, but it shall be sufficient if such consent
shall approve the substance thereof. The manner of obtaining such consents
and of evidencing the authorization of the execution thereof by Noteholders
shall be subject to such reasonable requirements as the Owner Trustee or the
Indenture Trustee, as applicable, may prescribe, including the establishment
of record dates. The consent of any Holder of a Note given pursuant to this
Section or pursuant to any other provision of this Agreement shall be
conclusive and binding on such Holder and on all future Holders of such Note
and of any Note issued upon the transfer thereof or in exchange thereof or in
lieu thereof whether or not notation of such consent is made upon the Note.

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<PAGE>

SECTION 6.7. NOTICES. All demands, notices and
communications to AFL or ARFC hereunder shall be in writing, personally
delivered, or sent by telecopier (subsequently confirmed in writing),
reputable overnight courier or mailed by certified mail, return receipt
requested, and shall be deemed to have been given upon receipt (a) in the
case of AFL, to Arcadia Financial Ltd., 7825 Washington Avenue South,
Minneapolis, Minnesota 55439-2435, Attention: John A. Witham, or such other
address as shall be designated by AFL in a written notice delivered to the
other party or to the Owner Trustee or the Indenture Trustee, as applicable,
or (b) in case of ARFC, to Arcadia Receivables Finance Corp., 7825 Washington
Avenue South, Suite 410, Minneapolis, Minnesota 55439-2435, Attention: John
A. Witham.

SECTION 6.8. MERGER AND INTEGRATION. Except as specifically
stated otherwise herein, this Agreement and the Related Documents set forth
the entire understanding of the parties relating to the subject matter
hereof, and all prior understandings, written or oral, are superseded by this
Agreement and the Related Documents. This Agreement may not be modified,
amended, waived or supplemented except as provided herein.

SECTION 6.9. SEVERABILITY OF PROVISIONS. If any one or more
of the covenants, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, provisions or terms
shall be deemed severable from the remaining covenants, provisions or terms
of this Agreement and shall in no way affect the validity or enforceability
of the other provisions of this Agreement.

SECTION 6.10. INTENTION OF THE PARTIES. The execution and
delivery of this Agreement and of each Subsequent Purchase Agreement shall
constitute an acknowledgment by AFL and ARFC that they intend that each
assignment and transfer herein and therein contemplated constitute a sale and
assignment outright, and not for security, of the Initial Receivables and the
Initial Other Conveyed Property and the Subsequent Receivables and Subsequent
Other Conveyed Property, as the case may be, conveying good title thereto
free and clear of any Liens, from AFL to ARFC, and that the Initial
Receivables and the Initial Other Conveyed Property and the Subsequent
Receivables and Subsequent Other Conveyed Property shall not be a part of
AFL's estate in the event of the bankruptcy, reorganization, arrangement,
insolvency or liquidation proceeding, or other proceeding under any federal
or state bankruptcy or similar law, or the occurrence of another similar
event, of, or with respect to, AFL. In the event that such conveyance is
determined to be made as security for a loan made by ARFC, the Trust or the
Noteholders to AFL, the parties intend that AFL shall have granted to ARFC a
security interest in all of AFL's right, title and interest in and to the
Initial Receivables and the Initial Other Conveyed Property and the
Subsequent Receivables and Subsequent Other Conveyed Property, as the case
may be, conveyed pursuant to Section 2.1 hereof or pursuant to any Subsequent
Purchase Agreement, and that this Agreement and each Subsequent Purchase
Agreement shall constitute a security agreement under applicable law.

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<PAGE>

SECTION 6.11. GOVERNING LAW. This Agreement shall be
construed in accordance with, the laws of the State of New York without
regard to the principles of conflicts of laws thereof, and the obligations,
rights and remedies of the parties under this Agreement shall be determined
in accordance with such laws.

SECTION 6.12. COUNTERPARTS. For the purpose of facilitating
the execution of this Agreement and for other purposes, this Agreement may be
executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and all of which counterparts
shall constitute but one and the same instrument.

SECTION 6.13. CONVEYANCE OF THE INITIAL RECEIVABLES AND THE
INITIAL OTHER CONVEYED PROPERTY TO THE TRUST. AFL acknowledges that ARFC
intends, pursuant to the Sale and Servicing Agreement, to convey the Initial
Receivables and the Initial Other Conveyed Property, together with its rights
under this Agreement, to the Trust on the date hereof. AFL acknowledges and
consents to such conveyance and waives any further notice thereof and
covenants and agrees that the representations and warranties of AFL contained
in this Agreement and the rights of ARFC hereunder are intended to benefit
the Security Insurer, the Owner Trustee, the Indenture Trustee, the Trust,
and the Noteholders. In furtherance of the foregoing, AFL covenants and
agrees to perform its duties and obligations hereunder, in accordance with
the terms hereof for the benefit of the Security Insurer, the Owner Trustee,
the Indenture Trustee, the Trust, and the Noteholders and that,
notwithstanding anything to the contrary in this Agreement, AFL shall be
directly liable to the Owner Trustee and the Trust (notwithstanding any
failure by the Servicer, the Backup Servicer or ARFC to perform its duties
and obligations hereunder or under the Sale and Servicing Agreement) and that
the Owner Trustee may enforce the duties and obligations of AFL under this
Agreement against AFL for the benefit of the Security Insurer, the Trust, and
the Noteholders.

SECTION 6.14. NONPETITION COVENANT. Neither ARFC nor AFL
shall petition or otherwise invoke the process of any court or government
authority for the purpose of commencing or sustaining a case against the
Trust (or, in the case of AFL, against ARFC) under any federal or state
bankruptcy, insolvency or similar law or appointing a receiver, liquidator,
assignee, trustee, custodian, sequestrator or other similar official of the
Trust (or ARFC) or any substantial part of its property, or ordering the
winding up or liquidation of the affairs of the Trust (or ARFC).

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<PAGE>

IN WITNESS WHEREOF, the parties have caused this Receivables
Purchase Agreement and Assignment to be duly executed by their respective
officers as of the day and year first above written.

ARCADIA RECEIVABLES FINANCE CORP.,
as Purchaser

By /s/ John A. Witham
------------------------------------
Name: John A. Witham
Title: Senior Vice President and Chief
Financial Officer

ARCADIA FINANCIAL LTD., as Seller

By /s/ John A. Witham
------------------------------------
Name: John A. Witham
Title: Executive Vice President and
Chief Financial Officer

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<PAGE>

SCHEDULE A

SCHEDULE OF INITIAL RECEIVABLES

[Available in transaction files.]

<PAGE>

SCHEDULE B

REPRESENTATIONS AND WARRANTIES OF AFL

2. NO FRAUD OR MISREPRESENTATION. Each Receivable was
originated by a Dealer and was sold by the Dealer to AFL without any fraud or
misrepresentation on the part of such Dealer in either case.

4. ORIGINATION. Each Receivable was originated in the
United States.

B-1

<PAGE>

case may be, of the Soldiers' and Sailors' Civil Relief Act of 1940, as
amended; and all parties to each Receivable had full legal capacity to
execute and deliver such Receivable and all other documents related thereto
and to grant the security interest purported to be granted thereby.

6. NO GOVERNMENT OBLIGOR. No Obligor is the United
States of America or any State or any agency, department, subdivision or
instrumentality thereof.

9. MARKING RECORDS. By the Closing Date or by each
Subsequent Transfer Date, as applicable, AFL will have caused the portions of
the Electronic Ledger relating to the Receivables to be clearly and
unambiguously marked to show that the Receivables constitute part of the
Trust Property and are owned by the Trust in accordance with the terms of the
Sale and Servicing Agreement.

10. COMPUTER TAPE. The Computer Tape made available by
AFL to ARFC, the Owner Trustee and the Indenture Trustee on the Closing Date
or on each Subsequent Transfer Date was complete and accurate as of the
Initial Cutoff Date or Subsequent Cutoff Date, as applicable, and includes a
description of the same Receivables that are described in the Schedule of
Receivables.

12. CHATTEL PAPER. The Receivables constitute chattel
paper within the meaning of the UCC as in effect in the States of Minnesota
and New York.

13. ONE ORIGINAL. There is only one original executed
copy of each Receivable.

14. RECEIVABLE FILES COMPLETE. There exists a Receivable
File pertaining to each Receivable, and such Receivable File contains (a) a
fully executed original of the Receivable, (b) a certificate of insurance,
application form for insurance signed by the Obligor or a signed
representation letter from the Obligor named in the Receivable pursuant to
which the Obligor has agreed to obtain physical damage insurance for the
Financed Vehicle, or copies

B-2

<PAGE>

thereof, (c) the original Lien Certificate or application therefor and (d) a
credit application signed by the Obligor, or a copy thereof. Each of such
documents which is required to be signed by the Obligor has been signed by
the Obligor in the appropriate spaces. All blanks on any form have been
properly filled in and each form has otherwise been correctly prepared. The
complete file for each Receivable currently is in the possession of the
Custodian.

15. RECEIVABLES IN FORCE. No Receivable has been
satisfied, subordinated or rescinded, and the Financed Vehicle securing each
such Receivable has not been released from the lien of the related Receivable
in whole or in part. No provisions of any Receivable have been waived,
altered or modified in any respect since its origination, except by
instruments or documents identified in the Receivable File. No Receivable
has been modified as a result of application of the Soldiers' and Sailors'
Civil Relief Act of 1940, as amended.

17. GOOD TITLE. No Receivable has been sold,
transferred, assigned or pledged by AFL to any Person other than ARFC;
immediately prior to the conveyance of the Receivables to ARFC pursuant to
this Agreement or any Subsequent Purchase Agreement, as applicable, ARFC or
AFL had good and indefeasible title thereto, free and clear of any Lien, and
immediately upon the transfer thereof, ARFC shall have good and indefeasible
title to and will be the sole owner of each Receivable, free of any Lien. No
Dealer has a participation in, or other right to receive, proceeds of any
Receivable. AFL has not taken any action to convey any right to any Person
that would result in such Person having a right to payments received under
the related Insurance Policies or the related Dealer Agreements or Dealer
Assignments or to payments due under such Receivables.

18. SECURITY INTEREST IN FINANCED VEHICLE. Each
Receivable created or shall create a valid, binding and enforceable first
priority security interest in favor of AFL in the Financed Vehicle. The Lien
Certificate and original certificate of title for each Financed Vehicle show,
or if a new or replacement Lien Certificate is being applied for with respect
to such Financed Vehicle, the Lien Certificate will be received within 180
days of the Closing Date or any Subsequent Transfer Date, as applicable, and
will show, AFL named as the original secured party under each Receivable as
the holder of a first priority security interest in such Financed Vehicle.
With respect to each Receivable for which the Lien Certificate has not yet
been returned from the Registrar of Titles, AFL has received written evidence
from the related Dealer that such Lien Certificate showing AFL as first
lienholder has been applied for. AFL's security interest has been validly
assigned by AFL to ARFC pursuant to this Agreement or any Subsequent Purchase
Agreement, as applicable. Immediately after the sale, transfer and
assignment thereof by ARFC to the Trust, each Receivable will be secured by
an enforceable and perfected first priority security interest in the Financed
Vehicle in favor of the Trust as secured

B-3

<PAGE>

party, which security interest is prior to all other Liens upon and security
interests in such Financed Vehicle which now exist or may hereafter arise or
be created (except, as to priority, for any lien for taxes, labor or
materials affecting a Financed Vehicle). As of the Initial Cutoff Date or
each Subsequent Cutoff Date, as applicable, there were no Liens or claims for
taxes, work, labor or materials affecting a Financed Vehicle which are or may
be Liens prior or equal to the lien of the related Receivable.

19. ALL FILINGS MADE. All filings (including, without
limitation, UCC filings) required to be made by any Person and actions
required to be taken or performed by any Person in any jurisdiction to give
the Trust a first priority perfected lien on, or ownership interest in, the
Receivables and the Other Conveyed Property have been made, taken or
performed.

20. NO IMPAIRMENT. AFL has not done anything to convey
any right to any Person that would result in such Person having a right to
payments due under a Receivable or otherwise to impair the rights of ARFC,
the Trust, the Indenture Trustee, the Security Insurer and the Noteholders in
any Receivable or the proceeds thereof.

21. RECEIVABLE NOT ASSUMABLE. No Receivable is assumable
by another Person in a manner which would release the Obligor thereof from
such Obligor's obligations to AFL with respect to such Receivable.

22. NO DEFENSES. No Receivable is subject to any right
of rescission, setoff, counterclaim or defense and no such right has been
asserted or threatened with respect to any Receivable.

23. NO DEFAULT. There has been no default, breach,
violation or event permitting acceleration under the terms of any Receivable
(other than payment delinquencies of not more than 30 days), and no condition
exists or event has occurred and is continuing that with notice, the lapse of
time or both would constitute a default, breach, violation or event
permitting acceleration under the terms of any Receivable, and there has been
no waiver of any of the foregoing. As of the Cutoff Date or any Subsequent
Transfer Date, as applicable, no Financed Vehicle had been repossessed.

24. INSURANCE. As of the date hereof or as of the date
of any Subsequent Purchase Agreement, as applicable, each Financed Vehicle is
covered by a comprehensive and collision insurance policy (i) in an amount at
least equal to the lesser of (a) its maximum insurable value or (b) the
principal amount due from the Obligor under the relate Receivable, (ii)
naming AFL as loss payee and (iii) insuring against loss and damage due to
fire, theft, transportation, collision and other risks generally covered by
comprehensive and collision coverage. Each Receivable requires the Obligor
to maintain physical loss and damage insurance, naming AFL and its successors
and assigns as additional insured parties, and each Receivable permits the
holder thereof to obtain physical loss and damage insurance at the expense of
the Obligor if the Obligor fails to do so. No Financed Vehicle was or had
previously been insured

B-4

<PAGE>

under a policy of Force-Placed Insurance on the Initial Cutoff Date or any
Subsequent Cutoff Date, as applicable.

25. PAST DUE. At the Initial Cutoff Date or any
Subsequent Cutoff Date, as applicable, no Receivable was more than 30 days
past due.

26. REMAINING PRINCIPAL BALANCE. At the Initial Cutoff
Date or any Subsequent Cutoff Date, as applicable, each Receivable had a
remaining principal balance equal to or greater than $500.00 and the
Principal Balance of each Receivable set forth in the Schedule of Receivables
is true and accurate in all material respects.

27. FINAL SCHEDULED MATURITY DATE. No Receivable has a
final maturity later than June 30, 2006.

B-5

<PAGE>

[LOGO] FINANCIAL FINANCIAL GUARANTY
SECURITY INSURANCE POLICY
ASSURANCE-Registered Trademark-

Obligor: Arcadia Automobile Receivables Trust, 1999-A Policy No.: 50789-N
Obligations: $550,000,000 Automobile Date of Issuance: 3/17/99
Receivables-Backed Notes,
as described in Endorsement No. 1

FINANCIAL SECURITY ASSURANCE INC. ("Financial Security"), for
consideration received, hereby UNCONDITIONALLY AND IRREVOCABLY GUARANTEES
to each Holder, subject only to the terms of this Policy (which includes each
endorsement hereto), the full and complete payment by the Obligor of
Scheduled Payments of principal of, and interest on, the Obligations.

For the further protection of each Holder, Financial Security
irrevocably and unconditionally guarantees:

(a) payment of the amount of any distribution of principal of, or
interest on, the Obligations made during the Term Of This Policy to such
Holder that is subsequently avoided in whole or in part as a preference
payment under applicable law (such payment to be made by Financial Security
in accordance with Endorsement No. 1 hereto).

(b) payment of any amount required to be paid under this Policy by
Financial Security following Financial Security's receipt of notice as
described in Endorsement No. 1 hereto.

Financial Security shall be subrogated to the rights of each Holder to
receive payments under the Obligations to the extent of any payment by
Financial Security hereunder.

Except to the extent expressly modified by an endorsement hereto, the
following terms shall have the meanings specified for all purposes of this
Policy. "Holder" means the registered owner of any Obligation as indicated on
the registration books maintained by or on behalf of the Obligor for such
purpose or, if the Obligation is in bearer form, the holder of the Obligation.
"Scheduled Payments" means payments which are scheduled to be made during the
Term Of This Policy in accordance with the original terms of the Obligations
when issued and without regard to any amendment or modification of such
Obligations thereafter; payments which become due on an accelerated basis as
a result of (a) a default by the Obligor, (b) an election by the Obligor to
pay principal on an accelerated basis or (c) any other cause, shall not
constitute "Scheduled Payments" unless Financial Security shall elect, in its
sole discretion, to pay such principal due upon such acceleration together
with any accrued interest to the date of acceleration. "Term Of This Policy"
shall have the meaning set forth in Endorsement No. 1 hereto.

This Policy sets forth in full the undertaking of Financial Security,
and shall not be modified, altered or affected by any other agreement or
instrument, including any modification or amendment thereto, or by the
merger, consolidation or dissolution of the Obligor. Except to the extent
expressly modified by an endorsement hereto, the premiums paid in respect of
this Policy are nonrefundable for any reason whatsoever, including payment,
or provision being made for payment, of the Obligations prior to maturity.
This Policy may not be canceled or revoked during the Term Of This Policy.
THIS POLICY IS NOT COVERED BY THE PROPERTY/CASUALTY INSURANCE SECURITY FUND
SPECIFIED IN ARTICLE 76 OF THE NEW YORK INSURANCE LAW.

In witness whereof, FINANCIAL SECURITY ASSURANCE INC. has caused this
Policy to be executed on its behalf by its Authorized Officer.

FINANCIAL SECURITY ASSURANCE INC.

By /s/ Russell B. Brewer, II
-------------------------
AUTHORIZED OFFICER

A subsidiary of Financial Security Assurance Holdings Ltd.
350 Park Avenue, New York, N.Y. 10022-6022 (212) 826-0100

Form 100NY (5/89)

<PAGE>

ENDORSEMENT NO. 1

FINANCIAL SECURITY 350 Park Avenue
ASSURANCE INC. New York, New York 10022

OBLIGOR: Arcadia Automobile Receivables Trust, 1999-A

OBLIGATIONS: $60,000,000 4.960% Class A-1 Automobile Receivables-Backed Notes
$153,000,000 5.373% Class A-2 Automobile Receivables-Backed Notes
$65,000,000 5.750% Class A-3 Automobile Receivables-Backed Notes
$105,000,000 5.940% Class A-4 Automobile Receivables-Backed Notes
$167,000,000 6.120% Class A-5 Automobile Receivables-Backed Notes

Policy No.: 50789-N
Date of Issuance: March 17, 1999

1. DEFINITIONS. For all purposes of this Policy, the terms specified
below shall have the meanings or constructions provided below. Capitalized
terms used herein and not otherwise defined herein shall have the meanings
provided in the Indenture unless otherwise specified.

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

"INDENTURE" means the Indenture, dated as of March 1, 1999, between the
Obligor and Norwest Bank Minnesota, National Association, as Trustee and
Indenture Collateral Agent, as amended from time to time with the consent of
Financial Security.

"POLICY" means the Financial Guaranty Insurance Policy and includes
each endorsement thereto.

"RECEIPT" and "RECEIVED" mean actual delivery to Financial Security and
to the Fiscal Agent (as defined below), if any, prior to 12:00 noon, New York
City time, on a Business Day; delivery either on a day that is not a Business
Day, or after 12:00 noon, New York City time, shall be deemed to be receipt
on the next succeeding Business Day. If any notice or certificate given
hereunder by the Trustee is not in proper form or is not properly completed,
executed or

<PAGE>

Policy No.: 50789-N Date of Issuance: March 17, 1999

delivered, it shall be deemed not to have been Received, and Financial
Security or its Fiscal Agent shall promptly so advise the Trustee and the
Trustee may submit an amended notice.

"SCHEDULED PAYMENTS" means, as to each Payment Date, the payment to be
made to Holders in accordance with the original terms of the Obligations when
issued and without regard to any subsequent amendment or modification of the
Obligations or of the Indenture except amendments or modifications to which
Financial Security has given its prior written consent in an amount equal to
(i) the Noteholders' Interest Distributable Amount and (ii) the Noteholders'
Principal Distributable Amount. Scheduled Payments do not include payments
which become due on an accelerated basis as a result of (a) a default by the
Obligor, (b) an election by the Obligor to pay principal on an accelerated
basis, (c) the occurrence of an Event of Default under the Indenture or (d)
any other cause, unless Financial Security elects, in its sole discretion, to
pay in whole or in part such principal due upon acceleration, together with
any accrued interest to the date of acceleration. In the event Financial
Security does not so elect, this Policy will continue to guarantee payment on
the Notes in accordance with their original terms. Scheduled Payments shall
not include (x) any portion of a Noteholders' Interest Distributable Amount
due to Noteholders because a notice and certificate in proper form as
required by paragraph 2 hereof was not timely Received by Financial Security,
(y) any portion of a Noteholders' Interest Distributable Amount due to
Noteholders representing interest on any Noteholders' Interest Carryover
Shortfall accrued from and including the date of payment of the amount of
such Noteholders' Interest Carryover Shortfall pursuant hereto, or (z) any
Note Prepayment Amounts or any Note Prepayment Premiums, unless, in each
case, Financial Security elects, in its sole discretion, to pay such amount
in whole or in part. Scheduled Payments shall not include any amounts due in
respect of the Obligations attributable to any increase in interest rate,
penalty or other sum payable by the Obligor by reason of any default or event
of default in respect of the Obligations, or by reason of any deterioration
of the credit worthiness of the Obligor, nor shall Scheduled Payments
include, nor shall coverage by provided under this Policy in respect of, any
taxes, withholding or other charge with respect to any Holder imposed by any
governmental authority due in connection with the payment of any Scheduled
Payment to a Holder.

"TERM OF THIS POLICY" means the period from and including the Closing
Date to and including the latest of the date on which (i) all Scheduled
Payments have been paid or deemed to be paid within the meaning of Section
4.01 of the Indenture; (ii) any period during which any Scheduled Payment
could have been avoided in whole or in part as a preference payment under
applicable bankruptcy, insolvency, receivership or similar law shall have
expired and (iii) if any proceedings requisite to avoidance as a preference
payment have been commenced prior to the occurrence of (i) and (ii), a final
and nonappealable order in resolution of each such proceeding has been
entered.

"TRUSTEE" means Norwest Bank Minnesota, National Association, in its
capacity as Trustee under the Indenture and any successor in such capacity.

2. NOTICES AND CONDITIONS TO PAYMENT IN RESPECT OF SCHEDULED PAYMENTS.
Following Receipt by Financial Security of a notice and certificate from the
Trustee in the form attached as Exhibit A to this Endorsement, Financial
Security will pay any amount payable hereunder in respect of Scheduled
Payments on the Obligations out of the funds of Financial Security on the

2
<PAGE>

Policy No.: 50789-N Date of Issuance: March 17, 1999

later to occur of (a) 12:00 noon, New York City time, on the third Business
Day following such Receipt; and (b) 12:00 noon, New York City time, on the
date on which such payment is due on the Obligations. Payments due hereunder
in respect of Scheduled Payments will be disbursed to the Trustee by wire
transfer of immediately available funds.

Financial Security shall be entitled to pay any amount hereunder in respect
of Scheduled Payments on the Obligations, including any amount due on the
Obligations upon acceleration, whether or not any notice and certificate
shall have been Received by Financial Security as provided above; PROVIDED,
HOWEVER, that by the acceptance of this Policy, the Trustee agrees to
provide, upon request by Financial Security, a notice and certificate in
respect of any such payment by Financial Security. Financial Security shall
be entitled to pay hereunder any amount due on the Obligations upon
acceleration at any time or from time to time, in whole or in part, prior to
the scheduled date of payment thereof; Scheduled Payments insured hereunder
shall not include interest, in respect of principal paid hereunder upon
acceleration, accruing from after the date of such payment of principal.
Financial Security's obligations hereunder in respect of Scheduled Payments
shall be discharged to the extent such amounts are paid by the Issuer in
accordance with the Indenture or disbursed by Financial Security as provided
herein whether or not such funds are properly applied by the Trustee except
as otherwise provided in paragraph 3 of this Endorsement.

3. NOTICES AND CONDITIONS TO PAYMENT IN RESPECT OF SCHEDULED PAYMENTS
AVOIDED AS PREFERENCE PAYMENTS. If any Scheduled Payment is avoided as a
preference payment under applicable bankruptcy, insolvency, receivership or
similar law, Financial Security will pay such amount out of the funds of
Financial Security on the later of (a) the date when due to be paid pursuant
to the Order referred to below or (b) the first to occur of (i) the fourth
Business Day following Receipt by Financial Security from the Trustee of (A)
a certified copy of the order of the court or other governmental body which
exercised jurisdiction to the effect that the Holder is required to return
principal of or interest paid on the Obligations during the Term Of This
Policy because such payments were avoidable as preference payments under
applicable bankruptcy law (the "Order"), (B) a certificate of the Holder that
the Order has been entered and is not subject to any stay and (C) an
assignment duly executed and delivered by the Holder, in such form as is
reasonably required by Financial Security, and provided to the Holder by
Financial Security, irrevocably assigning to Financial Security all rights
and claims of the Holder relating to or arising under the Obligations against
the estate of the Obligor or otherwise with respect to such preference
payment or (ii) the date of Receipt by Financial Security from the Trustee of
the items referred to in clauses (A), (B) and (C) above if, as least four
Business Days prior to such date of Receipt, Financial Security shall have
Received written notice from the Trustee that such items were to be delivered
on such date was specified in such notice. Such payment shall be disbursed to
the receiver, conservator, debtor-in-possession or trustee in bankruptcy
named in the Order and not to the Trustee or any Holder directly (unless a
Holder has previously paid such amount to the receiver, conservator,
debtor-in-possession or trustee in bankruptcy named in the Order, in which
case such payment shall be disbursed to the Trustee for distribution to such
Holder upon proof of such payment reasonably satisfactory to Financial
Security). In connection with the foregoing, Financial Security shall have
the rights provided pursuant to Section 5.19 of the Indenture.

3
<PAGE>

Policy No.: 50789-N Date of Issuance: March 17, 1999

4. GOVERNING LAW. This Policy shall be governed by and construed in
accordance with the laws of the State of New York without giving effect to
the conflict of laws principles thereof.

5. FISCAL AGENT. At any time during the Term Of This Policy,
Financial Security may appoint a fiscal agent (the "Fiscal Agent") for
purposes of this Policy by written notice to the Trustee at the notice
address specified in the Indenture specifying the name and notice address of
the Fiscal Agent. From and after the date of receipt of such notice by the
Trustee, (i) copies of all notices and documents required to be delivered to
Financial Security pursuant to this Policy shall be simultaneously delivered
to the Fiscal Agent and to Financial Security and shall not be deemed
Received until Received by both, and (ii) all payments required to be made by
Financial Security under this policy may be made directly by Financial
Security or by the Fiscal Agent on behalf of Financial Security. The Fiscal
Agent is the agent of Financial Security only and the Fiscal Agent shall in
no event be liable to any Holder for any acts of the Fiscal Agent or any failure
of Financial Security to deposit, or cause to be deposited, sufficient funds
to make payments due under the Policy.

6. WAIVER OF DEFENSES. To the fullest extent permitted by applicable
law, Financial Security agrees not to assert, and hereby waives, for the
benefit of each Holder, all rights (whether by counterclaim, setoff or
otherwise) and defenses (including, without limitation, the defenses of
fraud), whether acquired by subrogation, assignment or otherwise, to the
extent that such rights and defenses may be available to Financial Security
to avoid payment of its obligations under this Policy in accordance with the
express provisions of this Policy.

7. NOTICES. All notices to be given hereunder shall be in writing
(except as otherwise specifically provided herein) and shall be mailed by
registered mail or personally delivered or telecopied to Financial Security
as follows:

Financial Security Assurance Inc.
350 Park Avenue
New York, NY 10022
Attention: Senior Vice President - Transaction Oversight
Telecopy No.: (212) 339-3518
Confirmation: (212) 826-0100

Financial Security may specify a different address or addresses by
writing mailed or delivered to the Trustee.

8. PRIORITIES. In the event that any term or provision of the fact
of this Policy is inconsistent with the provisions of this Endorsement, the
provisions of this Endorsement shall take precedence and shall be binding.

9. EXCLUSIONS FROM INSURANCE GUARANTY FUNDS. This Policy is not
covered by the Property/Casualty Insurance Security Fund specified in
Article 76 of the New York Insurance Law. This Policy is not covered by the
Florida Insurance Guaranty Association created under Part II of Chapter 631
of the Florida Insurance Code. In the event that Financial Security were to
become insolvent, any claims arising under this Policy are excluded from
coverage by the

4
<PAGE>

Policy No.: 50789-N Date of Issuance: March 17, 1999

California Insurance Guaranty Association, established pursuant to Article
14.2 of Chapter 1 of Part 2 of Division 1 of the California Insurance Code.

10. SURRENDER OF POLICY. The Holder shall surrender this Policy to
Financial Security for cancellation upon expiration of the Term Of This
Policy.

IN WITNESS WHEREOF, FINANCIAL SECURITY ASSURANCE INC. has caused this
Endorsement No. 1 to be executed by its Authorized Officer.

FINANCIAL SECURITY ASSURANCE INC.

By: /s/ Russell B. Brewer, II
------------------------------
Authorized Officer

5
<PAGE>

Policy No.: 50789-N Date of Issuance: March 17, 1999

EXHIBIT A
To Endorsement No. 1

NOTICE OF CLAIM AND CERTIFICATE
(Letterhead of Trustee)

Financial Security Assurance Inc.
350 Park Avenue
New York, NY 10022
Attention: Senior Vice President

Re: ARCADIA AUTOMOBILE RECEIVABLES TRUST, 1999-A

The undersigned, a duly authorized officer of Norwest Bank Minnesota,
National Association (the "Trustee"), hereby certifies to Financial Security
Assurance Inc. ("Financial Security"), with reference to Financial Guaranty
Insurance Policy No. 50789-N dated March 17, 1999 (the "Policy") issued by
Financial Security in respect of the $60,000,000 4.960% Class A-1 Automobile
Receivables-Backed Notes, the $153,000,000 5.373% Class A-2 Automobile
Receivables-Backed Notes the $65,000,000 5.750% Class A-3 Automobile
Receivables-Backed Notes, the $105,000,000 5.940% Class A-4 Automobile
Receivables-Backed Notes and the $167,000,000 6.120% Class A-5 Automobile
Receivables-Backed Notes of the above referenced Trust (the "Obligations"),
that:

(i) The Trustee is the Trustee under the Indenture for the Holders.

(ii) The sum of all amounts on deposit (or scheduled to be on deposit)
in the Note Distribution Account and available for distribution to the
Holders pursuant to the Indenture will be $___________ (the "Shortfall") less
than the aggregate amount of Scheduled Payments due on __________________.

(iii) The Trustee is making a claim under the Policy for the Shortfall
to be applied to the payment of Scheduled Payments.

(iv) The Trustee agrees that, following receipt of funds from Financial
Security, it shall (a) hold such amounts in trust and apply the same directly
to the payment of Scheduled Payments on the Obligations when due; (b) not
apply such funds for any other purpose; (c) not commingle such funds with
other funds held by the Trustee and (d) maintain an accurate record of such
payments with respect to each Obligation and the corresponding claim on the
Policy and proceeds thereof, and, if the Obligation is required to be
surrendered or presented for such payment, shall stamp on each such Obligation
the legend $"[insert applicable amount] paid by Financial Security and the
balance hereof has been canceled and reissued" and then shall deliver such
Obligation to Financial Security.

A-1
<PAGE>

Policy No.: 50789-N Date of Issuance: March 17, 1999

(v) The Trustee, on behalf of the Holders, hereby assigns to
Financial Security the rights of the Holders with respect to the Obligations
to the extent of any payments under the Policy, including, without
limitations, any amounts due to the Holders in respect of securities law
violations arising from the offer and sale of the Obligations. The foregoing
assignment is in addition to, and not in limitation of, rights of subrogation
otherwise available to Financial Security in respect of such payments.
Payments to Financial Security in respect of the foregoing assignment shall
in all cases be subject to and subordinate to the rights of the Holders to
receive all Scheduled Payments in respect of the Obligations. The Trustee
shall take such action and deliver such instruments as may be reasonably
requested or required by Financial Security to effectuate the purpose or
provisions of this clause (v).

(vi) The Trustee, on its behalf and on behalf of the Holders,
hereby appoints Financial Security as agent and attorney-in-fact for the
Trustee and each such Holder in any legal proceeding with respect to the
Obligations. The Trustee hereby agrees that, so long as an Insurer Default
(as defined in the Indenture) shall not exist, Financial Security may at any
time during the contribution of any proceeding by or against the Obligor
under the United States Bankruptcy Code or any other applicable bankruptcy,
insolvency, receivership, rehabilitation or similar law (an "Insolvency
Proceeding") direct all matters relating to such Insolvency Proceeding,
including without limitation, (A) all matters relating to any claim in
connection with an Insolvency Proceeding seeking the avoidance as a
preferential transfer of any payment made with respect to the Obligations (a
"Preference Claim"), (B) the direction of any appeal of any order relating to
any Preference Claim at the expense of Financial Security but subject to
reimbursement as provided in the Insurance Agreement and (C) the posting of
any surety, supersedeas or performance bond pending any such appeal. In
addition, the Trustee hereby agrees that Financial Security shall be
subrogated to, and the Trustee on its behalf and on behalf of each Holder,
hereby delegates and assigns, to the fullest extent permitted by law, the
rights of the Trustee and each Holder in the conduct of any Insolvency
Proceeding, including, without limitation, all rights of any party to an
adversary proceeding or action with respect to any court order issued in
connection with any such Insolvency Proceeding.

(vii) Payment should be made by wire transfer directed to
[SPECIFY ACCOUNT].

Unless the context otherwise requires, capitalized terms used in this
Notice of Claim and Certificate and not defined herein shall have the
meanings provided in the Policy.

A-2
<PAGE>

Policy No.: 50789-N Date of Issuance: March 17, 1999

IN WITNESS WHEREOF, the Trustee has executed and delivered this Notice
of Claim and Certificate as of the ____ day of ________, ____.

NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION

By
-------------------------------------

Title
----------------------------------

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

For Financial Security or
Fiscal Agent Use Only

Wire transfer sent on _____________ by ___________________________________

Confirmation Number _________________________________

A-3

<PAGE>

[DORSEY & WHITNEY LLP LETTERHEAD]

EXHIBIT 8.1
Arcadia Receivables Finance Corp.
7825 Washington Avenue South, Suite 410
Minneapolis, Minnesota 55439-2435

Re: Registration Statement on Form S-3
File No. 333-48141

Ladies and Gentlemen:

We have acted as counsel to Arcadia Receivables Finance Corp. (the
"Seller") in connection with the registration under the Securities Act of
1933, as amended, by the Seller of $2,500,000,000 of Automobile Receivables-
Backed Certificates (the "Certificates") and Automobile Receivables-Backed
Notes (the "Notes") to be issued from time to time by trusts established by
the Seller, the related preparation and filing of a registration statement on
Form S-3, filed by the Seller with the Securities and Exchange Commission
(the "Commission") on March 17, 1998 (the "Registration Statement"), and the
preparation of a Prospectus Supplement, dated March 11, 1999, and related
Prospectus, dated June 10, 1998 (together, the "Prospectus") relating to the
offering and sale of $60,000,000 aggregate principal amount of Class A-1
Automobile Receivables-Backed Notes (the "Class A-1 Notes"), $153,000,000
aggregate principal balance of Class A-2 Automobile Receivables-Backed Notes
(the "Class A-2 Notes") and $65,000,000 aggregate principal amount of Class A-3
Automobile Receivables-Backed Notes (the "Class A-3 Notes"), $105,000,000
aggregate principal amount of Class A-4 Automobile Receivables-Backed Notes
(the "Class A-4 Notes"), $167,000,000 aggregate principal balance of Class
A-5 Automobile Receivables-Backed Notes (the "Class A-5 Notes" and, together
with the Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes, and the
Class A-4 Notes, the "Notes") to be issued by Arcadia Automobile Receivables
Trust, 1999-A (the "Trust"). The corpus of the Trust will consist of a pool
of motor vehicle retail installment sales contracts and promissory notes (the
"Receivables") and certain other property. The Notes are to be issued under
an Indenture (the "Indenture"), dated as of March 1, 1999, between the Trust
and Norwest Bank Minnesota, National Association, as Indenture Trustee and
Indenture Collateral Agent. The Notes are described in the Prospectus forming
part of the Registration Statement.

You have requested our opinion with respect to the federal income
tax characterization of the Trust and the Notes. For purposes of rendering
our opinion we have examined the Registration Statement, the Trust Agreement
(the "Trust Agreement"), dated as of

<PAGE>

DORSEY & WHITNEY LLP

Arcadia Receivables Finance Corp.
March 17, 1999
Page 2

March 1, 1999 among the Seller, Financial Security Assurance Inc. ("Financial
Security") and Wilmington Trust Company, as Owner Trustee, the Indenture, and
the related documents and agreements contemplated therein (collectively, the
"Transaction Documents"), and we have reviewed such questions of law as we
have considered necessary and appropriate. Capitalized terms used herein and
not otherwise defined herein shall have the meanings assigned to them in the
Prospectus.

Our opinion is based upon the existing provisions of the Internal
Revenue Code of 1986, as amended (the "Code"), currently applicable Treasury
Department regulations issued thereunder, current published administrative
positions of the Internal Revenue Service (the "Service") contained in
revenue rulings and revenue procedures, and judicial decisions, all of which
are subject to change, either prospectively or retroactively, and to possibly
differing interpretations. Any change in such authorities may affect the
opinions rendered herein. Our opinion is also based on the representations
set forth in the certificate dated the date hereof delivered to us by the
Seller, the representations and warranties set forth in the Transaction
Documents and the assumptions that the Seller, the Servicer, the Owner
Trustee and the Indenture Trustee will at all times comply with the
requirements of the Transaction Documents.

An opinion of counsel is predicated on all the facts and conditions
set forth in the opinion and is based upon counsel's analysis of the
statutes, regulatory interpretations and case law in effect as of the date of
the opinion. It is not a guarantee of the current status of the law and
should not be accepted as a guarantee that a court of law or an
administrative agency will concur in the opinion.

1. CHARACTERIZATION OF THE TRUST. In many respects, the Trust is
similar to trusts established to hold collateral pledged as security in
connection with lending transactions. Section 2.11 of the Trust Agreement
provides that the Depositor and the Trustee shall treat the Trust as a
security device only and shall not file tax returns or obtain an employer
identification number on behalf of the Trust, unless a class of Notes is
treated as an equity interest in the Trust. Therefore, the Trust should be
disregarded for federal income tax purposes and should be characterized as a
mere security arrangement. Treas. Reg. Section 1.61-13(b); Rev. Rul. 76-265,
1976-2 C.B. 448; SEE ALSO Rev. Rul. 73-100, 1973-1 C.B. 613; Rev. Rul.
71-119, 1971 C.B. 163.

If the Trust is recognized as an entity for federal tax purposes,
whether as a result of a class of Notes being treated as an equity interest
in the Trust or for some other reason, the Trust will be a business entity
whose federal tax characterization will be determined under Treasury
Regulations Sections 301.7701-2 and 301.7701-3. Treasury Regulations Section
301.7701-2 provides that "a BUSINESS ENTITY is any entity recognized for
federal tax purposes ... that is not properly classified as a trust under
Section 301.7701-4 or otherwise subject to special treatment under the
Internal Revenue Code."

<PAGE>

DORSEY & WHITNEY LLP

Arcadia Receivables Finance Corp.
March 17, 1999
Page 3

Treasury Regulations Section 301.7701-2 also provides that certain types
of entities are treated as corporations for federal tax purposes, including
entities formed under a state statute which refers to the entity as
"incorporated or as a corporation, body corporate or body politic," or as a
"joint-stock company or joint-stock association." The definition of
corporation also includes insurance companies, certain banking entities,
foreign entities and other entities specified in Section 301.7701-2. The
Trust is not an entity which is treated as a corporation under Section
301.7701-2.

Treasury Regulations Section 301.7701-3 refers to a business entity that
is not classified as a corporation as an "eligible entity." That section
provides that an eligible entity with a single owner can elect to be
classified as an association (which is taxed as a corporation) or to be
disregarded as an entity separate from its owner. An eligible entity with at
least two members can elect to be classified as either an association or a
partnership. Treasury Regulations Section 301.7701-3 further provides certain
default rules pursuant to which, unless the entity affirmatively elects to be
classified as an association, an eligible entity is disregarded as an entity
separate from its owner if it has a single owner, and is treated as a
partnership if it has two or more members.

Under Sections 2.6 and 4.1 of the Trust Agreement, the Seller and the
Owner Trustee have agreed not to file any election to treat the Trust as an
association taxable as a corporation.

Based on the foregoing, it is our opinion that the Trust will not be
treated as an association taxable as a corporation for federal tax purposes.

Under Section 7704 of the Code, certain publicly traded partnerships are
treated as corporations for federal income tax purposes. This treatment does
not apply, however, to any publicly traded partnership if 90% or more of the
gross income of the partnership constitutes "qualifying income." For purposes
of Section 7704, "qualifying income" generally includes interest, dividends
and certain other types of passive income. Based on the representations made
in the Transaction Documents, we conclude that if the Trust is treated as a
partnership for federal income tax purposes, 90% or more of the Trust's gross
income will constitute "qualifying income" within the meaning of Section 7704
of the Code. Therefore, it is our opinion that the Trust will not be taxed
as a corporation under the publicly traded partnership rules of Section 7704
of the Code.

2. CHARACTERIZATION OF THE NOTES. The characterization of an
instrument as debt or equity for federal income tax purposes depends on all
of the facts and circumstances in each case. In any such determination,
several factors must be considered, including, among other things, the
independence of the debt holder and equity holders, the intention of the
parties to create a debt, the creation of a formal debt instrument, the
safety of the principal amount, and the debt to equity ratio of the issuer.
In this regard, we note that the Owner Trustee, on behalf of the Trust, and
each Noteholder will agree to treat the Notes as debt for federal income tax
purposes. Based on such agreement, the factors listed above and other
considerations, although there is no authority on

<PAGE>

DORSEY & WHITNEY LLP

Arcadia Receivables Finance Corp.
March 17, 1999
Page 4

transactions which resemble the issuance of the Notes by the Trust, it is our
opinion that the Notes will be treated as debt for federal income tax
purposes.

We express no opinion about the tax treatment of any features of the
Trust's activities or an investment therein other than those expressly set
forth above.

We consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of our name under the heading "Certain
Federal Income Tax Consequences" in the Prospectus Supplement, and we hereby
confirm that, insofar as they constitute statements of law or legal
conclusions as to the likely outcome of material issues under the federal
income tax laws, the discussion under such heading accurately sets forth our
advice.

Dated: March 17, 1999
Very truly yours,

CFS

/s/ Dorsey & Whitney LLP

<PAGE>

[PRICEWATERHOUSECOOPERS LETTERHEAD]

CONSENT OF INDEPENDENT ACCOUNTANTS

----------

We consent to the incorporation by reference in the Prospectus Supplement of
Arcadia Receivables Finance Corporation relating to Arcadia Automobile
Receivables Trust 1999-A of our report dated January 26, 1998 on our audits
of the consolidated financial statements of Financial Security Assurance Inc.
and Subsidiaries as of December 31, 1997 and 1996, and for each of the three
years in the period ended December 31, 1997. We also consent to the reference
to our Firm under the caption "Experts".

/s/ PricewaterhouseCoopers LLP

PricewaterhouseCoopers LLP

March 10, 1999