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                                                                   EXHIBIT 10.22



                                      THIRD
                              AMENDED AND RESTATED
                     MASTER COLLATERAL ASSIGNMENT AGREEMENT


               THIS THIRD AMENDED AND RESTATED MASTER COLLATERAL ASSIGNMENT
AGREEMENT dated as of March 1, 2000 (the "Agreement"), which amends and restates
the Master Collateral Assignment Agreement dated as of September 30, 1993, as
amended and restated as of June 1, 1995 (the "Original Agreement"), as amended
and restated as of November 1, 1998 (the "Second Amended and Restated
Agreement") is by and among WESTERN FINANCIAL BANK, a federally-chartered
savings association formerly known as Western Financial Savings Bank, F.S.B.
(including its successors and assigns, the "Bank"), WFS FINANCIAL AUTO LOANS,
INC., a California corporation formerly known as Western Financial Auto Loans,
Inc. ("WFAL"), WFS RECEIVABLES CORPORATION, a California corporation ("WFSRC"
and collectively with WFAL, the "Depositors" and individually, each a
"Depositor"), WFS FINANCIAL AUTO LOANS 2, INC., a California corporation
formerly known as Western Financial Auto Loans 2, Inc. ("WFAL 2"), FINANCIAL
SECURITY ASSURANCE INC., a New York stock insurance company (including its
successors and assigns, "Financial Security"), BANKERS TRUST COMPANY, a New York
banking corporation, in its capacities as Trustee and Collateral Agent (each as
defined herein) and BANKERS TRUST COMPANY OF CALIFORNIA, N.A., in its capacity
as Master Collateral Agent (as defined herein). Capitalized terms used without
definition have the meanings set forth in Article I hereof.


                                 R E C I T A L S


               The Bank (i) is, the obligor under certain reinvestment contracts
(as amended from time to time, the "Bank Reinvestment Contracts") and may in the
future be an obligor together with WFAL 2 under certain reinvestment contracts
(as amended from time to time, the "Joint Reinvestment Contracts", and, with the
Bank Reinvestment Contracts, the "Reinvestment Contracts") all as referenced in
the Trust Agreements (as defined in Section 1.01 hereof), pursuant to which
Trusts (as defined in Section 1.01 hereof) have been or will be formed, in favor
of Bankers Trust Company, in its capacity as each of the trustees (collectively,
the "Trustee") under the Trust Agreements and/or in its capacity as each of the
collateral agents (acting for the benefit of Financial Security) referenced in
the Trust Agreements (collectively, together with any collateral agent appointed
by Financial Security thereunder or under the Master RIC Reimbursement
Agreement, the "Collateral Agent"), and (ii) was formerly the obligor under
certain spread account agreements with Financial Security, the Trustee and the
Collateral Agent ("Spread Account Agreements") relating to the Trusts insofar as
the Bank was obligated thereunder to repay moneys deposited in its general
ledger accounts when due.

               WFAL 2 is and may in the future be the obligor under Joint
Reinvestment Contracts.



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               In transactions in which certificates insured by Financial
Security were issued under the Trust Agreements dated as of a date prior to
January 1, 1993, WFAL 2 pledged, pursuant to the related Spread Account
Agreements, to the Collateral Agent for the benefit of Financial Security all
its right, title and interest in and to the Spread Accounts (as defined in the
relevant Agreements) (together with the Spread Accounts referred to in the next
succeeding paragraph, the "Spread Accounts") and all investments and moneys
therein from time to time and all proceeds thereof (collectively, the related
"Spread Amounts").

               In certain transactions in which certificates insured by
Financial Security were issued under the pooling and servicing agreements dated
as of a date on or after January 1, 1993, the Depositor or WFAL 2 pledged
pursuant to the Trust Agreements, to the Trustee, as collateral agent, all their
right, title and interest in and to the Spread Accounts (as defined in the
relevant pooling and servicing agreements) and all investments and moneys
therein from time to time and related Spread Amounts in order to secure their
respective obligations under such pooling and servicing agreements and related
Spread Account Agreements.

               All securities issued in transactions referenced in the foregoing
two paragraphs in which WFAL 2 was a depositor have been fully paid and
discharged, and all obligations of the Bank and the Depositor in respect of
Spread Account Agreements referenced in clause (ii) of the first Recital hereof
have been fully performed and discharged.

               To the extent provided in the Reinvestment Contracts, the Bank
and/or WFAL 2, as applicable, will receive funds credited to (i) in the
Collection Accounts, the Note Distribution Accounts and the Certificate
Distribution Accounts, (ii) in the Spread Accounts and (iii) in the Holding
Accounts for investment in Reinvestment Accounts.

               The parties hereto desire to amend and restate the Second Amended
and Restated Agreement to reflect (i) the addition of WFSRC as a Depositor under
one or more future Trust Agreements.

               Except as specifically amended by this Agreement the Original
Agreement shall continue in full force and effect in accordance with its
existing terms. Any reference to this Agreement prior to the date hereof shall
refer to the Original Agreement.


                               A G R E E M E N T S


               In consideration of the premises, the mutual agreements contained
herein and the reduction of Financial Security's premium for the Policies, and
for other consideration, the parties hereto agree as follows:



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                                    ARTICLE I

                                   DEFINITIONS


        Section 1.01. Definitions. The following terms shall have the following
respective meanings:

               "Aggregate Collateral Value" means, as of any date of
determination, (i) the aggregate outstanding principal amount of all items of
Collateral pledged to the Master Collateral Agent pursuant to Section 2.01
hereof, discounted as set forth on Schedule A hereto less (ii) the collection
discount determined in Section II.B. of the relevant Monthly Statement.

               "Aggregate Commingled Account Balance" means, as of any date of
determination, the aggregate amounts as determined in Section I of the relevant
Monthly Statement.

               "Authorized Officer" means, (i) with respect to the Bank and WFAL
2, the President, the Chief Financial Officer, Treasurer or any Vice President,
(ii) with respect to Financial Security, the Chairman of the Board, the
President, the Executive Vice President or any Managing Director, (iii) with
respect to the Master Collateral Agent, any Vice President, Assistant Vice
President or Trust Officer, (iv) with respect to the Collateral Agent or
Trustee, any Vice President or Trust Officer.

               "Business Day" means any day that is not (a) a Saturday or Sunday
or (b) a day on which banking institutions in the City of New York or in the
State of California are authorized or obligated by law or executive order to be
closed.

               "Clearing Corporation" shall mean a "clearing corporation" (as
defined in Section 8-102(a)(5) of the UCC) with which the Master Collateral
Agent maintains an account and which is used by the Master Collateral Agent to
hold Securities and Securities Entitlement.

               "Collateral" has the meaning specified in Section 2.01(c) hereof.

               "Collateral Account" has the meaning specified in Section 3.01
hereof.

               "Collateral Schedule" has the meaning specified in Section 7.01
hereof.

               "Contract" means any retail installment sales contract and
security agreement, or installment loan agreement and security agreement, which
have been executed by an obligor and pursuant to which such obligor purchased or
financed a motor vehicle, not inconsistent with the criteria set forth on
Schedule A hereto.

               "Controlling Party" means Financial Security so long as no
Financial Security Insolvency shall have occurred and no Insurer Default shall
have occurred and be continuing, and, at any other time, the Trustee.



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               "Default" means (i) any failure by the Bank or WFAL 2 to Deliver
Collateral as and when required hereunder, (ii) any other material breach by the
Bank or WFAL 2 of its obligations hereunder and failure to cure such breach
within two (2) Business Days after receipt of notice thereof from the
Controlling Party or (iii) any default by the Bank, WFAL 2, WFS or the Depositor
under any Existing Agreement to which it is a party.

               "Delivery" means, with respect to Collateral, the accomplishment
of the following:

               (i) all "instruments" and "certificated securities" (as such
terms are defined in the UCC)("Possessory Collateral") shall be in bearer form
or registered in the name of the Master Collateral Agent or its nominee or duly
indorsed to the Master Collateral Agent or in blank, and in no case will any
Collateral be registered in the name of the Bank or WFAL 2, payable to the order
of the Bank or WFAL 2 or specially indorsed to the Bank or WFAL 2 (except to the
extent the foregoing have been further specially indorsed by the Bank or WFAL 2
to the Master Collateral Agent or its nominee or in blank);

               (ii) all Security Entitlements in certificated Securities
included in the Collateral and held by or for a Clearing Corporation shall be
(A) held by the Clearing Corporation (or its custodian and/or nominee) as
specified in clause (i) above, (B) evidenced by a written or electronic advice
of the book-entry registration of such Securities Entitlement in an account of
the Master Collateral Agent (or its nominee) as such Clearing Corporation
maintained in accordance with the rules of such Clearing Corporation (a
"Clearing Corporation Account"), and (C) the corresponding Security Entitlement
shall be evidenced by written records of the Master Collateral Agent as being
credited to the Collateral Account; and

               (iii) as to all Uncertificated Securities included in the
Collateral the Master Collateral Agent shall have received evidence that (A) it
or its nominee is the registered owner on the books of the issuer thereof or (B)
a Clearing Corporation or its nominee is so registered and the corresponding
Security Entitlement is evidenced by written records of the Master Collateral
Agent as being credited to the Collateral Account.

               "Depositor" or "Depositors" means (i) WFS Financial Auto Loans,
Inc., in its capacity as depositor under relevant Trust Agreements, and its
successors and assigns in such capacity, and (ii) WFS Receivables Corporation,
in its capacity as depositor under relevant Trust Agreements, and its successors
and assigns in such capacity.

               "Eligible Account" means (i) a segregated trust account in the
corporate trust department that is maintained with a depository institution or
trust company the commercial paper or other short-term debt obligations of which
have credit ratings from S&P at least equal to "A-1" and from Moody's equal to
"P-1", which account is fully insured up to applicable limits by the Federal
Deposit Insurance Corporation or (ii) a general ledger account or deposit
account (a) that is maintained at a depository institution or trust company
satisfying the criteria specified in clause (i) above or (b) that otherwise is
maintained at a depository institution acceptable to Financial Security as
evidenced by a letter to such effect from Financial Security to the Master
Collateral Agent.



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               "Entitlement Order" shall mean a notification communicated in
accordance with this Agreement by the Controlling Party to the Master Collateral
Agent directing transfer, redemption or other action with respect to a Financial
Asset credited to a Custody Account hereunder.

               "Existing Agreements" means the Trust Agreements and any related
Policy, insurance, indemnity and pledge agreement, sub-servicing agreement,
indemnification agreement, Reinvestment Contract and Spread Account Agreement
relating to a Trust to which the Bank, WFS or WFAL is a party.

               "Federal Agency Security" means any mortgage-backed security
issued by the Federal National Mortgage Association or the Federal Home Loan
Mortgage Corporation or guaranteed by the Government National Mortgage
Association.

               "Financial Asset" shall mean Collateral which is a security or an
obligation of a Person or a share, participation, or other interest in a Person
or in property or an enterprise of a Person which is, or is of a type, dealt in
or traded on financial markets, or which is recognized in any area in which it
is issued or dealt in as a medium for investment. As the context requires,
references to "Financial Asset" herein shall mean the Financial Asset itself or
the means by which the interest of a Person holding an interest therein is
evidenced, including a Security Certificate or Uncertificated Security or a
Security Entitlement.

               "FSA Notice" has the meaning set forth in Section 3.05 hereof.

               "Insurer Default" has the meaning set forth in the latest
Indenture referenced in the relevant Trust Agreement.

               "Insurer Insolvency" has the meaning set forth in the latest
Indenture referenced in the relevant Trust Agreement.

               "Lien" means, as applied to the property or assets (or the
income, proceeds, products, rents or profits therefrom) of any Person, in each
case whether the same is consensual or nonconsensual or arises by contract,
operation of law, legal process or otherwise: (a) any mortgage, lien, pledge,
attachment, charge, lease, conditional sale or other title retention agreement,
or other security interest or encumbrance of any kind; or (b) any arrangement,
express or implied, under which such property or assets (and/or such income,
proceeds, products, rents or profits) are transferred, sequestered or otherwise
identified for the purpose of subjecting or making available the same for
payment of debt or performance of any other obligation in priority to the
payment of the general, unsecured creditors of such Person.

               "Master Collateral Agent" means, initially, Bankers Trust Company
of California, N.A., including its successors and assigns, in its capacity as
collateral agent on behalf of the Trustee, the Collateral Agent and Financial
Security, or any successor which shall have become the Master Collateral Agent
pursuant to Section 4.05 hereof, and thereafter "Master Collateral Agent" shall
mean such successor.



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               "Master RIC Reimbursement Agreement" means, the Amended and
Restated Master RIC Reimbursement Agreement dated as of the date hereof among
the Bank, WFAL 2 and Financial Security.

               "Master Secured Obligations" means, on any date, (i) the
respective obligations of the Bank and, WFAL 2 set forth in Sections 2.01(a) and
2.01(b) hereof, and (ii) all costs, expenses, attorney's fees and disbursements
and other amounts expended or incurred by the Trustee, the Master Collateral
Agent, or Financial Security in connection with the protection or preservation
of any Collateral and the enforcement of the rights and remedies of the Trustee,
the Master Collateral Agent or Financial Security under this Agreement.

               "Monthly Statement" means the Monthly Collateral Statement of the
Bank and WFAL 2 in the form of Schedule B hereto Delivered pursuant to Section
3.02(b) hereof.

               "Mortgage Loan" means any single-family or multi-family mortgage
loan, representing a first or second lien on residential mortgaged property, not
inconsistent with the criteria set forth on Schedule A hereto.

               "Opinion of Counsel" means a written opinion of counsel
acceptable, as to form, substance and issuing counsel (which may be counsel to
the Bank and WFAL 2), to the Controlling Party and the Master Collateral Agent.

               "Person" means any individual, sole proprietorship, joint stock
company, unincorporated association, joint venture, corporation, partnership,
business or owner trust, government, governmental department or agency or any
other entity whatsoever.

               "Policies" means financial guaranty insurance policies in respect
of the Trusts (including, in each case, any endorsements thereto) issued by
Financial Security.

               "Securities Intermediary" shall have the meaning set forth in
Section 8-102(a)(14) of the UCC.

               "Security" shall mean an obligation of an issuer or a share,
participation, or other interest in an issuer or in property or an enterprise or
an issuer which is represented by a Security Certificate in bearer or registered
form, or an Uncertificated Security, the transfer of which may be registered
upon books maintained for that purpose by or on behalf of the issuer, or which
is one of a class or series or by its terms is divisible into class or series of
shares, participations, interests, or obligations and which is, or is of a type,
dealt in or traded on securities exchanges or securities markets.

               "Security Entitlement" shall mean the rights and property
interest of an Entitlement Holder with respect to Financial Assets.



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               "Security Interests" means the Liens on the Collateral granted to
the Master Collateral Agent under this Agreement to secure the Master Secured
Obligations.

               "Servicer" means Western Financial Savings Bank, F.S.B.
(including its successors), as servicer under the Servicing Agreement.

               "Servicing Agreement" means the Servicing Agreement dated as of
September 30, 1993 between the Servicer and the Master Collateral Agent, with
the Controlling Party as a third party beneficiary thereof, as such agreement
may be amended from time to time in accordance with the terms thereof.

               "Termination Date" means the date which is the earlier of (A) the
latest of (i) the date on which all Reinvestment Contracts shall have terminated
and all amounts owing by the Bank, WFAL 2 and each Depositor to the relevant
Trust, Financial Security and the Trustee shall have been paid in full, (ii) the
date on which Financial Security shall have received full payment and
performance by the Bank, WFAL 2 and WFAL pursuant to the Existing Agreements,
(iii) the latest date on which any payment received by Financial Security
pursuant to the Existing Agreements could be avoided in whole or in part as a
preference payment under the United States Bankruptcy Code or any similar
federal or state law relating to insolvency, bankruptcy, rehabilitation,
liquidation or reorganization, or (B) the date on which no amounts in any
accounts under Trust Agreements or Spread Account Agreements are invested in
Reinvestment Contracts or general ledger accounts at the Bank or are otherwise
commingled with funds of the Bank, or (C) any date mutually agreed by the Bank,
WFAL 2 and the Controlling Party.

               "Trust Agreements" mean the trust agreements pursuant to which
the Trusts are constituted, as amended from time to time in accordance with
their terms.

               "Trusts" means the grantor trusts or business trusts created in
respective automobile installment sale contract securitization transactions
established prior to the date hereof or from time to time hereafter by the Bank
and its affiliates whose certificates of beneficial interest or other securities
have the benefit of Policies.

               "Uncertificated Security" shall mean a Security that is not
represented by a certificate.

               "Uniform Commercial Code" or "UCC" means the Uniform Commercial
Code as in effect in the State of California or other applicable jurisdiction.

               "WFS Sale and Servicing Agreement" means the Sale and Servicing
Agreement dated as of the date hereof between WFS Financial Inc. and WFAL 2.

        Section 1.02. Rules of Interpretation. The terms "hereof," "herein" or
"hereunder," unless otherwise modified by more specific reference, shall refer
to this Agreement in its entirety. Unless otherwise indicated in context, the
terms "Article," "Section," "Exhibit" or "Annex" shall refer to an Article or
Section of, or Exhibit or Annex to, this Agreement. The definition of a term



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shall include the singular, the plural, the past, the present, the future, the
active and the passive forms of such term.



                                   ARTICLE II

                                 THE COLLATERAL

        Section 2.01. Security Interests.

               (a) In order to secure the full and punctual payment of all
amounts when due by the Bank or WFAL 2 under, and the performance by the Bank
and WFAL 2 of all of their other obligations pursuant to, the Reinvestment
Contracts and the Master RIC Reimbursement Agreement from time to time in
accordance with the terms thereof, the Bank hereby pledges, assigns, transfers
and conveys all of its right, title and interest in and to all of the
securities, property and assets set forth in Section 2.01(c) hereof (the
"Collateral") to the Master Collateral Agent on behalf of, and for the benefit
of, the Trustee, the Collateral Agent and Financial Security. The Security
Interests granted to the Master Collateral Agent, the Trustee, each Depositor,
the Collateral Agent and Financial Security shall be pari passu in all respects.

               (b) In order to secure the full and punctual payment of all
amounts when due by WFAL 2 or the Bank under, and the performance by WFAL 2 and
the Bank of all of their other obligations pursuant to, the Reinvestment
Contracts and the Master RIC Reimbursement Agreement from time to time in
accordance with the terms thereof, WFAL 2 hereby pledges, assigns, transfers and
conveys all of its right, title and interest in and to all of the securities,
property and assets set forth in Section 2.01(c) hereof (the "Collateral") to
the Master Collateral Agent on behalf of, and for the benefit of, the Trustee,
the Collateral Agent and Financial Security. The Security Interests granted to
the Master Collateral Agent, the Trustee, each Depositor, the Collateral Agent
and Financial Security shall be pari passu in all respects.

               (c) The "Collateral" shall at any time consist of (i) the assets,
property and Financial Assets set forth on the most recent Schedule B hereto and
any other assets, property and Financial Assets, and proceeds thereof, approved
in writing by the Controlling Party (which may be by amendment of Schedule A or
B by mutual agreement of the Bank, WFAL 2 and the Controlling Party), and (ii)
the WFS Sale and Servicing Agreement, including:

                         (i) the related documentation, and all proceeds, income
        and profits thereon, and all interest, principal and other payments and
        distributions with respect thereto;

                         (ii) all rights and remedies for the enforcement of
        payment of any principal, interest and proceeds;

                         (iii) any collateral securing any Collateral including,
        without limitation, all rights and remedies of a beneficiary of such
        security to foreclose upon,



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        repossess and sell the related collateral, or all rights and remedies
        assertable against any Person other than the related obligor under a
        guaranty, warranty or otherwise in connection with any Collateral;

                         (iv) insurance proceeds, if any, and any other proceeds
        received in connection with the disposition, repossession, foreclosure,
        destruction or condemnation of, or impairment of title to, any
        Collateral;

                         (v) any cash, securities or other property received on
        account of the Collateral from any liquidation thereof or any adjustment
        of debt of the obligors and any portion of the Collateral which may be
        distributed in kind in connection with any such liquidation or
        adjustment of debt of the obligors;

                         (vi) the Collateral Account and each other account, if
        any, established by or with the Master Collateral Agent hereunder; and

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

               (d) Each of the Bank and WFAL 2 agrees that it will not (i) use
any adverse selection method in including Collateral hereunder, and (ii) include
any Collateral which would be charged off in accordance with its normal
accounting practices. If any Collateral Delivered to the Master Collateral Agent
hereunder shall be or become subject to charge off by the Bank or WFAL 2, the
Bank or WFAL 2, as the case may be, will promptly substitute new Collateral
therefor to the extent necessary to satisfy the requirements of Section 3.02
hereof.

               (e) In order to effectuate the provisions and purposes of this
Agreement, including to effectuate the collateral assignment to the Master
Collateral Agent, as agent for the Trustee and the Collateral Agent, pursuant to
this Section 2.01, each of the Bank and WFAL 2 hereby Delivers, and in the
future agrees to Deliver, to the Master Collateral Agent, all items of
Collateral pledged by it hereunder in which a security interest must be
perfected by possession, and the Master Collateral Agent hereby agrees to accept
such Collateral on the terms set forth in this Agreement. The Bank and WFAL 2,
and each of them, hereby agree to take all additional steps that may be
necessary or reasonably requested by the Master Collateral Agent or the
Controlling Party from time to time for the perfection, preservation,
protection, maintenance or continuation of such transfers, assignments and
security interests including, but not limited to, the execution, recording,
registering and filing of any appropriate collateral assignments, security
interests and Uniform Commercial Code financing statements and the making of
notations on records or documents of title.

               (f) The Security Interests are granted as security only and shall
not (i) transfer or in any way affect or modify, or relieve the Bank or WFAL 2,
or any of them, from any obligation to perform or satisfy, any term, covenant,
condition or agreement to be performed or satisfied by them or any of them under
or in connection with this Agreement, the Servicing Agreement or any Existing
Agreement to which it is a party or (ii) impose any obligation on Financial
Security, the



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Trustee or the Master Collateral Agent to perform or observe any such term,
covenant, condition or agreement or impose any liability on Financial Security,
the Trustee or the Master Collateral Agent for any act or omission on its part
relative thereto or for any breach of any representation or warranty on its part
contained therein or made in connection therewith.

        Section 2.02. Priority. The Bank and WFAL 2, and each of them, intend
the Security Interests granted hereunder to be prior to all other Liens in
respect of the Collateral, and the Bank and WFAL 2, and each of them, shall take
all actions necessary to obtain and maintain, in favor of the Master Collateral
Agent, a first lien on and a first priority, perfected security interest in the
Collateral other than in general intangibles and rights under insurance policies
not perfected by the means used to perfect the Security Interest in the items of
Collateral set forth on Schedule A hereto. The Master Collateral Agent shall
have all of the rights, remedies and recourse with respect to the Collateral
afforded a secured party under the Uniform Commercial Code of the State of
California and all other applicable law, in addition to, and not in limitation
of, the other rights, remedies and recourse granted to the Master Collateral
Agent by this Agreement, the Servicing Agreement, any Existing Agreement or any
other law relating to the creation and perfection of liens on, and security
interests in, the Collateral.


        Section 2.03. Maintenance of Collateral.


               (a) Safekeeping. The Master Collateral Agent agrees to maintain
the Collateral received by it and all records and documents relating thereto at
the office of the Master Collateral Agent or such other address as may be
approved by the Controlling Party. The Master Collateral Agent shall keep or
cause to be kept all Collateral and related documentation in its possession
separate and apart from all other property that it is holding in its possession
and from its own general assets and shall maintain accurate records pertaining
to the Collateral and the Collateral Account in such a manner as shall enable
the Master Collateral Agent and the Controlling Party to verify the accuracy of
such record-keeping. The Master Collateral Agent's books and records shall at
all times show that the Collateral is held by the Master Collateral Agent as
agent for the Trustee and the Collateral Agent and is not the property of the
Master Collateral Agent. The Master Collateral Agent will promptly report to
Financial Security, the Trustee, the Bank and WFAL 2 any failure on its part to
hold the Collateral as provided in this Section 2.03(a) and will promptly take
appropriate action to remedy any such failure.

               (b) Access. The Master Collateral Agent shall permit Financial
Security or the Trustee, or their respective duly authorized representatives,
attorneys, auditors or designees, to inspect the Collateral in the possession of
or otherwise under the control of the Master Collateral Agent pursuant hereto at
such reasonable times during normal business hours as Financial Security or the
Trustee may reasonably request with prior written notice. Prior to a Default
such inspection shall be at the expense of Financial Security or the Trustee, as
the case may be, but after a Default such inspection shall be at the expense of
the Bank and WFAL 2.



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               (c) Servicing. The Bank and WFAL 2 agree that they shall cause
all Contracts pledged hereunder to be serviced by WFS Financial Inc. pursuant to
the WFS Sale and Servicing Agreement.

               (d) Limitations on Investments and Collateral.

                      (i) Specified Account Funds, Spread Account Funds and
Holding Account Deposited Funds, as such terms are defined in the Reinvestment
Contracts, may be invested in Bank Reinvestment Contracts and WFAL 2
Reinvestment Contracts subject to the aggregate limitations and other provisions
set forth in Schedule A hereto, which may be amended from time to time by a
writing signed only by Financial Security, the Bank and WFAL 2.

               (e) Liquidity. In order to ensure that WFAL 2 has sufficient
funds to satisfy its repayment obligations pursuant to Section 4 of each
Reinvestment Contract, the Bank hereby agrees to lend WFAL 2 sufficient
immediately available funds in order to enable WFAL 2 timely to perform its
obligations under each such Sections and any other payments obligations due by
WFAL 2 under any Reinvestment Contract, or otherwise to make available, or cause
to be made available, to WFAL 2 immediately available funds for such purpose.

        Section 2.04. General Authority. The Bank and WFAL 2, and each of them,
hereby irrevocably appoint each of the Master Collateral Agent and the
Controlling Party its true and lawful attorney, with full power of substitution,
in the name of the Bank, WFAL 2, the Master Collateral Agent, Financial
Security, the Trustee or otherwise, for the sole use and benefit of the Master
Collateral Agent, the Trustee and Financial Security, but at the expense of the
Bank and WFAL 2, to the extent permitted by law, to exercise, at any time while
a Default has occurred and is continuing, all or any of the following powers
with respect to all or any of the Collateral:


                   (i) to demand, sue for, collect, receive and give acquittance
               for any and all monies due or to become due upon or by virtue
               thereof,

                   (ii) to settle, compromise, compound, prosecute or defend any
               action or proceeding with respect thereto,

                   (iii) to sell, transfer, assign or otherwise deal in or with
               the same or the proceeds or avails thereof, as fully and
               effectually as if the Master Collateral Agent were the absolute
               owner thereof, and

                   (iv) to extend the time of payment of any or all thereof and
               to make any allowance and other adjustments with reference
               thereto;

provided that the Controlling Party or the Master Collateral Agent (as the case
may be) shall give the Bank and WFAL 2 such prior notice of the time and place
of sale of any of the Collateral as may be required pursuant to Section 6.01
hereof.



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        Section 2.05. Termination of Security Interests. On the Termination
Date, the rights, remedies, powers, duties, authority and obligations conferred
upon the Master Collateral Agent, Financial Security and the Trustee pursuant to
this Agreement in respect of the Collateral shall terminate and be of no further
force and effect and all rights, remedies, powers, duties, authority and
obligations of the Master Collateral Agent, Financial Security and the Trustee
with respect to such Collateral shall be automatically released. In addition,
the Trustee, the Master Collateral Agent and Financial Security agree that, upon
request by the Bank and WFAL 2, they, or any of them, shall execute and Deliver
such instruments as the Bank or WFAL 2 may reasonably request to effectuate such
release, and any such instruments so executed and Delivered shall be fully
binding on the Master Collateral Agent, Financial Security and the Trustee.

                                   ARTICLE III

                             THE COLLATERAL ACCOUNT

        Section 3.01. Establishment. On the date of this Agreement, the Master
Collateral Agent shall establish a segregated, non-interest bearing trust
account, which shall be an Eligible Account under the control (as defined in
Article 8-106 of the UCC) of the Controlling Party, designated "Collateral
Account - Bankers Trust Company of California, N.A., as Master Collateral Agent
for Bankers Trust Company, as Trustee and as Collateral Agent (for the benefit
of Financial Security Assurance Inc.)" (the "Collateral Account"). The
Collateral Account shall be established at a banking office, located in the
State of California, of Bankers Trust Company of California, N.A. or another
depository institution acceptable to the Controlling Party. Funds in the
Collateral Account shall not be commingled with any other funds. The Controlling
Party shall have sole signature authority over the Collateral Account, and no
withdrawals of funds in the Collateral Account shall be made except as specified
in this Agreement.


        Section 3.02. Delivery and Release of Collateral.

               (a) Concurrently with each Delivery or other pledge of Collateral
hereunder, the Bank and WFAL 2 shall furnish to the Master Collateral Agent, the
Trustee and Financial Security an Opinion of Counsel to the effect that the
Master Collateral Agent has a valid, perfected first priority security interest
in such items of Collateral listed in the relevant Collateral Schedule, and so
Delivered or otherwise pledged hereunder, subject to customary exceptions.

               (b) On the tenth (10th) Business Day of each calendar month, the
Bank and WFAL 2 shall Deliver to the Master Collateral Agent, the Trustee and
Financial Security the Monthly Statement, signed by an Authorized Officer each
of the Bank and WFAL 2, certifying the Aggregate Collateral Value of Collateral
Delivered by it to the Master Collateral Agent and held by the Master Collateral
Agent as of the last day of the preceding calendar month and the Aggregate
Commingled Account Balance required to be maintained as of such day. If the
Aggregate Collateral Value so certified is less than the Aggregate Commingled
Account Balance as so certified, either or both of the Bank and WFAL 2 shall,
together with such certificate, Deliver additional Collateral in an amount
necessary to make the Aggregate Collateral Value (after giving effect to such
Delivery) at least equal to the Aggregate Commingled Account Balance.



                                       12
<PAGE>   13

               (c) The Master Collateral Agent may release items of Collateral
(i) to the Servicer in connection with the Servicer's performance of its duties
pursuant to Section 7.02 hereof and (ii) to the Bank and WFAL 2, in the capacity
of each as a pledgor hereunder, in connection with the substitution of new
Collateral against Delivery by the Bank and/or WFAL 2 to the Master Collateral
Agent of substitute Collateral in an amount necessary to make the Aggregate
Collateral Value (after giving effect to such substitution) at least equal to
the Aggregate Collateral Value prior to such substitution.

               (d) On any date on which the Master Collateral Agent shall have
received an FSA Notice to the effect that a Default has occurred and is
continuing, and for as long as stated in such FSA Notice, no Collateral shall be
released to the Bank, WFAL 2 or any other Person, except as specified in
Sections 3.03(d) and/or 6.01 hereof.

               (e) Pending its maturity or disposition hereunder, all Collateral
consisting of Possessory Collateral shall be held, pending maturity or
disposition, solely by the Master Collateral Agent; all Collateral consisting of
Security Entitlements shall be continuously maintained by the Master Collateral
Agent, pending maturity or disposition hereunder, through continued book-entry
registration of such Collateral as described in clause (ii) of the definition of
"Delivery"; and all Collateral consisting of Uncertificated Securities shall be
maintained pending its maturity or deposition hereunder, through continued
registration of the ownership of such Security as described in Clause (iii) of
the definition of "Delivery".

               (f) All Collateral consisting of chattel paper or general
intangibles (including the WFS Sale and Servicing Agreement) shall be duly
perfected by the filing of financing statements with appropriate filing officer,
as set forth in the Opinion of Counsel required to be delivered pursuant to
subsection (a) above.

        Section 3.03. Collateral Account Funds.

               (a) Payments on the Collateral received by the Servicer shall be
paid over to the Bank or WFAL 2 as pledgor of such Collateral free of the lien
created by this Agreement until the Servicer shall have received an FSA Notice
specifying that a Default has occurred and is continuing. After receipt of such
an FSA Notice, the Servicer shall transfer to the Master Collateral Agent any
moneys received by it on or in respect of the Collateral for deposit in the
Collateral Account.

               (b) Following delivery of an FSA Notice, all payments made to the
Master Collateral Agent on or otherwise received by the Master Collateral Agent
in respect of any Collateral shall be deposited on the date of receipt by the
Master Collateral Agent in the Collateral Account. Any income received by the
Master Collateral Agent with respect to the balance from time to time credited
to the Collateral Account, including any interest or capital gains on
investments, shall be deposited in the Collateral Account. All right, title and
interest in and to the funds on deposit from time to time in the Collateral
Account, together with any investments made pursuant to paragraph (c) below,
shall vest in the Master Collateral Agent, shall constitute part of



                                       13
<PAGE>   14

the Collateral hereunder and shall not constitute payment of any Master Secured
Obligations until applied as specified herein.

               (c) Amounts, if any, on deposit in the Collateral Account shall
be invested and re-invested from time to time in such investments as shall be
specified by instructions (which may include, subject to the other provisions
hereof, general standing instructions) given to the Master Collateral Agent by
the Controlling Party; provided that if the Master Collateral Agent receives an
FSA Notice, the Master Collateral Agent shall, if instructed by the Controlling
Party, liquidate any such investments and apply or cause to be applied the
proceeds thereof to the payment of the Master Secured Obligations in the manner
specified in Section 3.03(c) hereof. If no such instruction with respect to
investment of any portion of the Collateral Account is received by the Master
Collateral Agent, no investment shall be made of such portion and the Master
Collateral Agent shall not be liable for any resulting absence of income.

               (d) On each Business Day specified by the Controlling Party after
delivery of an FSA Notice, the Master Collateral Agent shall withdraw from the
Collateral Account an amount (up to the balance therein) that is sufficient to
pay to Financial Security or the Trustee all amounts constituting Master Secured
Obligations owing to Financial Security or the Trustee, as the case may be (such
payments to be applied to reduce the Master Secured Obligations in such manner
as the Controlling Party shall specify). All amounts or investments, if any,
remaining in the Collateral Account on any date after giving effect to the
distribution required to be made on such date pursuant to this paragraph shall
remain on deposit in the Collateral Account until required or permitted to be
withdrawn therefrom pursuant to the provisions of this Section.

        Section 3.04. General Provisions Regarding the Accounts.

               (a) Promptly upon the establishment (initially or upon any
relocation) of the Collateral Account hereunder, the Master Collateral Agent
shall advise the Bank, WFAL 2, Financial Security and the Trustee in writing of
the name and address of the depository institution at which such Collateral
Account was established (if not Bankers Trust Company of California, N.A. or any
successor Master Collateral Agent in its commercial banking capacity), the name
of the officer of the depository institution who is responsible for overseeing
the Collateral Account, the Collateral Account number and the individuals whose
names appear on the signature cards for the Collateral Account. The Bank and
WFAL 2 shall cause such depository institution to execute a written agreement,
in form and substance satisfactory to the Controlling Party, waiving, in each
case to the extent permitted under applicable law, (i) any banker's or other
statutory or similar Lien, and (ii) any right of setoff or other similar right
under applicable law with respect to the Collateral Account and agreeing to
notify the Bank, WFAL 2, the Master Collateral Agent, Financial Security and the
Trustee of any charge or claim against or with respect to the Collateral
Account. The Master Collateral Agent shall give the Bank, WFAL 2, Financial
Security and the Trustee at least ten (10) Business Days' prior written notice
of any change in the location of the Collateral Account or in any related
account information. Anything herein to the contrary notwithstanding, unless
otherwise consented to by the Controlling Party in writing, the Master
Collateral Agent shall have no right to change the location of the Collateral
Account.



                                       14
<PAGE>   15

               (b) If at any time the Collateral Account ceases to be an
Eligible Account, the Master Collateral Agent shall establish, in accordance
with paragraph (a) of this Section, a successor Collateral Account thereto which
shall be an Eligible Account at Bankers Trust Company of California, N.A. or at
another depository institution acceptable to the Controlling Party.

               (c) Any investment of funds in the Collateral Account shall be
made in accordance with the provisions of Section 3.02(c) hereof in the name of
the Master Collateral Agent (in its capacity as such). Subject to the other
provisions hereof, the Master 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
Master Collateral Agent, together with each document of transfer, if any,
necessary to transfer title to such investment to the Master Collateral Agent in
a manner which complies with Article II and this Section.

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

        Section 3.05. FSA Notices. The Controlling Party may at any time give
notice (an "FSA Notice") to the Master Collateral Agent stating that (i) a
Default has occurred and is continuing or (ii) the Controlling Party has,
pursuant to any Existing Agreement, terminated the status of a Reinvestment
Contract as an eligible investment under a Trust Agreement or other Existing
Agreement.

        Section 3.06. Representations by the Bank and WFAL 2. The Bank and WFAL
2 hereby jointly and severally represent and warrant to the other parties
hereto, as of the date hereof and as of the Delivery of any Collateral
hereunder, as follows:

               (a) Immediately prior to Delivery or other pledge hereunder of
any item of Collateral, the Bank or WFAL 2 shall have owned such Collateral free
and clear of all liens, adverse claims or rights of others of any nature
whatsoever.

               (b) Upon Delivery or other pledge of Collateral hereunder, the
Master Collateral Agent will have a valid perfected first priority security
interest in such Collateral.


                                   ARTICLE IV

                           THE MASTER COLLATERAL AGENT

        Section 4.01. Appointment and Powers. (a) Subject to the terms and
conditions hereof, the Collateral Agent, the Trustee and each Depositor in their
capacities as pledgees hereunder hereby appoint Bankers Trust Company of
California, N.A. as the Master Collateral



                                       15
<PAGE>   16

Agent with respect to the Collateral, and Bankers Trust Company of California,
N.A. hereby accepts such appointment and agrees to act as Master Collateral
Agent hereunder. The Collateral Agent, the Trustee and each Depositor in their
capacities as pledgees hereunder hereby authorize the Master Collateral Agent to
take such action on their 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 Master Collateral Agent by the
terms hereof, together with such actions, rights, remedies, powers and
privileges as are reasonably incidental thereto. The Master Collateral Agent
shall execute the Servicing Agreement and shall act upon and in compliance with
the written instructions of the Controlling Party delivered pursuant to this
Agreement promptly following receipt of such written instructions.

               (b) The Master Collateral Agent is, and shall at all times during
the term of this Agreement be, a Securities Intermediary for Financial Security.

               (c) The Master Collateral Agent is eligible to maintain, and does
maintain, and will continue to be eligible to maintain and will maintain, one or
more accounts in its name (or the name of a nominee) with each Clearing
Corporation through which Securities or Security Entitlements constituting
Collateral are held.

        Section 4.02. Performance of Duties. The Master Collateral Agent may
perform any of its duties hereunder by or through agents and employees, shall be
entitled to retain counsel and act in reliance upon the written advice of such
counsel concerning all matters pertaining to the agencies hereby created or its
duties hereunder and shall not be liable for actions taken, or omitted to be
taken, in good faith reliance upon the opinion of counsel selected by it. The
duties of the Master Collateral Agent shall be mechanical and administrative in
nature. The Master Collateral Agent shall not have by reason of this Agreement a
fiduciary relationship. Nothing in this Agreement, express or implied, is
intended to or shall be construed as to impose upon the Master Collateral Agent
any obligations in respect of this Agreement except as expressly set forth
herein.

        Section 4.03. Limitation on Liability; Indemnification. Neither the
Master 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 Master Collateral Agent shall be
liable for its own gross negligence or willful misconduct; nor shall the Master
Collateral Agent be responsible for the validity, effectiveness, value,
sufficiency or enforceability against the Bank or WFAL 2 of this Agreement or
any of the Collateral (or any part thereof).

               The Bank and WFAL 2 hereby jointly and severally agree to
indemnify and hold the Master Collateral Agent harmless from and against all
damage, liability and expense (including reasonable attorneys' fees) arising out
of or in connection with this Agreement, except to the extent such damage,
liability or expense arises out of the Master Collateral Agent's negligence,
willful misconduct or breach of the obligations imposed hereby on the Master
Collateral Agent.



                                       16
<PAGE>   17

        Section 4.04. Reliance upon Documents. Subject to the provisions of
Section 4.08 hereof, in the absence of gross negligence or willful misconduct on
its part, the Master 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 and
shall have no liability in acting, or omitting to act, where such action or
omission to act is in reasonable reliance upon any statement or opinion
contained in any such document or instrument.

        Section 4.05. Successor Master Collateral Agent. The Master Collateral
Agent acting hereunder at any time may resign by giving not less than ninety
(90) days' prior written notice in writing to the Bank, WFAL 2, the Trustee and
Financial Security. If the Master Collateral Agent is also a Trustee and, as
such, determines that it has a conflicting interest on account of its acting as
Master Collateral Agent, the Master Collateral Agent shall eliminate such
conflicting interest by resigning as Master Collateral Agent hereunder rather
than resigning as such Trustee. The Controlling Party shall appoint a successor
to the Master Collateral Agent upon any such resignation by an instrument of
substitution complying with the requirements of applicable law, or, in the
absence of any such requirements, without formality other than appointment and
designation in writing, a copy of which instrument or writing shall be sent to
the Bank and WFAL 2; provided, however, that the validity of any such
appointment shall not be impaired or affected by any failure to give any such
notice to the Bank and WFAL 2 or by any defect therein. Notwithstanding the
foregoing, prior to the receipt by the Bank and WFAL 2 of an FSA Notice, such
appointment shall be subject to the consent of the Bank and WFAL 2, which
consent shall not be unreasonably withheld. Upon the making and acceptance of
such appointment, the execution and delivery by such successor Master Collateral
Agent of a ratifying instrument pursuant to which such successor Master
Collateral Agent agrees to assume the duties and obligations imposed on the
Master Collateral Agent by the terms of this Agreement, and the delivery to such
successor Master Collateral Agent of the Collateral and related documents then
held by the retiring Master Collateral Agent, such successor Master Collateral
Agent shall thereupon succeed to and become vested with all the estate, rights,
powers, remedies, privileges, immunities, indemnities, duties and obligations
hereby granted to or conferred or imposed upon the Master Collateral Agent named
herein, and one such appointment and designation shall not exhaust the right to
appoint and designate further successor Master Collateral Agents hereunder. No
Master Collateral Agent shall be discharged from its duties or obligations
hereunder until the Collateral and related documents then held by such Master
Collateral Agent shall have been transferred and delivered to the successor
Master Collateral Agent and such retiring Master Collateral Agent shall have
executed and delivered to the successor Master Collateral Agent appropriate
instruments establishing the successor Master Collateral Agent as the record
holder of all liens and security interests in favor of the Trustee and the
Collateral Agent in the Collateral and transferring to such successor Master
Collateral Agent all power given pursuant to this Agreement to act as
attorney-in-fact of the Bank and WFAL 2, and each of them, for purposes of this
Agreement. Each such successor Master Collateral Agent shall provide the Bank,
WFAL 2 and Financial Security with its address, and its telephone and telecopier
numbers, to be used for purposes of Section 7.05 hereof, in a notice complying
with the terms of said Section.



                                       17
<PAGE>   18

        Section 4.06. Representations and Warranties of Bankers Trust Company of
California, N.A.. Bankers Trust Company of California, N.A. represents and
warrants to the Bank, WFAL 2, the Trustee and Financial Security as follows:

               (a) Bankers Trust Company of California, N.A. is a national
banking association, duly organized, validly existing and in good standing.

               (b) Bankers Trust Company of California, N.A. has full power,
authority and legal right to execute, deliver and perform this Agreement and the
Servicing Agreement and has taken all necessary action to authorize the
execution, delivery and performance by it of this Agreement and the Servicing
Agreement.

               (c) This Agreement and the Servicing Agreement constitute valid
and binding obligations of Bankers Trust Company of California, N.A. in its
capacity as Master Collateral Agent enforceable against it in accordance with
their respective terms.

               (d) The execution and delivery by Bankers Trust Company of
California, N.A. of this Agreement and the Servicing Agreement and the
performance by it of its obligations hereunder and thereunder, will not violate
any law, rule or regulation or any agreement, order or decree binding on it or
its properties.

        Section 4.07. Waiver of Setoffs. The Master Collateral Agent hereby
expressly waives any and all rights of setoff that the Master Collateral Agent
may otherwise at any time have under applicable law with respect to the
Collateral Account and agrees that amounts in the Collateral Account shall at
all times be held and applied solely in accordance with the provisions of this
Agreement.

        Section 4.08. Control by the Controlling Party. The Master Collateral
Agent shall comply with notices and instructions given by the Bank or WFAL 2
only if expressly contemplated hereby or if accompanied by the written consent
of the Controlling Party, except that if any Default shall have occurred and be
continuing, the Master Collateral Agent shall act upon and comply with notices
and instructions given by the Controlling Party alone in the place and stead of
the Bank or WFAL 2. In the absence of any written communication by the
Controlling Party to the Master Collateral Agent to the effect that a Default
has occurred and is continuing, the Master Collateral Agent may assume that no
Default has occurred and is continuing. The Master Collateral Agent shall have
no duty to verify whether or not a Default has occurred or is continuing or the
facts stated in any FSA Notice. Any written communication by the Controlling
Party to the Master Collateral Agent specifying the amount of any obligations
owing to Financial Security or the Trustee shall be conclusive evidence of such
amount, notwithstanding any notice to the contrary received by the Master
Collateral Agent from the Bank, WFAL 2 or any other Person.



                                       18
<PAGE>   19

                                    ARTICLE V

                        COVENANTS OF THE BANK AND WFAL 2

        Section 5.01. Preservation of Collateral. Subject to the rights, powers
and authorities granted to the Master Collateral Agent, Financial Security, and
the Trustee in this Agreement, the Bank and WFAL 2 shall take such action as is
necessary and proper with respect to the Collateral in order to preserve,
maintain and service such Collateral and to cause (subject to the rights of the
Controlling Party) the Master Collateral Agent to perform its obligations with
respect to such Collateral as provided herein. The Bank and WFAL 2, and each of
them, will do, execute, acknowledge and deliver, or cause to be done, executed,
acknowledged and delivered, such instruments of transfer or take such other
steps or actions as may be necessary, or required by the Controlling Party, to
perfect the Security Interests granted hereunder in (a) prior to delivery of an
FSA Notice to the Master Collateral Agent, the items of Collateral referenced in
Schedule A hereto and (b) after delivery of an FSA Notice to the Master
Collateral Agent, all Collateral, to ensure that such Security Interests rank
prior to all other Liens and to preserve the priority of such Security Interests
and the validity and enforceability thereof. Upon any Delivery or substitution
of Collateral, the Bank and/or WFAL 2, as pledgor, shall be obligated to create
for the benefit of the Master Collateral Agent a valid first Lien on, and valid
and perfected, first priority security interest in, (a) prior to delivery of an
FSA Notice to the Master Collateral Agent, the items of Collateral referenced in
Schedule A hereto and (b) after delivery of an FSA Notice to the Master
Collateral Agent, all Collateral so delivered and to deliver such Collateral to
the Master Collateral Agent, free and clear of any other Lien, together with
satisfactory assurances thereof, and to pay any reasonable costs incurred by the
Controlling Party or the Master Collateral Agent (including its agents) or
otherwise in connection with such Delivery.


        Section 5.02. Opinions as to Collateral. On the date of delivery of the
Monthly Statement following each January and July, commencing with such date
following January 1999, the Bank and WFAL 2 shall, at their own cost and
expense, furnish to Financial Security, the Trustee and the Master Collateral
Agent an Opinion of Counsel either stating that, in the opinion of such counsel,
(a) such actions have been taken as are necessary under California law to
perfect, maintain and protect the lien and security interest of the Master
Collateral Agent with respect to the items of Collateral set forth on Schedule A
that have been granted to the Master Collateral Agent as of the last Business
Day of the relevant January or July under California law (and other applicable
law) against all creditors of and purchasers from the Bank or WFAL 2, as the
case may be, and reciting the details of such action, or (b) no action is
necessary to maintain such perfected lien and security interest. Such Opinion of
Counsel shall describe each execution and filing of any documents and
instruments and such other actions as will, in the opinion of such counsel, be
required to perfect, maintain and protect the lien and security interest of the
Master Collateral Agent, on behalf of the Trustee and the Collateral Agent with
respect to such Collateral under California law (and other applicable law)
against all creditors of and purchasers from the Bank or WFAL 2, as the case may
be, for a period, specified in such Opinion, continuing until a date not earlier
than eighteen months from the date of such Opinion.



                                       19
<PAGE>   20

        Section 5.03. Notices. In the event the Bank or WFAL 2 acquires
knowledge of the occurrence and continuance of any Default, the Bank or WFAL 2,
as the case may be, shall promptly give notice thereof to the Master Collateral
Agent, the Trustee and Financial Security.

        Section 5.04. Waiver of Stay or Extension Laws; Marshalling of Assets.
The Bank and WFAL 2 covenant, to the fullest extent permitted by applicable law,
that they, and each of them, will not at any time insist upon, plead, or in any
manner whatsoever claim or take the benefit or advantage of, any appraisement,
valuation, stay, extension or redemption law wherever enacted, now or at any
time hereafter in force, in order to prevent or hinder the enforcement of this
Agreement or any sale of the Collateral or any part thereof in accordance with
this Agreement or the possession thereof by any purchaser at any sale, pursuant
to and in accordance with Section 6.01 hereof; and the Bank and WFAL 2, to the
fullest extent permitted by applicable law, for themselves and all who may claim
under them, or any of them, hereby waive the benefit of all such laws, and
covenant that they will not hinder, delay or impede the execution of any power
herein granted to the Master Collateral Agent, but will suffer and permit the
execution of every such power as though no such law had been enacted. The Bank
and WFAL 2, for themselves and all who may claim under them, waive, to the
fullest extent permitted by applicable law, all right to have the Collateral
marshalled upon any foreclosure or other disposition thereof.

        Section 5.05. Noninterference, etc.. The Bank and WFAL 2 shall not take
any action, or fail to take any action, if such action or failure to take action
will interfere with the enforcement of any rights under this Agreement, the
Servicing Agreement or the Existing Agreements.


        Section 5.06. Changes. Neither the Bank nor WFAL 2 shall change its name
unless it shall have given Financial Security, the Trustee and the Master
Collateral Agent at least sixty (60) days' prior written notice thereof. The
Bank or WFAL 2, as the case may be, shall give Financial Security, the Trustee
and the Master Collateral Agent at least sixty (60) days' prior written notice
of any relocation of its principal executive office. If the Bank or WFAL 2
relocates (i) its principal executive office or principal place of business from
that set forth in Section 8.05 hereof or (ii) the locations where it keeps or
holds any Collateral or any records relating thereto from that set forth in
Section 8.05 hereof, the Bank or WFAL 2, as the case may be, shall give prior
notice thereof to Financial Security, the Trustee and the Master Collateral
Agent.



                                       20
<PAGE>   21

                                   ARTICLE VI

                              REMEDIES UPON DEFAULT

        Section 6.01. Rights and Remedies Upon Default.

               (a) In addition to and not in limitation of the rights otherwise
provided to the Controlling Party pursuant to this Agreement, to the fullest
extent permitted by applicable law, if a Default has occurred and is continuing,
the Controlling Party in its discretion may, or may direct the Master Collateral
Agent to, exercise the following rights, privileges and remedies:

                   (i) Collection of the Collateral. The Master Collateral Agent
shall have the right to collect all proceeds of the Collateral, to pay all
expenses of such collection, including the reasonable expenses and compensation
of the Master Collateral Agent, its agents and attorneys, and to apply the
remainder of the moneys so received as provided herein.

                  (ii) Sale of Collateral. The Master Collateral Agent may sell,
or cause to be sold, the Collateral or any part thereof or interest therein, at
public auction to the highest bidder for cash or at private sale or auction with
or without demand, advertisement or notice of the date, time or place of sale or
any adjournment thereof, upon such terms as the Controlling Party may approve,
and upon such sale the Master Collateral Agent shall make and deliver to the
purchaser or purchasers an appropriate instrument or instruments of transfer.
The Master Collateral Agent is hereby irrevocably appointed the true and lawful
attorney of the Bank and WFAL 2, and each of them, in its name and stead, to
make all necessary transfers of property thus sold; and for that purpose it may
execute all necessary instruments of transfer, and may substitute one or more
Persons with like power, the Bank and WFAL 2, and each of them, hereby ratifying
and confirming all that its said attorney, or such substitute or substitutes,
shall lawfully do by virtue hereof. Nevertheless, if so requested by the Master
Collateral Agent or any purchaser of the Collateral or any part thereof, the
Bank and WFAL 2, and each of them, shall ratify and confirm any such sale or
transfer by executing and delivering to the Master Collateral Agent or such
purchaser all proper instruments of transfer and releases as may be designated
in any such request. The Master Collateral Agent may proceed at law or in equity
to foreclose the lien of this Agreement against all or any part of the
Collateral and to have the same sold under the judgment or decree of a court
having jurisdiction or as otherwise may be required or permitted by law. Upon
any such sale, whether made under the power of sale hereby given or by virtue of
judicial proceedings, the Controlling Party may bid for and purchase the
Collateral or any part thereof and, upon compliance with the terms of such sale,
may hold, retain, possess or dispose of such property in its or their own
absolute right without accountability. Upon any sale, whether made under the
power of sale hereby given or by virtue of judicial proceedings, a receipt of
the Master Collateral Agent, or of the officer making such sale under judicial
proceedings, shall be a sufficient discharge to the purchaser or purchasers at
such sale for its or their purchase money, and such purchaser or purchasers
shall not be obliged to see to the application thereof. Any such sale, whether
under the power of sale hereby given or by virtue of judicial proceedings, shall
bind the Master Collateral Agent, the Bank and WFAL 2, shall operate to divest
all right, title and interest whatsoever, either at law or in equity, of each of
them in and to the property sold, and shall be a perpetual bar, both at law and
in equity,



                                       21
<PAGE>   22

against each of them and their successors and assigns, and against any and all
Persons claiming through or under them.

                 (iii) Other Actions. The Master Collateral Agent shall have the
right to cause any other action permitted at law or in equity to be initiated
and prosecuted to enforce this Agreement and any rights granted by virtue of the
pledge of the Collateral hereunder.

               (b) In the event that the Bank or WFAL 2 shall default in the
performance or observance of any covenant or agreement contained herein, the
Master Collateral Agent shall have the right to take any action or initiate any
proceeding at law or equity available to it to enforce the terms of this
Agreement.

        Section 6.02. Restoration of Rights and Remedies. If the Master
Collateral Agent has instituted any proceeding to enforce any right or remedy
under this Agreement, and such proceeding has been discontinued or abandoned for
any reason, or has been determined adversely to such Master Collateral Agent,
then and in every such case the Bank, WFAL 2 and the Master Collateral Agent
shall, subject to any determination in such proceeding, be restored severally
and respectively to their former positions hereunder, and thereafter all rights
and remedies of the Controlling Party shall continue as though no such
proceeding had been instituted.

        Section 6.03. No Remedy Exclusive. No right or remedy herein conferred
upon or reserved to the Master Collateral Agent or the Controlling Party is
intended to be exclusive of any other right or remedy, and every right or remedy
shall, to the extent permitted by law, be cumulative and in addition to every
other right and remedy given hereunder or now or hereafter existing at law, in
equity or otherwise, and each and every right, power and remedy whether
specifically herein given or otherwise existing may be exercised from time to
time and as often and in such order as may be deemed expedient by the
Controlling Party, and the exercise of or the beginning of the exercise of any
right or power or remedy shall not be construed to be a waiver of the right to
exercise at the same time or thereafter any other right, power or remedy.


                                   ARTICLE VII

                                     CUSTODY

        Section 7.01. Collateral Schedule; Collateral Files. On each date on
which the Bank and/or WFAL 2 pledge items of Collateral to the Master Collateral
Agent hereunder (each such date, a "Pledge Date"), the Bank and WFAL 2 shall
deliver to the Master Collateral Agent, the Trustee and Financial Security a
schedule of Collateral (each, a "Collateral Schedule") which, as to each item of
Collateral, sets forth, to the extent applicable, the obligor's name, the loan
or other identifying number, the interest rate, the original principal balance,
the outstanding principal balance, the origination or issue date, the scheduled
monthly principal and interest payment and the maturity date.



                                       22
<PAGE>   23

               On each Pledge Date, the Bank and WFAL 2 shall deliver to the
Master Collateral Agent the following documents with respect to each Mortgage
Loan pledged on such date to the Master Collateral Agent:

               a.     Original mortgage note endorsed or assigned without
                      recourse to Bankers Trust Company of California, N.A., as
                      Master Collateral Agent;

               b.     Original recorded mortgage or deed of trust or certified
                      copy thereof; and

               c.     Original assignment, in recordable form, of mortgage or
                      deed of trust (which may be a blanket assignment for all
                      Mortgage Loans) to Bankers Trust Company of California,
                      N.A., as Master Collateral Agent.

               The Bank and WFAL 2 jointly and severally represent, warrant and
covenant to the Master Collateral Agent, the Trustee and Financial Security
that, with respect to each Mortgage Loan pledged to the Master Collateral Agent
hereunder, the Bank or WFAL 2 has (i) originals of all assumption and
modification agreements related thereto, (ii) evidence of homeowners insurance
on the related mortgaged property, and (iii) a title insurance policy.

               Upon receipt by the Bank and WFAL 2 of an FSA Notice stating that
a Default has occurred and is continuing, the Bank and WFAL 2 shall deliver to
the Master Collateral Agent all documents and instruments specified in the
immediately preceding paragraph and such other documents and instruments with
respect to each Mortgage Loan, Contract, Federal Agency Security or other item
of Collateral pledged hereunder to the Master Collateral Agent in which a
security interest may be perfected by possession.

               The documents and instruments delivered in respect of each
Mortgage Loan, Contract, Federal Agency Security or other item of Collateral are
herein referred to as the "Collateral File". The Master Collateral Agent shall
segregate and maintain continuous custody of all documents constituting each
Collateral File in secure and fireproof facilities within the State of
California in accordance with customary standards for such custody.

        Section 7.02. Release of Documents to Servicer. In the event that a
specific document relating to an item of Collateral is required to be obtained
by the Servicer because such Collateral has been paid in full and is to be
released by the Servicer to the related obligor or to facilitate enforcement and
collection procedures with respect to such Collateral, the Servicer shall be
entitled to obtain such document by submitting to the Master Collateral Agent
(with copies to the Trustee and Financial Security) a written request therefor,
indicating and confirming that it will hold such document in trust for the
benefit of the Master Collateral Agent until such time as it is released to the
related obligor upon full payment or is otherwise returned to the Master
Collateral Agent. Upon its receipt of an FSA Notice stating that a Default has
occurred and is continuing, the Master Collateral Agent shall not release such
document to the Servicer until it has received the written authorization from
the Controlling Party.



                                       23
<PAGE>   24

        Section 7.03. Insurance. The Master Collateral Agent shall, at its own
expense, maintain at all times during the existence of this Agreement and keep
in full force and effect (a) fidelity insurance, (b) theft of documents
insurance and (c) forgery insurance. All such insurance shall be in amounts,
with standard coverage and subject to deductibles, as are customary for
insurance typically maintained by institutions which act as custodian in similar
transactions.

        Section 7.04. Master Collateral Agent's Interest in Collateral. By
execution of this Agreement, the Master Collateral Agent warrants and covenants
that it currently does not hold, and during the existence of this Agreement will
not hold, any adverse interest, by way of security or otherwise, in any
Collateral and hereby waives and releases any such interest which it may have or
acquire in the future. The Master Collateral Agent expressly waives (i) any lien
which might arise in connection with unpaid fees or any lien which might arise
in connection with any other claims against any party hereto and (ii) any
possessory lien, claim or right of set-off with respect to any Collateral.


                                  ARTICLE VIII

                                  MISCELLANEOUS

        Section 8.01. Further Assurances. Each of the Bank, WFAL 2 and the
Master Collateral Agent shall take such action and deliver such instruments, in
addition to the actions and instruments specifically provided for herein, as may
be reasonably requested or required by the Controlling Party to effectuate the
purpose or provisions of this Agreement or to confirm or perfect any transaction
described or contemplated herein. The parties hereto will make any changes
required by the Office of Thrift Supervision if mutually agreed by the parties
hereto and if there is no such mutual agreement, the Bank, WFAL 2 and the
Controlling Party agree to terminate this Agreement.

        Section 8.02. Waiver. Any waiver by any party of any provision of this
Agreement or any right, remedy or option hereunder shall only prevent and stop
such party from thereafter enforcing such provision, right, remedy or option if
such waiver is given in writing and only as to the specific instance and for the
specific purpose for which such waiver was given. The failure or refusal of any
party hereto to insist in any one or more instances, or in a course of dealing,
upon the strict performance of any of the terms or provisions of this Agreement
by any party hereto or the partial exercise of any right, remedy or option
hereunder shall not be construed as a waiver or relinquishment of any such term
or provision, but the same shall continue in full force and effect.

        Section 8.03. Amendments. This Agreement may be amended, changed,
modified, altered or terminated only by written instrument or written
instruments signed by each of the parties hereto; provided that the consent of
the Master Collateral Agent shall not be withheld or delayed with respect to any
amendment that does not adversely affect the Master Collateral Agent and,
provided further that Schedule A hereto may be amended or replaced as set forth
in



                                       24
<PAGE>   25

Section 2.03 (d) hereof. The Original Agreement, as amended and restated hereby,
shall remain in full force and effect.

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

        Section 8.05. Notices. All notices, demands, certificates, requests and
communications hereunder ("notices") shall be in writing and shall be effective
(a) upon receipt when sent through the U.S. mails, registered or certified mail,
return receipt requested, postage prepaid, with such receipt to be effective the
date of delivery indicated on the return receipt, or (b) one Business Day after
delivery to an overnight courier, or (c) on the date personally delivered to an
Authorized Officer of the party to which sent, or (d) on the date transmitted by
legible telecopier transmission with a confirmation of receipt, in all cases
addressed to the recipient as follows:


               (i)    If to the Bank or the Bank as Servicer:

                             Western Financial Bank
                             16485 Laguna Canyon Road
                             Irvine, California 92618
                             Attention:  Joy Schaefer
                             Telecopier No.: (949) 727-2306

                (ii)  If to WFAL:

                             WFS Financial Auto Loans, Inc.
                             23 Pasteur
                             Irvine, California 92618
                             Attention: Guy DuBose, Esq.
                             Telecopier No.: (949) 753-3085



                                       25
<PAGE>   26

               (iii)  If to WFSRC:

                             WFS Receivables Corporation
                             6655 West Sahara Avenue
                             Las Vegas, Nevada 89102
                             Attention:  David A. Guay
                             Telecopier No.: 702-247-4602

               (iv)   If to WFAL 2:

                             WFS Financial Auto Loans 2, Inc.
                             23 Pasteur
                             Irvine, California 92618
                             Attention: Guy DuBose, Esq.
                             Telecopier No.: (949) 753-3085

               (v)    If to WFS as Servicer:

                             WFS Financial Inc.
                             23 Pasteur
                             Irvine, California  92618
                             Attention:  Joy Schaefer
                             Telecopier No.: (949) 727-2306

               (vi)   If to Financial Security:

                             Financial Security Assurance Inc.
                             350 Park Avenue - 13th Floor
                             New York, New York  10022
                             Attention:  Surveillance Department
                             Telecopier No. (212) 755-5165
                                            (212) 688-3101

               (vii)  If to the Trustee or the Collateral Agent:

                             Bankers Trust Company
                             Four Albany Street, 10th Floor
                             New York, New York  10006
                             Attention:  Corporate Trust and Agency Group/
                             Western Financial Master Collateral
                             Telecopier No.: (212) 250-6533



                                       26
<PAGE>   27

               (viii) If to the Master Collateral Agent:

                             Bankers Trust Company of California, N.A.
                             3 Park Plaza, 16th Floor
                             Irvine, California  92714
                             Telecopier No.: (949) 253-7577
                             Attention: Western Financial Collateral
                                        Assignment

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

        Section 8.06. Term of this Agreement. This Agreement shall take effect
on the date hereof and shall continue in effect until the Termination Date. On
the Termination Date, this Agreement shall terminate, all obligations of the
parties hereunder shall cease and terminate and the Collateral, if any, held
hereunder and not to be used or applied in discharge of any obligations of the
Bank or WFAL 2 in respect of the Master Secured Obligations or otherwise under
this Agreement, shall be released to and in favor of the Bank or WFAL 2, as
pledgor as the case may be.

        Section 8.07. Assignments; Third-Party Rights; Reinsurance.

               (a) This Agreement shall be a continuing obligation of the Bank
and WFAL 2 and shall (i) be binding upon the Bank and WFAL 2 and their
respective successors and assigns, and (ii) inure to the benefit of and be
enforceable by Financial Security, the Trustee and the Master Collateral Agent,
and by their respective successors and assigns. Neither the Bank nor WFAL 2 may
assign this Agreement or delegate any of its duties hereunder, without the prior
written consent of the Controlling Party. Any assignment made in violation of
this Agreement shall be null and void.

               (b) Financial Security shall have the right to give
participations in its rights under this Agreement and to enter into contracts of
reinsurance with respect to any Policy issued in connection with any of the
Trusts upon such terms and conditions as Financial Security may in its
discretion determine; provided, however, that no such participation or
reinsurance agreement or arrangement shall relieve Financial Security of its
obligations hereunder or under any such Policy.

               (c) In addition, Financial Security shall be entitled to assign
or pledge to any bank or other lender providing liquidity or credit with respect
to any Trust or the obligations of Financial Security in connection therewith
any rights of Financial Security under this Agreement, the Servicing Agreement
or the Existing Agreements or with respect to any real or personal property or
other interests pledged to Financial Security, or in which Financial Security
has a security interest, in connection with any Trust.



                                       27
<PAGE>   28

               (d) Except as provided herein with respect to participants and,
nothing in this Agreement shall confer any right, remedy or claim, express or
implied, upon any Person, any owner or other holder of any security or other
investment covered by any Policy, other than Financial Security, against the
Bank or WFAL 2, and all the terms, covenants, conditions, promises and
agreements contained herein shall be for the sole and exclusive benefit of the
parties hereto and their successors and permitted assigns.

        Section 8.08. Consent of the Controlling Party. In the event that the
Controlling Party's consent is required under the terms hereof, it is understood
and agreed that, except as otherwise provided expressly herein, the
determination whether to grant or withhold such consent shall be made solely by
the Controlling Party in its sole discretion.

        Section 8.09. Trial by Jury Waived. EACH OF THE PARTIES HERETO WAIVES,
TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY LITIGATION ARISING DIRECTLY OR INDIRECTLY OUT OF, UNDER OR IN
CONNECTION WITH THIS AGREEMENT, THE SERVICING AGREEMENT, ANY OF THE EXISTING
AGREEMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREUNDER OR THEREUNDER. EACH
OF THE PARTIES HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF
ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY
WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND
(B) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG
OTHER THINGS, THIS WAIVER.

        Section 8.10. Counterparts. This Agreement may be executed in two or
more counterparts by the parties hereto, and each such counterpart shall be
considered an original and all such counterparts shall constitute one and the
same instrument.

        Section 8.11. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER
SHALL BE DETERMINED, IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA.



                                     xxviii
<PAGE>   29

               IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the date set forth on the first page hereof.

                                    WESTERN FINANCIAL BANK


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

                                    WFS FINANCIAL AUTO LOANS, INC.


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

                                    WFS FINANCIAL AUTO LOANS 2, INC.


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

                                    WFS RECEIVABLES CORPORATION


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

                                    FINANCIAL SECURITY ASSURANCE INC.


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

                                    BANKERS TRUST COMPANY, as Trustee
                                    and Collateral Agent


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



                                    BANKERS TRUST COMPANY OF CALIFORNIA, N.A.,
                                    as Master Collateral Agent


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




                                      xxix