<PAGE>

                                                                  EXECUTION COPY









                   ARCADIA AUTOMOBILE RECEIVABLES WAREHOUSE TRUST



                  U.S. $400,000,000 FLOATING RATE VARIABLE FUNDING

                                    FSA INSURED

                        AUTOMOBILE RECEIVABLES-BACKED NOTES










                                AMENDED AND RESTATED
                              NOTE PURCHASE AGREEMENT

                             DATED AS OF JULY 21, 1998



<PAGE>


                                    TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                  PAGE
<S>          <C>                                                                  <C>
SECTION 1.   The Notes............................................................   2

SECTION 2.   Effective Date, Exchange and Purchase; Funding of Note Increases.....   3

SECTION 3.   Delivery and Payment.................................................   3

SECTION 4.   Issuer's Representations, Warranties and Covenants...................   4

SECTION 5.   Purchaser Representations............................................   6

SECTION 6.   Conditions of Purchaser's Obligations................................   8

SECTION 7.   Expenses.............................................................   9

SECTION 8.   Definitions..........................................................  10

SECTION 9.   Successors and Assigns...............................................  11

SECTION 10.  Indemnification......................................................  12

SECTION 11.  Increased Costs......................................................  13

SECTION 12.  Notices..............................................................  14

SECTION 13.  Counterparts.........................................................  14

SECTION 14.  Entire Agreement.....................................................  15

SECTION 15.  Governing Law........................................................  15

SECTION 16.  Severability of Provisions...........................................  15

SECTION 17.  Survival.............................................................  15

SECTION 18.  Limited Recourse.....................................................  15

SECTION 19.  No Proceedings.......................................................  15

SECTION 20.  Trial By Jury Waived.................................................  15

SECTION 21.  Matters Relating to Agents and Administrative Agent..................  16

SECTION 22.  Limitation of Liability..............................................  17

</TABLE>


<PAGE>


                               ARCADIA FINANCIAL, LTD.
                            7825 Washington Avenue South
                            Minneapolis, Minnesota 55439


                  ARCADIA AUTOMOBILE  RECEIVABLES WAREHOUSE TRUST
                            7825 Washington Avenue South
                           Minneapolis, Minnesota  55439

                             __________________________

                                AMENDED AND RESTATED
                              NOTE PURCHASE AGREEMENT

                             __________________________

                             Dated as of July 21, 1998


Receivables Capital Corporation
c/o Bank of America National Trust
  and Savings Association
  as RCC Agent
Asset Securitization Group
231 South LaSalle Street
Chicago, Illinois 60697

Bank of America National Trust
  and Savings Association
  as RCC Agent
  and as Administrative Agent
Asset Securitization Group
231 South LaSalle Street
Chicago, Illinois  60697

Delaware Funding Corporation
c/o J. H. Holdings Corporation
Ropes & Gray
One International Place
Boston, Massachusetts 02110-2464

Morgan Guaranty Trust Company of
New York, as DFC Agent
500 Stanton Christiana Road
Newark, Delaware 19713-2107
Attention:  Asset Finance Group


<PAGE>


Ladies and Gentlemen:

     The undersigned, Arcadia Automobile Receivables Warehouse Trust, a 
Delaware business trust (the "ISSUER"), and Arcadia Financial Ltd., a 
Minnesota corporation ("AFL"), propose to enter into with you this Amended 
and Restated Note Purchase Agreement which supersedes in its entirety the 
Note Purchase Agreement dated as of December 3, 1996, as previously amended, 
among AFL, Arcadia Receivables Conduit Corp. (the "ORIGINAL ISSUER"), 
Receivables Capital Corporation and Bank of America National Trust and 
Savings Association, and to that end, hereby agree with you as follows:

     SECTION 1. THE NOTES. On the Effective Date, the Issuer proposes to 
deliver to (i) Receivables Capital Corporation ("RCC") in exchange for the 
Floating Rate Variable Funding Automobile Receivables-Backed Note (the 
"CURRENTLY OUTSTANDING NOTE") held by RCC, a Floating Rate Variable Funding 
Automobile Receivables-Backed Note (the "RCC NOTE") in the maximum authorized 
principal amount outstanding at any time of $ 225,000,000 (the "RCC PURCHASE 
LIMIT") and (ii) Delaware Funding Corporation ("DFC") (each of RCC and DFC, a 
"PURCHASER" and collectively, the "PURCHASERS"), a Floating Rate Variable 
Funding Automobile Receivables-Backed Note (the "DFC NOTE"; each of the RCC 
Note and the DFC Note, a "NOTE"; and collectively, the RCC Note and the DFC 
Note, the "NOTES") in the maximum authorized principal amount outstanding at 
any time of $175,000,000 (the "DFC PURCHASE LIMIT").  Subject to the terms 
and conditions hereof, the Purchasers agree to fund increases in the 
outstanding principal amount of their respective  Notes (each, a "NOTE 
INCREASE", and the principal amount of any such Note Increase, the "NOTE 
INCREASE AMOUNT"), from time to time during the Purchase Period, in an 
aggregate maximum authorized amount to be outstanding at any time (the 
"MAXIMUM AUTHORIZED AMOUNT") of U.S. $400,000,000.

     The Currently Outstanding Note was issued prior to the Effective Date, 
and the Notes shall be issued by the Issuer on the Effective Date, pursuant 
to the Amended and Restated Indenture, dated as of July 21, 1998 (as from 
time to time amended, supplemented or modified, the "INDENTURE"), between the 
Issuer and Norwest Bank Minnesota, National Association, as trustee (in such 
capacity, the "TRUSTEE") and as Collateral Agent (as defined in the 
Indenture).

     The Indenture provides for Note Increases from time to time upon the 
terms and conditions set forth therein.  On each day on which Note Increases 
are to occur and be funded hereunder, each Purchaser's Note will have a Note 
Increase Amount equal to such Purchaser's Purchase Percentage of the total 
Note Increase Amount effected by the Issuer on such day.  Each Purchaser's 
Purchase Percentage of each Note Increase Amount shall be recorded on the 
grid attached to such Purchaser's Note.  Each Note issued to a Purchaser: (i) 
bears interest (subject to conversion to a fixed rate at the option of the 
related Agent upon the occurrence of an Amortization Event) at a fluctuating 
rate per annum equal to the Note Interest Rate (as defined in the Indenture) 
for such Note; (ii) can be funded by Note Increases in a minimum amount of 
$7,000,000 and any higher amount on any Purchase Date (as defined below), and 
(iii) is subject to prepayment at the option of the Issuer as provided in the 
Indenture.  Each Note shall be issued in the form of a fully registered 
security in certificated form (as contemplated by Article VIII of the New 
York Uniform Commercial Code).


                                       2
<PAGE>


     The Notes are secured by a revolving pool of automobile receivables 
originated by AFL and sold by AFL to its wholly-owned subsidiary, Arcadia 
Receivables Finance Corp. ("ARFC"), and by ARFC to the Issuer, and by 
collections received in respect thereof.  Payment of principal and interest 
on the entire Maximum Authorized Amount of Notes is insured by Financial 
Security Assurance Inc. ("FSA") under a financial guaranty insurance policy 
(the "POLICY") dated December 3, 1996, Endorsement No. 1 to the Policy, dated 
December 3, 1996, Endorsement No. 2 to the Policy, dated August 4, 1997, 
Endorsement No. 3 to the Policy, dated November 14, 1997, and Endorsement No. 
4 to the Policy, dated July 21, 1998.

   The Issuer, the Original Issuer, the RCC Agent, the Administrative Agent, 
the DFC Agent, AFL, ARFC and the Trustee have entered into an Amended and 
Restated Sale and Servicing Agreement, dated as of July 21, 1998 (as from 
time to time amended, supplemented or modified, the "SALE AND SERVICING 
AGREEMENT"), which provides for the sale of Receivables from time to time by 
ARFC to the Trust, the servicing of the Receivables and certain other matters.

     SECTION 2. EFFECTIVE DATE, EXCHANGE AND PURCHASE; FUNDING OF NOTE 
INCREASES. On the Effective Date, RCC shall receive its RCC Note in exchange 
for the Currently Outstanding Note and DFC shall receive its DFC Note.  
During the Purchase Period and subject to the terms and conditions of, and in 
reliance upon the representations, warranties and covenants set forth in, 
this Agreement, the Purchasers agree to fund, from time to time on each date 
as specified in Section 3 hereof (each, a "PURCHASE DATE") the Note Increase 
on such Purchase Date in an amount of the Note Increase Amount up to an 
aggregate principal amount at any time outstanding not to exceed the Maximum 
Authorized Amount, at a purchase price equal to 100% of such Note Increase 
Amount (the "PURCHASE PRICE").  Each Purchaser shall fund its Purchase 
Percentage of a Note Increase Amount on any day and shall pay its Purchase 
Percentage of the Purchase Price.  No Purchaser shall be required to fund a 
Note Increase Amount in excess of its Purchase Limit.

     SECTION 3. DELIVERY AND PAYMENT. The Issuer will provide each Agent with 
written notice of each Purchase Date and of the Note Increase Amount to be 
funded on such Purchase Date no later than 12:00 noon (Minneapolis, Minnesota 
time) one Business Day prior to the proposed Purchase Date; PROVIDED, that if 
the Purchase Price for the Note Increase Amount on a Purchase Date is less 
than or equal to $15,000,000, then such notice may be made no later than 
11:00 a.m., New York City time on such Purchase Date; PROVIDED FURTHER, that 
if such notice is given on a Purchase Date, the Purchasers will not be 
obligated to fund the Note Increase Amount on such Purchase Date unless the 
Purchasers are able to issue and sell their respective Commercial Paper Notes 
in an amount sufficient to fund such Note Increase Amount, and AFL and the 
Issuer agree to hold harmless the Purchasers for failing to effect a funding 
on such Purchase Date.  Each Note Increase shall be recorded on the grid 
attached to each Purchaser's Note by the applicable Agent on each Purchase 
Date.  The notation of the Note Increase shall be made against payment by 
wire transfer of immediately available funds to the account of Norwest Bank 
Minnesota, National Association as Trustee for Arcadia Receivables Conduit 
Warehouse, Clearing Account #1038377, Norwest Bank Minnesota, National 
Association, ABA # 091000019, for further credit to Arcadia Automobile 
Receivables Warehouse Trust A-C # 13284501 in the amount of the Purchase 
Price.  The Administrative Agent agrees to notify the RCC Agent and the DFC 
Agent of the receipt of a Purchase Date notice by 2:00 p.m. (New York


                                       3
<PAGE>


City time) on the day received by the Administrative Agent.  Each Agent 
agrees to collect the Purchase Price due or any Purchase Date from its 
related Purchaser.

     SECTION 4. ISSUER'S REPRESENTATIONS, WARRANTIES AND COVENANTS. The 
Issuer represents and warrants to, and agrees with, each Purchaser, the 
Administrative Agent, the RCC Agent and the DFC Agent as of the date hereof 
and as of each Purchase Date, as follows:

     (a)  The Issuer is a business trust duly organized, validly existing and 
in good standing under the laws of the State of Delaware.

     (b)  The Issuer has all requisite power and authority necessary to enter 
into this Agreement and the Basic Agreements, to offer, sell and deliver the 
Notes and to perform its obligations hereunder and thereunder; the Issuer has 
taken all corporate action required to authorize the execution and delivery 
of this Agreement, the Basic Agreements and the Notes, the offer, sale and 
delivery of the Notes and the performance of all obligations to be performed 
by it hereunder and under the Basic Agreements and the Notes; this Agreement 
and the Basic Agreements to which the Issuer is a party have been duly 
authorized, executed and delivered by the Issuer and constitute, and each 
Note when purchased by a Purchaser will have been duly authorized, executed 
and delivered and will constitute, the legal, valid and binding obligation of 
the Issuer, enforceable against the Issuer in accordance with its terms, 
subject to (i) limitations on enforceability imposed by bankruptcy, 
insolvency, reorganization, arrangement, moratorium or other similar laws 
relating to or affecting the enforcement of creditors' rights generally, and 
(ii) general principles of equity, regardless of whether such enforceability 
is considered in a proceeding in equity or at law.

     (c)  Neither the authorization, execution, sale, delivery or performance 
of the Notes or the authorization, execution, delivery or performance of this 
Agreement or the Basic Agreements to which the Issuer is a party, nor the 
consummation of any of the transactions contemplated herein or therein, nor 
the execution, delivery or performance of the terms of this Agreement, the 
Notes or any Basic Agreement, will result in the breach of any term or 
provision of the Certificate of Trust of the Issuer, or conflict with, result 
in a breach or violation of, or the acceleration of, indebtedness under, or 
constitute a default under, the terms of any indenture or other agreement, 
instrument or arrangement to which the Issuer is a party or by which it is 
bound, or any statute or regulation applicable to the Issuer or any order 
applicable to it of any court, regulatory body, administrative agency or 
governmental body having jurisdiction over it.

     (d)  With the exception of applicable blue-sky or state securities 
regulations (as to which no representation is made), no consent, approval, 
authorization of, registration or filing with, or notice to, any governmental 
or regulatory authority, agency, department, commission, board, bureau, body 
or instrumentality was or is required for the execution, delivery or 
performance of or compliance by the Issuer with this Agreement, the Notes or 
any Basic Agreement or the offer, sale, delivery or performance of the Notes, 
or the consummation by the Issuer of any other transaction contemplated by 
this Agreement, the Notes or any Basic Agreement, or such consent, approval 
or authorization has been obtained, or such registration, filing or notice 
has been made (and, in either such case, copies thereof delivered to you and 
your counsel). No tax, assessment or other governmental charge is or will 
become payable as a result

                                       4
<PAGE>


of (i) the execution, delivery or performance of this Agreement or any Basic 
Agreement, or (ii) the execution, sale, delivery or performance of any Note, 
or (iii) except for taxes imposed on the net income of a Purchaser with 
respect to interest on the Notes, the receipt or non-receipt of any payment 
of principal or interest on any Note (or in respect thereof under the Policy).

     (e)  There is no action, suit or proceeding pending, or investigation 
of, the Issuer, pending or, to the best of the Issuer's knowledge after due 
inquiry, threatened, against the Issuer before any court, administrative 
agency or other tribunal which, (i) either individually or in the aggregate, 
could, if adversely determined, result in any material adverse change in the 
business, operations, financial condition, prospects, properties, or assets 
of the Issuer or in any impairment of the right or ability of the Issuer to 
carry on its business substantially as now conducted, (ii) asserts the 
invalidity of this Agreement, any Note or any of the Basic Agreements, (iii) 
seeks to prevent the issuance, sale or purchase of the Notes or the 
consummation of any of the transactions contemplated by this Agreement or any 
of the Basic Agreements or (iv) could materially and adversely affect the 
performance by the Issuer of its obligations under, or the validity or 
enforceability of, this Agreement, any of the Notes or any of the Basic 
Agreements.

     (f)  The Issuer is not in default in the performance, observance or 
fulfillment of any of the obligations, covenants or conditions contained in, 
and is not otherwise in default under, (i) any law or statute applicable to 
it, or (ii) any judgment, decree, writ, injunction, order, award or other 
action of any court or governmental authority or arbitrator or any order, 
rule or regulation, of any federal, state, county, municipal or other 
governmental or public authority or agency having or asserting jurisdiction 
over it or any of its properties, or (iii) (x) any indebtedness or any 
instrument or agreement under or pursuant to which any such indebtedness has 
been, or could be, issued or incurred, or (y) any other instrument or 
agreement to which it is a party or by which it is bound or any of its 
properties is affected including, without limitation, the Basic Agreements 
which, (A) either individually or in the aggregate, could result in any 
material adverse change in the business, operations, financial condition, 
prospects, properties, or assets of the Issuer or in any impairment of the 
right or ability of the Issuer to carry on its business substantially as now 
conducted or (B) could materially and adversely affect the performance by the 
Issuer of its obligations under, or the validity or enforceability of, this 
Agreement, any of the Notes or any of the Basic Agreements.

     (g)  Neither the Issuer nor, to the best of the Issuer's knowledge, 
anyone acting on behalf of the Issuer, has offered, transferred, pledged, 
sold or otherwise disposed of any Note or any interest in any Note to, or 
solicited any offer to buy or accept a transfer, pledge or other disposition 
of any Note or any interest in any Note from, or otherwise approached or 
negotiated with respect to any Note or any interest in any Note with, any 
person in any manner, or made any general solicitation by means of general 
advertising or in any other manner, or taken any other action, which would 
constitute a public distribution of the Notes under the Securities Act of 
1933, as amended (the "1933 ACT"), or which would render the disposition of 
any Note a violation of Section 5 of the 1933 Act or any state securities 
laws, or require registration or qualification pursuant thereto or require 
registration of the Issuer under the Investment Company Act of 1940, as 
amended, nor will the Issuer act, nor has the Issuer authorized or will it 
authorize any person to act, in such manner with respect to any Note.


                                     5
<PAGE>


     (h)   (i) The offer and sale of the Notes from the Issuer to the 
Purchasers in the manner contemplated herein are transactions exempt from the 
registration requirements of the 1933 Act and (ii) the Indenture is not 
required to be qualified under the Trust Indenture Act of 1939, as amended.  
The representation by the Issuer with respect to the sale from the Issuer to 
the Purchasers in clause (i) of the preceding sentence is made upon and 
subject to the accuracy of the representations made by you in Section 5(a) 
hereof.

     (i)  The Issuer is not required, and will not be required as a result of 
the offer and sale of the Notes under the circumstances contemplated by this 
Agreement or the other transactions contemplated by this Agreement and the 
Basic Agreements, to register as an "investment company" under the Investment 
Company Act of 1940, as amended (the "1940 ACT"), and the Issuer is not 
"controlled" by an "investment company" as defined in the 1940 Act.

     (j)  Each Note purchased hereunder by a Purchaser will have been duly 
authorized, executed and delivered by the Issuer, will be entitled to the 
benefit of the security provided for in the Indenture, will bear interest and 
mature and be subject to prepayment all as specified in Section 1 hereof and 
will, as to both principal and interest, be fully and unconditionally insured 
under the Policy.

     (k)  The Issuer further agrees that it will not permit any amendment, 
modification or waiver, which could in any way be materially adverse to the 
Noteholders, to any of the provisions of any of  the Basic Agreements without 
the prior written consent of the Administrative Agent (acting at the 
direction of the RCC Agent and the DFC Agent) , it being agreed that a waiver 
of any Event of Default under the Sale and Servicing Agreement or of any 
Amortization Event materially adversely affects the Noteholders.

     (l)  The Issuer will treat the Notes as debt of the Issuer for federal 
income and state and local income and franchise tax purposes.

     SECTION 5. PURCHASER REPRESENTATIONS.

     This Agreement is made with each of you in reliance upon your 
representation to the Issuer, which by your acceptance hereof you confirm, 
that you understand that the Notes have not been and will not be registered 
under the 1933 Act in reliance upon the exemption provided in Section 4(2) of 
the 1933 Act or registered or qualified under the securities or "Blue Sky" 
laws of any jurisdiction and may not be resold or otherwise pledged or 
transferred except in a transaction which is exempt from the registration 
requirements of the 1933 Act (and, in that regard each Purchaser hereby 
represents that any Notes purchased by it (or by the RCC Agent or DFC Agent, 
as the case may be, on behalf of its related Purchaser) hereunder will be 
purchased for its own account and not with a view to distribution thereof); 
PROVIDED, that, (i) the disposition of your property shall at all times be 
within your control; and (ii) it is recognized and agreed that you may 
transfer your rights and interests under the Notes and herein to one or more 
liquidity purchasers ("LIQUIDITY PURCHASERS") under, in the case of RCC, an 
Amended and Restated Liquidity Asset Purchase Agreement dated as of July 21, 
1998 (the "RCC ASSET PURCHASE AGREEMENT") among the Liquidity Purchasers from 
time to time party thereto, RCC and Bank of


                                       6
<PAGE>


America National Trust and Savings Association, as Administrator and 
Liquidity Agent and, in the case of DFC, the Asset Purchase Agreement dated 
as of July 21, 1998, by and among DFC, the Liquidity Purchasers from time to 
time party thereto, and Morgan Guaranty Trust Company of New York, as DFC 
Agent and agent for the Liquidity Purchasers (the "DFC ASSET PURCHASE 
AGREEMENT", with the RCC Asset Purchase Agreement, the "LIQUIDITY 
AGREEMENTS"). Each Purchaser represents that the Liquidity Purchasers under 
its related Liquidity Agreement will make the foregoing representations and 
warranties with respect to any purchase of the Notes pursuant to such 
Liquidity Agreement.

     Each Purchaser hereby represents to the Issuer that:

     (a)  The Purchaser is a corporation duly organized, validly existing and 
in good standing under the laws of the jurisdiction of its formation.

     (b)  The Purchaser has all requisite power (corporate and other) and 
authority necessary to enter into this Agreement and to perform its 
obligations hereunder; the Purchaser has taken all corporate action required 
to authorize the execution and delivery of this Agreement and the performance 
of all obligations to be performed by it hereunder; this Agreement has been 
duly authorized, executed and delivered by the Purchaser, and constitutes the 
legal, valid and binding agreement of the Purchaser, enforceable against the 
Purchaser in accordance with its terms, subject to (i) limitations imposed by 
bankruptcy, insolvency, reorganization, arrangement, moratorium or other laws 
relating to or affecting the enforcement of creditors' rights generally, and 
(ii) general principles of equity, regardless of whether such enforceability 
is considered in a proceeding in equity or at law.

     (c)  Neither the purchase of the Notes nor the consummation of any of 
the transactions contemplated herein by the Purchaser, nor the execution, 
delivery or performance of the terms of this Agreement by the Purchaser, will 
result in the breach of any term or provision of the certificate of 
incorporation or by-laws of the Purchaser, or conflict with, result in a 
breach or violation of or the acceleration of indebtedness under or 
constitute a default under, the terms of any indenture or other agreement or 
instrument to which the Purchaser is a party or by which it is bound, or any 
statute or regulation applicable to the Purchaser or any order applicable to 
it of any court, regulatory body, administrative agency or governmental body 
having jurisdiction over it which materially and adversely affects, or may in 
the future materially and adversely affect, (i) the ability of the Purchaser 
to perform its obligations hereunder or (ii) the business, operations, 
financial condition, prospects, properties or assets of the Purchaser.

     (d)  No consent, approval, authorization of, registration or filing 
with, or notice to, any governmental or regulatory authority, agency, 
department, commission, board, bureau, body or instrumentality was or is 
required for the execution, delivery or performance of or compliance by the 
Purchaser with this Agreement or the purchase of the Notes by the Purchaser, 
or the consummation by the Purchaser of any other transaction contemplated 
under this Agreement or such consent, approval or authorization has been 
obtained or such registration, filing or notice has been made.

     (e)  There is no action, suit or proceeding against, or investigation 
of, the Purchaser, pending or, to the best of the Purchaser's knowledge, 
threatened, before any court,


                                       7
<PAGE>


administrative agency or other tribunal which, either individually or in the 
aggregate, (i) may result in any material adverse change in the business, 
operations, financial condition, prospects, properties, or assets of 
Purchaser or in any impairment of the right or ability of the Purchaser to 
carry on its business substantially as now conducted, or (ii) asserts the 
invalidity of this Agreement or (iii) seeks to prevent the purchase of the 
Notes or the consummation of any of the transactions contemplated by this 
Agreement or (iv) could materially and adversely affect the performance by 
the Purchaser of its obligations under, or the validity or enforceability of, 
this Agreement.

     (f)  The Purchaser is not required, and will not be required as a result 
of the purchase of the Notes under the circumstances contemplated by this 
Agreement, to register as an "investment company" under the 1940 Act.

     (g)   On the date hereof, the Purchaser's commercial paper notes are 
rated A-1+ by Standard & Poor's and P-1 by Moody's.

     SECTION 6. CONDITIONS OF PURCHASER'S OBLIGATIONS.

     (a)  EACH FUNDING OF A NOTE INCREASE. The obligation of each of you to 
fund your Purchase Percentage of a Note Increase on any Purchase Date shall 
be subject to the fact that: (u) no Default or Event of Default shall have 
occurred; (v) the Insurer Notice Date shall not have occurred; (w) the Note 
Increase to be funded shall be in conformity with the description thereof 
contained in Section 1 hereof; (x)  the Purchase Period shall not have 
expired;  (y) the representations and warranties that are made on the part of 
the Issuer and contained in this Agreement shall be true and correct, on and 
as of such Purchase Date, as if made on and as of such Purchase Date; and (z) 
the Issuer shall be in continuing compliance, in all material respects, with 
all of its obligations hereunder and under the Basic Agreements and that the 
Issuer and AFL are in continuing compliance in all material respects with 
their obligations under the Fee Letters.  The obligation of each of you to 
fund your Purchase Percentage of a Note Increase shall also be subject to the 
accuracy in all material respects, on and as of the date of such funding, of 
the representations and warranties contained herein and of the statements 
made by the Issuer in any certificates furnished pursuant to the provisions 
hereof.  Each funding of a Note Increase hereunder shall constitute a 
representation and warranty by the Issuer that all of the above conditions 
are satisfied on and as of the respective Purchase Date.

     (b)  EFFECTIVE DATE.  The obligation of RCC to accept the exchange of 
the RCC Note for the Currently-Outstanding Note and of DFC to purchase and 
pay for the DFC Note on the Effective Date shall be subject to the following 
additional conditions:

          (i)  Each Agent shall have received and had an opportunity to review
     the Basic Agreements (and, the respective amendments, appendices and
     exhibits thereto) and the form of Notes, and each of such documents shall
     be in form and substance satisfactory to the RCC Agent and the DFC Agent.

          (ii) Fully executed Endorsement No. 4 to the Policy shall have been
     delivered to the Administrative Agent and timely payment, as and when due,
     of all principal of and interest on the Notes shall be fully and
     unconditionally insured under the Policy.


                                       8
<PAGE>


          (iii) The Issuer shall have complied in all material respects with all
      the agreements and satisfied all the conditions on its part to be
      performed or satisfied by it on or prior to the Effective Date under this
      Agreement.

          (iv)  Each of the Basic Agreements shall have been duly authorized,
      executed and delivered by each of the parties thereto, shall be in full
      force and effect and shall constitute a legal, valid and binding agreement
      of each of the parties thereto, enforceable against each of them in
      accordance with its terms, subject, with respect to enforceability, to
      bankruptcy, insolvency, reorganization or other similar laws affecting the
      enforceability of creditors' rights generally and to general principles of
      equity regardless of whether enforcement is sought in a proceeding in
      equity or at law, and no event shall have occurred which constitutes or,
      with the passage of time or with notice or both, would constitute a
      default thereunder, and each Agent shall have received two fully executed
      copies of each of the Basic Agreements.

          (v)   The Administrative Agent shall have received opinions of counsel
      (or reliance letters with respect to certain opinions previously rendered)
      to the Issuer, AFL, ARFC, FSA, the Owner Trustee and the Indenture
      Trustee, each dated the Effective Date, and such opinions shall be in
      form, scope and substance satisfactory to the RCC Agent and the DFC Agent.

          (vi)  All proceedings in connection with the transactions contemplated
      by this Agreement and the Basic Agreements and all documents incident
      hereto and thereto shall be satisfactory in form and substance to the RCC
      Agent and the DFC Agent, and each Agent shall have received such
      information, certificates and documents as either Agent may request.

          (vii) The Administrative Agent shall have received a certificate from
      AFL dated the date hereof confirming that (y) its representations and
      warranties contained in the Basic Agreements are true and correct in all
      material respects on and as of the Effective Date and (z) as of the
      Effective Date, no Event of Default or Servicer Termination Event has
      occurred under the Sale and Servicing Agreement and to the best knowledge
      of AFL, there is no set of circumstances existing on the date hereof that
      with the passage of time would constitute such an Event of Default or
      Servicer Termination Event.

         (viii) The Administrative Agent shall have received from each of the
      Issuer, AFL, ARFC, FSA, the Owner Trustee and the Indenture Trustee copies
      of the certificate of trust, charter, by-laws, board resolutions,
      signature and incumbency and other related trust and/or corporate matters,
      as applicable, of those respective Persons, in form and substance
      acceptable to the RCC Agent and the DFC Agent, together with copies of the
      Officers' Certificates with respect thereto delivered on the Effective
      Date.

         (ix)   The Indenture shall be in form and substance satisfactory to
      each Agent, and each Agent shall have received two true and complete
      copies thereof.


                                       9
<PAGE>


     SECTION 7. EXPENSES. The Issuer and AFL shall, jointly and severally, be 
obligated to pay on demand to (i) each Purchaser, the RCC Agent and the DFC 
Agent all reasonable costs and expenses in connection with the preparation, 
execution, and delivery of the Basic Agreements and any other documents to be 
delivered in connection therewith, including, without limitation, the 
reasonable fees and expenses of counsel for each Purchaser and each Agent, 
and (ii) each Purchaser and each Agent all reasonable costs and expenses, 
including, without limitation, the reasonable fees and expenses of counsel 
for each Purchaser and each Agent, in connection with the enforcement of any 
Basic Agreement or any document delivered in connection therewith.

     SECTION 8. DEFINITIONS. For purposes of this Agreement, except as 
otherwise expressly provided or unless the context otherwise requires:

     (a)  The term "AGENT" means the RCC Agent or the DFC Agent, as the context
requires;

     (b)  the term "ADMINISTRATIVE AGENT" means Bank of America National 
Trust and Savings Association and its successors and assigns, as 
administrative agent for the Purchasers and the Agents;

     (c)  the term "BASIC AGREEMENTS" shall mean this Agreement, the Trust 
Agreement, the Administration Agreement, the Indenture, the Sale and 
Servicing Agreement, the Purchase Agreement, the Security Agreement, the 
Lockbox Agreement, the Custodian Agreement, the Policy, the Spread Account 
Agreement, the Fee Letters, the Assignment Agreement and the Insurance 
Agreement;

     (d)  the term "CP RATE" means, with respect to either Purchaser, for any 
period and with respect to any portion of the principal amount of the Notes 
as to which such Purchaser's funding of the purchase or carrying thereof is 
being provided by such Purchaser's Commercial Paper Notes, the rate of 
interest per annum determined in arrears in good faith by the applicable 
Agent to reflect such Purchaser's cost of funding the purchase or carrying of 
such portion of the Notes, which shall be equal to the weighted daily average 
interest rate payable in respect of such Commercial Paper Notes during such 
period (determined in the case of discount commercial paper notes by 
converting the discount to an interest bearing equivalent rate per annum), 
plus applicable placement fees and commissions, but excluding any other fees 
related to such funding;

     (e)  the term "DFC AGENT" means Morgan Guaranty Trust Company of New 
York, as agent for DFC and the Liquidity Purchasers under DFC's Liquidity 
Agreement;

     (f)  the term "EFFECTIVE DATE" means the date on which the conditions 
set forth in Section 6(b) hereof are satisfied;

     (g)  the term "FEE LETTERS" shall mean, collectively, the Fee Letter 
dated as of July 21, 1998 among AFL, RCC and the RCC Agent, and the Fee 
Letter dated as of July 21, 1998, among the Issuer, AFL and the DFC Agent;


                                       10
<PAGE>


     (h)  the term "PROGRAM SUPPORT DOCUMENT" shall mean, for each Purchaser, 
the Liquidity Agreement and any other agreement entered into by any other 
Program Support Provider providing for the issuance of one or more letters of 
credit for the account of such Purchaser, the issuance of one or more surety 
bonds for which such Purchaser is obligated to reimburse the applicable 
Program Support Provider of the related Commercial Paper Notes (or any 
interest therein) or the making of loans or other extensions of credit to the 
Purchaser in connection with such Purchaser's securitization program, 
together with any letter of credit, surety bond or other instrument issued 
thereunder (but excluding any discretionary advance facility provided by such 
Purchaser's Agent);

     (i)  the term "PURCHASE PERCENTAGE" shall mean 56.25% for RCC and 43.75% 
for DFC, as either percentage may be revised from time to time with the prior 
written consent of the Issuer, the RCC Agent and the DFC Agent;

     (j)  the term "PURCHASE PERIOD" shall mean the period from the date of 
execution hereof to the earliest to occur of (i) July 20, 1999, (ii) the 
commencement of the Amortization Period, (iii) the commitment of related 
Liquidity Purchasers to purchase interests in the respective Notes from a 
Purchaser under the related Liquidity Agreement shall expire and (iv) the 
date specified by the Issuer with five Business Day's prior notice to the 
Administrative Agent, each Agent, the Security Insurer, the Indenture Trustee 
and the Rating Agencies;

     (k)  the term "RCC AGENT" means Bank of America National Trust and Savings
Association, as agent for RCC and the Liquidity Purchasers under RCC's Liquidity
Agreement;

     (l)  all capitalized terms used herein and not otherwise defined shall 
have the meanings assigned thereto in the Sale and Servicing Agreement 
(including by way of reference to other documents);

     (m)  terms defined in this Agreement include the plural as well as the 
singular, and the use of any gender herein shall be deemed to include each 
other gender;

     (n)  the words "herein," "hereof," "hereunder" and other words of 
similar import refer to this Agreement as a whole and not to any particular 
provisions; and

     (o)  the term "include" or "including" shall mean without limitation by 
reason of enumeration.

     SECTION 9. SUCCESSORS AND ASSIGNS. This Agreement shall inure to the 
benefit of and be binding upon the parties hereto and their respective 
successors and assigns; PROVIDED, that the Issuer may not assign any of its 
rights or obligations hereunder without the prior written consent of the 
Purchasers.  No provision of this Agreement shall in any way limit a 
Purchaser's ability to assign all or any portion of its rights and 
obligations hereunder to any related Liquidity Purchaser, to any related 
Program Support Provider, or a related collateral agent under such 
Purchaser's securitization program.


                                       11
<PAGE>


     SECTION 10. INDEMNIFICATION. (a) Without limiting any other rights that 
the Administrative Agent, a Purchaser, an Agent or any of their respective 
Affiliates, employees, agents, successors, transfers or assigns (each, an 
"INDEMNIFIED PARTY") may have hereunder or under applicable law, the Issuer 
hereby agrees to indemnify each Indemnified Party from and against any and 
all claims, damages, expenses, losses and liabilities (including fees and 
expenses of counsel) (all of the foregoing being collectively referred to as 
"INDEMNIFIED AMOUNTS")  arising out of or resulting from this Agreement and 
the Basic Agreements (whether directly or indirectly) or the ownership of the 
Notes, or any interest therein, or in respect of any Receivable, excluding, 
however, (i) Indemnified Amounts to the extent resulting from gross 
negligence or willful misconduct on the part of such Indemnified Party, (ii) 
any losses arising out of or relating to any non-payment of any Receivable, 
or (iii) any overall net income tax es or franchise taxes imposed on such 
Indemnified Party by the jurisdiction under the laws of which such 
Indemnified Party is organized or any political subdivision thereof.

     (b)  Without limiting any other rights that the Indemnified Parties may 
have hereunder or under applicable law, AFL hereby agrees to indemnify each 
Ind  emnified Party from and against any and all Indemnified Amounts for or 
on account of or arising from or in connection with any breach of any rep 
resentation, warranty or covenant of AFL in this Note Purchase Agreement or 
any Basic Agreement or in any certificate or other written material 
delivered pur suant hereto or thereto, excluding, however, (i) Indemnified 
Amounts to the extent resulting from gross negligence or willful misconduct 
on the part of such Indemnified Party and (ii) any overall net income taxes 
or franchise taxes imposed on such Indemnified Party by the jurisdiction 
under the laws of which such Indemnified Party is organized or any political 
subdivision thereof.

     (c)  In order for an Indemnified Party to be entitled to any 
indemnification provided for under this Agreement in respect of, arising out 
of, or involving a claim made by any Person against the Indemnified Party (a 
"THIRD PARTY CLAIM"), such Indemnified Party must notify the Issuer or AFL, 
as applicable, in writing of the Third Party Claim within five Business Days 
of receipt of a summons, complaint or other notice of the commencement of 
litigation and within ten Business Days after receipt by such Indemnified 
Party of any other written notice of the Third Party Claim.  Thereafter, the 
Indemnified Party shall deliver to the Issuer or AFL, as applicable, within a 
reasonable time after the Indemnified Party's receipt thereof, copies of all 
notices and documents (including court papers) received by the Indemnified 
Party relating to the Third Party Claim.

     (d)  If a Third Party Claim is made against an Indemnified Party, (x) 
the Issuer or AFL, as applicable, will be entitled to participate in the 
defense thereof and, (y) if either so chooses, to assume the defense thereof 
with counsel selected by the Issuer or AFL, as applicable, provided that in 
connection with such assumption (i) such counsel is not reasonably objected 
to by the Indemnified Party and (ii) the Issuer or AFL, as applicable, first 
admits in writing its liability to indemnify the Indemnified Party with 
respect to all elements of such claim in full.  Should the Issuer or AFL, as 
applicable, so elect to assume the defense of a Third Party Claim, the Issuer 
or AFL, as applicable, will not be liable to the Indemnified Party for any 
legal expenses subsequently incurred by the Indemnified Party in connection 
with the defense thereof.  If the Issuer or AFL, as applicable, elects to 
assume the defense of a Third Party Claim, the 


                                       12
<PAGE>

Indemnified Party will (i) cooperate in all reasonable respects with the 
Issuer or AFL in connection with such defense and (ii) not admit any 
liability with respect to, or settle, compromise or discharge, such Third 
Party Claim without the Issuer's or AFL's prior written consent, as the case 
may be.  If the Issuer or AFL, as applicable, shall assume the defense of any 
Third Party Claim, the Indemnified Party shall be entitled to participate in 
(but not control) such defense with its own counsel at its own expense.  If 
the Issuer or AFL, as applicable, does not assume the defense of any such 
Third Party Claim, the Indemnified Party may defend the same in such manner 
as it may deem appropriate, including settling such claim or litigation after 
giving notice to the Issuer or AFL, as applicable, of such terms and the 
Issuer or AFL, as applicable, will promptly reimburse the Indemnified Party 
upon written request.  Anything contained in this Note Purchase Agreement to 
the contrary notwithstanding, the Issuer or AFL, as applicable, shall not be 
entitled to assume the defense of any part of a Third Party Claim that seeks 
an order, injunction or other equitable relief or relief for other than money 
damages against the Indemnified Party.

     SECTION 11. INCREASED COSTS. (a)  If the Purchaser, any Liquidity 
Purchaser, any other Program Support Provider or any of their respective 
Affiliates (each an "AFFECTED PERSON") determines that the existence of or 
compliance with (i) any law or regulation or any change therein or in the 
interpretation or application thereof, in each case adopted, issued or 
occurring after the date hereof or (ii) any request, guideline or directive 
from any central bank or other Governmental Authority (whether or not having 
the force of law) issued or occurring after the date of this Agreement 
affects or would affect the amount of capital required or expected to be 
maintained by such Affected Person and such Affected Person determines that 
the amount of such capital is increased by or based upon the existence of any 
commitment to make purchases of or otherwise to maintain the investment in 
the Notes or the applicable Liquidity Agreement or any other applicable 
Program Support Document, then, upon demand by such Affected Person (with a 
copy to the applicable Agent), the Issuer agrees to immediately pay to such 
Agent, for the account of such Affected Person, from time to time as 
specified by such Affected Person, additional amounts sufficient to 
compensate such Affected Person in the light of such circumstances, to the 
extent that such Affected Person reasonably determines such increase in 
capital to be allocable to the existence of any of such commitments.  A 
certificate as to such amounts submitted to the Issuer and such Agent by such 
Affected Person shall be conclusive and binding for all purposes, absent 
manifest error.

     (b)  If, due to either (i) the introduction of or any change in or in the
interpretation of any law or regulation or (ii) compliance with any guideline or
request from any central bank or other Governmental Authority (whether or not
having the force of law), there shall be any increase in the cost to any
Affected Person of agreeing to purchase or purchasing, or maintaining the
ownership of the Notes in respect of which interest is computed by reference to
the Offshore Rate or LIBOR, as applicable, then, upon demand by such Affected
Person, the Issuer agrees to immediately pay to such Affected Person, from time
to time as specified, additional amounts sufficient to compensate such Affected
Person for such increased costs.  A certificate as to such amounts submitted to
the Issuer by such Affected Person shall be conclusive and binding for all
purposes, absent manifest error.


                                       13
<PAGE>


     (c)  Before giving any notice to the Issuer under this Section 11, the 
Affected Person shall use commercially reasonable efforts to designate a 
different office with respect to its purchase of Notes or its provision of 
liquidity or credit sup  port under the relevant Program Support Document if 
such designation will avoid the need for giving such notice or making such 
demand and will not, in the judgment of the Affected Person, be illegal or 
otherwise disadvantageous to such Affected Person.

     (d)  Upon the receipt by the Issuer of a claim for reimbursement or 
compensation under this Section 11 related to the ownership of a Note or any 
interest therein by an Affected Person, and payment thereof hereunder shall 
not be waived by such Affected Person, the Issuer may (i) request the 
Affected Person to use its reasonable efforts to obtain a replacement bank, 
financial institution or asset-backed commercial paper conduit, as 
applicable, satisfactory to the Issuer to  acquire and assume all or a 
ratable part of all of such Affected Person's Note or interests therein (a 
"REPLACEMENT PURCHASER"), (ii) request one or more of the other Noteholders 
or Liquidity Purchasers to acquire and assume all or a part of such Affected 
Person's Note or interests therein; or (iii) designate a Replacement 
Purchaser.  Any such designation of a Replacement Purchaser under CLAUSE (i) 
or (iii) shall be subject to the prior written consent of each Agent (which 
consent shall not be unreasonably withheld).  Upon notice from the Issuer, 
such Affected Person shall assign its Note or interests therein and its other 
rights and obligations (if any) hereunder or a ratable share thereof to the 
Replacement Purchaser or Replacement Purchasers designated by the Issuer for 
a purchase price equal to the sum of the principal amount of the Notes or 
interests therein so assigned and all accrued and unpaid interest thereon and 
any other amounts (including fees) to which it is entitled hereunder or under 
any Basic Agreement or other Program Support Document (including any fee 
letters entered into in connection therewith); PROVIDED, that the Issuer 
shall provide such Affected Person with an officer's certificate stating that 
such Replacement Purchaser has advised the Issuer that it is not subject to, 
or has agreed not to seek, such increased amount.

     (e)  The parties to this Agreement acknowledge that the payment rights 
provided for in this Section 11 are not insured under the Policy.

     SECTION 12. NOTICES.  (a)  All communications provided for or permitted 
hereunder and under any other Basic Agreement shall be in writing and shall 
be delivered, sent by overnight courier or mailed or transmitted by 
telecopier and confirmed by a similar mailed writing, if to a Purchaser, or 
the Administrative Agent, addressed to a Purchaser, the Administrative Agent 
or an Agent, as applicable, at the addresses shown on page 1 of this 
Agreement, or to such other address as a Purchaser, an Agent or the 
Administrative Agent may have designated in writing to the Issuer, and if to 
the Issuer, AFL or the Rating Agencies, to their respective addresses set 
forth in the Sale and Servicing Agreement, or to such other address as the 
Issuer or AFL may have designated in writing to a Purchaser.

     (b)  All such written communications shall, when so sent by overnight 
courier, telecopied or mailed, be deemed given when delivered to the 
overnight courier, when telephone confirmation of telecopy is received, or, 
in the case of communications by mail, on the fourth Business Day following 
deposit in the mails.  All other written communications shall be deemed to 
have been given upon receipt thereof.


                                       14
<PAGE>


     SECTION 13. COUNTERPARTS.  This Agreement may be executed in several 
counterparts, each of which shall constitute an original, but all of which 
together shall constitute one instrument notwithstanding that all parties are 
not signatories to the same counterparts.

     SECTION 14. ENTIRE AGREEMENT.  This Agreement constitutes the entire 
agreement and understanding of the parties with respect to the matters and 
transactions contemplated by this Agreement and supersedes any prior 
agreement and understandings with respect to those matters and transactions.

     SECTION 15. GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED BY AND 
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT 
REGARD TO THE CONFLICT OF LAW PROVISIONS THEREOF.  THE PARTIES HERETO SUBMIT 
TO THE NON-EXCLUSIVE JURISDICTION OF ANY NEW YORK STATE OR UNITED STATES 
FEDERAL COURT SITTING IN THE BOROUGH OF MANHATTAN, THE CITY OF NEW YORK, OVER 
ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF, OR RELATING TO, THIS 
AGREEMENT, ANY NOTE OR ANY BASIC AGREEMENT AND HEREBY WAIVE ANY OBJECTION TO 
THE VENUE OF ANY SUCH COURT AS WELL AS ANY CLAIM OF INCONVENIENT FORUM.

     SECTION 16. SEVERABILITY OF PROVISIONS.  If any one or more of the 
covenants, agreements, provisions or terms of this Agreement shall be for any 
reason whatsoever held invalid, the invalidity of any such covenant, 
agreement, provision or term of this Agreement shall in no way affect the 
validity or enforceability of the other provisions of this Agreement, 
PROVIDED, HOWEVER, that if the invalidity of any covenant, agreement or 
provision shall deprive any party of the economic benefit intended to be 
conferred by this Agreement, the parties shall negotiate in good faith to 
develop a structure the economic effect of which is as nearly as possible the 
same as the economic effect of this Agreement.

     SECTION 17. SURVIVAL.  All representations, warranties and covenants 
made by the Issuer herein shall be considered to have been relied upon by you 
and shall survive the delivery to you of the Notes regardless of any 
investigation made by you or on your behalf.

     SECTION 18. LIMITED RECOURSE.  This Agreement is solely a corporate 
obligation of the Issuer, AFL, the Administrative Agent, each Agent and each 
Purchaser.  No recourse may be taken, directly or indirectly, under this 
Purchase Agreement or any certificate or other writing delivered in 
connection herewith against any stockholder, incorporator, employee, officer, 
director or agent of the Issuer, AFL, the Administrative Agent, either 
Purchaser or either Agent.  The obligations of the Issuer hereunder shall be 
payable solely out of the Trust Property.

     SECTION 19. NO PROCEEDINGS.  Each of the Issuer and AFL hereby agrees 
that it will not institute or join with others in instituting against either 
Purchaser, and each Purchaser hereby agrees that it will not institute or 
join with others in instituting against the Issuer, a bankruptcy, 
reorganization or analogous proceeding until at least 368 days after the 
later of (i) the last maturing commercial paper note issued or to be issued 
by such Purchaser matures and (ii) the last maturing Note issued or to be 
issued by the Issuer matures.

     SECTION 20. 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


                                       15
<PAGE>


litigation arising directly or indirectly out of, under or in connection with 
this Agreement or any of the transactions contemplated hereunder.

     SECTION 21. MATTERS RELATING TO AGENTS AND ADMINISTRATIVE AGENT.

     (a)  DFC hereby accepts the appointment of and authorizes the DFC Agent 
to take such action as agent on its behalf and to exercise such powers as are 
delegated to the DFC Agent by the terms hereof and any other Basic 
Agreements, together with such powers as are reasonably incidental thereto.  
RCC hereby accepts the appointment of and authorizes the RCC Agent to take 
such action as agent on its behalf and to exercise such powers as are 
delegated to the RCC Agent by the terms hereof and any other Basic 
Agreements, together with such powers as are reasonably incidental thereto.  
Each Purchaser and each Agent hereby accepts the appointment of and 
authorizes the Administrative Agent to take such action as agent on its 
behalf and to exercise such powers as are delegated to the Administrative 
Agent by the terms hereof and the other Basic Agreements, together with such 
powers as are reasonably incidental thereto.  Each of the Agents and the 
Administrative Agent reserves the right, in its sole discretion, to take any 
actions, exercise any rights or remedies under this Note Purchase Agreement 
and any Basic Agreements.  Except for actions which the Administrative Agent 
or either Agent is expressly required to take pursuant to this Note Purchase 
Agreement or the applicable Liquidity Agreement, the Administrative Agent or 
an Agent shall not be required to take any action which exposes the 
Administrative Agent or such Agent to personal liability or which is contrary 
to applicable law unless such Person shall receive further assurances to its 
satisfaction of indemnification against any and all liability and expense 
which may be incurred in taking or continuing to take such action.  Each 
Agent and the Administrative Agent agrees to give its respective Purchaser 
and Liquidity Purchasers and the Agents, as applicable, prompt notice of each 
notice and determination given to it by the Issuer, the Servicer, the Owner 
Trustee or the Trustee, pursuant to the terms of this Note Purchase Agreement 
or any Basic Agreement.  Subject to clause (e) hereof or any Basic Agreement, 
the appointment and authority of the Agents and the Administrative Agent 
hereunder shall terminate after the Purchase Period upon the payment to each 
Purchaser of all amounts owing to such Purchaser.

     (b)  The Administrative Agent agrees to provide to each Agent (i) prompt 
notice of eac  h notice the Administrative Agent (in its capacity as 
Administrative Agent) receives pursuant to this Agreement or any of the other 
Basic Agreements and (ii) copies of each written notice, certificate, report 
or other document that the Administrative Agent (in its capacity as 
Administrative Agent) receives hereunder or under any of the other Basic 
Agreements, other than any document which is, in the reasonable judgment of 
the Administrative Agent, immaterial.

     (c)  Neither the Agents nor the Administrative Agent nor any of their 
respective directors, officers, agents or employees shall be liable for any 
action taken or omitted to be taken by it or them as Agent or Administrative 
Agent under or in connection with this Note Purchase Agreement or any Basic 
Agreement, except for its or their own gross negligence or willful misconduct.


                                       16
<PAGE>


     (d)  Each Purchaser and Liquidity Purchaser acknowledges or is deemed to 
have acknowledged that it has, independently and without reliance upon the 
Administrative Agent or the Agents, and based on such documents and 
information as it has deemed appropriate, made its own evaluation and 
decision to enter into this Note Purchase Agreement and to purchase its Notes 
or a portion thereof. Each Purchaser and Liquidity Purchaser also 
acknowledges or is deemed to have acknowledged that it will, independently 
and without reliance upon the Agents or the Administrative Agent, and based 
on such documents and information as it shall deem appropriate at the time, 
continue to make its own decisions in taking or not taking action under this 
Note Purchase Agreement or any Basic Agreement.

     (e)  Each Agent or the Administrative Agent may resign at any time by 
giving thirty days' written notice thereof to the Purchasers, the other 
Agents, the Administrative Agent, the Servicer, FSA and the Indenture 
Trustee.  Upon any such resignation, each Purchaser shall have the right to 
appoint a related successor Agent and the Purchasers and the Agents shall 
have the right to appoint a successor Administrative Agent approved by the 
Issuer (which approval will not be unreasonably withheld or delayed).  Upon 
the acceptance of any appointment as Agent or Administrative Agent hereunder 
by a successor Agent or Administrative Agent, such successor Agent or 
Administrative Agent shall thereupon succeed to and become vested with all of 
the rights, powers, privileges and duties of the retiring Agent or 
Administrative Agent, as the case may be, and the retiring Administrative 
Agent or Agent shall be discharged from its duties and obligations under this 
Note Purchase Agreement.

     (f)  Each Agent (pro rata in accordance with its related Purchaser's 
Purchase Percentage) hereby severally covenants and agrees to indemnify the 
Administrative Agent, its directors, officers, officers, employees and agents 
for, and hold the Administrative Agent, its directors, officers, employees 
and agents harmless against, any loss, liability or expense (including the 
costs and expenses of defending against any claim of liability) arising out 
of or in connection with the Administrative Agent acting as Administrative 
Agent hereunder or under any Basic Agreement, except such loss, liability or 
expense as shall result from the gross negligence, bad faith or willful 
misconduct of the Administrative Agent or its officers or agents.  The 
obligation of the Agents under this Section 21 shall survive the termination 
of this Note Purchase Agreement or the resignation of the Administrative 
Agent.

     SECTION 22. LIMITATION OF LIABILITY. It is expressly understood and 
agreed by the parties hereto that (a) this Agreement is executed and 
delivered by Wilmington Trust Company, not individually or personally but 
solely as Owner Trustee, in the exercise of the powers and authority 
conferred and vested in it, (b) each of the representations, undertakings and 
agreements herein made on the part of the Issuer is made and intended not as 
a personal representation, undertaking or agreement by Wilmington Trust 
Company but is made and intended for the purpose for binding only the Issuer, 
(c) nothing herein contained shall be construed as creating any liability on 
Wilmington Trust Company, individually or personally, to perform any covenant 
either expressed or implied contained herein, all such liability, if any, 
being expressly waived by the parties hereto and by any Person claiming by, 
through or under such parties and (d) under no circumstances shall Wilmington 
Trust Company be personally liable for the payment of any indebtedness or 
expenses of the Issuer or be liable for the breach or failure of any 
obligation, representation, warranty or covenant made or undertaken by the 
Issuer under this Agreement or the Basic Agreements.


                                       17
<PAGE>

     IN WITNESS WHEREOF, the Purchasers, the Administrative Agent, the 
Agents, AFL and the Issuer have caused their names to be signed hereto by 
their respective officers thereunto duly authorized as of the date first 
above written.

                                   ARCADIA AUTOMOBILE RECEIVABLES
                                   WAREHOUSE TRUST

                                   By:  Wilmington Trust Company, not in its
                                        individual capacity but solely as Owner
                                        Trustee


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


                                   ARCADIA FINANCIAL LTD.


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



The foregoing Agreement
is hereby accepted as of the
21st day of July, 1998:

RECEIVABLES CAPITAL CORPORATION


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

BANK OF AMERICA NATIONAL
  TRUST AND SAVINGS ASSOCIATION,
as RCC Agent and Administrative Agent

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



               [Signature Page to Amended and Restated Note Purchase Agreement]


<PAGE>


DELAWARE FUNDING CORPORATION


By:  Morgan Guaranty Trust Company of New
     York, as attorney-in-fact
     for Delaware Funding
     Corporation


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


MORGAN GUARANTY TRUST COMPANY
  OF NEW YORK,
  as DFC Agent


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


Acknowledgment and Consent:

ARCADIA RECEIVABLES CONDUIT
  CORP


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



               [Signature Page to Amended and Restated Note Purchase Agreement]