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                                                                 EXECUTION COPY

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                                AMENDMENT NO. 1

                                      to

                              AMENDED AND RESTATED
                        RECEIVABLES PURCHASE AGREEMENT
                                AND ASSIGNMENT


                                   between

                        ARCADIA RECEIVABLES FINANCE CORP.
                                  Purchaser

                                     and

                            ARCADIA FINANCIAL LTD.
                                   Seller


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                              TABLE OF CONTENTS

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                                                                            PAGE


                                  ARTICLE I

                                 DEFINITIONS

                                  ARTICLE II

                                 AMENDMENTS

<S>                                                                         <C>
SECTION 2.1   Amendments to Section 1.01 of the Receivables
                Purchase Agreement .......................................  1

SECTION 2.2   Substitution for "Dealer" References .......................  2

SECTION 2.3   Amendment to Schedule B of the Receivables
                Purchase Agreement .......................................  2

                                  ARTICLE III

                                 MISCELLANEOUS

SECTION 3.1   Counterparts; Effectiveness ................................  2

SECTION 3.2   Governing Law; Entire Agreement ............................  3

SECTION 3.3   Headings ...................................................  3

SECTION 3.4   Receivables Purchase Agreement in Full Force and
                Effect as Amended ........................................  3
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                                      -i-
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          AMENDMENT NO. 1 dated as of July 13, 1999 (this "AMENDMENT") to
AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT AND ASSIGNMENT dated as
of July 21, 1998 (the "RECEIVABLES PURCHASE AGREEMENT"), between Arcadia
Receivables Finance Corp., a Delaware corporation, as Purchaser (the
"PURCHASER") and Arcadia Financial Ltd., a Minnesota corporation, as Seller,
(the "SELLER").

          WHEREAS, the parties listed above have entered into the Receivables
Purchase Agreement;

          WHEREAS, pursuant to Section 6.04(b) of the Receivables Purchase
Agreement, the Purchaser and the Seller desire to amend the Receivables
Purchase Agreement in certain respects as provided below;

          WHEREAS, the Security Insurer is willing to consent to this
Amendment as required by Section 6.04(b) of the Receivables Purchase
Agreement.

          NOW, THEREFORE, the parties to this Amendment hereby agree as
follows:

                                  ARTICLE I

                                 DEFINITIONS

          Unless otherwise defined herein or the context otherwise requires,
defined terms used herein shall have the meaning ascribed thereto in the
Receivables Purchase Agreement.

                                  ARTICLE II

                                 AMENDMENTS

          SECTION 2.1 AMENDMENTS TO SECTION 1.01 OF THE RECEIVABLES PURCHASE
AGREEMENT. The following new definitions are hereby added in their
appropriate alphabetical order to Section 1.01 of the Receivables Purchase
Agreement:

          "RECEIVABLE ASSIGNMENT" means with respect to a Receivable
     sold to AFL by a Third-Party Seller (other than a Dealer), the executed
     assignment executed by such Third-Party Seller conveying such Receivable
     to AFL.

          "RECEIVABLES SALE AGREEMENT" means an agreement between AFL
     and a Third-Party Seller (other than a Dealer), relating to the sale of
     retail installment sales contracts and installment notes of AFL and all
     documents and instruments relating thereto.

          "THIRD-PARTY AGREEMENT" means a Dealer Agreement or a
     Receivables Sale Agreement.

          "THIRD-PARTY ASSIGNMENT" means a Dealer Assignment or a
     Receivable Assignment.

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          "THIRD-PARTY SELLER" means a Dealer or other Person who (i) is
     not AFL or a Subsidiary of AFL, (ii) is acceptable to the Security
     Insurer and the Agents and (iii) sells Receivables to AFL pursuant to a
     Receivables Sale Agreement.

          SECTION 2.2  SUBSTITUTION FOR "DEALER" REFERENCES. All references
to "Dealer," "Dealer Agreement" and "Dealer Assignment" in the following
sections of the Receivables Purchase Agreement are hereby deleted and
replaced with "Third-Party Seller," "Third-Party Agreement" and "Third-Party
Assignment", as applicable: the definition of "Other Conveyed Property" in
Section 1.01; Section 2.03(iv); and paragraphs 14, 17, 18 and 25 of Schedule B.

          SECTION 2.3  AMENDMENT TO SCHEDULE B OF THE RECEIVABLES PURCHASE
AGREEMENT. Paragraphs 1 and 2 of Schedule B are deleted in their entirety and
replaced with the following:

          1.  CHARACTERISTICS OF RECEIVABLES. Each Receivable (A) was
     originated by (i) AFL or (ii) a Third-Party Seller or other Person (if
     purchased by AFL pursuant to a Receivables Sale Agreement with a
     Third-Party Seller who did not originate such Receivable) for the retail
     sale of a Financed Vehicle in the ordinary course of business of such
     Third-Party Seller or other Person, as the case may be, and such
     Third-Party Seller or other Person had all necessary licenses and
     permits to originate Receivables in the state where such Third-Party
     Seller or other Person was located, was fully and properly executed by
     the parties thereto, was purchased by Arcadia from the applicable
     Third-Party Seller under an existing Third-Party Agreement with AFL and
     was validly assigned by the applicable Third-Party Seller to Arcadia,
     (B) contains customary and enforceable provisions such as to render the
     rights and remedies of the holder thereof adequate for realization
     against the collateral security, and (C) is a fully amortizing
     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.

          2.  NO FRAUD OR MISREPRESENTATION. Each Receivable was
     originated by AFL or by a Third-Party Seller or other Person (if
     purchased by AFL pursuant to a Receivables Sale Agreement with a
     Third-Party Seller who did not originate such Receivable) and was sold
     by the applicable Third-Party Seller to AFL without any fraud or
     misrepresentation on the part of such Third-Party Seller in either case.

                                  ARTICLE III

                                 MISCELLANEOUS

          SECTION 3.1  COUNTERPARTS; EFFECTIVENESS. This Amendment may be
executed by the parties hereto in several counterparts, each of which shall
be deemed to be an original and all of which shall constitute together but one
and the same agreement. This Amendment shall become effective when the
Servicer shall have received (a) counterparts hereof executed on behalf of
the Seller and the Purchaser, (b) the consent of the Security Insurer to the


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terms of this Amendment, and (c) evidence of notice to Standard & Poor's and
Moody's of this Amendment.

          SECTION 3.2  GOVERNING LAW; ENTIRE AGREEMENT. THIS AMENDMENT SHALL
BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF
THE STATE OF NEW YORK. This Amendment and the Receivables Purchase Agreement
(and all exhibits, annexes and schedules thereto) constitute the entire
understanding among the parties hereto with respect to the subject matter
hereof and supersede any prior agreements, written or oral, with respect
thereto.

          SECTION 3.3  HEADINGS. The various headings of this Amendment are
inserted for convenience only and shall not affect the meaning or
interpretation of this Amendment or any provisions hereof or thereof.

          SECTION 3.4  RECEIVABLES PURCHASE AGREEMENT IN FULL FORCE AND
EFFECT AS AMENDED. Except as specifically stated herein, all of the terms and
conditions of the Receivables Purchase Agreement shall remain in full force
and effect. All reference to the Receivables Purchase Agreement in any other
document or instrument shall be deemed to mean the Receivables Purchase
Agreement, as amended by this Amendment. This Amendment shall not constitute
a novation of the Receivables Purchase Agreement, but shall constitute an
amendment thereto. The parties hereto agree to be bound by the terms and
obligations of the Receivables Purchase Agreement, as amended by this
Amendment, as though the terms and obligations of the Receivables Purchase
Agreement were set forth herein.


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        IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed and delivered by their authorized officers, all as of the
date and year first above written.

                                 PURCHASER:
                                 ARCADIA RECEIVABLES FINANCE CORP.


                                 By: /s/ John Witham
                                     --------------------------
                                     Name: John Witham
                                     Title: SVP & CFO


                                 SELLER:
                                 ARCADIA FINANCIAL LTD.


                                 By: /s/ John Witham
                                     --------------------------
                                     NAME: John Witham
                                     TITLE: EVP & CFO


ASSURED AND CONSENTED:

SECURITY INSURER:
FINANCIAL SECURITY ASSURANCE INC.


By: /s/ Dan Farrell
    ----------------------------
Name:
Title:




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