<PAGE>

                                                                  EXECUTION COPY



                              SERIES 1998-C SUPPLEMENT

                           dated as of September 22, 1998

                                         to

                              SPREAD ACCOUNT AGREEMENT

                            dated as of March 25, 1993,

                              as amended and restated

                                as of July 21, 1998

                                       among

                               ARCADIA FINANCIAL LTD.

                         ARCADIA RECEIVABLES FINANCE CORP.

                         FINANCIAL SECURITY ASSURANCE INC.

                                        and

                    NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION


<PAGE>

                                 TABLE OF CONTENTS

<TABLE>
<CAPTION>

                                                                            Page
                                     Article I.

                                    DEFINITIONS
<S>                                                                         <C>
Section 1.1      Definitions . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.2      Rules of Interpretation . . . . . . . . . . . . . . . . . . 5

                                    Article II.

CREDIT ENHANCEMENT FEE; SERIES SUPPLEMENTS; THE COLLATERAL

Section 2.1      Series 1998-C Credit Enhancement Fee. . . . . . . . . . . . 6
Section 2.2      Series Supplements. . . . . . . . . . . . . . . . . . . . . 6
Section 2.3      Grant of Security Interest by Arcadia Financial and the
                 Seller. . . . . . . . . . . . . . . . . . . . . . . . . . . 6

                                    Article III.

                                   SPREAD ACCOUNT

Section 3.1      Establishment of Series 1998-C Spread Account; Initial Deposit
                 into Series 1998-C Spread Account.. . . . . . . . . . . . . 7
Section 3.2      Spread Account Additional Deposits. . . . . . . . . . . . . 8

                                    Article IV.

                                   MISCELLANEOUS

Section 4.1      Further Assurances. . . . . . . . . . . . . . . . . . . . . 8
Section 4.2      Governing Law . . . . . . . . . . . . . . . . . . . . . . . 8
Section 4.3      Counterparts. . . . . . . . . . . . . . . . . . . . . . . . 8
Section 4.4      Headings. . . . . . . . . . . . . . . . . . . . . . . . . . 8
</TABLE>
                 Schedule I


<PAGE>

                              SERIES 1998-C SUPPLEMENT

     SERIES 1998-C SUPPLEMENT, dated as of September 22, 1998 (the "Series
1998-C Supplement"), by and among ARCADIA FINANCIAL LTD., a Minnesota
corporation ("Arcadia Financial"), ARCADIA RECEIVABLES FINANCE CORP., a Delaware
corporation (the "Seller"), FINANCIAL SECURITY ASSURANCE INC., a New York stock
insurance company ("Financial Security"), NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION, a national banking association, in its capacity as Indenture
Trustee under the Indenture and as Collateral Agent hereunder.

                                      RECITALS

     1.   The parties hereto have previously entered into a Spread Account
Agreement, dated as of March 25, 1993, as amended and restated as of July 21,
1998 (the "Spread Account Agreement"), and, as contemplated by Section 2.02 of
the Spread Account Agreement, this Series 1998-C Supplement constitutes a Series
Supplement to the Spread Account Agreement so that hereafter this Series 1998-C
Supplement shall form a part of the Spread Account Agreement for all purposes
thereof, and all references herein and hereafter to the Spread Account Agreement
shall mean the Spread Account Agreement, as supplemented hereby.

     2.   Arcadia Automobile Receivables Trust, 1998-C (the "Series 1998-C
Trust") is being formed contemporaneously herewith pursuant to the Series 1998-C
Trust Agreement (as defined herein).

     3.   Pursuant to the Series 1998-C Sale and Servicing Agreement, the Seller
is selling to the Series 1998-C Trust all of its right, title and interest in
and to the Initial Receivables (as defined in the Series 1998-C Sale and
Servicing Agreement) and certain other Trust Property (as defined in the Series
1998-C Trust Agreement).

     4.   Pursuant to the Series 1998-C Indenture, the Series 1998-C Trust is
issuing the Series 1998-C Notes (as defined herein).

     5.   The Seller has requested that Financial Security issue the Series
1998-C Note Policy to the Trustee to guarantee payment of the Scheduled Payments
(as deemed in such Policy) on each Payment Date in respect of the Series 1998-C
Notes.

     6.   In partial consideration of the issuance of the Series 1998-C Note
Policy, the Seller has agreed that Financial Security shall have certain rights
as Controlling Party, to the extent set forth in the Spread Account Agreement
and the Series 1998-C Indenture.

     7.   The Seller is a wholly owned special purpose subsidiary of Arcadia
Financial. The Series 1998-C Trust has agreed to pay the Series 1998-C Credit


<PAGE>

Enhancement Fee to the Seller in consideration of the obligations of the Seller
and Arcadia Financial pursuant hereto and in consideration of the obligations of
Arcadia Financial pursuant to the Series 1998-C Insurance Agreement (such
obligations forming part of the Series 1998-C Insurer Secured Obligations as
referred to herein). The Series 1998-C Insurer Secured Obligations form part of
the consideration to Financial Security for its issuance of the Series 1998-C
Policy.

     8.   In order to secure the performance of the Series 1998-C Secured
Obligations, to further effect and enforce the subordination provisions to which
the Series 1998-C Credit Enhancement Fee is subject, and in consideration of the
receipt of the Series 1998-C Credit Enhancement Fee, Arcadia Financial and the
Seller have agreed to pledge the Series 1998-C Collateral as Collateral to the
Collateral Agent for the benefit of Financial Security and for the benefit of
the Trustee on behalf of the Trust, upon the terms and conditions set forth
herein.

                                     AGREEMENTS

     In consideration of the premises, and for other good and valuable
consideration, the adequacy, receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

                                     ARTICLE I.

                                    DEFINITIONS

          Section 1.1    DEFINITIONS.  All terms defined in Section 1.1 of the
Series 1998-C Sale and Servicing Agreement shall have the same meaning with
respect to this Series 1998-C Supplement. The following terms shall have the
following meanings:

     "COLLECTION ACCOUNT SHORTFALL" means, with respect to Series 1998-C and any
Distribution Date, the Deficiency Claim Amount, as defined in the Series 1998-C
Sale and Servicing Agreement, with respect to such Distribution Date.

     "DEEMED CURED" means with respect to Series 1998-C, (a) with respect to an
event that has occurred pursuant to clause (A)(i) of the definition of Trigger
Event, as of a Determination Date with respect to Series 1998-C, that no event
as specified in clause (A)(i) of the definition thereof with respect to such
Series shall have occurred as of such Determination Date or as of any of the two
consecutively preceding Determination Dates, and (b) with respect to an event
that has occurred pursuant to clause (A)(ii) or clause (A)(iii) of the
definition of Trigger Event, as of the next Determination Date which occurs in a
calendar month which is a multiple of three months succeeding the Series 1998-C
Closing Date, that no event specified in clause (A)(ii) or clause (A)(iii) of
the definition of Trigger Event with respect to such Series shall have occurred
as of such Determination Date.


                                          2
<PAGE>

     "INITIAL PRINCIPAL AMOUNT" means $600,000,000 with respect to Series
1998-C.

     "INITIAL SPREAD ACCOUNT DEPOSIT" means $0 for Series 1998-C.

     "INITIAL SPREAD ACCOUNT MAXIMUM AMOUNT" means, with respect to Series
1998-C and any Distribution Date, an amount equal to the greater of (i) 9% of
the Series 1998-C Balance as of the close of business on such Distribution Date
and (ii) the Spread Account Minimum Amount as of the close of business on such
Distribution Date.

     "SERIES 1998-C BALANCE" means, with respect to Series 1998-C and any
Distribution Date, the aggregate principal amount of the Series 1998-C Notes as
of such Distribution Date (after giving effect to the distributions in respect
of principal on the Notes made on such Distribution Date).

     "SERIES 1998-C COLLATERAL" has the meaning specified in Section 2.3(a)
hereof.

     "SERIES 1998-C CREDIT ENHANCEMENT FEE" means the amount distributable on
each Distribution Date pursuant to Section 4.6(viii) and (ix) of the Series
1998-C Sale and Servicing Agreement.

     "SERIES 1998-C INDENTURE" means the Indenture, dated as of September 1,
1998, among the Series 1998-C Trust, the Trustee and the Indenture Collateral
Agent.

     "SERIES 1998-C NOTE POLICY" means the financial guaranty insurance policy
issued by Financial Security with respect to the Series 1998-C Notes.

     "SERIES 1998-C NOTES" means the Class A-1, Class A-2 and Class A-3 Notes
issued pursuant to the Series 1998-C Indenture.

     "SERIES 1998-C OWNER TRUSTEE" means Wilmington Trust Company, not in its
individual capacity but solely as Owner Trustee, or its successor in interest,
and any successor Owner Trustee appointed as provided in the Series 1998-C Trust
Agreement.

     "SERIES 1998-C RECEIVABLE" means each Receivable referenced on the Schedule
of Receivables attached to the Series 1998-C Sale and Servicing Agreement, as
supplemented from time to time during the Funding Period by one or more
Subsequent Transfer Agreements.

     "SERIES 1998-C RESERVE ACCOUNT" means the Reserve Account established
pursuant to Section 4.1(d) of the Series 1998-C Sale and Servicing Agreement.

     "SERIES 1998-C SALE AND SERVICING AGREEMENT" means the Sale and Servicing
Agreement, dated as of September 1, 1998, among the Series 1998-C Trust, Arcadia
Financial, in its individual capacity and as Servicer, the Seller and the Backup
Servicer, as such agreement may be supplemented, amended or modified from time
to time.


                                          3
<PAGE>

     "SERIES 1998-C SECURED OBLIGATIONS" means the Insurer Secured Obligations
and the Trustee Secured Obligations with respect to Series 1998-C.

     "SERIES 1998-C SPREAD ACCOUNT" means the Spread Account established
pursuant to Section 3.1(a) hereof.

     "SERIES 1998-C SUPPLEMENT" means this Series 1998-C Supplement which
constitutes a Series Supplement to the Spread Account Agreement.

     "SERIES 1998-C TRUST AGREEMENT" means the Trust Agreement, dated as of
September 1, 1998, among the Seller, Financial Security and the Series 1998-C
Owner Trustee.

     "SPREAD ACCOUNT ADDITIONAL DEPOSIT" means, with respect to Series 1998-C
and any Subsequent Transfer Date, an amount equal to 0.00% of the aggregate
Principal Balance (as of the related Subsequent Cutoff Date) of the Subsequent
Receivables being transferred to the Series 1998-C Trust on such Subsequent
Transfer Date or such greater amount as required by the Rating Agencies to
confirm that the rating assigned to the Series 1998-C Notes will be in the
highest category by such Rating Agencies.

     "SPREAD ACCOUNT MAXIMUM AMOUNT" means, with respect to Series 1998-C and
any Distribution Date:

          (i)  if no Insurance Agreement Event of Default with respect to Series
     1998-C has occurred and is continuing, no Capture Event has occurred and is
     continuing, no Trigger Event has occurred on the related Determination
     Date, and if any Trigger Event with respect to Series 1998-C has occurred
     as of a prior Determination Date, such Trigger Event is Deemed Cured as of
     the related Determination Date, the Initial Spread Account Maximum Amount
     with respect to Series 1998-C and such Distribution Date;

          (ii) if an event specified in clause (A) of the definition of Trigger
     Event with respect to Series 1998-C has occurred as of the Determination
     Date or has occurred as of a prior Distribution Date (and whether or not a
     Trigger Event shall occur or shall have occurred in connection with such
     event), and such event is not Deemed Cured as of the related Determination
     Date and no Insurance Agreement Event of Default with respect to Series
     1998-C has occurred and is continuing and no Capture Event has occurred and
     is continuing, the Spread Account Maximum Amount shall be equal to the
     greater of (i) 12% of the Series 1998-C Balance as of the close of business
     on such Distribution Date and (ii) the Spread Account Minimum Amount as of
     the close of business on such Distribution Date; or

          (iii)     if (A) an Insurance Agreement Event of Default with respect
     to Series 1998-C has occurred and is continuing or (B) a Capture Event has
     occurred and is continuing as of the related Determination Date, the Spread
     Account


                                          4
<PAGE>

     Maximum Amount shall be equal to the greater of (i) 25% of the Series
     1998-C Balance as of the close of business on such Distribution Date and
     (ii) the Spread Account Minimum Amount as of the close of business on such
     Distribution Date.

     "SPREAD ACCOUNT MINIMUM AMOUNT" means, with respect to Series 1998-C and
any Distribution Date, an amount equal to the greater of:

          (i)       $100,000, and

          (ii)      the lesser of:

                    (A)  2.0% of the Initial Principal Amount of Series 1998-C,
                         and

                    (B)  the Series 1998-C Balance.

     "TRIGGER EVENT" means, with respect to Series 1998-C and as of a
Determination Date, the occurrence of any of the events specified in clause (A)
together with the occurrence of the event specified in clause (B):

     (A)  (i)       the Average Delinquency Ratio for such Determination Date
                    shall be 8.19% or greater;

          (ii)      with respect to any Determination Date, the Cumulative
                    Default Rate shall be equal to or greater than the
                    percentage set forth in Column A of Schedule I attached
                    hereto corresponding to such Determination Date;

          (iii)     with respect to any Determination Date, the Cumulative Net
                    Loss Rate shall be equal to or greater than the percentage
                    set forth in Column B of Schedule I attached hereto
                    corresponding to such Determination Date;

     (B)  The amount specified with respect to such Series in the last sentence
          of Section 2.09(d) of the Spread Account Agreement is positive on such
          Determination Date, and such amount has not been deposited in the
          related Tag Account on such Determination Date.

          Section 1.2    RULES OF INTERPRETATION.  The terms "hereof," "herein,"
"hereto" or "hereunder," unless otherwise modified by more specific reference,
shall refer to this Series 1998-C Supplement. Unless otherwise indicated in
context, the terms "Article," "Section" or "Exhibit" shall refer to an Article
or Section of, or Exhibit to, this Series 1998-C Supplement. The definition of a
term shall include the singular, the plural, the past, the present, the future,
the active and the passive forms of such term. A term defined herein and used
herein preceded by a Series designation, shall mean such term as it relates to
the Series designated.


                                          5
<PAGE>

                                    ARTICLE II.

             CREDIT ENHANCEMENT FEE; SERIES SUPPLEMENTS; THE COLLATERAL

          Section 2.1    SERIES 1998-C CREDIT ENHANCEMENT FEE.  The Series
1998-C Sale and Servicing Agreement provides for the payment to the Seller of
the Series 1998-C Credit Enhancement Fee, to be paid to the Seller by
distribution of such amounts to the Collateral Agent for deposit and
distribution pursuant to this Agreement. The Seller and Arcadia Financial hereby
agree that payment of the Series 1998-C Credit Enhancement Fee in the manner and
subject to the conditions set forth herein and in the Series 1998-C Sale and
Servicing Agreement is adequate consideration and the exclusive consideration to
be received by the Seller or Arcadia Financial for the obligations of the Seller
pursuant hereto and the obligations of Arcadia Financial pursuant hereto
(including, without limitation, the transfer by the Seller to the Collateral
Agent of the Initial Spread Account Deposit with respect to Series 1998-C) and
pursuant to the Series 1998-C Insurance Agreement. The Seller and Arcadia
Financial hereby agree with the Trustee and with Financial Security that payment
of the Series 1998-C Credit Enhancement Fee to the Seller is expressly
conditioned on subordination of the Series 1998-C Credit Enhancement Fee to
payments on the Notes (if any) and Certificates of any Series, payments of
amounts due to Financial Security and the other obligations of the Trusts, in
each case to the extent provided in Section 4.6 of the Standard Terms and
Conditions or Section 4.6 of the related Sale and Servicing Agreement, as
applicable, and Section 3.03 of the Spread Account Agreement, and the Security
Interest of the Secured Parties in the Series 1998-C Collateral is intended to
effect and enforce such subordination and to provide security for the Series
1998-C Secured Obligations and subject to the terms hereof the Secured
Obligations with respect to other Series.

          Section 2.2    SERIES SUPPLEMENTS.  As provided in and subject to the
conditions specified in Section 2.02 of the Spread Account Agreement, the
parties hereto are entering into this Series 1998-C Supplement with respect to
the Series 1998-C Securities.

          Section 2.3    GRANT OF SECURITY INTEREST BY ARCADIA FINANCIAL AND THE
SELLER.

          (a)       In order to secure the performance of the Secured
Obligations with respect to each Series, the Seller (and Arcadia Financial, to
the extent it may have any rights therein) hereby pledges, assigns, grants,
transfers and conveys to the Collateral Agent, on behalf of and for the benefit
of the Secured Parties to secure the Secured Obligations, a lien on and security
interest in (which lien and security interest is intended to be prior to all
other liens, security interests or other encumbrances), all of its right, title
and interest in and to the following (all being collectively referred to herein
as the "Series 1998-C Collateral"):


                                          6
<PAGE>

             (i)    the Series 1998-C Credit Enhancement Fee and all rights and
     remedies that the Seller may have to enforce payment of the Series 1998-C
     Credit Enhancement Fee whether under the Series 1998-C Sale and Servicing
     Agreement or otherwise;

            (ii)    the Series 1998-C Spread Account established pursuant to
     Section 3.1 of this Series 1998-C Supplement and Section 3.01 of the Spread
     Account Agreement, and each other account owned by the Seller and
     maintained by the Collateral Agent (including, without limitation, all
     monies, checks, securities, investments and other documents from time to
     time held in or evidencing any such accounts);

           (iii)    all of the Seller's right, title and interest in and to
     investments made with proceeds of the property described in clauses (i) and
     (ii) above, or made with amounts on deposit in the Series 1998-C Spread
     Account; and

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

             (b)    In order to effectuate the provisions and purposes of this
Series 1998-C Supplement, including for the purpose of perfecting the security
interests granted hereunder, the Seller represents and warrants that it has,
prior to the execution of this Series 1998-C Supplement, executed and filed an
appropriate Uniform Commercial Code financing statement in Minnesota sufficient
to ensure that the Collateral Agent, as agent for the Secured Parties, has a
first priority perfected security interest in all Series 1998-C Collateral which
can be perfected by the filing of a financing statement.


                                    ARTCILE III.

                                   SPREAD ACCOUNT

          Section 3.1    ESTABLISHMENT OF SERIES 1998-C SPREAD ACCOUNT; INITIAL
DEPOSIT INTO SERIES 1998-C SPREAD ACCOUNT.

          (a)  On or prior to the Closing Date, the Collateral Agent shall
establish with respect to Series 1998-C, at its office or at another depository
institution or trust company, an Eligible Account, designated "Spread
Account-Series 1998-C-Norwest Bank Minnesota, National Association, as
Collateral Agent for Financial Security Assurance Inc. and another Secured
Party" (the "Series 1998-C Spread Account").

          (b)  On the Closing Date relating to Series 1998-C, the Collateral
Agent shall deposit the Initial Spread Account Deposit with respect to Series
1998-C received from the Seller into the Series 1998-C Spread Account.


                                          7
<PAGE>

          Section 3.2    SPREAD ACCOUNT ADDITIONAL DEPOSITS.  On each Subsequent
Transfer Date, the Series 1998-C Trust will, pursuant to Section 2.4 of the
Series 1998-C Sale and Servicing Agreement, deliver on behalf of the Seller the
Spread Account Additional Deposit for such Subsequent Transfer Date to the
Collateral Agent. The Collateral Agent shall deposit each such Spread Account
Additional Deposit received from the Series 1998-C Trust into the Series 1998-C
Spread Account.

                                    ARTICLE IV.

                                   MISCELLANEOUS

          Section 4.1    FURTHER ASSURANCES.  Each party hereto shall take such
action and deliver such instruments to any other party hereto, in addition to
the actions and instruments specifically provided for herein, as may be
reasonably requested or required to effectuate the purpose or provisions of this
Series 1998-C Supplement or to confirm or perfect any transaction described or
contemplated herein.

          Section 4.2    GOVERNING LAW.  This Series 1998-C Supplement shall be
governed by and construed, and the obligations, rights and remedies of the
parties hereunder shall be determined, in accordance with the laws of the State
of New York.

          Section 4.3    COUNTERPARTS.  This Series 1998-C Supplement may be
executed in two or more counterparts by the parties hereto, and each such
counterpart shall be considered an original and all such counterparts shall
constitute one and the same instrument.

          Section 4.4    HEADINGS.  The headings of sections and paragraphs and
the Table of Contents contained in this Series 1998-C Supplement are provided
for convenience only. They form no part of this Series 1998-C Supplement and
shall not affect its construction or interpretation.


                                          8
<PAGE>

     IN WITNESS WHEREOF, the parties hereto have executed this Series 1998-C
Supplement as of the date set forth on the first page hereof.

                                   ARCADIA FINANCIAL LTD.

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

                                   ARCADIA RECEIVABLES FINANCE CORP.

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

                                   FINANCIAL SECURITY ASSURANCE INC.

                                   By:  /s/ SCOTT GORDON
                                       ----------------------------------------
                                        Authorized Officer

                                   NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,
                                   as Trustee

                                   By:  /s/ MARIANNA C. STERSHIC
                                       ----------------------------------------
                                        Name:     Marianna C. Stershic
                                        Title:    Assistant Vice President

                                   NORWEST BANK MINNESOTA, NATIONAL
                                        ASSOCIATION, as Collateral Agent

                                   By:  /s/ MARIANNA C. STERSHIC
                                       ----------------------------------------
                                        Name:     Marianna C. Stershic
                                        Title:    Assistant Vice President



<PAGE>

                                                                      SCHEDULE I

<TABLE>
<CAPTION>
   Determination Date*    Cumulative Default Rate    Cumulative Net Loss Rate
        (month)                (Column A)                    (Column B)
   <S>                    <C>                        <C>
        0 to 3                     2.11%                        1.05%
        3 to 6                     4.21%                        2.11%
        6 to 9                     6.10%                        3.05%
        9 to 12                    7.79%                        3.90%
       12 to 15                   10.03%                        5.02%
       15 to 18                   12.07%                        6.04%
       18 to 21                   13.85%                        6.93%
       21 to 24                   15.40%                        7.70%
       24 to 27                   16.21%                        8.10%
       27 to 30                   16.86%                        8.43%
       30 to 33                   17.43%                        8.71%
       33 to 36                   17.92%                        8.96%
       36 to 39                   18.15%                        9.08%
       39 to 42                   18.34%                        9.17%
       42 to 45                   18.49%                        9.25%
       45 to 48                   18.62%                        9.31%
       48 to 51                   18.73%                        9.36%
       51 to 54                   18.81%                        9.41%
       54 to 57                   18.88%                        9.44%
       57 to 60                   18.93%                        9.46%
       60 to 63                   18.96%                        9.48%
       63 to 66                   18.98%                        9.49%
       66 to 69                   18.99%                        9.50%
    69 and higher                 19.00%                        9.50%
</TABLE>



--------------------
*    Such determination Date occuring after the designated calendar months
succeeding Series 1998-C Closing Date appearing first in the column below, and
prior to or during the designated calendar months succeeding the Series 1998-C
Distribution Date appearing second in the column below.