Document:

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                                                                   EXHIBIT 10.12

                    AMENDED AND RESTATED ALLOCATION AGREEMENT

         This AMENDED AND RESTATED ALLOCATION AGREEMENT ("AGREEMENT") DATED
March 31, 2003 is effective as of the first day of the consolidated return year
beginning January 1, 2003, by and among each of the undersigned companies (the
"Companies", or individually, "Company"):

                              WESTCORP ("Westcorp")
                     WESTERN AUTO INVESTMENTS, INC. ("WAI")
                        WESTERN CONSUMER PRODUCTS ("WCP")
                        WESTERN CONSUMER SERVICES ("WCS")
                       WESTERN FINANCIAL BANK (the "Bank")
                   WESTERN RECONVEYANCE COMPANY, INC. ("WREC")
                       WESTRAN SERVICES CORP. ("Westran")
                            WFS FINANCIAL INC ('WFS")
                     WFS FINANCIAL AUTO LOANS, INC. ("WFAL")
                   WFS FINANCIAL AUTO LOANS 2, INC. ("WFAL2")
                          WFS FUNDING, INC. ("Funding")
                         WFS INVESTMENTS, INC. ("WFSII")
                      WFS RECEIVABLES CORPORATION ("WFSRC")
                    WFS RECEIVABLES CORPORATION 2 ("WFSRC2")
                     WFS RECEIVABLES CORPORATION 3 (`WFSRCY)
                           WFS WEB INVESTMENTS ("WWI")
                     WESTFIN INSURANCE AGENCY, INC. ("WFIA")
                     WESTHRIFT LIFE INSURANCE COMPANY ("WT")
              THE HAMMOND COMPANY, THE MORTGAGE BANKERS ("THCTMB")

         This Agreement shall replace and supersede the Allocation Agreement
dated as of January 1, 2003, existing among the various Companies.

                                    RECITALS

         A.       Whereas, the Board of Directors of Westcorp has approved the
adoption of the statement of the Financial Account Statement Board SFAS #148 in
which the fair value of stock options are expensed over the vesting period of
such options;

         B.       Whereas, these stock options are granted to directors and
associates employed by the Bank and WFS;

         C.       Whereas, the Bank and WFS have agreed to pay Westcorp for the
cost of these options as further stated in the attached Exhibit C, as adjusted
from time to time based on directors or associate termination and in accordance
with Westcorp 2001 Stock Option Plan;

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         D.       Westcorp is the sole shareholder of Westran and WCP, each of
which is a California corporation, and WFSRC2 which is a Nevada corporation, and
is the sole shareholder of the Bank, a federally chartered savings bank;

         E.       The Bank is the majority shareholder of WFS, a California
corporation, and is the sole shareholder of WFIA, WAI, THCTIVIB, WREC, WCS, each
a California corporation and WT, an Arizona corporation;

         F.       WFS is the sole shareholder of WFAL, WFAL2, WFSII, Funding,
VVWI, WFSRC, and WFSRC3, each California corporations;

         G.       Whereas, the Companies desire to obtain management and
administrative services along with provide for the reimbursement to Westcorp for
the Westcorp stock options that are granted to directors or associates of the
Bank and WFS from each other;

         H.       Whereas, the Companies are willing to provide such management
and administrative services and reimbursements to each other on the terms and
conditions described below;

         1.       Whereas, certain arrangements for the use of space have been
terminated and others have been created and the parties desire to have the
Agreement amended to reflect those changes; and

         J.       Companies desire to set forth the terms of their relationship
in order to ensure that, in accordance with Office of Thrift Supervision ("OTS")
regulations, each Company functions as and remains a corporate entity separate
and apart from each other Company.

                                    AGREEMENT

         In consideration of the mutual promises set forth herein, and in
reliance upon the recitals set forth above, the parties agree as follows:

         1.       Services Performed By One Company For the Benefit of Other
Companies. Certain services are performed by one Company ("Performing Company")
for itself and for other Companies ("Benefiting Company"). These costs are not
always directly traceable to each Benefiting Company; or such tracing cannot be
economically or practically accomplished; or the value of such goods and
services are not sufficiently substantial, as a portion of Performing Company's
total expenditure for such goods and services, as to be separately calculated.
Therefore, each Benefiting Company agrees that it shall reimburse Performing
Company for aggregate categories of such goods and services at the rates and
using the methods specified for each category in the attached Exhibit "A", as
amended from time to time, which is incorporated herein and made part of this
Agreement. The

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Companies have determined that the method and rate for each category most
accurately reflect the amount of services devoted by Performing Company to each
Benefiting Company. Methods and rates shall be calculated as of the effective
date of this agreement and recalculated each January 1st for the upcoming year,
or more frequently if a material change occurs.

         Performing Companies and the services currently provided by them are
described in a note to Exhibit A and may be changed from time to time by a
change to the note.

         2.       Direct Costs. Direct costing shall be used when a specific
service or product directly benefits a Company and the costs of the service or
product is readily identifiable and measurable. For example, invoices from third
party suppliers of goods or services, will be treated as direct costs and paid
directly by Benefiting Company as incurred. Where appropriate, Companies shall
enter into separate agreements for such goods and services.

         Furthermore, Performing Companies are authorized to process invoices
and pay expenditures for Benefiting Companies that have deminimus costs and
expenses on behalf of the Benefiting Company, provided, however, that the
Benefiting Company will immediately initiate a cash transfer to the Performing
Company to reimburse it for said expenditures.

         3.       Employee Stock Options. The Bank and WFS have agreed to pay
Westcorp for the cost of stock options granted to directors or associates as
further stated in the attached Exhibit C, as adjusted from time to time based on
directors or associate termination and in accordance with the Westcorp 2001
Stock Option Plan. Such payments shall be consistent with Westcorp's expense
under SFAS #148.

         4.       Space and Office Services. A Company, from time to time and at
different times, may permit another Company to occupy certain space at specific
locations owned or leased by Company. At particular locations, certain office
services, including without limitation, receptionist, telecommunications, and
photocopying services, may be included in the occupancy arrangement. Because
additional locations and services may be requested and provided and locations
and services may be changed or canceled, locations, services and the
compensation for them are as set forth in Exhibit "B", as amended from time to
time, attached hereto and incorporated herein.

         5.       Time and Method of Payment. Reimbursement for allocated costs
shall be payable by each Company to others Companies on a monthly basis by the
20th day of each month for expenses and costs incurred during the prior month.
The Accounting Department, under the direction of the Controller, shall
administer the reimbursement and reflect the reimbursement on the separate books
and records of each Company.

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         6.       Term.

                  6.1      This Agreement shall commence as of the date stated
above and shall continue until terminated by the parties.

                  6.2      This Agreement may be terminated immediately for
breach of any covenant, obligation, or duty herein contained or for violation of
law, ordinance, statute, rule or regulation (collectively referred to as "law")
governing the conduct of any party hereto.

                  6.3      Termination shall not affect the obligations of the
Companies with respect to any event occurring before termination. Each Company
shall be bound by and responsible for any transaction or expense properly agreed
to or incurred by another Company in connection with services performed
hereunder but not settled, paid or reimbursed prior to the date of any such
termination. Upon termination of this Agreement, the fee referred to above will
be prorated, but the due date thereof shall not be changed.

         7.       Representations and Warranties of Company. Each Company on its
behalf alone represents and warrants to and for the benefit of other Companies
as follows:

                  7.1      Corporate Existence and Qualifications. Company is a
corporation or association duly organized, validly existing and in good standing
under the laws of the United States or of the States of California, Nevada or
Arizona, as applicable, with full corporate power to own its properties and to
carry on its business as now owned and operated by Company.

                  7.2      Licenses; Compliance with Laws. Company has all
licenses, franchises, permits and authorizations necessary for the lawful
conduct by Company of its business. Company has not violated, and is not in
violation of, any such licenses, franchises, permits or authorizations or any
applicable statutes, laws, ordinances, rules or regulations of any federal,
state, or local governmental bodies, agencies or subdivisions having, asserting
or claiming jurisdiction over it or over any part of its operations.

         8.       Covenants Regarding Corporate Existence.

                  8.1      Preservation of Corporate Existence and
Qualifications. Each Company shall keep in full effect its existence, rights and
franchises as a corporation or association under the laws of the jurisdiction in
which organized and will obtain and preserve its qualifications to carry on
business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary.

                  8.2      Observation of Corporate Formalities. Each Company
shall at all times observe the applicable legal requirements for the recognition
of Company as a corporate entity separate and apart from any other Company,
including without limitation the following:

                           (a)      Each Company shall maintain corporate
records and books of account separate from those of other Companies;

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                           (b)      Each Company shall not at any time commingle
its funds with those of other Companies;

                           (c)      Each Company shall hold meetings of its
Board of Directors as appropriate to authorize its corporate actions;

                           (d)      Each Company shall hold meetings of its
shareholder(s) as appropriate and as required by the Corporations Code of the
jurisdiction in which organized to authorize its corporate actions;

                           (e)      Each Company shall file all reports required
by the Secretary of State in all jurisdictions in which Company is licensed or
qualified, including the annual statement by whatever name denominated, in a
timely manner; and

                           (f)      Each Company shall ensure that yearly
franchise taxes are paid in a timely manner so as to maintain its corporate
existence uninterrupted.

                  8.3      Advertising. Each Company will at all times hold
itself out to the public as an entity separate from any other Company and its
advertising and marketing shall reflect such separate corporate existence.

                  8.4      OTS Regulations. Each Company shall comply with all
applicable OTS regulations. If required by 12 C.F.R. Section 563.37(b), any
instrument evidencing borrowing by Company shall indicate that no other Company
is responsible for any such debt.

         9.       Liability: Consultation with Counsel. No Performing Company
shall assume responsibility or liability with respect to the business or affairs
of another Company except to the extent provided for in this Agreement. Each
Benefiting Company under this Agreement ("Indemnitor") shall indemnify, defend
and hold harmless the Performing Companies against and in respect of any and all
claims, demands, losses, costs, expenses, obligations, liabilities, damages,
recoveries and deficiencies (collectively the "Claims), including without
limitation interest penalties and attorney's fees, that such Performing Company
shall incur or suffer, which arise, result from or relate to (I) conduct by
Indemnitor of its business and operations and (ii) breach by Indemnitor of its
obligations pursuant to this Agreement. Notwithstanding anything contained
herein to the contrary, Indemnitor's obligations pursuant to this section shall
not be applicable to Claims arising directly from Performing Company's bad
faith, gross negligence or willful misconduct. This Agreement shall create no
right, benefit or privilege in favor of any person not a party hereto, and no
person not a party hereto shall have any recourse against Performing Company for
any advice, service or facility provided or omitted by Performing Company
pursuant to this Agreement. Performing Company may consult with legal counsel
(who may also be counsel to Indemnitor) concerning any questions that may arise
with respect to its duties and obligations hereunder, and it shall be fully
protected in respect of any action

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taken or omitted by it hereunder in good faith reliance on any opinion of such
counsel with respect to any such duty or obligation.

         10.      General.

                  10.1     This Agreement may be modified, amended or superseded
in whole or in part, at any time, by a writing executed by the parties hereto.

                  10.2     This Agreement shall be governed by the laws of
California, except to the extent any such laws are superseded by federal law or
regulation.

                  10.3     This Agreement may be executed in counterparts, all
of which, taken together shall constitute one agreement.

                  10.4     No Company shall assign this Agreement without the
prior written consent of the other Companies, which consent shall not
unreasonably be withheld.

                  Wherefore, the undersigned have executed this Agreement on the
date set forth below to be effective as of the date first set forth above.

WESTCORP

By: ________________________________________________    Date: _________, 2003
       Thomas A. Wolfe, President

WESTERN AUTO INVESTMENTS, INC.

By: ________________________________________________    Date: __________2003
       John Coluccio, President

WESTRAN SERVICES CORP.

By: ________________________________________________    Date: _________, 2003
       Shelley M. Chase, President

WESTERN FINANCIAL BANK

By ________________________________________________     Date: _________, 2003
       Thomas A. Wolfe, Vice Chairman &
       President

WFS FINANCIAL INC

By: ________________________________________________    Date: _________, 2003
       Thomas A. Wolfe, President

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WFS FINANCIAL AUTO LOANS, INC.

By: ________________________________________________    Date: _________, 2003
       John Coluccio, President

WFS FINANCIAL AUTO LOANS 2, INC

By: ________________________________________________    Date: _________, 2003
       John Coluccio, President

WFS INVESTMENTS, INC.

By: ________________________________________________    Date: _________, 2003
       Thomas A. Wolfe, President

WFS FUNDING, INC.

By: ________________________________________________    Date: _________, 2003
       John Coluccio, President

WFS RECEIVABLES CORPORATION

By: ________________________________________________    Date: _________, 2003
       John Coluccio, President

WESTFIN INSURANCE AGENCY, INC.

By: ________________________________________________    Date: _________, 2003
       Thomas A. Wolfe, President

WESTHRIFT LIFE INSURANCE COMPANY

By: ________________________________________________    Date: _________, 2003
       Shelley M. Chase, Vice President

THE HAMMOND COMPANY, THE MORTGAGE BANKERS

By: ________________________________________________    Date: _________, 2003
       Thomas A. Wolfe, President & Chief Executive
       Officer

WFS WEB INVESTMENTS

By: ________________________________________________    Date: _________, 2003
       Thomas Wolfe, President

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WESTERN RECONVEYANCE COMPANY, INC.

By: ________________________________________________    Date: _________, 2003
       J. Keith Palmer, President, Chief Executive
       Officer & Treasurer

WESTERN CONSUMER SERVICES, INC.

By: ________________________________________________    Date: _________, 2003
       Mark Olson, Vice President & Controller

WESTERN CONSUMER PRODUCTS

By: ________________________________________________    Date: _________, 2003
       Mark Marty, President

WFS RECEIVABLES CORPORATION 2

By: ________________________________________________    Date: _________, 2003
       Mark Olson, Vice President & Controller

WFS RECEIVABLES CORPORATION 3

By: ________________________________________________    Date: _________, 2003
       J. Keith Palmer, Vice President & Treasurer

WFS RECEIVABLES CORPORATION 4

By: ________________________________________________    Date: _________, 2003
       Mark Olson, Vice President & Controller

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                                                                 EXHIBIT 10.12.1

                             FIRST AMENDMENT TO THE
                    AMENDED AND RESTATED ALLOCATION AGREEMENT

         This First Amendment To The Amended And Restated Allocation Agreement
("Amendment") dated as of August 1, 2003 is effective as of the first day of the
consolidated return year beginning January 1, 2003, by and among each of the
undersigned parties.

                                    RECITALS

         A.       Whereas, the parties have entered into an Amended and Restated
Allocation Agreement ("Agreement") dated March 31, 2003, effective as of the
first day of the consolidated return year beginning January 1, 2003;

         B.       Whereas, the parties to the Agreement desire to amend the
Agreement to include current and future expense accruals related to Long Term
Incentive Agreements entered into by and between Westcorp and WFS Financial Inc
("WFS") or Western Financial Bank (the "Bank") associates;

                                    AGREEMENT

         In consideration of the mutual promises set forth herein, and in
reliance upon the recitals set forth above, the parties agree as follows:

         A new section 3 is added to the Agreement and the remainder of the
provisions are renumbered:

         3.       Long Term Incentive Plan. The Bank and WFS have agreed to
assume current and future expense accruals related to the Long Term Incentive
Plan Agreements entered into between Westcorp and WFS or the Bank associates.

         Wherefore, the undersigned have executed this Agreement on the date set
forth below to be effective as of the date first set forth above.

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WESTCORP

By: ________________________________________________    Date: _________, 2003
       Thomas A. Wolfe, President

WESTERN AUTO INVESTMENTS, INC.

By: ________________________________________________    Date: __________2003
       John Coluccio, President

WESTRAN SERVICES CORP.

By: ________________________________________________    Date: _________, 2003
       Shelley M. Chase, President

WESTERN FINANCIAL BANK

By  ________________________________________________    Date: _________, 2003
       Thomas A. Wolfe, Vice Chairman &
       President

WFS FINANCIAL INC

By: ________________________________________________    Date: _________, 2003
       Thomas A. Wolfe, President

WFS FINANCIAL AUTO LOANS, INC.

By: ________________________________________________    Date: _________, 2003
       John Coluccio, President

WFS FINANCIAL AUTO LOANS 2, INC

By: ________________________________________________    Date: _________, 2003
       John Coluccio, President

WFS INVESTMENTS, INC.

By: ________________________________________________    Date: _________, 2003
       Thomas A. Wolfe, President

WFS FUNDING, INC.

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By: ________________________________________________    Date: _________, 2003
       John Coluccio, President

WFS RECEIVABLES CORPORATION

By: ________________________________________________    Date: _________, 2003
       John Coluccio, President

WESTFIN INSURANCE AGENCY, INC.

By: ________________________________________________    Date: _________, 2003
       Thomas A. Wolfe, President

WESTHRIFT LIFE INSURANCE COMPANY

By: ________________________________________________    Date: _________, 2003
       Shelley M. Chase, Vice President

THE HAMMOND COMPANY, THE MORTGAGE BANKERS

By: ________________________________________________    Date: _________, 2003
       Thomas A. Wolfe, President & Chief Executive
       Officer

WFS WEB INVESTMENTS

By: ________________________________________________    Date: _________, 2003
       Thomas Wolfe, President

WESTERN RECONVEYANCE COMPANY, INC.

By: ________________________________________________    Date: _________, 2003
       J. Keith Palmer, President, Chief Executive
       Officer & Treasurer

WESTERN CONSUMER SERVICES, INC.

By: ________________________________________________    Date: _________, 2003
       Mark Olson, Vice President & Controller

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WESTERN CONSUMER PRODUCTS

By: ________________________________________________    Date: _________, 2003
       Mark Marty, President

WFS RECEIVABLES CORPORATION INC. 2

By: ________________________________________________    Date: _________, 2003
       Mark Olson, Vice President & Controller

WFS RECEIVABLES CORPORATION INC. 3

By: ________________________________________________    Date: _________, 2003
       J. Keith Palmer, Vice President & Treasurer

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