<PAGE>



                           RECEIVABLES PURCHASE AGREEMENT
                                   AND ASSIGNMENT

                                      BETWEEN

                        ARCADIA RECEIVABLES FINANCE CORP. IV
                                     PURCHASER

                                        AND

                               ARCADIA FINANCIAL LTD.
                                       SELLER

                                    DATED AS OF
                                 SEPTEMBER 24, 1998
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                                 TABLE OF CONTENTS
<TABLE>
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                                                                           PAGE
                                                                           ----
<S>                                                                        <C>
ARTICLE I DEFINITIONS                                                        1
     SECTION 1.1    General                                                  1
     SECTION 1.2    Specific Terms                                           1
     SECTION 1.3    Usage of Terms                                           3
     SECTION 1.4    Certain References                                       3
     SECTION 1.5    No Recourse                                              3
     SECTION 1.6    Effectiveness                                            3

ARTICLE II CONVEYANCE OF THE RECEIVABLES AND THE OTHER
     CONVEYED PROPERTY                                                       4
     SECTION 2.1    Purchase Price                                           4
     SECTION 2.2    Conveyance of Receivables                                4
     SECTION 2.3    Delivery of Receivables File                             5

ARTICLE III REPRESENTATIONS AND WARRANTIES                                   5
     SECTION 3.1    Representations and Warranties of Arcadia                5
     SECTION 3.2    Representations and Warranties of ARFC IV                7

ARTICLE IV COVENANTS OF ARCADIA                                              9
     SECTION 4.1    Protection of Title of ARFC IV                           9
     SECTION 4.2    Other Liens or Interests                                10
     SECTION 4.3    Costs and Expenses; Fees                                11
     SECTION 4.4    Indemnification                                         11

ARTICLE V REPURCHASES                                                       13
     SECTION 5.1    Repurchase of Receivables Upon Breach of
                    Warranty or Covenant                                    13
     SECTION 5.2    Reassignment of Purchased Receivables                   13
     SECTION 5.3    Waivers                                                 14

ARTICLE VI MISCELLANEOUS                                                    14
     SECTION 6.1    Liability of Arcadia                                    14
     SECTION 6.2    Merger or Consolidation of Arcadia or ARFC IV           14
     SECTION 6.3    Limitation on Liability of Arcadia and Others           15
     SECTION 6.4    Amendment                                               15
     SECTION 6.5    Notices                                                 15
     SECTION 6.6    Merger and Integration                                  15
     SECTION 6.7    Severability of Provisions                              15
     SECTION 6.8    Intention of the Parties                                16
     SECTION 6.9    Governing Law                                           16

<PAGE>

     SECTION 6.10   Counterparts                                            16
     SECTION 6.11   Pledge of the Receivables and the Other
                    Conveyed Property to the Collateral Agent
                    on behalf of the Secured Parties                        16

</TABLE>

<PAGE>

                           RECEIVABLES PURCHASE AGREEMENT
                                   AND ASSIGNMENT

       THIS RECEIVABLES PURCHASE AGREEMENT AND ASSIGNMENT, dated as of September
24, 1998, executed between ARCADIA RECEIVABLES FINANCE CORP. IV, a Delaware
corporation, as purchaser ("ARFC IV"), and ARCADIA FINANCIAL LTD., a Minnesota
corporation, as seller ("Arcadia").

                                     WITNESSETH:

       WHEREAS, ARFC IV has agreed from time to time to purchase from Arcadia
and Arcadia, pursuant to this Agreement, has agreed from time to time to sell
and assign to ARFC IV the Receivables and Other Conveyed Property;

       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 IV and Arcadia, 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 Financing Agreement (defined below).

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

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

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

       "ASSIGNMENT AGREEMENT" means, with respect to any Receivables and related

<PAGE>

Other Conveyed Property, the assignment agreement between Arcadia and ARFC IV
pursuant to which Arcadia sells and assigns such Receivables and related Other
Conveyed Property to ARFC IV, the form of which is attached hereto as Exhibit A.

       "EFFECTIVENESS DATE" has the meaning specified in SECTION 1.6 hereof.

       "FINANCING AGREEMENT" means the Receivables Financing Agreement, dated as
of September 24, 1998, executed and delivered by ARFC IV, as Borrower, Arcadia,
as Servicer and as Custodian, the "Lenders" (as defined therein) party thereto,
Credit Suisse First Boston, New York Branch, as Agent and Norwest Bank
Minnesota, National Association, as Backup Servicer and Collateral Agent.

       "OTHER CONVEYED PROPERTY" means, with respect to any Receivable, all
monies at any time paid or payable on such Receivable or in respect thereof
after the applicable Transfer Date (including amounts due on or before the
applicable Transfer Date but received by ARFC IV or Arcadia after such Transfer
Date), an assignment of security interests of Arcadia in the related Financed
Vehicle, the Insurance Policies and any proceeds from any Insurance Policies
relating to such Receivable, the Obligors or the Financed Vehicle, including
rebates of premiums, rights under any Collateral Insurance and any Force Placed
Insurance relating to such Receivable, rights of Arcadia against Dealers with
respect to such Receivable under the Dealer Agreements and the Dealer
Assignments, all items contained in the related Receivable File, any and all
other documents or electronic records that Arcadia keeps on file in accordance
with its customary procedures or rating to such Receivable, the Obligors or the
Financed Vehicles, property (including the right to receive Recoveries) that
secures such Receivable and that has been acquired by or on behalf of Arcadia
pursuant to liquidation of such Receivable, and all proceeds of the foregoing.

       "PURCHASE AMOUNT" has the meaning specified in SECTION 5.1 hereof.

       "PURCHASE PRICE" has the meaning specified in Section 2.1 hereof.

       "RECEIVABLE" means a retail installment contract or promissory note and
related security agreement for a new or used automobile or light truck (and all
accessories thereto) that is originated or purchased by Arcadia, and all rights
and obligations thereunder.

       "REPURCHASE EVENT" means the occurrence of a breach of any of Arcadia's
representations and warranties contained in SECTION 3.1 (a) hereof or any other
event which requires the repurchase of a Receivable by Arcadia under the
Financing Agreement.

       "SCHEDULE OF RECEIVABLES" means the schedule of all Receivables sold and
transferred pursuant to each Assignment Agreement which is attached hereto as

<PAGE>

Schedule A, as such Schedule shall be supplemented from time to time (i) by each
Schedule of Receivables with respect to each Assignment Agreement, which
Schedules of Receivables shall be deemed incorporated and made a part of
Schedule A hereto and (ii) to reflect the repurchase from ARFC IV of (a)
Warranty Receivables and (b) other Receivables purchased from ARFC IV by
Arcadia.  With respect to an Assignment Agreement, "Schedule of Receivables"
shall mean the Schedule attached to such Assignment Agreement as Exhibit A
thereto.

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

       "TRANSACTION DOCUMENTS" means the Note, the Collateral Agent Agreement,
the Financing Agreement, the Custodian Agreement and the Lockbox Agreement.  The
Transaction Documents to be executed by any party are referred to herein as
"SUCH PARTY'S TRANSACTION DOCUMENTS," "ITS TRANSACTION DOCUMENTS" or by a
similar expression.

       "TRANSFER DATE" means any date on which Receivables and related Other
Conveyed Property are sold and assigned to ARFC IV pursuant to SECTION 2.2.

       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 Financing
Agreement; references to Persons include their permitted successors and assigns;
and the terms "include" or "including" mean "include without limitation" or
"including without limitation."

       SECTION 1.4   CERTAIN REFERENCES.  All references to the Principal
Balance of a Receivable as of a Transfer Date shall refer to the close of
business on such day.

       SECTION 1.5   NO RECOURSE.  Without limiting the obligations of Arcadia
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 Arcadia,
or of any predecessor or successor of Arcadia.

       SECTION 1.6   EFFECTIVENESS.  The "Effectiveness Date" of this Agreement
shall occur on the date on which the conditions set forth in this Agreement
shall have been satisfied or waived by both parties to this Agreement.

                                     ARTICLE II

<PAGE>

                           CONVEYANCE OF THE RECEIVABLES
                          AND THE OTHER CONVEYED PROPERTY

       SECTION 2.1   PURCHASE PRICE.   In consideration of the conveyance of the
Receivables and the related Other Conveyed Property to ARFC IV on each Transfer
Date, ARFC IV shall pay or cause to be paid to Arcadia an amount (the "Purchase
Price") equal to the product of (x) the outstanding Principal Balance (as
defined in the Financing Agreement) of each Receivable and (y) 100%.  Such
amount shall be paid to Arcadia, by wire transfer of immediately available
funds, (a) on the date of such conveyance, in an amount equal to the product of
(i) the outstanding Principal Balance of such Receivables and (ii) (A) 100%
minus (B) the Required Percentage minus (C) the Deficiency Percentage minus (D)
the amount necessary to meet the Required Reserve Account Amount, in each case
with respect to such Receivables; PROVIDED that the amount set forth in this
clause (a) may be reduced by an amount not to exceed 1% of the outstanding
Principal Balance of such Receivables to equal the amount of financing available
to ARFC IV for such purchase, and (b) upon the subsequent transfer by ARFC IV of
such Receivables for securitization or upon a Take-Out Securitization, in an
amount equal to the remaining balance of the Purchase Price.

       SECTION 2.2   CONVEYANCE OF RECEIVABLES.

       (a)    Subject to the conditions set forth in paragraph (b) below,
Arcadia, pursuant to the mutually agreed upon terms contained herein and
pursuant to one or more Assignment Agreements, shall sell, transfer, assign and
otherwise convey to ARFC IV without recourse (but without limitation of its
obligations in this Agreement or the Financing Agreement), all of the right,
title and interest of Arcadia, whether then existing or thereafter acquired, in
and to the Receivables listed on the Schedule of Receivables and the related
Other Conveyed Property.  It is the intention of ARFC IV and Arcadia that the
transfers and assignments contemplated by this Agreement and each Assignment
Agreement shall constitute a sale of the Receivables and the Other Conveyed
Property from Arcadia to ARFC IV, conveying good title thereto free and clear of
any Liens, and the Receivables and Other Conveyed Property shall not be a part
of Arcadia's estate in the event of the filing of a bankruptcy petition by or
against Arcadia under any bankruptcy or similar law.

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

              (i)    Arcadia shall have delivered to ARFC IV a duly executed
       Assignment Agreement (including an acceptance by ARFC IV), which shall
       include a Schedule of Receivables listing the Receivables being
       transferred on such Transfer Date, including the loan numbers thereof;

<PAGE>

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

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

              (iv)   no selection procedures adverse to the interests of ARFC IV
       shall have been used by Arcadia or ARFC IV in selecting the Receivables;

              (v)    Arcadia shall have provided to ARFC IV any information
       reasonably requested by ARFC IV with respect to the Receivables;

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

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

              (viii) if Arcadia is not acting as a Custodian under the Custodian
       Agreement, Arcadia shall have delivered the Receivable Files with respect
       to such Receivables to the Custodian.

              (ix)   Arcadia shall have delivered to the Agent an Officer's
       Certificate confirming the satisfaction of each condition precedent
       specified in this paragraph (b).

       SECTION 2.3   DELIVERY OF RECEIVABLES FILE.  In the event that at any
time Arcadia is not acting as Custodian under the Custodian Agreement, Arcadia
shall deliver or cause to be delivered to ARFC IV within three Business Days
after each Transfer Date a notice indicating transfer of the related Receivable
Files to the Custodian.

                                    ARTICLE III

                           REPRESENTATIONS AND WARRANTIES

       SECTION 3.1   REPRESENTATIONS AND WARRANTIES OF ARCADIA.  Arcadia hereby

<PAGE>

makes the following representations and warranties, on which ARFC IV relies in
purchasing the Receivables and the Other Conveyed Property.  Such
representations are made as of the Effectiveness Date and each Transfer Date,
and shall survive the sale, transfer and assignment of the Receivables and the
Other Conveyed Property hereunder and under the Assignment Agreements and the
pledge thereof by ARFC IV to the Collateral Agent on behalf of the Secured
Parties under the Financing Agreement.  Arcadia and ARFC IV agree that ARFC IV
will pledge to the Collateral Agent for the benefit of the Secured Parties all
of ARFC IV's rights under this Agreement and that the Collateral Agent on behalf
of the Secured Parties will, to the extent provided in the Transaction
Documents, thereafter be entitled to enforce this Agreement against Arcadia.

       (a)    SCHEDULE OF REPRESENTATIONS.  The representations and warranties
set forth on the Schedule of Representations are true and correct.

       (b)    ORGANIZATION AND GOOD STANDING.  Arcadia has been duly organized
and is validly existing as a corporation in good standing under the laws of the
State of Minnesota, with power and authority to own its properties and to
conduct its business as such properties are currently owned and such business is
currently conducted, and had at all relevant times, and now has, power,
authority and legal right to acquire, own and sell the Receivables and the Other
Conveyed Property transferred to ARFC IV.

       (c)    DUE QUALIFICATION.  Arcadia 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.  Arcadia has the power and authority to
execute and deliver this Agreement, each Assignment Agreement and its
Transaction Documents and to carry out its terms and their terms, respectively;
Arcadia has full power and authority to sell and assign the Receivables and the
Other Conveyed Property to be sold and assigned to and deposited with ARFC IV
under each Assignment Agreement and has duly authorized such sale and assignment
to ARFC IV by all necessary corporate action; and the execution, delivery and
performance of this Agreement, each Assignment Agreement and Arcadia's
Transaction Documents have been duly authorized by Arcadia by all necessary
corporate action

       (e)    VALID SALE: BINDING OBLIGATIONS.  This Agreement, each Assignment
Agreement and Arcadia's Transaction Documents have been duly executed and
delivered, shall effect a valid sale, transfer and assignment of the Receivables
and the Other Conveyed Property, enforceable against Arcadia and creditors of
and purchasers from Arcadia; and this Agreement, each Assignment Agreement and
Arcadia's Transaction Documents constitute legal, valid and binding obligations
of Arcadia enforceable in accordance with their respective terms, except as
enforceability may be


<PAGE>

limited by bankruptcy, insolvency, reorganization or other similar laws
affecting the enforcement of creditors' rights generally and by equitable
limitations on the availability of specific remedies, regardless of whether such
enforceability is considered in a proceeding in equity or at law.

       (f)    NO VIOLATION.  The consummation of the transactions contemplated
by this Agreement, each Assignment Agreement and the Transaction Documents and
the fulfillment of the terms of this Agreement, each Assignment Agreement and
the Transaction 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
Arcadia, or any indenture, agreement, mortgage, deed of trust or other
instrument to which Arcadia is a party or by which it is bound, or result in the
creation or imposition of any Lien upon any of its properties pursuant to the
terms of any such indenture, agreement, mortgage, deed of trust or other
instrument, other than this Agreement, each Assignment Agreement and the
Financing Agreement, or violate any law, order, rule or regulation applicable to
Arcadia of any court or of any federal or state regulatory body, administrative
agency or other governmental instrumentality having jurisdiction over Arcadia or
any of its properties.

       (g)    NO PROCEEDINGS.  There are no proceedings or investigations
pending or, to, Arcadia's knowledge, threatened against Arcadia, before any
court, regulatory body, administrative agency or other tribunal or governmental
instrumentality having jurisdiction over Arcadia or its properties (i) asserting
the invalidity of this Agreement, any Assignment Agreement or any of the
Transaction Documents, (ii) seeking any determination or ruling that might
materially and adversely affect the performance by Arcadia of its obligations
under, or the validity or enforceability of, this Agreement, any Assignment
Agreement or any of the Transaction Documents or (iii) seeking to affect
adversely the federal income tax or other federal, state or local tax attributes
of, or seeking to impose any excise, franchise, transfer or similar tax upon,
the transfer and acquisition of the Receivables and the Other Conveyed Property
hereunder, under any Assignment Agreement or under the Financing Agreement.

       (h)    NO TERMINATION EVENTS.  No default hereunder or Servicer
Termination Event shall have occurred and be continuing.

       (i)    CHIEF EXECUTIVE OFFICE.  The chief executive office of Arcadia is
located at 7825 Washington Avenue South, Suite 500, Minneapolis, MN 55439-2435.

       SECTION 3.2   REPRESENTATIONS AND WARRANTIES OF ARFC IV.  ARFC IV hereby
makes the following representations and warranties, on which Arcadia relies in
selling, assigning, transferring and conveying the Receivables and the Other
Conveyed Property to ARFC IV under this Agreement and each Assignment Agreement.
Such representations are made as of the Effectiveness Date and each Transfer
Date, and shall survive the sale, transfer and assignment of the Receivables and
the Other Conveyed

<PAGE>

Property hereunder and under each Assignment Agreement and the pledge thereof by
ARFC IV to the Collateral Agent for the benefit of the Secured Parties under the
Financing Agreement.

       (a)    ORGANIZATION AND GOOD STANDING.  ARFC IV has been duly organized
and is validly existing and in good standing as a corporation under the laws of
the State of Delaware, with the power and authority to own its properties and to
conduct its business as such properties are currently owned and such business is
currently conducted, and had at all relevant times, and has, full power,
authority and legal right to acquire and own the Receivables and the Other
Conveyed Property and to pledge the Receivables and the Other Conveyed Property
to the Collateral Agent for the benefit of the Secured Parties pursuant to the
Financing Agreement.

       (b)    DUE QUALIFICATION.  ARFC IV 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 IV's ability to acquire the Receivables or the
Other Conveyed Property, (ii) the validity or enforceability of the Receivables
and the Other Conveyed Property or (iii) ARFC IV's ability to perform its
obligations hereunder, under any Assignment Agreement and under its Transaction
Documents.

       (c)    POWER AND AUTHORITY.  ARFC IV has the power, authority and legal
right to execute and deliver this Agreement, each Assignment Agreement and its
Transaction Documents and to carry out the terms hereof and thereof and to
acquire the Receivables and the Other Conveyed Property hereunder and under each
Assignment Agreement; and the execution, delivery and performance of this
Agreement, each Assignment Agreement and its Transaction Documents and all of
the documents required pursuant hereto or thereto have been duly authorized by
ARFC IV by all necessary action.

       (d)    NO CONSENT REQUIRED.  ARFC IV is not required to obtain the
consent of any other Person, or any consent, license, approval or authorization
or registration or declaration with, any governmental authority, bureau or
agency in connection with the execution, delivery or performance of this
Agreement, each Assignment Agreement and the Transaction Documents, except for
such as have been obtained, effected or made.

       (e)    BINDING OBLIGATION.  This Agreement, each Assignment Agreement and
each of its Transaction Documents constitutes a legal, valid and binding
obligation of ARFC IV, enforceable against ARFC IV 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 IV
of this Agreement and each Assignment Agreement, the consummation of the
transactions contemplated by this Agreement, each Assignment Agreement and the
Transaction

<PAGE>

Documents and the fulfillment of the terms of this Agreement, each Assignment
Agreement and the Transaction 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 IV, 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 IV is a party or by which ARFC IV 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 Financing
Agreement), or violate any law, order, rule or regulation, applicable to ARFC IV
or its properties, of any federal or state regulatory body or any court,
administrative agency, or other governmental instrumentality having jurisdiction
over ARFC IV or any of its properties.

       (g)    NO PROCEEDINGS.  There are no proceedings or investigations
pending, or, to the knowledge of ARFC IV, threatened against ARFC IV, before any
court, regulatory body, administrative agency, or other tribunal or governmental
instrumentality having jurisdiction over ARFC IV or its properties: (i)
asserting the invalidity of this Agreement, any Assignment Agreement or any of
the Transaction Documents, (ii) seeking to prevent the consummation of any of
the transactions contemplated by this Agreement, any Assignment Agreement or any
of the Transaction Documents, (iii) seeking any determination or ruling that
might materially and adversely affect the performance by ARFC IV of its
obligations under, or the validity or enforceability of, this Agreement, any
Assignment Agreement or any of the Transaction Documents or (iv) that may
adversely affect the federal or state income tax attributes of, or seeking to
impose any excise, franchise, transfer or similar tax upon, the transfer and
acquisition of the Receivables and the Other Conveyed Property hereunder or
under any Assignment Agreement or the pledge of the Receivables and the Other
Conveyed Property to the Collateral Agent on behalf of the Secured Parties
pursuant to the Financing Agreement.  In the event of any breach of a
representation and warranty made by ARFC IV hereunder, Arcadia and ARFC IV agree
that damages will not be an adequate remedy for such breach and that this
covenant may be specifically enforced by ARFC IV or by the Collateral Agent on
behalf of the Secured Parties.

                                     ARTICLE IV

                                COVENANTS OF ARCADIA

       SECTION 4.1   PROTECTION OF TITLE OF ARFC IV.

       (a)    At or prior to the Closing Date, Arcadia shall have filed or
caused to be filed a UCC- I financing statement, executed by Arcadia as seller
or debtor, naming ARFC IV as purchaser or secured party and describing the
Receivables and the Other

<PAGE>

Conveyed Property, with respect to this Agreement and each Assignment Agreement,
being sold by it to ARFC IV as collateral, with the office of the Secretary of
State of the State of Minnesota and in such other locations as ARFC IV shall
have required.  From time to time thereafter, Arcadia 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 IV under this
Agreement and each Assignment Agreement and of the Collateral Agent under the
Financing Agreement in the Receivables and the Other Conveyed Property and in
the proceeds thereof.  Arcadia shall deliver (or cause to be delivered) to ARFC
IV, the Agent and the Collateral Agent file-stamped copies of, or filing
receipts for, any document filed as provided above, as soon as available
following such filing.  In the event that Arcadia fails to perform its
obligations under this subsection, ARFC IV may do so at the expense of Arcadia.

       (b)    Arcadia 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 Arcadia (or by ARFC IV, the Agent or the
Collateral Agent on behalf of Arcadia) 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 IV, the Agent and the Collateral Agent at least 60
days' prior written notice thereof, and shall promptly file appropriate
amendments to all previously filed financing statements and continuation
statements.

       (c)    Arcadia shall give ARFC IV, the Agent and the Collateral Agent 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.  Arcadia shall at all
times maintain each office from which it services Receivables and its principal
executive office within the United States of America.

       (d)    Arcadia shall maintain its computer systems so that, from and
after the time of sale under this Agreement and under any Assignment Agreement
of the Receivables to ARFC IV, and the pledge of the Receivables by ARFC IV to
the Collateral Agent for the benefit of the Secured Parties, Arcadia's master
computer records (including archives) that shall refer to a Receivable indicate
clearly that such Receivable has been sold to ARFC IV and has been pledged by
ARFC IV to the Collateral Agent on behalf of the Secured Parties.  Indication of
the Collateral Agent's security interest in the Receivable shall be deleted from
or modified on Arcadia's computer systems when, and only when, the Receivable
shall become a Pledged Receivable, shall have been paid in full or shall
otherwise have been released from such security interest pursuant to the
Transaction Documents.  Arcadia shall indicate in its consolidated financial
statements that Receivables have been sold to ARFC IV and are not available to
the creditors of Arcadia.

<PAGE>

       (e)    If at any time Arcadia 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, Arcadia 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 Receivable, shall indicate clearly that such
Receivable has been sold to ARFC IV and is subject to a security interest in
favor of the Collateral Agent for the benefit of the Secured Parties.

       SECTION 4.2   OTHER LIENS OR INTERESTS.  Except for the conveyances under
any Assignment Agreement, Arcadia will not sell, pledge, assign or transfer to
any other Person, or grant, create, incur, assume or suffer to exist any Lien on
the Receivables or the Other Conveyed Property, or any interest therein, and
Arcadia shall defend the right, title and interest of ARFC IV and the Collateral
Agent on behalf of the Secured Parties in and to the Receivables and the Other
Conveyed Property against all claims of third parties claiming through or under
Arcadia.

       SECTION 4.3   COSTS AND EXPENSES; FEES.

       (a)    Arcadia shall pay all reasonable costs and disbursements in
connection with the performance of its obligations hereunder and under each
Assignment Agreement and its Transaction Documents.

       (b)    In consideration of ARFC IV's purchase of Receivables (and the
related Other Conveyed Property) from time to time hereunder, Arcadia hereby
agrees to pay to ARFC IV the amount of any fees payable by ARFC IV pursuant to
the Fee Letter in respect of the unused portion of the Facility.

       SECTION 4.4   INDEMNIFICATION OF ARFC IV.  Arcadia hereby agrees to
indemnify ARFC IV, each Lender, each Investor, the Agent, the Collateral Agent
and the Backup Servicer (each of the foregoing Persons being individually called
an "INDEMNIFIED PARTY" and shall be a third party beneficiary of the
indemnifications set forth in this Section 4.4), forthwith on demand, from and
against any and all damages, losses, claims, liabilities and related costs and
expenses, including reasonable attorneys' fees and disbursements (all of the
foregoing being collectively called "INDEMNIFIED AMOUNTS") awarded against or
incurred by any of them arising out of or relating to any Transaction Document
or the transactions contemplated thereby or the use of proceeds therefrom by
Arcadia, including (without limitation) in respect of the funding of any Advance
or in respect of any Transferred Receivable, EXCLUDING, HOWEVER, (a) Indemnified
Amounts resulting from gross negligence or willful misconduct on the part of
such Indemnified Party or its agent or subcontractor, (b) except as specifically
provided herein, non-payment by any Obligor of an amount due and payable with

<PAGE>

respect to a Transferred Receivable, (c) any loss in value of any Financed
Vehicle or any loss in value of any Permitted Investment due to changes in
market conditions or for other reasons beyond the control of Arcadia or (d) any
tax upon or measured by net income of any Indemnified Party.  Without limiting
the foregoing, but subject to the exclusions (a) through (d) above, Arcadia
agrees to indemnify each Indemnified Party for Indemnified Amounts arising out
of or relating to:

       (a)    the breach of any representation or warranty made by Arcadia (or
any of its officers) under or in connection with this Agreement or the other
Transaction Documents, any Servicer's Certificate, Borrowing Base Confirmation
or any other information, report or certificate delivered by Arcadia pursuant
hereto or thereto, which shall have been false or incorrect in any material
respect when made or deemed made;

       (b)    the failure by Arcadia to comply in any material way with any
applicable law, rule or regulation with respect to any Transferred Receivable or
any Financed Vehicle, or the nonconformity of any Transferred Receivable with
any such applicable law, rule or regulation;

       (c)    the failure to vest and maintain vested in the Collateral Agent,
for the benefit of the Secured Parties, a first-priority security interest in
all the Collateral, free and clear of any Lien, other than a Lien arising solely
as a result of an act of any Investor, or any assignee of any Investor;

       (d)    any dispute, claim, offset or defense (other than discharge in
bankruptcy) of an Obligor to the payment of any Transferred Receivable
(including, without limitation, a defense based on such Transferred Receivable
not being a legal, valid and binding obligation of such Obligor enforceable
against it in accordance with its terms);

       (e)    any failure to perform its duties or obligations as Servicer in
accordance with the provisions of ARTICLE VIII of the Financing Agreement or any
provision contained in any Transaction Document;

       (f)    any claim involving products liability that arises out of or
relates to merchandise or services that are the subject of any Transferred
Receivable or strict liability claim in connection with any Financed Vehicle
related to a Transferred Receivable;

       (g)    the offering or effectuation of any Take-Out Securitization;

       (h)    the commingling of the proceeds of the Borrower Collateral at any
time with other funds;

       (i)    any breach of any of Arcadia's representations and warranties
contained

<PAGE>

herein;

       (j)    the use, ownership or operation of a Financed Vehicle;

       (k)    any action taken, or failed to be taken, by it in respect of any
portion of the Receivables and the Other Conveyed Property transferred hereunder
other than in accordance with this Agreement or the Financing Agreement;

       (l)    any taxes that may at any time be asserted against the Indemnified
Parties with respect to the transactions contemplated in this Agreement or in
any Assignment Agreement, including, without limitation, any sales, gross
receipts, general corporation, tangible or intangible personal property,
privilege, or license taxes (but not including any taxes asserted with respect
to, and as of the date of, any sale, transfer and assignment of the Receivables
and the Other Conveyed Property to ARFC IV, or asserted with respect to
ownership of the Receivables and Other Conveyed Property which shall be
indemnified by Arcadia pursuant to clause (m) below, or federal, state or other
income taxes, arising out of distributions on the Note or transfer taxes arising
in connection with the transfer of the Note) and costs and expenses in defending
against the same, arising by reason of the acts to be performed by Arcadia under
this Agreement or under any Assignment Agreement or imposed against such
Persons;

       (m)    any taxes which may at any time be asserted against such Persons
with respect to, and as of the date of, the conveyance or ownership of any
Receivables or the Other Conveyed Property hereunder or under each Assignment
Agreement and the pledge of such Receivables and Other Conveyed Property under
the Financing Agreement, 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 Note) and costs and expenses in
defending against the same, arising by reason of the acts to be performed by
Arcadia under this Agreement or under any Assignment Agreement or imposed
against such Persons;

       (n)    to the extent that such cost, expense, loss, claim, damage, or
liability arose out of, or was imposed upon any Indemnified Party through the
negligence, willful misfeasance, or bad faith of Arcadia in the performance of
its duties under this Agreement or under any Assignment Agreement or by reason
of reckless disregard of Arcadia's obligations and duties under this Agreement
or under any Assignment Agreement;

       (o)    the failure of any Receivable, or the sale of the related Financed
Vehicle, to comply with all requirements of applicable law; or

       (p)    the acceptance or performance of Arcadia's duties as Servicer
under the

<PAGE>

Financing Agreement, except to the extent that such cost, expense, loss, claim,
damage, or liability shall be due to the willful misfeasance, bad faith, or
negligence (except for errors in judgment) of ARFC IV.

The indemnity obligations hereunder shall be in addition to any obligation that
Arcadia may otherwise have.


                                     ARTICLE V

                                    REPURCHASES

       SECTION 5.1   REPURCHASE OF RECEIVABLES UPON BREACH OF WARRANTY OR
COVENANT.  Upon the occurrence of a Repurchase Event, Arcadia shall, unless such
breach shall have been cured in all material respects, repurchase such
Receivable from ARFC IV by the last day of the first full calendar month
following discovery or notice to Arcadia of such breach, and Arcadia shall pay
the sum of the outstanding principal amount of such Receivable plus accrued
interest thereon in each case as of the date of repurchase (the "Purchase
Amount").  It is understood and agreed that, except as set forth in SECTION 6.1,
the obligation of Arcadia 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 Arcadia for such breach available to ARFC IV, the
Secured Parties the Agent, the Collateral Agent and the Backup Servicer.  The
provisions of this SECTION 5.1 are intended to grant the Collateral Agent, for
the benefit of the Secured Parties, a direct right against Arcadia to demand
performance hereunder, and in connection therewith, Arcadia waives any
requirement of prior demand against ARFC IV with respect to such repurchase
obligation.  Any such purchase shall take place in the manner specified in
Section 8.7 of the Financing Agreement.  Notwithstanding any other provision of
this Agreement or the Financing Agreement to the contrary, the obligation of
Arcadia under this Section shall not terminate upon a termination of Arcadia as
Servicer under the Financing Agreement and shall be performed in accordance with
the terms hereof notwithstanding the failure of the Servicer or ARFC IV to
perform any of their respective obligations with respect to such Receivable
under the Financing Agreement.

       In addition to the foregoing and notwithstanding whether the related
Receivable shall have been purchased by Arcadia, Arcadia shall indemnify the
Collateral Agent on behalf of the Secured Parties against all costs, expenses,
losses, damages, claims and liabilities, including reasonable fees and expenses
of counsel, which may be asserted against or incurred by any of them as a result
of third party claims arising out of the events or facts giving rise to such
Repurchase Events.

       SECTION 5.2   REASSIGNMENT OF PURCHASED RECEIVABLES.  Upon deposit in the
Collection Account of the Purchase Amount of any Receivable repurchased by

<PAGE>

Arcadia under SECTION 5.1, ARFC IV and the Collateral Agent on behalf of the
Secured Parties shall take such steps as may be reasonably requested by Arcadia
in order to assign to Arcadia all of ARFC IV's right, title and interest in and
to such Receivable and all security and documents and all Other Conveyed
Property conveyed to ARFC IV directly relating thereto, and to release the
Collateral Agent's security interest therein, 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 IV.  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 Arcadia 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 IV shall, at the expense of Arcadia, take such
steps as Arcadia deems reasonably necessary to enforce the Receivable, including
bringing suit in ARFC IV's name.

       SECTION 5.3   WAIVERS.  No failure or delay on the part of ARFC IV, or
the Collateral Agent on behalf of the Secured Parties as assignee of ARFC IV, in
exercising any power, right or remedy under this Agreement shall operate as a
waiver thereof, nor shall any single or partial exercise of any such power,
right or remedy preclude any other or future exercise thereof or the exercise of
any other power, right or remedy.



                                     ARTICLE VI

                                   MISCELLANEOUS

       SECTION 6.1   LIABILITY OF ARCADIA.  Arcadia shall be liable in
accordance herewith only to the extent of the obligations in this Agreement or
in any Assignment Agreement specifically undertaken by Arcadia and the
representations and warranties of Arcadia.

       SECTION 6.2   MERGER OR CONSOLIDATION OF ARCADIA OR ARFC IV.  Any
corporation or other entity (i) into which Arcadia or ARFC IV may be merged or
consolidated, (ii) resulting from any merger or consolidation to which Arcadia
or ARFC IV is a party or (iii) succeeding to the business of Arcadia or ARFC IV,
in the case of ARFC IV, which corporation has a certificate of incorporation
containing provisions relating to limitations on business and other matters
substantively identical to those contained in ARFC IV'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 Arcadia
or ARFC IV, as the case may be, under this Agreement and each Assignment
Agreement and, whether or not such assumption agreement is executed, shall be
the successor to Arcadia or ARFC IV, as the case may be, hereunder and under
each such Assignment Agreement (without relieving Arcadia or ARFC IV of its
responsibilities hereunder, if it survives such merger or consolidation) without
the

<PAGE>

execution or filing of any document or any further act by any of the parties to
this Agreement or each Assignment Agreement.  Notwithstanding the foregoing,
ARFC IV shall not merge or consolidate with any other Person or permit any other
Person to become the successor to ARFC IV's business without the prior written
consent of the Agent.  Arcadia or ARFC IV shall promptly inform the other party,
the Agent, the Collateral Agent and the Backup Servicer of any 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 of this
Agreement, or similar representation or warranty made in any Assignment
Agreement, shall have been breached (for purposes hereof, such representations
and warranties shall speak as of the date of the consummation of such
transaction), (y) Arcadia or ARFC IV, as applicable, shall have delivered prompt
written notice of such consolidation, merger or purchase and assumption to the
Agent, the Collateral Agent and the Backup Servicer prior to the consummation of
such transaction and shall have delivered to the Agent 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, or in
each Assignment Agreement, relating to such transaction have been complied with,
and (z) Arcadia or ARFC IV, as applicable, shall have delivered to the Agent 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 Collateral Agent for the benefit of the Secured Parties in the
Receivables and Other Conveyed Property and reciting the details of the filings
or (B) no such action shall be necessary to preserve and protect such interest.

       SECTION 6.3   LIMITATION ON LIABILITY OF ARCADIA AND OTHERS.  Arcadia 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.
Arcadia shall not be under any obligation to appear in, prosecute or defend any
legal action that is not incidental to its obligations under this Agreement, any
Assignment Agreement or its Transaction Documents and that in its opinion may
involve it in any expense or liability.

       SECTION 6.4   AMENDMENT.

       This Agreement and any Assignment Agreement may be amended by Arcadia and
ARFC IV, with the consent of the Agent.

       SECTION 6.5   NOTICES.  All demands, notices and communications to
Arcadia or ARFC IV hereunder shall be in writing, personally delivered, or sent
by

<PAGE>

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 Arcadia, 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 Arcadia in a written
notice delivered to Arcadia and to the Agent, as applicable, or (b) in case of
ARFC IV, to Arcadia Receivables Finance Corp. II, 7825 Washington Avenue South,
Suite 410, Minneapolis, Minnesota 55439-2435, Attention: John A. Witham.

       SECTION 6.6   MERGER AND INTEGRATION.  Except as specifically stated
otherwise herein, this Agreement, each Assignment Agreement and the Transaction
Documents set forth the entire understanding of the parties relating to the
subject matter hereof, and all prior understandings, written or oral, are
superseded by this Agreement, each Assignment Agreement and the Transaction
Documents.  Neither this Agreement nor any Assignment Agreement may be modified,
amended, waived or supplemented except as provided herein.

       SECTION 6.7   SEVERABILITY OF PROVISIONS.  If any one or more of the
covenants, provisions or terms of this Agreement or any Assignment Agreement
shall be for any reason whatsoever held invalid, then such covenants, provisions
or terms shall be deemed severable from the remaining covenants, provisions or
teens of this Agreement or any Assignment Agreement and shall in no way affect
the validity or enforceability of the other provisions of this Agreement or any
Assignment Agreement.

       SECTION 6.8   INTENTION OF THE PARTIES.  The execution and delivery of
this Agreement shall constitute an acknowledgment by Arcadia and ARFC IV that
they intend that the assignments and transfers herein contemplated pursuant to
each Assignment Agreement constitute a sale and assignment outright, and not for
security, of the Receivables and the Other Conveyed Property, conveying good
title thereto free and clear of any Liens, from Arcadia to ARFC IV, and that the
Receivables and the Other Conveyed Property shall not be a part of Arcadia'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, Arcadia.  In the event that such conveyance is determined to be
made as security for a loan made by ARFC IV to Arcadia, the parties intend that
Arcadia shall have granted (and Arcadia does hereby grant) to ARFC IV a security
interest in all of Arcadia's right, title and interest in and to the Receivables
and the Other Conveyed Property conveyed pursuant to each Assignment Agreement
and that this Agreement shall constitute a security agreement under applicable
law.

       SECTION 6.9   GOVERNING LAW.  THIS AGREEMENT SHALL BE A CONTRACT MADE
UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT REGARD
TO ANY OTHERWISE

<PAGE>

APPLICABLE CONFLICT OF LAW PRINCIPLES (OTHER THAN SECTION 5-1401 OF THE NEW YORK
GENERAL OBLIGATIONS LAW).

       SECTION 6.10  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 6.11  PLEDGE OF THE RECEIVABLES AND THE OTHER CONVEYED PROPERTY
TO THE COLLATERAL AGENT ON BEHALF OF THE SECURED PARTIES.  Arcadia acknowledges
that ARFC IV intends, pursuant to the Financing Agreement, to pledge and assign
the Receivables and the Other Conveyed Property together with its rights under
this Agreement to the Collateral Agent for the benefit of the Secured Parties on
the date hereof.  Arcadia acknowledges and consents to such pledge and
assignment and waives any further notice thereof and covenants and agrees that
the representations and warranties of Arcadia contained in this Agreement and
the rights of ARFC IV hereunder are intended to benefit the Collateral Agent for
the benefit of the Secured Parties.  In furtherance of the foregoing, Arcadia
covenants and agrees to perform its duties and obligations hereunder, in
accordance with the terms hereof for the benefit of the Collateral Agent for the
benefit of the Secured Parties and that, notwithstanding anything to the
contrary in this Agreement, Arcadia shall be directly liable to the Collateral
Agent for the benefit of the Secured Parties (notwithstanding any failure by the
Servicer, the Backup Servicer or ARFC IV to perform its duties and obligations
hereunder or under the Financing Agreement) and that the Collateral Agent for
the benefit of the Secured Parties may enforce the duties and obligations of
Arcadia under this Agreement against Arcadia.

                            [Signature Pages to Follow]

<PAGE>

       IN WITNESS THEREOF, 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. IV, AS
                            PURCHASER


                            By:
                                Name:
                                Title:


                            ARCADIA FINANCIAL LTD., AS SELLER


                            By:
                                Name:
                                Title:

                 [Signature page to Receivables Purchase Agreement]
<PAGE>

                                      EXHIBIT A

                             FORM OF ASSIGNMENT AGREEMENT

       THIS ASSIGNMENT AGREEMENT, dated as of __________,  executed between
ARCADIA RECEIVABLES FINANCE CORP. IV, a Delaware corporation, as
purchaser ("ARFC IV"), and ARCADIA FINANCIAL LTD., a Minnesota corporation, as
seller ("Arcadia").

                                     WITNESSETH

       WHEREAS, ARFC IV and Arcadia are parties to the Receivables Purchase
Agreement and Assignment dated as of October 17, 1997 (hereinafter as such
agreement may have been, or may from time to time be, amended, supplemented or
otherwise modified, the "PURCHASE AGREEMENT"); and

       WHEREAS, pursuant to the Purchase Agreement, Arcadia wishes to convey
Receivables and Other Conveyed Property (as each such term is defined in the
Purchase Agreement) to ARFC IV hereunder;

       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 hereby acknowledged, ARFC IV and Arcadia, intending to
be legally bound, hereby agree as follows:

       1.     DEFINITIONS.  All terms defined in the Purchase Agreement (whether
directly or by reference to other documents) and used herein shall have such
defined meanings when used herein, unless otherwise defined herein.

       "Transfer Date" shall mean, with respect to the Receivables and the
related Other Conveyed Property being conveyed hereby, __________ __, ____.

       2.     SCHEDULE OF RECEIVABLES.  The Schedule of Receivables attached
hereto as Exhibit A is a supplement to the Schedule of Receivables attached as
Schedule A to the Purchase Agreement.  The Receivables listed in the Schedule of
Receivables constitute the Receivables to be conveyed pursuant to this Agreement
on the Transfer Date.

       3.     CONVEYANCE OF RECEIVABLES.  Subject to the conditions specified in
Section 2.2(b) of the Purchase Agreement and subject to the mutually agreed upon
terms contained in the Purchase Agreement, Arcadia hereby sells, transfers,
assigns and otherwise conveys to ARFC IV without recourse (but without
limitation of its obligations in the Purchase Agreement or the Financing
Agreement), all of the right, title and interest of Arcadia, whether now
existing or hereafter acquired, in and to all accounts, contract rights, general
intangibles, chattel paper, instruments, documents,

<PAGE>

money, deposit accounts, certificates of deposit, goods, letters of credit,
advices of credit and uncertified securities consisting of, arising from or
relating to the Receivables listed on Schedule A hereto and the related Other
Conveyed Property.

       4.     INCORPORATION OF PURCHASE AGREEMENT.  This Assignment Agreement is
made pursuant to and in reliance upon the representations, warranties and
agreements on the part of Arcadia and ARFC IV contained in the Purchase
Agreement and shall be governed in all respects by the Purchase Agreement.

       5.     RATIFICATION OF PURCHASE AGREEMENT.  As supplemented by this
Agreement, the Purchase Agreement is in all respects ratified and confirmed and
the Purchase Agreement as so supplemented by this Agreement shall be read, taken
and construed as one and the same instrument.

       6.     COUNTERPARTS.  This Assignment Agreement may be executed in two or
more counterparts, each of which shall be an original, but all of which together
shall constitute one and the same instrument.

       7.     GOVERNING LAW.  THIS AGREEMENT SHALL BE A CONTRACT MADE UNDER AND
GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO ANY
OTHERWISE APPLICABLE CONFLICT OF LAW PRINCIPLES (OTHER THAN SECTION 5-1401 OF
THE NEW YORK GENERAL OBLIGATIONS LAW).

<PAGE>

       IN WITNESS WHEREOF, the undersigned have caused this Assignment Agreement
to be duly executed and delivered by their respective duly authorized officers
on the day and year first above written.

                            ARCADIA RECEIVABLES FINANCE CORP. IV, AS
                            PURCHASER


                            By:
                                Name:
                                Title:


                            ARCADIA FINANCIAL LTD., AS SELLER


                            By:
                                Name:
                                Title:
<PAGE>

                                     SCHEDULE A

                              SCHEDULE OF RECEIVABLES
<PAGE>

                                     SCHEDULE B

                            SCHEDULE OF REPRESENTATIONS

Each Receivable:

(a) (i) was originated directly by AFL with the consumer or 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 a Dealer Agreement with AFL and was validly assigned by such Dealer to
AFL, (ii) 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 (iii) is a Simple Interest Receivable or Pre-Computed
Receivable which 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;

       (b)    is a Dollar obligation of an Obligor domiciled in the United
States of America and was originated and, if originated by a Dealer, was sold by
the Dealer to AFL, without any fraud or material misrepresentation on the part
of such originator or Dealer in either case or on the part of the Obligor;

       (c)    with respect to which 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 Financed 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 such Receivable, the sale
of the Financed Vehicle related thereto and the sale of credit life and credit
accident and health insurance and any extended service contracts, if any, in
connection with such Receivable, have been complied with in all material
respects;

       (d)    was originated in the United States of America and, at the time of
origination, materially conformed to all requirements of the Dealer Underwriting
Guides applicable to such Receivable;

       (e)    represents the genuine, legal, valid and binding payment
obligation of the Obligor thereon, is enforceable by the holder thereof in
accordance with its terms, except (i) as enforceability may be limited by
bankruptcy, insolvency, reorganization or

<PAGE>

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 (ii) as such Receivable may be modified by the application of the Soldiers'
and Sailors' Civil Relief Act of 1940, as amended; and all parties to such
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;

       (f)    is not due from the United States of America or any State or from
any agency, department, subdivision or instrumentality thereof;

       (g)    (i) as of the related Advance Date, (A) had an original maturity
of at least 6 months but not more than 84 months, PROVIDED that, after giving
effect to the inclusion of such Receivable as an Eligible Receivable, the
Aggregate Outstanding Principal Balance of Eligible Receivables with original
maturities in excess of 72 months shall not exceed 10% of the Aggregate
Outstanding Principal Balance of all Eligible Receivables at such time, (B) had
an original Amount Financed of at least $1,000 and not more than $50,000, (C)
had an Annual Percentage Rate of at least 7.75% and not more than 27.0%, and (D)
was not more than 30 days past due; (ii) no funds have been advanced with
respect to such Receivable by the Borrower, the Servicer, any Dealer, or anyone
acting on behalf of any of them in order to cause such Receivable to qualify
under SUBCLAUSE (i)(D) of this CLAUSE (f); and (iii) had no provision thereof
waived, altered or modified in any respect since its origination other than any
provision requiring vendor single interest insurance and those waivers,
alterations or modifications specifically permitted pursuant to SECTION 8.2 of
this Agreement;

       (h)    with respect to which the information pertaining to such
Receivable set forth in each Schedule of Receivables submitted to the Agent and
the Custodian is true and correct in all material respects;

       (i)    with respect to which, by the related Advance Date and on each
relevant date thereafter, AFL will have caused the portions of AFL's servicing
records relating to such Receivable to be clearly and unambiguously marked to
show that such Receivable constitutes part of the Collateral and is subject to
the Lien of the Collateral Agent on behalf of the Secured Parties;

       (j)    with respect to which the Monthly Tape delivered by the Servicer
to the Backup Servicer from time to time was complete and accurate as of the
date delivered and consistent with the information set forth in the Schedule of
Receivables with respect to such Receivable;

       (k)    which constitutes chattel paper within the meaning of the UCC;

       (l)    of which there is only one original executed copy;

<PAGE>

       (m)    with respect to each of which a Receivable File is in the
possession of the Custodian and such Receivable File contains (i) the fully
executed original of such Receivable, (ii) a certificate of insurance, an
application form for insurance signed by the related Obligor, or a signed
representation letter from the Obligor named in such Receivable pursuant to
which such Obligor has agreed to obtain physical damage insurance for the
related Financed Vehicle, or copies thereof, or a documented verbal confirmation
by an insurance agent for such Obligor of a policy number for an insurance
policy for the Financed Vehicle, (iii) the original Lien Certificate (indicating
AFL's interest as first lienholder) or application therefor or a letter from the
applicable Dealer agreeing unconditionally to repurchase the related Receivable
if the certificate of title is not received by the Servicer within 180 days
(PROVIDED that the Lien Certificate is delivered to the Custodian within 180
days), and (iv) 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; and all blanks on any form have
been properly filled in and each form has otherwise been correctly prepared;

       (n)    which has not been satisfied, subordinated or rescinded, and the
Financed Vehicle securing such Receivable has not been released from the Lien of
such Receivable in whole or in part;

       (o)    which was not originated in, or is subject to the laws of, any
jurisdiction the laws of which would make unlawful, void or voidable the sale,
pledge, transfer and assignment of such Receivable under this Agreement and with
respect to which AFL has not entered into any agreement with any account debtor
that prohibits, restricts or conditions the assignment of any portion of such
Receivable;

       (p)    which has not been sold, transferred, assigned or pledged by the
Borrower to any Person other than hereunder; and no Dealer has a participation
in, or other right to receive, proceeds of such Receivable and with respect to
which neither AFL nor the Borrower has taken any action to convey any right to
any Person (other than hereunder) that would result in such Person having a
right to payments received under the related Insurance Policy or the related
Dealer Agreement or Dealer Assignment or to payments due under such Receivable;

       (q)    which has created, or will create when all required procedures are
completed by the Servicer, a valid, binding and enforceable first priority
perfected security interest in the related Financed Vehicle in favor of AFL as
secured party, and such security interest is, or will be upon the completion of
all required procedures by the Servicer, prior to all other Liens upon and
security interests in such Financed Vehicle that now exist or may hereafter
arise or be created (except, as to priority, for any tax liens or mechanic's
liens that may arise after the applicable Advance Date for such Receivable);

<PAGE>

       (r)    as to which 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 Collateral Agent, on
behalf of the Secured Parties, a first priority perfected Lien on such
Receivable and the proceeds thereof and the other Collateral related thereto
have been made, taken or performed;

       (s)    as to which neither AFL nor the Borrower has done anything to
convey any right to any Person that would result in such Person having a right
to payments due under such Receivable or otherwise to impair the rights of the
Collateral Agent on behalf of the Secured Parties in such Receivable or the
proceeds thereof;

       (t)    which is not assumable by another Person in a manner which would
release the Obligor thereof from such Obligor's obligations to the Borrower with
respect to such Receivable;

       (u)    which is not subject to any right of rescission, setoff,
counterclaim or defense and no such right has been asserted or threatened with
respect thereto;

       (v)    (i) if determined on any day during a Collection Period prior to
the Distribution Date occurring during such Collection Period, as of the last
day of the second preceding Collection Period, or (ii) if determined on any day
during a Collection Period after the Distribution Date occurring during such
Collection Period, as of the last day of the immediately preceding Collection
Period:  as to which there has been no default, breach, violation or event
permitting acceleration under the terms of such Receivables (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 such Receivables, and there has been no waiver of any of the
foregoing, and with respect to which the related Financed Vehicle had not been
repossessed;

       (w)    at the time of the origination of which the related Financed
Vehicle was covered by a comprehensive and collision insurance policy (i) in an
amount at least equal to the lesser of (A) its maximum insurable value and (B)
the Amount Financed, (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 and with respect to
which the Obligor is required to maintain physical loss and damage insurance,
naming AFL and its successors and assigns as an additional insured party, and
such 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 unless
otherwise prohibited by the law of the state in which the related contract was
entered into;

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       (x)    with respect to which the following is true:

              The Lien Certificate for the related Financed Vehicle shows, 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 related Purchase Date and will show, AFL named as the original secured party
under such Receivable and, accordingly, AFL will be 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
or the Obligor that such Lien Certificate showing AFL as first lienholder has
been applied for.  If the Receivable was originated in a state in which a filing
or recording is required of the secured party to perfect a security interest in
motor vehicles, such filings or recordings have been duly made to show AFL named
as the original secured party under the related Receivable;

       (y)    as to which no selection procedures adverse to the Secured Parties
have been utilized in selecting such Receivable from all other similar
Receivables owned or originated by AFL;

       (z)    if determined on any day during a Collection Period prior to the
Distribution Date occurring during such Collection Period, was not a Defaulted
Receivable as of the last day of the second preceding Collection Period, or, if
determined on any day during a Collection Period after the Distribution Date
occurring during such Collection Period, was not a Defaulted Receivable as of
the last day of the immediately preceding Collection Period;

       (aa)   if determined on any day during a Collection Period prior to the
Distribution Date occurring during such Collection Period, was not a Delinquent
Receivable as of the last day of the second preceding Collection Period, or, if
determined on any day during a Collection Period after the Distribution Date
occurring during such Collection Period, was not a Delinquent Receivable as of
the last day of the immediately preceding Collection Period; and

       (bb)   is not secured by vehicles which are financed repossessions.