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                                                                  EXHIBIT 10.2.2

                          SALE AND SERVICING AGREEMENT

                                      among

                        WFS FINANCIAL 2000-A OWNER TRUST,
                                   as Issuer,

                                       and

                         WFS FINANCIAL AUTO LOANS, INC.

                                       and

                          WFS RECEIVABLES CORPORATION,
                                   as Sellers,

                                       and

                               WFS FINANCIAL INC,
                               as Master Servicer

                          Dated as of ________ 1, 2000

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                                TABLE OF CONTENTS

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                                                                                           Page

                                   ARTICLE ONE
                                   DEFINITIONS
<S>           <C>                                                                          <C>
Section 1.01. Definitions................................................................    1
Section 1.02. Usage of Terms.............................................................   23
Section 1.03. Section References.........................................................   23
Section 1.04. Calculations...............................................................   23
Section 1.05. Accounting Terms...........................................................   23

                                   ARTICLE TWO
                             CONVEYANCE OF CONTRACTS

Section 2.01. Conveyance of Contracts....................................................   24

                                  ARTICLE THREE
                                  THE CONTRACTS

Section 3.01. Representations and Warranties of the Sellers..............................   26
Section 3.02. Purchase of Certain Contracts..............................................   31
Section 3.03. Custody of Contract Files..................................................   31
Section 3.04. Duties of Master Servicer as Custodian.....................................   32
Section 3.05. Instructions; Authority to Act.............................................   33
Section 3.06. Indemnification............................................................   33
Section 3.07. Effective Period and Termination...........................................   34
Section 3.08. Nonpetition Covenant.......................................................   34
Section 3.09. Collecting Title Documents Not Delivered at the Closing Date...............   35
Section 3.10. Optional Repurchase of Contracts by WFSRC..................................   35

                                  ARTICLE FOUR
                    ADMINISTRATION AND SERVICING OF CONTRACTS

Section 4.01. Duties of Master Servicer..................................................   36
Section 4.02. Collection of Contract Payments............................................   40
Section 4.03. Realization upon Defaulted Contracts and Liquidated Contracts..............   40
Section 4.04. Insurance..................................................................   41
Section 4.05. Maintenance of Security Interests in Financed Vehicles.....................   41
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<S>           <C>                                                                          <C>
Section 4.06. Covenants, Representations and Warranties of Master Servicer...............   41
Section 4.07. Repurchase of Contracts upon Breach of Covenant............................   43
Section 4.08. Servicing Compensation.....................................................   43
Section 4.09. Reporting by the Master Servicer...........................................   43
Section 4.10. Annual Statement as to Compliance..........................................   46
Section 4.11. Annual Independent Certified Public Accountants' Report....................   47
Section 4.12. Access to Certain Documentation and Information Regarding Contracts........   47
Section 4.13. Fidelity Bond..............................................................   47
Section 4.14. Indemnification; Third Party Claims........................................   47

                                  ARTICLE FIVE
          DISTRIBUTIONS; SPREAD ACCOUNT; STATEMENTS TO SECURITYHOLDERS

Section 5.01. Establishment of Trust Accounts............................................   49
Section 5.02. Collections; Realization Upon Note Policy; Net Deposits....................   51
Section 5.03. Application of Collections.................................................   52
Section 5.04. Advances and Nonrecoverable Advances; Repurchase Amounts...................   53
Section 5.05. Distributions..............................................................   53
Section 5.06. Spread Account.............................................................   55
Section 5.07. Statements to Securityholders..............................................   55

                                   ARTICLE SIX
                                   THE SELLERS

Section 6.01. Corporate Existence........................................................   57
Section 6.02. Liability of Seller; Indemnities...........................................   57
Section 6.03. Merger or Consolidation of, or Assumption of the Obligations of, a
                 Seller; Certain Limitations.............................................   58
Section 6.04. Limitation on Liability of Sellers and Others..............................   59
Section 6.05. Sellers Not to Resign......................................................   60
Section 6.06. Sellers May Own Securities.................................................   60

                                  ARTICLE SEVEN
                               THE MASTER SERVICER

Section 7.01. Liability of Master Servicer; Indemnities..................................   61
Section 7.02. Corporate Existence; Status as Master Servicer; Merger.....................   62
Section 7.03. Performance of Obligations.................................................   62
Section 7.04. Master Servicer Not to Resign; Assignment..................................   62
Section 7.05. Limitation on Liability of Master Servicer and Others......................   63
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<TABLE>
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                                  ARTICLE EIGHT
                                     DEFAULT
<S>           <C>                                                                          <C>
Section 8.01. Servicer Default...........................................................   65
Section 8.02. Indenture Trustee to Act; Appointment of Successor.........................   66
Section 8.03. Repayment of Advances......................................................   67
Section 8.04. Notification to Noteholders and Certificateholders.........................   67
Section 8.05. Waiver of Past Defaults....................................................   67
Section 8.06. Insurer Direction of Insolvency Proceedings................................   67

                                  ARTICLE NINE
                                   TERMINATION

Section 9.01. Optional Purchase of All Contracts.........................................   69
Section 9.02. Transfer to the Insurer....................................................   70

                                   ARTICLE TEN
                                  MISCELLANEOUS

Section 10.01. Amendment.................................................................   71
Section 10.02. Protection of Title to Trust..............................................   72
Section 10.03. Governing Law.............................................................   74
Section 10.04. Notices...................................................................   74
Section 10.05. Severability of Provisions................................................   74
Section 10.06. Assignment................................................................   74
Section 10.07. Third Party Beneficiaries.................................................   74
Section 10.08. Insurer Default or Insolvency.............................................   75
Section 10.09. Counterparts..............................................................   75
Section 10.10. Headings..................................................................   75
Section 10.11. Assignment by Issuer......................................................   75
Section 10.12. Limitation of Liability of Owner Trustee..................................   75

                                    SCHEDULES

Schedule A     Schedule of Contracts...................................................   SA-1
Schedule B     Location of Contract Files..............................................   SB-1
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                                    EXHIBITS
<S>           <C>                                                                          <C>
Exhibit A      Form of Insurance Agreement.............................................    A-1
Exhibit B      Form of Note Policy.....................................................    B-1
Exhibit C      Form of RIC.............................................................    C-1
Exhibit D      Form of Subservicing Agreement..........................................    D-1
Exhibit E      Form of Distribution Date Statement.....................................    E-1
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        This SALE AND SERVICING AGREEMENT, dated as of _________ 1, 2000, is
among WFS Financial 2000-A Owner Trust, as issuer (the "Issuer"), WFS Financial
Auto Loans, Inc. and WFS Receivables Corporation, as sellers (the "Sellers"),
and WFS Financial Inc. ("WFS"), as master servicer (the "Master Servicer").

        WHEREAS, the Issuer desires to purchase from the Sellers a portfolio of
receivables arising in connection with automobile retail installment sales
contracts and installment loans (collectively, the "Contracts") primarily
originated by motor vehicle dealers and purchased by WFS, which Contracts were
subsequently sold by WFS to the Sellers;

        WHEREAS, the Sellers are willing to sell the Contracts to the Issuer
pursuant to the terms hereof; and

        WHEREAS, the Master Servicer is willing to service the Contracts
pursuant to the terms hereof.

        NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto agree as follows:

                                   Article ONE

                                   DEFINITIONS

        Section 1.01. Definitions. Whenever used in this Agreement, the
following words and phrases, unless the context otherwise requires, shall have
the following meanings:

        "Accelerated Principal Distributable Amount" means, with respect to any
Distribution Date, an amount equal to the lesser of (i) the sum of one-twelfth
of 0% of the Aggregate Scheduled Balance as of the first day of each month of
the Due Period relating to such Distribution Date and (ii) amounts remaining on
deposit in the Collection Account for such Distribution Date after giving effect
to the distributions pursuant to Section 5.05(a) without regard to the inclusion
of such amount as part of the Note Principal Distributable Amount. The
Accelerated Principal Distributable Amount shall be allocated and distributed on
each Distribution Date to the Note Distribution Account.

        "Advance" means the aggregate amount, as of a Master Servicer Report
Date, that the Master Servicer is required to advance in respect of the
Contracts pursuant to Section 5.04(a).

        "Affiliate" of any specified Person means any other Person controlling
or controlled by or under common control with such specified Person. For the
purposes of this definition, "control" when used with respect to any specified
Person means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" or "controlled" have meanings
correlative to the foregoing.

        "Aggregate Net Liquidation Losses" means, with respect to any Due
Period, the aggregate of the amounts by which (i) the principal amount of each
Contract that became a Liquidated

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Contract pursuant to clause (ii) or (iv) of the definition of the term
"Liquidated Contract" during such Due Period plus accrued and unpaid interest
thereon (adjusted to the Net Contract Rate) to the last Due Date in such Due
Period exceeds (ii) the Net Liquidation Proceeds for such Contract.

        "Aggregate Scheduled Balance" means, with respect to any Distribution
Date and the Outstanding Contracts, the aggregate of the Scheduled Balances of
such Contracts as of the end of the Due Period immediately preceding such
Distribution Date.

        "Aggregate Scheduled Balance Decline" means, with respect to any
Distribution Date, the amount by which the Aggregate Scheduled Balance as of the
beginning of the related Due Period (or the Cut-Off Date Aggregate Scheduled
Balance in the case of the first Distribution Date) exceeds the Aggregate
Scheduled Balance at the end of such Due Period.

        "Amount Financed" means, with respect to a Contract, the amount advanced
under the Contract toward the purchase price of the related Financed Vehicle and
any related costs, exclusive of any amount allocable to the premium of
force-placed physical damage insurance covering such Financed Vehicle.

        "APR" of a Contract means annual percentage rate and is the annual rate
of finance charges specified in such Contract.

        "Assignments" means, collectively, (i) the original instrument of
assignment of a Contract and all other documents securing such Contract made by
the related Seller to the Owner Trustee (or in the case of any Contract acquired
by a Seller from another Person, from such other Person to the Seller and from
the Seller to the Owner Trustee), and (ii) the original instrument granting a
security interest in such Contract and other documents made by the Owner Trustee
to the Insurer, which, in the case of clause (i) above, is in a form sufficient
under the laws of the jurisdiction under which the security interest in the
related Financed Vehicle arises to permit the assignee to exercise all rights
granted by the Obligor under such Contract and such other documents and all
rights available under applicable law to the Obligee under such Contract and
such other documents and, in the case of clause (ii) above, is in a form
sufficient under the laws of the jurisdiction under which the security interest
in the related Financed Vehicle arises to permit the Insurer, as a secured
party, to exercise, upon default, all rights granted by the Obligor under such
Contract and such other documents and all rights available under applicable law
to the Obligee under such Contract and which, in the case of either clause (i)
or (ii) above, may, to the extent permitted by the laws of such jurisdiction, be
a blanket instrument of assignment covering other Contracts as well and which
may also, to the extent permitted by the laws of the jurisdiction governing such
Contract, be an instrument of assignment running directly from the related
Seller to the Owner Trustee and the Insurer.

        "Bank" means Western Financial Bank, and its successors.

        "Base Price" means the WFSRC Aggregate Scheduled Balance on the
Repurchase Distribution Date.

        "Basic Documents" shall have the meaning specified in the Indenture.

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        "Business Day" means any day that is not a Saturday, Sunday or other day
on which banking institutions in Los Angeles, California, Wilmington, Delaware
or New York, New York are authorized or obligated by law, executive order or
government decree to remain closed.

        "Calculation Day" means the last day of each calendar month.

        "Certificate Distributable Amount" means the aggregate amount of the
Excess Spread Amount distributed to Certificateholders pursuant to Section
5.05(b).

        "Certificate Distribution Account" shall have the meaning specified in
the Trust Agreement.

        "Certificate Percentage Interest" means, with respect to a Certificate,
the percentage specified on such Certificate as the Certificate Percentage
Interest, which percentage represents the beneficial interest of such
Certificate in the Trust.

        "Certificate Register" shall have the meaning specified in the Trust
Agreement.

        "Certificateholders" shall have the meaning specified in the Trust
Agreement.

        "Certificates" means the Trust Certificates (as such term is defined in
the Trust Agreement).

        "Charge-Off Percentage" means, with respect to any three calendar month
period, the annualized percentage equivalent of the average of the percentages
of charged-off Contracts for each month in such period. For each month, the
percentage of charged-off Contracts shall be the percentage equivalent of a
fraction, the numerator of which is the aggregate Scheduled Balance for such
month of all Contracts that became Liquidated Contracts pursuant to clauses (ii)
or (iv) of the definition of the term "Liquidated Contract" during such month,
less any Net Liquidation Proceeds received during such month (and not reflected
in prior periods) with respect to such Contracts or from any Contracts
charged-off in prior periods, and the denominator of which is the aggregate
Scheduled Balances of all Outstanding Contracts as of the end of the immediately
preceding month.

        "Class" means all Notes whose form is identical except for variation in
denomination, principal amount or owner.

        "Class A-1 Final Distribution Date" means the ____, ____ Distribution
Date.

        "Class A-1 Noteholder" means the Person in whose name a Class A-1 Note
is registered in the Note Register, as such term is defined in the Indenture.

        "Class A-1 Rate" means ____ per annum.

        "Class A-2 Final Distribution Date" means the ______, ____ Distribution
Date.

        "Class A-2 Noteholder" means the Person in whose name a Class A-2 Note
is registered in the Note Register.

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        "Class A-2 Rate" means _____% per annum.

        "Class A-3 Final Distribution Date" means the _________, _____
Distribution Date.

        "Class A-3 Noteholder" means the Person in whose name a Class A-3 Note
is registered in the Note Register.

        "Class A-3 Rate" means _____% per annum.

        "Class A-4 Final Distribution Date" means the _________, _____
Distribution Date.

        "Class A-4 Noteholder" means the Person in whose name a Class A-3 Note
is registered in the Note Register.

        "Class A-4 Rate" means _____% per annum.

        "Clearing Agency" means an organization registered as a "clearing
agency" pursuant to Section 17A of the Exchange Act.

        "Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency effects book-entry transfers and pledges of securities deposited with the
Clearing Agency.

        "Closing Date" means ________, 2000.

        "Collateral Agent" means Bankers Trust Company, in its capacity as
collateral agent for the Insurer under the Insurance Agreement, and each
successor thereto.

        "Collection Account" means the account established and maintained as
such pursuant to Section 5.01.

        "Contract" means each retail installment sales contract and security
agreement or installment loan agreement and security agreement which has been
executed by an Obligor and pursuant to which such Obligor purchased, financed or
pledged the Financed Vehicle described therein, agreed to pay the deferred
purchase price (i.e., the purchase price net of any down payment) or amount
borrowed, together with interest, as therein provided in connection with such
purchase or loan, granted a security interest in such Financed Vehicle, and
undertook to perform certain other obligations as specified in such Contract and
which has been conveyed to the Trust pursuant to this Agreement.

        "Contract Documents" means, with respect to each Contract, (i) the
Contract; (ii) either the original Title Document for the related Financed
Vehicle or a duplicate copy thereof issued or certified by the Registrar of
Titles which issued the original thereof, together with evidence of perfection
of the security interest in the related Financed Vehicle granted by such
Contract, as determined by the Master Servicer to be permitted or required to
perfect such security interest under the laws of the applicable jurisdiction
(or, in the case of a Contract listed on the Schedule of Contracts, written
evidence from the Dealer selling such Financed Vehicle that the Title Document
for such Financed Vehicle showing the Seller as first lienholder has been
applied for);

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(iii) the related Assignments; (iv) any agreement(s) modifying the Contract
(including, without limitation, any extension agreement(s)); and (v) documents
evidencing the existence of physical damage insurance covering such Financed
Vehicle.

        "Contract Files" means the Contract Documents and all other papers and
computerized records customarily kept by the Master Servicer and all
Subservicers, as the case may be, in servicing contracts and loans comparable to
the Contracts.

        "Contract Number" means, with respect to any Contract included in the
Trust, the number assigned to such Contract by the Master Servicer, which number
is set forth in the related Schedule of Contracts.

        "Contract Rate" means, with respect to a Contract that is a (i) Simple
Interest Contract, the interest rate borne by such Contract as determined by the
terms thereof, and (ii) Rule of 78's Contract, the discount rate used in
accordance with the definition of the term "Scheduled Balance" to derive the
Scheduled Balance of such Contract.

        "Corporate Trust Office" means the principal office of the Indenture
Trustee at which at any particular time its corporate trust business shall be
administered, which office at the date of the execution of this Agreement is
located at Four Albany Street - 10th Floor, New York, New York 10006, Attention:
Corporate Trust Department - Asset Backed Group; or at such other address as the
Indenture Trustee may designate from time to time by notice to the
Certificateholders, the Insurer, the Master Servicer and each Seller.

        "Cut-Off Date" means ________, 2000.

        "Cut-Off Date Aggregate Scheduled Balance" means $__________ , the
aggregate of the Scheduled Balances of the Contracts as of the Cut-Off Date.

        "Cut-Off Date WFSRC Aggregate Scheduled Balance" means $__________,
the aggregate of the Scheduled Balances of the WFSRC Contracts as of the
Cut-Off Date.

        "Dealer" means the seller of a Financed Vehicle, which seller originated
and assigned the related Contract, including the Bank.

        "Defaulted Contract" means, with respect to any Due Period, a Contract
(i) which is, at the end of such Due Period, delinquent in the amount of at
least two monthly payments or (ii) with respect to which the related Financed
Vehicle has been repossessed or repossession efforts have been commenced.

        "Deficiency Claim Date" means, with respect to any Distribution Date,
the fourth Business Day immediately preceding such Distribution Date.

        "Deficiency Notice" means, with respect to any Distribution Date, the
notice delivered pursuant to Section 5.02(c) by the Master Servicer to the
Indenture Trustee, with a copy to the Insurer and the Owner Trustee.

        "Delinquency Percentage" means, with respect to any three calendar month
period, the average of the percentages of delinquent Contracts for each month in
such period. For each month the percentage of delinquent Contracts shall be the
percentage equivalent of a fraction, the numerator of which is the sum of (i)
the aggregate Scheduled Balance of all Outstanding

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Contracts 61 days or more delinquent (after taking into account permitted
extensions), plus (ii) the aggregate Scheduled Balance of all Contracts in
respect of which the related Financed Vehicles have been repossessed but have
not been liquidated (to the extent the related Contract is not otherwise
reflected in clause (i) above), and the denominator of which is the aggregate
Scheduled Balance of all outstanding Contracts, in each case, on the last day of
such calendar month.

        "Delivery" means, when used with respect to Trust Account Property:

               (i) with respect to certificated securities, bankers'
        acceptances, commercial paper, negotiable certificates of deposit and
        any other obligations which evidence a right to the payment of money and
        is not itself a security agreement or lease and is of a type which is in
        ordinary course of business transferred by delivery with necessary
        endorsement or assignment (collectively, "Physical Property"): (A) the
        Indenture Trustee or the Owner Trustee, as the case may be, or its
        Financial Intermediary acquires possession of the Physical Property, and
        evidence that any such Physical Property that is in registerable form
        has been registered in the name of the Trustee, its Financial
        Intermediary, its custodian or its nominee; (B) the Financial
        Intermediary, not a clearing corporation, sends the Indenture Trustee or
        the Owner Trustee, as the case may be, confirmation of the transfer and
        also by book entry or otherwise identifies as belonging to the Indenture
        Trustee or the Owner Trustee, as the case may be, the Physical Property
        in the Financial Intermediary's possession; or (C) with respect to a
        clearing corporation, appropriate entries to the account of the
        Indenture Trustee or the Owner Trustee, as the case may be, or a Person
        designated by him or her and, if certificated, it is both, in the
        custody of the clearing corporation or another clearing corporation, a
        custodian bank or a nominee of any of them and, in bearer form or
        endorsed in blank by the appropriate person or registered in the name of
        the clearing corporation, custodian bank, or a nominee of any of them;

               (ii) with respect to any Trust Account Property that is a
        book-entry security held through the Federal Reserve System pursuant to
        Federal book-entry regulations, the following procedures, all in
        accordance with applicable law, including applicable Federal regulations
        and Articles 8 and 9 of the UCC: (A) book-entry registration of such
        property to an appropriate book-entry account maintained with a Federal
        Reserve Bank by the Indenture Trustee or the Owner Trustee, as the case
        may be, of a deposit advice or other written confirmation of such
        book-entry registration, (B) the making by any such custodian of entries
        in its books and records identifying such book-entry security held
        through the Federal Reserve System pursuant to federal book-entry
        regulations as belonging to the Indenture Trustee or the Owner Trustee,
        as the case may be, and indicating that such custodian holds such Trust
        Account Property solely as agent for the Indenture Trustee or the Owner
        Trustee, as the case may be, and the making by the Indenture Trustee or
        the Owner Trustee, as the case may be, of entries in its books and
        records establishing that it holds such Trust Account Property solely as
        trustee pursuant to Section 5.01, and (C) such additional or alternative
        procedures as may hereafter become necessary to effect complete transfer
        of ownership of any such Trust Account Property to the Indenture Trustee
        or the Owner Trustee, as the case may be, consistent with changes in
        applicable law or regulations or the interpretation thereof; and

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               (iii) with respect to any Trust Account Property that is an
        uncertificated security under Article 8 of the UCC and that is not
        governed by clause (ii) above, registration of the transfer to, and
        ownership of such Trust Account Property by, the Indenture Trustee or
        the Owner Trustee, as the case may be, its custodian or its nominee by
        the issuer of such Trust Account Property.

        "Depositors" means the Sellers in their capacity as Depositors under the
Trust Agreement, and its successors.

        "Distribution Date" means each _______ 20, _______ 20, _______ 20 and
_______ 20, or, if any such date shall not be a Business Day, the next
succeeding Business Day, commencing _______ 20, 2000.

        "Distribution Date Outstanding Principal Balance" means, with respect to
any Contract which has been the subject of a Partial Prepayment and under which
payments are applied on the basis of the Rule of 78's, the amount equal to the
total of all Monthly P&I due after the Distribution Date next succeeding the Due
Period during which such Partial Prepayment was received, less any unearned
finance charge as of the Due Date next preceding such Distribution Date computed
in accordance with the Rule of 78's.

        "Distribution Date Statement" shall have the meaning specified in
Section 4.09(a).

        "DTC" means The Depository Trust Company, and its successors.

        "Due Date" means, as to any Contract, the date upon which an installment
of Monthly P&I is due.

        "Due Period" means, with respect to any Distribution Date, the three
month period commencing on the first day of the third month preceding the month
in which such Distribution Date occurs (or from ______ 1, 2000 in the case of
the first Distribution Date) to the last day of the month immediately preceding
the month in which such Distribution Date occurs.

        "Eligible Account" means (i) a segregated trust account in the corporate
trust department that is maintained with a depository institution or trust
company the commercial paper or other short-term debt obligations of which have
credit ratings from Standard & Poor's at least equal to "A-1" and from Moody's
equal to "P-1", which account is fully insured up to applicable limits by the
FDIC or (ii) a general ledger account or deposit account that is (a) guaranteed
by an entity the long-term unsecured debt obligations of which are rated "Aa2"
by Moody's and "AAA" by Standard & Poor's or the commercial paper or other
short-term debt obligations of which have credit ratings from Standard & Poor's
at least equal to "A-1+" and from Moody's equal to "P-1" or (b) that otherwise
will not result in the qualification, reduction or withdrawal by any Rating
Agency of its then-applicable rating on any Class of Notes (without giving
effect to the guaranty under the Note Policy of payments owing to the
Noteholders). If any Eligible Account falls below the ratings specified in (i)
or (ii) above, all monies in such Eligible Account will be moved within 15 days
to an account meeting the requirements of an Eligible Account.

        "Eligible Investments" means any one or more of the following
obligations or securities, all of which shall be denominated in United States
dollars:

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               (i) direct obligations of, and obligations fully guaranteed as to
        timely payment of principal and interest by, the United States or any
        agency or instrumentality of the United States the obligations of which
        are backed by the full faith and credit of the United States;

               (ii) general obligations of or obligations guaranteed as to
        timely payment of principal and interest by FNMA, FHLMC or any state of
        the United States, the District of Columbia or the Commonwealth of
        Puerto Rico then rated the highest available credit rating of each
        Rating Agency for such obligations;

               (iii) demand and time deposits in, certificates of deposit of,
        banker's acceptances issued by, or federal funds sold by any depository
        institution or trust company (including the Indenture Trustee or the
        Owner Trustee) incorporated under the laws of the United States or any
        state and subject to supervision and examination by federal and/or state
        banking authorities, so long as at the time of such investment or
        contractual commitment providing for such investment either (a) the
        long-term, unsecured debt obligations of such depository institution or
        trust company have credit ratings from Moody's at least equal to "Aa2"
        and shall have commercial paper or other short-term debt obligations
        rated at least "A-1+" by Standard & Poor's and "P-1" by Moody's or (b)
        the investment is guaranteed by an entity the long-term, unsecured debt
        obligations of which have been rated "AAA" by Standard & Poor's and at
        least "Aa2" by Moody's or otherwise will not result in the
        qualification, reduction or withdrawal by Moody's or Standard & Poor's
        of its then-applicable rating on any Class of Notes (without giving
        effect to the guaranty under the Note Policy of payments owing to the
        Noteholders); if the investments in this paragraph (iii) fall below the
        specified ratings, the invested monies shall be moved to Eligible
        Investments as soon as the investment matures; however, no new monies
        may be invested in any instrument that is not currently an Eligible
        Investment;

               (iv) repurchase obligations with respect to (a) any security
        described in clause (i) above or (b) any other security issued or
        guaranteed as to timely payment of principal and interest by an agency
        or instrumentality of the United States, in either case entered into
        with a depository institution or trust company (including the Indenture
        Trustee or the Owner Trustee), acting as principal and the counterparty,
        the long-term unsecured debt obligations of which are rated "AAA" by
        Standard & Poor's and at least "Aa2" by Moody's and commercial paper or
        other short-term debt obligations are rated at least "A-1+" by Standard
        & Poor's and "P-1" by Moody's;

               (v) securities bearing interest or sold at a discount issued by
        any corporation incorporated under the laws of the United States or any
        state thereof which at the time of such investment or contractual
        commitment providing for such investment have long-term, unsecured debt
        obligations rated "AAA" by Standard & Poor's and at least "Aa2" by
        Moody's or better and shall have commercial paper or other short-term
        debt obligations rated at least "A-1+" by Standard & Poor's and "P-1" by
        Moody's; provided, however, that securities issued by any corporation
        will not be Eligible Investments to the extent that investment therein
        will cause the then outstanding principal amount of securities issued by
        such corporation and held as part of the Trust to exceed 10% of the

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        sum of the aggregate Outstanding Principal Balances of the Contracts and
        all Eligible Investments held as part of the Trust;

               (vi) commercial paper given the highest rating by each Rating
        Agency at the time of such investment; provided that the issuer of such
        commercial paper must have a long-term unsecured debt rating of at least
        A1 from Moody's and AAA from Standard & Poor's;

               (vii) the RIC, if investment in such RIC will not result in a
        qualification, reduction or withdrawal by Moody's or Standard & Poor's
        of its then-applicable rating on any Class of Notes (without giving
        effect to the guaranty under the Note Policy of payments owing to the
        Noteholders); if the investments in this paragraph (vii) fall below the
        specified ratings, the invested monies shall be moved to Eligible
        Investments on the fifth Business Day preceding the next succeeding
        Distribution Date; however, no new monies may be invested in the RIC
        until the RIC once again becomes an Eligible Investment; and

               (viii) any other investments which meet the criteria of each
        Rating Agency as being consistent with their then-current rating of each
        Class of Notes.

        "Excess Amounts" shall have the meaning specified in Section 5.05(b).

        "Excess Spread Amount" means, with respect to a Distribution Date or
Calculation Day, the excess of the Spread Account Balance over the Specified
Spread Account Balance (after giving effect to all deposits to, and withdrawals
(other than withdrawals pursuant to Section 5.06(b)) from, the Spread Account on
such Distribution Date or Calculation Day).

        "Exchange Act" means the Securities Exchange Act of 1934, as amended.

        "FDIC" means the Federal Deposit Insurance Corporation, and its
successors.

        "FHLMC" means the Federal Home Loan Mortgage Corporation, and its
successors.

        "FNMA" means the Federal National Mortgage Association, and its
successors.

        "Final Distribution Date" means the Class A-1 Final Distribution Date,
the Class A-2 Final Distribution Date, Class A-3 Final Distribution Date or the
Class A-4 Final Distribution Date, as the case may be.

        "Financed Vehicle" means, as to any Contract, an automobile or
light-duty truck, together with all accessions thereto, securing the related
Obligor's indebtedness under such Contract.

        "Financial Intermediary" means a bank, broker, clearing corporation or
the Person (or the nominee of any of them) that in the ordinary course of its
business maintains security accounts for its customers and is acting in that
capacity.

        "Fiscal Agent" shall have the meaning set forth in the Note Policy.

                                       9
<PAGE>   15

        "Full Prepayment" means any of the following: (i) payment to the Master
Servicer of 100% of the outstanding principal balance of a Contract, exclusive
of any Contract referred to in clause (ii), (iii) or (iv) of the definition of
the term "Liquidated Contract," together with all accrued and unpaid interest
thereon to the date of such payment, or (ii) payment by the Sellers or the
Master Servicer, as the case may be, of the purchase price of a Contract in
connection with the purchase of a Contract pursuant to Section 3.02, 3.10 or
4.07 or payment by the Sellers of the purchase price of a Contract in connection
with the purchase of all Contracts pursuant to Section 9.01.

        "Holder" means, with respect to a (i) Certificate, the Person in whose
name such Certificate is registered in the Certificate Register and (ii) Note,
the Person in whose name such Note is registered in the Note Register.

        "Holding Account" means the account established and maintained as such
pursuant to Section 5.01.

        "Indenture" means the Indenture, dated as of the date hereof, among the
Issuer and the Indenture Trustee.

        "Indenture Trustee" means the Person acting as Indenture Trustee under
the Indenture, its successors in interest and any successor trustee under the
Indenture.

        "Independent", when used with respect to any specified Person, means
such a Person who (i) is in fact independent of the Issuer, the Sellers or WFS,
(ii) is not a director, officer or employee of any Affiliate of the Issuer, the
Sellers or WFS, (iii) is not a person related to any officer or director of the
Issuer, the Sellers, WFS or any of their respective Affiliates, (iv) is not a
holder (directly or indirectly) of more than 10% of any voting securities of
Issuer, the Sellers, WFS or any of their respective Affiliates, and (v) is not
connected with the Issuer, the Sellers or WFS as an officer, employee, promoter,
underwriter, trustee, partner, director or person performing similar functions.

        "Insolvency Event" means, with respect to a specified Person, (i) the
entry of a decree or order for relief by a court or regulatory authority having
jurisdiction in respect of such Person in an involuntary case under the federal
bankruptcy laws, as now or hereafter in effect, or any other present or future,
federal or state, bankruptcy, insolvency or similar law, or appointing a
receiver, liquidator, assignee, custodian, trustee, sequestrator or other
similar official for such Person or for any substantial part of its property, or
ordering the winding-up or liquidation of such Person's affairs, and the
continuance of any such decree or order unstayed and in effect for a period of
60 consecutive days; (ii) the commencement of an involuntary case under the
federal bankruptcy laws, as now or hereinafter in effect, or any other present
or future federal or state bankruptcy, insolvency or similar law and such case
is not dismissed within 60 days; or (iii) the commencement by such Person of a
voluntary case under the federal bankruptcy laws, as now or hereinafter in
effect, or any other present or future federal or state, bankruptcy, insolvency
or similar law, or the consent by such Person to the appointment of or taking
possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator
or other similar official for such Person or for any substantial part of its
property, or the making by such Person of an assignment for the benefit of

                                       10
<PAGE>   16

creditors or the failure by such Person generally to pay its debts as such debts
become due or the taking of corporate action by such Person in furtherance of
any the foregoing.

        "Insolvency Proceeding" shall have the meaning specified in Section
8.06.

        "Insolvency Proceeds" shall have the meaning specified in Section
9.01(b).

        "Insurance Agreement" means the Insurance, Indemnity and Pledge
Agreement, dated as of the date hereof, among the Insurer, the Issuer, the
Sellers, the Master Servicer and the Indenture Trustee, the form of which is
attached hereto as Exhibit A.

        "Insurance Agreement Obligations" means, as of any date, the aggregate
of amounts owing to the Insurer under the Insurance Agreement as of such date,
other than amounts representing payments made under the Note Policy for which
the Insurer has not yet been reimbursed.

        "Insurance Policy" means, with respect to a Financed Vehicle, the
policies of comprehensive and collision insurance and the LDI Policy.

        "Insurance Proceeds" means proceeds paid pursuant to any Insurance
Policy and amounts (exclusive of rebated premiums) paid by any insurer under any
other insurance policy related to a Financed Vehicle, a Contract or an Obligor.

        "Insurer" means Financial Security Assurance Inc., and its successors.

        "Insurer Insolvency" means (i) the entry of a decree or order for relief
by a court or regulatory authority having jurisdiction in respect of the Insurer
in an involuntary case under the federal bankruptcy laws, as now or hereafter in
effect, or any other present or future federal or state bankruptcy, insolvency,
rehabilitation or similar law, or appointing a receiver, liquidator, assignee,
trustee, custodian, sequestrator or other similar official of the Insurer or of
any substantial part of its property, or ordering the winding up or liquidation
of the affairs of the Insurer and the continuance of any such decree or order
unstayed and in effect for a period of 60 consecutive days, or (ii) the
commencement by the Insurer of a voluntary case under the federal bankruptcy
laws, as now or hereafter in effect, or any other present or future federal or
state bankruptcy, insolvency, rehabilitation or similar law, or the consent by
the Insurer to the appointment of or taking possession by a receiver,
liquidator, assignee, trustee, custodian, sequestrator or other similar official
of the Insurer or of any substantial part of its property or the making by the
Insurer of an assignment for the benefit of creditors or the failure by the
Insurer generally to pay its debts as such debts become due or the taking of
corporate action by the Insurer in furtherance of any of the foregoing.

        "Interest Period" means, with respect to any Distribution Date, the
period from and including the Distribution Date immediately preceding such
Distribution Date (or, in the case of the first Distribution Date, from and
including _____, 2000) to but excluding such Distribution Date.

        "Interest Rate" means the Class A-1 Rate, the Class A-2 Rate, Class A-3
Rate or the Class A-4 Rate, as the case may be.

                                       11
<PAGE>   17

        "Investment Earnings" means, with respect to any Distribution Date, the
investment earnings (net of losses and investment expenses) on amounts on
deposit in the Trust Accounts, other than the Holding Account, to be deposited
into the Collection Account on such Distribution Date pursuant to Section
5.01(b).

        "Issuer" means the WFS Financial 2000-A Owner Trust.

        "LDI Policy" means the limited dual interest policy providing coverage
for physical damage to, or loss of, a Financed Vehicle.

        "Lien" means a security interest, lien, charge, pledge, equity or
encumbrance of any kind, other than tax liens, mechanics' liens and any liens
that attach to the respective Contract by operation of law.

        "Liquidated Contract" means a Contract which (i) has been the subject of
a Full Prepayment; (ii) was a Defaulted Contract and with respect to which the
related Financed Vehicle was repossessed and, after any cure period required by
law has expired, the Master Servicer has charged-off any losses prior to the end
of the four-month period referred to in clause (iv); (iii) has been paid in full
on or after its Maturity Date; or (iv) has become delinquent as to all or part
of four or more payments of Monthly P&I.

        "Liquidation Expenses" means reasonable out-of-pocket expenses (not to
exceed Liquidation Proceeds), other than any overhead expenses, incurred by the
Master Servicer in connection with the realization of the full amounts due under
any Contract (including the attempted liquidation of a Contract which is brought
current and is no longer in default during such attempted liquidation) and the
sale of any property acquired in respect thereof which are not recoverable under
any Insurance Policy.

        "Liquidation Proceeds" means amounts received by the Master Servicer
(before reimbursement for Liquidation Expenses) in connection with the
realization of the amounts due and to become due under any Defaulted Contract
and the sale of any property acquired in respect thereof.

        "Master Servicer" means WFS in its capacity as the master servicer of
the Contracts under Section 4.01, and, in each case upon succession in
accordance herewith, each successor servicer in the same capacity pursuant to
Section 4.01 and each successor master servicer pursuant to Section 8.02.

        "Master Servicer Report Date" means, with respect to any Distribution
Date, the fifth Business Day prior to such Distribution Date.

        "Maturity Date" means, with respect to any Contract, the date on which
the last scheduled payment of such Contract shall be due and payable (after
giving effect to all Prepayments received prior to the date of determination) as
such date may be extended pursuant to Section 4.02.

        "Monthly P&I" means, with respect to any Contract, the amount of each
monthly installment of principal and interest payable to the Obligee of such
Contract in accordance with

                                       12
<PAGE>   18

the terms thereof, exclusive of any charges allocable to the financing of any
insurance premium and charges which represent late payment charges or extension
fees.

        "Moody's" means Moody's Investors Service, Inc., and its successors.

        "Net Collections" means, with respect to any Distribution Date and the
related Due Period, the sum of (i) all amounts of principal and interest
collected on or in respect of the Contracts during such Due Period (in the case
of principal and interest that are part of any Liquidation Proceeds or Insurance
Proceeds, only to the extent of the related Net Liquidation Proceeds or Net
Insurance Proceeds), less (a) the Retained Yield, if any, (b) any late payments
of interest retained by the Master Servicer as reimbursement for Advances
pursuant to Section 5.04 and (c) any installments of Monthly P&I or Prepayments
retained by the Master Servicer as reimbursement for Nonrecoverable Advances
pursuant to Section 5.04; (ii) the Advance for such Due Period to the extent
actually made; (iii) the investment earnings on funds in the Collection Account
for such Distribution Date (which, except as otherwise provided in Section 5.01,
shall be the RIC Reinvestment Earnings); (iv) amounts withdrawn from the Holding
Account and deposited in the Collection Account in such Due Period pursuant to
Section 5.02; (v) the aggregate Repurchase Amount for Repurchased Contracts
deposited in or credited to the Collection Account pursuant to Section 5.04(c)
on the related Master Servicer Report Date; and (vi) the Base Price for WFSRC
Contracts repurchased by WFSRC pursuant to Section 3.10(a).

        "Net Contract Rate" means, with respect to any Contract, its Contract
Rate less the sum of the Servicing Fee Percent and the Retained Yield Percent.

        "Net Insurance Proceeds" means, with respect to any Contract, Insurance
Proceeds net of any such amount applied to the repair of the related Financed
Vehicle, released to the related Obligor in accordance with the normal servicing
procedures of the Master Servicer or representing expenses incurred by the
Master Servicer and recoverable hereunder.

        "Net Liquidation Proceeds" means the amount derived by subtracting from
the Liquidation Proceeds of a Contract the related Liquidation Expenses.

        "Nonrecoverable Advance" means any Advance proposed to be made or
previously made by the Master Servicer which, in its good faith judgment, would
not be or will not be ultimately recoverable by the Master Servicer from late
payments, Insurance Proceeds or Liquidation Proceeds.

        "Note Balance" means with respect to any Distribution Date, the
aggregate outstanding principal amount of the Class A-1 Notes, Class A-2 Notes,
Class A-3 Notes and Class A-4 Notes, in each case as of the immediately
preceding Distribution Date (after giving effect to any distributions of
principal made on such preceding Distribution Date). Notwithstanding the
foregoing, any payments of the Repurchase Premium shall not reduce the Note
Balance.

        "Note Deficiency Claim Amount" means, with respect to each Distribution
Date, the amount, if any, by which the Note Distributable Amount for such
Distribution Date exceeds the amount of Net Collections actually deposited in
the Note Distribution Account on such Distribution Date in accordance with
Section 5.05.

                                       13
<PAGE>   19

        "Note Distributable Amount" means, with respect to any Distribution
Date, the sum of the Note Principal Distributable Amount and the Note Interest
Distributable Amount for such Distribution Date.

        "Note Distribution Account" means the account established and maintained
as such pursuant to Section 5.01.

        "Note Final Distribution Date" means the Class A-1 Final Distribution
Date, the Class A-2 Final Distribution Date and the Class A-3 Final Distribution
Date, as the case may be.

        "Note Interest Carryover Shortfall" means, with respect to any
Distribution Date and a Class of Notes, the excess, if any, of the sum of the
Note Interest Distributable Amount for such Class for the immediately preceding
Distribution Date plus any outstanding Note Interest Carryover Shortfall for
such Class on such preceding Distribution Date, over the amount in respect of
interest that is actually deposited in the Note Distribution Account with
respect to such Class on such preceding Distribution Date, plus, to the extent
permitted by applicable law, interest on the amount of interest due but not paid
to Noteholders of such Class on the preceding Distribution Date at the related
Interest Rate for the related Interest Period.

        "Note Interest Distributable Amount" means, with respect to any
Distribution Date and a Class of Notes, the sum of the Note Quarterly Interest
Distributable Amount for such Class of Notes for such Distribution Date and the
Note Interest Carryover Shortfall for such Class of Notes for such Distribution
Date. For all purposes of this Agreement and the other Basic Documents, interest
with respect to the (i) Class A-1 Notes shall be computed on the basis of a
360-day year and the actual number of days elapsed since the immediately
preceding Distribution Date (or, with respect to the first Distribution Date,
since ______ 1, 2000) and (ii) Class A-2 Notes and Class A-3 Notes shall be
computed on the basis of a 360-day year consisting of twelve 30-day months.

        "Note Percentage" means, (i) for each Distribution Date prior to but
excluding the Distribution Date on which the principal amount of the Class A-3
Notes is reduced to zero, 100%; (ii) for the Distribution Date on which the
principal amount of the Class A-3 Notes is reduced to zero, (A) 100% until the
principal amount of the Class A-3 Notes has been reduced to zero and (B) with
respect to any remaining portion of the Principal Distributable Amount, zero;
and (iii) for any Distribution Date thereafter, zero.

        "Note Policy" means the financial guaranty insurance policy issued by
the Insurer to the Indenture Trustee on behalf of the Noteholders, the form of
which is attached as Exhibit N hereto.

        "Note Policy Claim Amount" means, with respect to each Distribution
Date, the amount, if any, by which the Note Distributable Amount for such
Distribution Date exceeds the sum of (i) the amount of Net Collections actually
deposited in the Note Distribution Account on such Distribution Date in
accordance with Section 5.05 and (ii) the amount of the Note Deficiency Claim
Amount, if any, paid to the Note Distribution Account from the Spread Account
pursuant to a Deficiency Notice delivered for such Distribution Date.

                                       14
<PAGE>   20

        "Note Pool Factor" means, with respect to any Class of Notes as of any
Distribution Date, a six-digit decimal figure equal to the outstanding principal
amount of such Class of Notes (after giving effect to any reductions thereof to
be made on such Distribution Date) divided by the original outstanding principal
amount of such Class of Notes.

        "Note Principal Carryover Shortfall" means, as of any Distribution Date,
the excess of the sum of the Note Quarterly Principal Distributable Amount and
any outstanding Note Principal Carryover Shortfall for the immediately preceding
Distribution Date over the amount in respect of principal that is actually
deposited in the Note Distribution Account on such Distribution Date.

        "Note Principal Distributable Amount" means, with respect to any
Distribution Date, the sum of the Note Quarterly Principal Distributable Amount
and the Accelerated Principal Distributable Amount, if any, for such
Distribution Date and any outstanding Note Principal Carryover Shortfall for the
immediately preceding Distribution Date; provided, however, that the Note
Principal Distributable Amount with respect to a Class of Notes shall not exceed
the outstanding principal amount of such Class of Notes; and provided, further,
that the Note Principal Distributable Amount on each Note Final Distribution
Date shall not be less than the amount that is necessary (after giving effect to
other amounts to be deposited in the Note Distribution Account on such
Distribution Date and allocable to principal) to reduce the outstanding
principal amount of the related Class of Notes to zero.

        "Note Quarterly Interest Distributable Amount" means, with respect to
any Distribution Date, interest accrued for the related Interest Period on each
Class of Notes at the related Interest Rate for such Class on the outstanding
principal amount of the Notes of such Class on the immediately preceding
Distribution Date, after giving effect to all payments of principal to the
Noteholders of such Class on or prior to such Distribution Date (or, in the case
of the first Distribution Date, on the original principal amount of such Class
of Notes).

        "Note Quarterly Principal Distributable Amount" means, with respect to
any Distribution Date, the Note Percentage of the Principal Distributable Amount
for such Distribution Date.

        "Note Register" shall have the meaning specified in the Indenture.

        "Obligee" means the Person to whom an Obligor is indebted under a
Contract.

        "Obligor" on a Contract means the purchaser or co-purchasers of the
Financed Vehicle and any other Person who owes payments under the Contract.

        "Offered Securities" shall have the meaning specified in Section
6.03(b)(ii).

        "Officers' Certificate" means a certificate signed by the Chairman, the
President or a Vice President, and by the Treasurer, an Assistant Treasurer, the
Controller, an Assistant Controller, the Secretary or an Assistant Secretary of
any Person delivering such certificate and delivered to the Person to whom such
certificate is required to be delivered. In the case of an Officers' Certificate
of the Master Servicer, at least one of the signing officers must be a Servicing
Officer. Unless otherwise specified, any reference herein to an Officers'
Certificate shall be to an Officers' Certificate of the Master Servicer.

                                       15
<PAGE>   21

        "Opinion of Counsel" means a written opinion of counsel (who may be
counsel to the Seller or the Master Servicer) acceptable to the Indenture
Trustee or the Owner Trustee, as the case may be, and the Insurer.

        "Optional Repurchase Payment" means, with respect to the repurchase by
WFSRC of all WFSRC Contracts pursuant to Section 3.10, an amount equal to the
sum of Base Price and the Repurchase Premium.

        "Original Class A-1 Note Balance" means $____________.

        "Original Class A-2 Note Balance" means $____________.

        "Original Class A-3 Note Balance" means $____________.

        "Original Pool Balance" means $____________.

        "Outstanding" means, with respect

               (i) to a Contract and as of time of reference thereto, a Contract
        that has not reached its Maturity Date, has not been fully prepaid, has
        not become a Liquidated Contract and has not been repurchased pursuant
        to Section 3.02, 3.10, 4.07 or 9.01; and

               (ii) Securities, as of the date of determination, all Notes of
        one Class or of all Classes, all Certificates or all Notes and
        Certificates, as the case may be, theretofore authenticated and
        delivered except:

                      (a) Securities theretofore cancelled by the applicable
               Registrar or delivered to the applicable Registrar for
               cancellation;

                      (b) Securities or portions thereof the payment for which
               money in the necessary amount has been theretofore deposited with
               the applicable Trustee or any Paying Agent, as the case may be,
               in trust for the Holders of such Securities (provided, however,
               that if such Securities are to be redeemed or repurchased, notice
               of such redemption or repurchase has been duly given or provision
               for such notice has been made, satisfactory to the applicable
               Trustee); and

                      (c) Securities in exchange for or in lieu of other
               Securities which have been authenticated and delivered unless
               proof satisfactory to the applicable Trustee is presented that
               any such Securities are held by a bona fide purchaser;

provided, however, that Securities which have been paid with proceeds of the
Note Policy shall continue to remain Outstanding until the Insurer has been paid
as subrogee hereunder or reimbursed pursuant to the Insurance Agreement as
evidenced by a written notice from the Insurer delivered to the applicable
Trustee, and the Insurer shall be deemed to be the Holder thereof to the extent
of any payments thereon made by the Insurer; provided, further, that in
determining whether the Holders of a specified Outstanding Amount of Securities
have given any request, demand, authorization, direction, notice, consent or
waiver hereunder or under any other Basic Document, Securities owned by the
Issuer, any other obligor upon the Securities,

                                       16
<PAGE>   22

either Seller, WFS or any of their respective Affiliates shall be disregarded
and deemed not to be Outstanding, except that, in determining whether the
applicable Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Securities that the
applicable Trustee knows to be so owned shall be so disregarded. Securities so
owned that have been pledged in good faith may be regarded as Outstanding if the
pledgee establishes to the satisfaction of the applicable Trustee the pledgee's
right so to act with respect to such Securities and that the pledgee is not the
Issuer, any other obligor upon the Securities, any Seller, WFS or any of their
respective Affiliates.

        "Outstanding Amount" means the aggregate principal amount of all Notes
of one Class or of all Classes, as the case may be, Outstanding at the date of
determination.

        "Outstanding Principal Balance" means, with respect to a Contract that
is a (i) Rule of 78's Contract, the amount set forth as the Outstanding
Principal Balance of such Contract on the Schedule of Contracts, such amount
being the total of all Monthly P&I due on or after _______ 1, 2000 less any
unearned interest as of the Due Date for such Contract next preceding _______ 1,
2000, computed in accordance with the Rule of 78's, less all amounts received on
or in respect of such Contract on or after _______ 1, 2000 that are allocable to
principal and (ii) Simple Interest Contract, the actual principal balance under
the terms thereof.

        "Owner Trustee" means the Person acting as Owner Trustee under the Trust
Agreement, its successors in interest and any successor owner trustee under the
Trust Agreement.

        "Owner Trustee Corporate Trust Office" shall have the meaning specified
in the Trust Agreement.

        "Partial Prepayment" means, as to any Rule of 78's Contract, any partial
prepayment received by the Master Servicer that (i) is not accompanied by an
amount specified by the related Obligor to be interest representing scheduled
interest due on any date or dates in any month or months subsequent to the month
of such prepayment and (ii) is required by the terms of such Contract to be
applied to the payment of principal thereunder on or prior to the Due Date next
succeeding the date of receipt.

        "Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.

        "Physical Property" shall have the meaning specified in the definition
of the term "Delivery".

        "Pool Balance" as of the time of determination means the Aggregate
Scheduled Balance, exclusive of the Scheduled Balances of all Contracts that are
not Outstanding at the end of the Due Period ending immediately prior to such
time of determination.

        "Preference Claim" shall have the meaning specified in Section 8.06.

        "Preferential Transfer" shall have the meaning specified for the term
"Preference" in the Insurance Agreement.

                                       17
<PAGE>   23

        "Prepayment" means a Full Prepayment or a Partial Prepayment.

        "Principal Distributable Amount" means, with respect to any Distribution
Date, the Aggregate Scheduled Balance Decline for such Distribution Date.

        "Proprietary Fund" means money market funds having a rating from each
Rating Agency in the highest investment category granted by each Rating Agency,
including funds for which the Indenture Trustee or the Owner Trustee or any of
their respective Affiliates is investment manager or advisor.

        "Rating Agency" means Moody's and Standard & Poor's.

        "Record Date" means, with respect to a Class of Notes or the
Certificates and any Distribution Date, the Business Day immediately preceding
such Distribution Date or, in the case of the Notes, in the event that
Definitive Notes are issued, the 15th day of the month preceding the month in
which such Distribution Date occurs.

        "Registrar of Titles" means the agency, department or office having the
responsibility for maintaining records of titles to motor vehicles and issuing
documents evidencing such titles in the jurisdiction in which a particular
Financed Vehicle is registered.

        "Related Contracts" means, with respect to a particular Seller, the
Contracts sold to the Trust by such Seller.

        "Repurchase Amount" means, with respect to any Contract, the amount, as
of the date of repurchase, required to prepay in full the principal of and
accrued interest on such Contract to the last Due Date in the Due Period in
which such repurchase occurs.

        "Repurchase Distribution Date" has the meaning set forth in the Trust
Agreement.

        "Repurchase Premium" means an amount equal to:

               (i) the product of Base Price and __% if the Base Price is more
        than 15% of the Cut-Off Date WFSRC Aggregate Scheduled Balance;

               (ii) the product of Base Price and __% if the Base Price is less
        than or equal to 15% of the Cut-Off Date Aggregate Scheduled Balance but
        more than 10% of the Cut-Off Date WFSRC Aggregate Scheduled Balance; and

               (iii) zero if the Base Price is less than or equal to 10% of the
        Cut-Off Date WFSRC Aggregate Scheduled Balance.

        "Repurchased Contract" means a Contract repurchased as of the related
Master Servicer Report Date by the Master Servicer pursuant to Section 4.07, by
WFSRC pursuant to Section 3.10 or by the Sellers pursuant to Section 3.02.

        "Responsible Officer" means any officer within the Corporate Trust and
Agency Group (or any successor group of the Indenture Trustee) including any
Vice President, assistant secretary or any other officer or assistant officer of
the Indenture Trustee customarily performing functions similar to those
performed by the persons who at the time shall be such officers,

                                       18
<PAGE>   24
respectively, or to whom any corporate trust matter is referred at the
Indenture Trustee's Corporate Trust Office because of his knowledge of and
familiarity with the particular subject.

        "Retained Yield" shall mean the amount, if any, stripped off from the
interest portion of Monthly P&I by the Servicer and paid to the Seller on a
monthly basis. Such monthly payment shall be equal to (i) with respect to each
Rule of 78's Contract, an amount equal to the product of the Retained Yield
Percent and the Scheduled Balance of such Contract (as specified in the Schedule
of Contracts) for such month, but only to the extent that the Monthly P&I for
such Contract for such month has been collected and (ii) with respect to each
Simple Interest Contract, out of each payment of Monthly P&I collected on such
Contract, an amount equal to interest at the Retained Yield Percent of the
Scheduled Balance of such Contract on which, and for the period for which, the
interest portion of such payment of Monthly P&I was calculated.

        "Retained Yield Percent" means, with respect to any Contract, the lesser
of (i) 0% per annum or (ii) a percent per annum equal to the APR of such
Contract less the sum of (A) 1% and (B) the Class A-3 Rate.

        "RIC" means the reinvestment contract provided by the Bank and WFAL2 or,
with the prior written consent of the Insurer, a subsidiary thereof,
substantially in the form of Exhibit C hereto, in consideration of the right to
direct the investment of the funds on deposit in all Trust Accounts other than
the Holding Account.

        "RIC Reinvestment Earnings" means, with respect to any Distribution
Date, the related Due Period and the Contracts that were Outstanding at the
beginning of such Due Period, the amount by which the sum of the Note Quarterly
Interest Distributable Amount for such Distribution Date exceeds the sum of (i)
the aggregate amount of interest on the Contracts (adjusted with respect to each
Contract to the Class A-3 Rate and exclusive of such collections that have been
paid to the Master Servicer in reimbursement of a previous Advance) that is part
of Net Collections for such Distribution Date and (ii) the amount of the Advance
as to interest for such Distribution Date (assuming for this purpose that an
Advance was made in respect of each delinquent Contract).

        "Rule of 78's Contract" means a Contract as to which payments thereunder
are applied on the basis of the Rule of 78's.

        "Schedule of Contracts" means the list or lists of Contracts attached as
Schedule A to this Agreement, which Contracts are being transferred to the Owner
Trustee as part of the Trust Estate, which list or lists shall set forth the
following information with respect to each such Contract in numbered columns:

                                       19
<PAGE>   25

<TABLE>
<CAPTION>
                        Information                               Column Number
<S>                                                                <C>
Contract Number ("ACCT NBR")..............................              2
Date of Origination ("ORG DT")............................              9
Maturity Date ("MAT DT")..................................             15
Monthly P&I ("P&I").......................................             10
Original Principal Balance ("ORIG AMT")...................             16 Top
Outstanding Principal Balance ("PRIN BAL")................             16 Bottom
Discount Rate ("APR").....................................              7
</TABLE>

In addition, the Scheduled Balance of each Rule of 78's Contract for each Due
Date on or after the Cut-Off Date, computed in accordance with the definition of
the term "Scheduled Balance," shall be contained on a computer disk or tape (the
"Disk") that shall be delivered by WFAL to the Master Servicer not later than
the fifth Business Day following the Closing Date. The Disk shall be a part of
the Schedule of Contracts and shall be made available by the Master Servicer to
the Indenture Trustee and the Owner Trustee upon reasonable request. In
calculating the Outstanding Principal Balance of each Rule of 78's Contract to
be set forth in Column 16 Bottom, it shall be assumed that all payments of
principal and interest due on or before the Cut-Off Date were received and
applied. The Schedule of Contracts or the Disk shall also set forth the Original
Pool Balance and the Retained Yield Percent (if the Retained Yield Percent is
not the same for all the Contracts).

        "Scheduled Balance" means, with respect to any Rule of 78's Contract for
each month and as of the Cut-Off Date, the amount set forth as the "Scheduled
Balance" of such Contract for such month or as of the Cut-Off Date on the
Schedule of Contracts. Each such amount shall be the present value (determined
as provided below) for the applicable month of all payments of Monthly P&I on
the Contract due after such month (due during or after the first Due Period in
the case of a Scheduled Balance at the Cut-Off Date). Such present value as of a
Distribution Date shall be determined by discounting, on a monthly basis, each
such payment of Monthly P&I from the last day of the month in which such payment
of Monthly P&I is due back to the first day of the month during which such
Distribution Date occurs, using the applicable discount rate specified below.
Such present value as of the Cut-Off Date shall be determined by discounting, on
a monthly basis, each such payment of Monthly P&I back from the last day of the
month in which such payment of Monthly P&I is due to the Cut-Off Date, using the
applicable discount rate specified below. The applicable discount rate (the
"Discount Rate") shall be the discount rate that will produce a present value at
the Cut-Off Date equal to the Outstanding Principal Balance of the Contract. The
Scheduled Balance of a Rule of 78's Contract that becomes a Liquidated Contract
or a Repurchased Contract shall be reduced to zero as of the end of the Due
Period in which such Contract became a Liquidated Contract. In the case of a
Simple Interest Contract, the Scheduled Balance thereof is its actual principal
balance. The principal balance of a Simple Interest Contract that becomes a
Repurchased Contract shall be deemed to be reduced to zero upon the related
repurchase thereof and the principal balance of a Simple Interest Contract that
becomes a Liquidated Contract shall be deemed to be reduced to zero as of the
date on which such Contract becomes a Liquidated Contract. If a Partial
Prepayment is received on any Rule of 78's Contract at any time after the
Cut-Off Date, the Schedule of Contracts shall be revised to reflect the new
Scheduled Balance of such Contract for each Due Date after the date of such
Partial Prepayment, any such recalculations being made in the manner described
above,

                                       20
<PAGE>   26

except that "Outstanding Principal Balance" shall be read to mean "Distribution
Date Outstanding Principal Balance" and "Cut-Off Date" shall be read to mean the
Due Date next succeeding the Due Date after which such Partial Prepayment was
received. As used herein, reference to the Scheduled Balance of a Contract for a
Distribution Date shall mean (i) in the case of a Rule of 78's Contract, the
Scheduled Balance of such Contract on the last day for such Contract in the Due
Period ending immediately prior to such Distribution Date, and (ii) in the case
of a Simple Interest Contract, the Scheduled Balance of such Contract at the
close of business of the last day in such Due Period, and reference to the
Scheduled Balance of a Contract in a month shall mean (i) in the case of a Rule
of 78's Contract, the Scheduled Balance of such Contract for the last day of
such month and (ii) in the case of a Simple Interest Contract, the Scheduled
Balance of such Contract at the close of business on the last day of such month.

        "Securities" means the Notes and the Certificates.

        "Securityholders" means the Holders of the Notes and the Certificates.

        "Sellers" means WFAL and WFSRC, each in its capacity as the Seller of
Contracts under this Agreement, and each successor thereto (in the same
capacity) pursuant to Section 6.03.

        "Servicer Default" means an event specified in Section 8.01.

        "Servicing Fee" means, as to any Distribution Date, the fee payable to
the Master Servicer for services rendered during the related Due Period, which
shall equal with respect to each Contract that is a (i) Rule of 78's Contract,
the amount equal to, for each month in such Due Period, the product of the
Servicing Fee Percent and the Scheduled Balance of such Contract (as specified
in the Schedule of Contracts) for such month in the related Due Period, but only
to the extent that the Monthly P&I for such Contract for such month has been
collected or advanced by the Master Servicer pursuant to Section 5.04 and (ii)
Simple Interest Contract, out of each payment of Monthly P&I collected or
advanced on such Contract an amount equal to interest at the Servicing Fee
Percent on the Scheduled Balance of such Contract on which, and for the period
for which, the interest portion of such payment of Monthly P&I was calculated.

        "Servicing Fee Percent" means one-twelfth of 1.25% per annum.

        "Servicing Officer" means any officer of the Master Servicer involved
in, or responsible for, the administration and servicing of the Contracts whose
name appears on a list of servicing officers furnished to the Indenture Trustee
and the Owner Trustee by the Master Servicer pursuant to Section 4.01.

        "Simple Interest Contract" means a Contract as to which interest is
calculated each day on the basis of the actual principal balance of such
Contract on such day.

        "Specified Spread Account Balance" means, with respect to any
Calculation Day or Distribution Date, ___% of the Aggregate Scheduled Balance on
such date of calculation, except that if on any date of calculation (i) the
Charge-Off Percentage for the three calendar month period ending on such date of
calculation exceeds ___% or (ii) the Delinquency Percentage for the three
calendar month period ending on such date of calculation exceeds ___%, then the
Specified Spread Account Balance shall equal ___% of the Aggregate Scheduled
Balance on

                                       21
<PAGE>   27

such date of calculation (but only for so long as such Charge-Off Percentage or
Delinquency Percentage thresholds continue to be exceeded on any subsequent date
of calculation). Notwithstanding the foregoing, in no event shall the Specified
Spread Account Balance be greater than $__________ or less than $__________;
provided, however, the Specified Spread Account Balance shall not be greater
than the Outstanding Amount of the Securities if such amount is less than
$________.

        "Spread Account" means the account established and maintained as such
pursuant to Section 5.01.

        "Spread Account Balance" means the amount on deposit in the Spread
Account.

        "Spread Account Initial Deposit" means $________, 100% of which will be
cash.

        "Standard & Poor's" means Standard & Poor's, a division of The
McGraw-Hill Companies, Inc., and its successors in interest.

        "Subservicer" means any subservicer engaged by the Master Servicer to
subservice a Contract pursuant to Section 4.01.

        "Subservicing Agreement" means an agreement between the Master Servicer
and a Subservicer relating to the servicing of one or more Contracts,
substantially in the form of Exhibit E hereto.

        "Third Party Lender" means an independent finance company which has
originated or acquired one or more Contracts and assigned such Contract(s) to
WFS.

        "Title Document" means, with respect to any Financed Vehicle, the
certificate of title for, or other evidence of ownership of, such Financed
Vehicle issued by the Registrar of Titles in the jurisdiction in which such
Financed Vehicle is registered.

        "Trust" means the Issuer.

        "Trust Account Property" means the Trust Accounts, all amounts and
investments held from time to time in any Trust Account (whether in the form of
deposit accounts, physical property, book-entry securities, uncertificated
securities or otherwise), including the Spread Account Initial Deposit, and all
proceeds of the foregoing.

        "Trust Accounts" shall have the meaning specified in Section 5.01(a).

        "Trust Agreement" means the Trust Agreement, dated _____, 2000, as
amended and restated as of _______, 2000, among the Depositors, the Insurer and
the Owner Trustee.

        "Trust Estate" shall have the meaning specified in the Trust Agreement.

        "UCC" means the Uniform Commercial Code as in effect in the applicable
jurisdiction.

        "United States" means the United States of America.

                                       22
<PAGE>   28

        "Unreimbursed Insurer Amounts" means, on any date, the amount that is
the sum of (i) all payments (if any) made under the Note Policy for which the
Insurer has not yet been reimbursed as of such date, plus (ii) all Insurance
Agreement Obligations as of such date.

        "Vehicle Receivables" shall have the meaning specified in Section
6.03(b)(ii).

        "Vice President" of any Person means any vice president of such Person,
whether or not designated by a number or words before or after the title "Vice
President," who is a duly elected officer of such Person.

        "WFAL" means WFS Financial Auto Loans, Inc., a wholly owned subsidiary
of WFS, and its successors and assigns.

        "WFAL Certificates" means the Certificates issued to WFAL on the Closing
Date as consideration in part for its conveyance of the WFAL Contracts to the
Trust pursuant to Section 2.01.

        "WFAL Contracts" mean the Contracts sold to the Trust by WFAL.

        "WFAL2" means WFS Financial Auto Loans 2, Inc., a wholly owned
subsidiary of WFS, and its successors and assigns.

        "WFS" means WFS Financial Inc, a majority-owned operating subsidiary of
the Bank, and its successors and assigns.

        "WFSRC" means WFS Receivables Corporation, a wholly-owned subsidiary of
WFS, and its successors and assigns.

        "WFSRC Aggregate Scheduled Balance" means with respect to any
Distribution Date and the Outstanding WFSRC Contracts, the aggregate of the
Scheduled Balances of such WFSRC Contracts as of the end of the Due Period
immediately preceding such Distribution Date.

        "WFSRC Certificate" means the Certificate issued to WFSRC on the Closing
Date as consideration in part for its conveyance of the WFSRC Contracts to the
Trust pursuant to Section 2.01.

        "WFSRC Contracts" mean the Contracts sold to the Trust by WFSRC.

        Section 1.02. Usage of Terms. With respect to all terms in this
Agreement, the singular includes the plural and the plural the singular; words
importing any gender include the other genders; references to "writing" include
printing, typing, lithography and other means of reproducing words in a visible
form; references to agreements and other contractual instruments include all
amendments, modifications and supplements thereto or any changes therein entered
into in accordance with their respective terms and not prohibited by this
Agreement; references to Persons include their permitted successors and assigns;
and the term "including" means "including without limitation."

        Section 1.03. Section References. All section references, unless
otherwise indicated, shall be to Sections in this Agreement.

        Section 1.04. Calculations. Except as otherwise provided herein, all
interest rate and basis point calculations hereunder will be made on the basis
of a 360-day year and twelve 30-day

                                       23
<PAGE>   29

months (or, in the case of the Class A-1 Notes, on the basis of a 360-day year
and the actual number of days elapsed since the immediately preceding
Distribution Date or ______ 1, 2000, in the case of the first Distribution Date)
and will be carried out to at least six decimal places. Collections of interest
on Rule of 78's Contracts shall be calculated as if such Contracts were
actuarial contracts the scheduled principal balances of which are the Scheduled
Balances thereof, and collections of interest on Simple Interest Contracts will
be calculated in accordance with the terms thereof.

        Section 1.05. Accounting Terms. All accounting terms used but not
specifically defined herein shall be construed in accordance with generally
accepted accounting principles in the United States.

                                       24
<PAGE>   30

                                 ARTICLE TWO

                             CONVEYANCE OF CONTRACTS

        Section 2.01.        Conveyance of Contracts.

        (a) In consideration of the Issuer's delivery to or upon the order of
WFAL of the WFAL Certificates and $________, which amount equals the Outstanding
Principal Balance of WFAL Contracts less the Spread Account Initial Deposit
effective upon the Closing Date, WFAL hereby sells, grants, transfers, assigns
and otherwise conveys to the Issuer, without recourse (subject to the
obligations herein), all of its right, title and interest (exclusive of (i) the
Retained Yield in respect of the WFAL Contracts, and (ii) the amount, if any,
allocable to any rebatable insurance premium financed by any WFAL Contract) in,
to and under the WFAL Contracts (which Contracts shall be listed in the Schedule
of Contracts), including, without limitation, all payments of Monthly P&I
(exclusive of the Retained Yield, which shall be paid directly to WFAL as
provided in Section 5.02(b)) due on or after ______ 1, 2000 (excluding the
amount allocable to principal and interest due prior to ______ 1, 2000); all Net
Liquidation Proceeds and Net Insurance Proceeds with respect to any Financed
Vehicle to which a Contract relates received on or after ______ 1, 2000 and all
other proceeds received on or in respect of such Contracts (other than payments
of Monthly P&I due prior to ______ 1, 2000), and any and all security interests
in the Financed Vehicles; the Contract Documents relating to the Contracts
(except the Contract Documents for Contracts which have been the subject of a
Full Prepayment received on or after ______ 1, 2000 but no later than one
Business Day prior to the Closing Date, in lieu of which WFAL shall have
deposited in or credited to the Collection Account on or prior to the Closing
Date an amount equal to such Full Prepayment); and all proceeds in any way
delivered with respect to the foregoing, all rights to payments with respect to
the foregoing and all rights to enforce the foregoing, provided that $ _______
of the principal amount of Contract number __________ is retained by WFAL.

        In consideration of the Issuer's delivery to or upon the order of WFSRC
of the WFSRC Certificate and $________, which amount equals Outstanding
Principal Balance of WFSRC Contracts, effective upon the Closing Date, WFSRC
hereby respectively transfers and assigns to the Issuer, without recourse
(subject to the obligations herein), all of its right, title and interest
(exclusive of (i) the Retained Yield in respect of the WFSRC Contracts, and (ii)
the amount, if any, allocable to any rebatable insurance premium financed by any
WFSRC Contract) in, to and under the WFAL Contracts (which Contracts shall be
listed in the Schedule of Contracts), including, without limitation, all
payments of Monthly P&I (exclusive of the Retained Yield, which shall be paid
directly to WFSRC as provided in Section 5.02(b)) due on or after ______ 1, 2000
(excluding the amount allocable to principal and interest due prior to ______ 1,
2000); all Net Liquidation Proceeds and Net Insurance Proceeds with respect to
any Financed Vehicle to which a Contract relates received on or after ______ 1,
2000 and all other proceeds received on or in respect of such Contracts (other
than payments of Monthly P&I due prior to ______ 1, 2000), and any and all
security interests in the Financed Vehicles; the Contract Documents relating to
the Contracts (except the Contract Documents for Contracts which have been the
subject of a Full Prepayment received on or after ______ 1, 2000 but no later
than one Business Day prior to the Closing Date, in lieu of which WFSRC shall
have deposited in or credited to the Collection Account on or prior to the
Closing Date an amount equal to such Full Prepayment);

                                       25
<PAGE>   31

and all proceeds in any way delivered with respect to the foregoing, all rights
to payments with respect to the foregoing and all rights to enforce the
foregoing, provided that $ _______ of the principal amount of Contract number
__________ is retained by WFSRC.

        (b) The Bank has filed or caused to be filed UCC-1 financing statements,
executed by the Bank as debtor, naming WFS as secured party and describing the
Contracts originated by the Bank and transferred to WFS on or prior to the
Closing Date as collateral with the Office of the Secretary of State of the
State of California. WFS has filed or caused to be filed with the office of the
Secretary of State of the State of California UCC-1 financing statements
executed by WFS as debtor, naming WFAL as secured party and describing the
Contracts as collateral. WFAL has filed or caused to be filed with the office of
the Secretary of State of the State of California UCC-1 financing statements
executed by WFAL as debtor, naming WFSRC as secured party and describing the
WFSRC Contracts as collateral. WFAL has caused to be filed UCC-1 financing
statements, executed by it as debtor, naming the Collateral Agent, on behalf of
the Insurer, as secured party and describing the WFAL Contracts as collateral,
with the Office of the Secretary of State of the State of California. WFSRC has
caused to be filed UCC-1 financing statements, executed by it as debtor, naming
the Collateral Agent, on behalf of the Insurer, as secured party and describing
the WFSRC Contracts as collateral, with the Office of the Secretary of State of
the State of Nevada. The grant of a security interest to the Collateral Agent on
behalf of the Insurer and the rights of the Collateral Agent and the Insurer in
respect of such security interest shall be governed by the Insurance Agreement.
WFAL has filed or caused to be filed UCC-1 financing statements, executed by
WFAL as debtor, naming the Owner Trust as secured party and describing the WFAL
Contracts being sold by it to the Owner Trust as collateral, with the Office of
the Secretary of State of the State of California. WFSRC has filed or caused to
be filed UCC-1 financing statements, executed by WFSRC as debtor, naming the
Owner Trust as secured party and describing the WFSRC Contracts being sold by it
to the Owner Trust as collateral, with the Office of the Secretary of State of
the State of Nevada. The Owner Trust has filed or caused to be filed UCC-1
financing statements, executed by the Owner Trust as debtor, naming the
Indenture Trustee, on behalf of the Noteholders, as secured party and describing
the Contracts as collateral, with the office of the Secretary of State of the
States of Delaware and California. The grant of a security interest to the
Indenture Trustee and the rights of the Indenture Trustee in the Contracts shall
be governed by the Indenture. From time to time, the Master Servicer shall cause
to be taken such actions as are necessary to continue the perfection of the
respective interests of the Indenture Trustee, the Owner Trust and the
Collateral Agent on behalf of the Insurer in the Contracts and to continue the
first priority security interest of the Indenture Trustee (subject to the
security interest of the Insurer pursuant to the Insurance Agreement) in the
Financed Vehicles and their proceeds (other than, as to such priority, any
statutory lien arising by operation of law after the Closing Date which is prior
to such interest), including, without limitation, the filing of financing
statements, amendments thereto or continuation statements and the making of
notations on records or documents of title.

        If any change in the name, identity or corporate structure of a Seller
or WFS or the relocation of the chief executive office of any of them would make
any financing or continuation statement or notice of lien filed under this
Agreement or the other Basic Documents seriously misleading within the meaning
of applicable provisions of the UCC or any title statute, the Master Servicer,
within the time period required by applicable law, shall file such financing
statements or amendments as may be required to preserve and protect the
interests of the

                                       26
<PAGE>   32

Indenture Trustee, the Owner Trustee, the Securityholders and the Insurer in the
Contracts, Financed Vehicles and the proceeds thereof. Promptly thereafter, the
Master Servicer shall deliver to the Indenture Trustee, the Owner Trustee and
the Insurer an Opinion of Counsel stating that, in the opinion of such counsel,
all financing statements or amendments necessary fully to preserve and protect
the interests of the Indenture Trustee, the Owner Trustee, Securityholders and
the Insurer in the Contracts, Financed Vehicles and the proceeds thereof have
been filed, and reciting the details of such filings.

        During the term of this Agreement, each Seller and WFS shall each
maintain its chief executive office in one of the states of the United States,
other than Louisiana or Tennessee.

        The Master Servicer shall pay all reasonable costs and disbursements in
connection with the perfection and the maintenance of perfection, as against all
third parties, of the Indenture Trustee's right, title and interest in and to
the Contracts and in connection with maintaining the first priority security
interest (subject to the security interest of the Insurer pursuant to the
Insurance Agreement) in the Financed Vehicles and the proceeds thereof.

                                       27
<PAGE>   33

                                  ARTICLE THREE

                                  THE CONTRACTS

        Section 3.01. Representations and Warranties of the Sellers. Each Seller
hereby jointly and severally makes the following representations and warranties
on which (i) the Issuer is deemed to have relied in acquiring the Contracts and
(ii) the Insurer is deemed to have relied in issuing the Note Policy. Such
representations and warranties speak as of the execution and delivery of this
Agreement and as of the Closing Date, but shall survive the sale, transfer and
assignment of the Contracts to the Issuer and the pledge thereof to the
Indenture Trustee pursuant to the Indenture.

        (a) As to each Seller:

               (i) Organization and Good Standing. The Seller is duly organized
        and validly existing as a corporation in good standing under the laws of
        the State of California, with power and authority to own its properties
        and to conduct its business, and has the corporate power, authority and
        legal right to acquire and own the Contracts.

               (ii) Due Qualification. The Seller is duly qualified to do
        business as a foreign corporation in good standing, and shall have
        obtained all necessary licenses and approvals, in all jurisdictions in
        which the ownership or lease of property or the conduct of its business
        shall require such qualifications.

               (iii) Power and Authority. The Seller has the corporate power and
        authority to execute and deliver this Agreement and to carry out its
        terms; the Seller has full power and authority to sell and assign the
        property to be sold and assigned to and deposited with the Issuer, and
        has duly authorized such sale and assignment to the Issuer by all
        necessary corporate action; and the execution, delivery and performance
        of this Agreement has been duly authorized by the Seller by all
        necessary corporate action.

               (iv) Binding Obligation. This Agreement constitutes (A) a valid
        sale, transfer and assignment of the Contracts, enforceable against
        creditors of and purchasers from the Seller and (B) a legal, valid and
        binding obligation of the Seller enforceable in accordance with its
        terms, except as such enforceability may be limited by bankruptcy,
        insolvency, reorganization or other similar laws affecting the
        enforcement of creditors' rights in general and by general principles of
        equity, regardless of whether such enforceability shall be considered in
        a proceeding in equity or at law.

               (v) No Violation. The consummation of the transactions
        contemplated by this Agreement and the fulfillment of the terms hereof
        do not conflict with, result in any breach of any of the terms and
        provisions of, or constitute (with or without notice or lapse of time) a
        default under, the articles of incorporation or bylaws of the Seller, or
        any indenture, agreement or other instrument to which the Seller is a
        party or by which it is bound; nor result in the creation or imposition
        of any Lien upon any of its properties pursuant to the terms of any such
        indenture, agreement or other instrument (other than pursuant to the
        Basic Documents to which the Seller is a party); nor violate any law or,
        to

                                       28
<PAGE>   34

        the best of the Seller's knowledge, any order, rule or regulation
        applicable to the Seller of any court or of any federal or state
        regulatory body, administrative agency or other governmental
        instrumentality having jurisdiction over the Seller or its properties.

               (vi) No Proceedings. There are no proceedings or investigations
        pending, or to the Seller's best knowledge, threatened, before any
        court, regulatory body, administrative agency or other governmental
        instrumentality having jurisdiction over the Seller or its properties:
        (A) asserting the invalidity of this Agreement or any of the other Basic
        Documents, the Notes or the Certificates, (B) seeking to prevent the
        issuance of the Notes or the Certificates or the consummation of any of
        the transactions contemplated by this Agreement or any of the other
        Basic Documents, (C) seeking any determination or ruling that might
        materially and adversely affect the performance by the Seller of its
        obligations under, or the validity or enforceability of, this Agreement,
        any of the other Basic Documents, the Notes or the Certificates or (D)
        which might adversely affect the federal or state income tax attributes
        of the Notes or the Certificates.

        (b) As to each Contract or all of the Contracts, as the case may be:

               (i) Schedule of Contracts. The information pertaining to such
        Contract set forth in the related Schedule of Contracts was true and
        correct in all material respects at the Closing Date and the
        calculations of the Scheduled Balances appearing in such Schedule of
        Contracts for each such Contract at the Closing Date and at each
        Distribution Date thereafter prior to the related Maturity Date have
        been performed in accordance with this Agreement and are accurate.

               (ii) Security Interests. As of the Closing Date, such Contract
        granted a valid and enforceable first priority security interest in
        favor of WFS (or to the Bank, a Dealer or a Third Party Lender, which
        security interest has been assigned to WFS) in the related Financed
        Vehicle, and such security interest has been duly perfected and is prior
        to all other liens upon and security interests in such Financed Vehicle
        which now exist or may hereafter arise or be created (except, as to
        priority, for any lien for unpaid taxes or unpaid storage or repair
        charges which may arise after the Closing Date).

               (iii) Title Documents. (A) If the related Financed Vehicle was
        originated in a state in which notation of a security interest on the
        Title Document is required or permitted to perfect such security
        interest, the Title Document for such Financed Vehicle shows, or if a
        new or replacement Title Document is being applied for with respect to
        such Financed Vehicle the Title Document will be received within 180
        days of the Closing Date and will show WFS named as the original secured
        party under the related Contract as the holder of a first priority
        security interest in such Financed Vehicle, and (B) if the related
        Financed Vehicle was originated in a state in which the filing of a
        financing statement under the UCC is required to perfect a security
        interest in motor vehicles, such filings or recordings have been duly
        made and show WFS named as the original secured party under the related
        Contract, and in either case, the Indenture Trustee and the Owner
        Trustee have the same rights as such secured party has or would have (if
        such secured party were still the owner of the Contract) against all
        parties claiming an interest in such Financed Vehicle. With respect to
        each Contract for which the Title

                                       29
<PAGE>   35

        Document has not yet been returned from the Registrar of Titles, WFS has
        received written evidence from the related Dealer that such Title
        Document showing WFS as first lienholder has been applied for.

               (iv) Title to the Contracts. Immediately prior to the issuance of
        the Notes and the Certificates, the Seller had good and indefeasible
        title to and was the sole owner of each Contract to be transferred to
        the Issuer pursuant to Section 2.01 free of liens, claims, encumbrances
        and rights of others and, upon transfer of such Contract to the Issuer
        pursuant to Section 2.01, the Issuer will have good and indefeasible
        title to and will be the sole owner of such Contract free of liens,
        encumbrances and rights of others, except for the Lien of the Indenture
        Trustee under the Indenture and the security interest granted to the
        Insurer under the Insurance Agreement.

               (v) Current in Payment. As of the Cut-Off Date, such Contract is
        no more than 30 days delinquent in payment as to all or any portion of
        any installment of Monthly P&I.

               (vi) Tax Liens. As of the Closing Date, there is no lien against
        the related Financed Vehicle for delinquent taxes.

               (vii) Rescission, Offset, Etc. As of the Closing Date, there is
        no right of rescission, offset, defense or counterclaim to the
        obligation of the Obligor to pay the unpaid principal or interest due
        under such Contract; the operation of the terms of such Contract or the
        exercise of any right thereunder will not render such Contract
        unenforceable in whole or in part or subject to any right of rescission,
        offset, defense or counterclaim, and no such right of rescission,
        offset, defense or counterclaim has been asserted.

               (viii) Mechanics' Liens. As of the Closing Date, there are no
        liens or claims for work, labor, material or storage affecting the
        related Financed Vehicle which are or may become a lien prior to or
        equal with the security interest granted by such Contract.

               (ix) Compliance with Laws. Such Contract, and the sale of the
        Financed Vehicle sold thereunder, complied, at the time it was made, in
        all material respects with all applicable state and federal laws (and
        regulations thereunder), including without limitation usury, equal
        credit opportunity, fair credit reporting, truth-in-lending or other
        similar laws, the Federal Trade Commission Act, and applicable state
        laws regulating retail installment sales contracts and loans in general
        and motor vehicle retail installment contracts and loans in particular;
        and the consummation of the transactions herein contemplated, including,
        without limitation, the transfer of ownership of the Contracts to the
        Issuer and the receipt of interest by the Securityholders, will not
        involve the violation of any applicable state or federal law.

               (x) Valid and Binding. Such Contract is the legal, valid and
        binding obligation of the Obligor thereunder and is enforceable in
        accordance with its terms, except as enforcement may be limited by
        bankruptcy, insolvency or similar laws affecting the enforcement of
        creditors' rights generally; all parties to such Contract had full legal
        capacity to execute and deliver such Contract and all other documents
        related thereto and

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<PAGE>   36

        to grant the security interest purported to be granted thereby; and the
        terms of such Contract have not been waived or modified in any respect,
        except by instruments that are part of the Contract Documents.

               (xi) Enforceability. Such Contract contains customary and
        enforceable provisions such as to render the rights and remedies of the
        holder or assignee thereof adequate for the realization against the
        collateral of the benefits of the security, subject, as to
        enforceability, to bankruptcy, insolvency, reorganization or similar
        laws affecting the enforcement of creditors' rights generally.

               (xii) No Default. As of the Cut-Off Date, there was no default,
        breach, violation or event permitting acceleration existing under such
        Contract (except payment delinquencies permitted by subparagraph (v)
        above) and no event which, with notice and the expiration of any grace
        or cure period, would constitute such a default, breach, violation or
        event permitting acceleration under such Contract, and the Seller has
        not waived any such default, breach, violation or event permitting
        acceleration except payment delinquencies permitted by subparagraph (v)
        above.

               (xiii) Insurance. At the Closing Date, the related Financed
        Vehicle will be covered by (A) a comprehensive and collision insurance
        policy (i) in an amount at least equal to the lesser of (a) its actual
        cash value or (b) the principal amount due from the Obligor under the
        related Contract, (ii) naming WFS as a loss payee and (iii) insuring
        against loss and damage due to fire, theft, transportation, collision
        and other risks generally covered by comprehensive and collision
        coverage or (B) an LDI Policy; provided, however, that if such Financed
        Vehicle has an unpaid principal balance of less than $4,000.00 or the
        related Contract has six or fewer months remaining before its Maturity
        Date, it will not be required to be covered by the insurance described
        in this subparagraph. Each of the Sellers, WFS and the Master Servicer
        shall at all times comply with all of the provisions of such insurance
        policies and the LDI Policy applicable to such Financed Vehicle.

               (xiv) Acquisition of Contract. Such Contract was either acquired
        by WFS (or its predecessor in interest) from a Dealer or a Third Party
        Lender with which it ordinarily does business or the Bank or originated
        directly by WFS in the ordinary course of its business, and no adverse
        selection procedures have been utilized in selecting such Contract from
        all other similar contracts purchased by the Seller.

               (xv) Scheduled Payments. As of the Cut-Off Date, scheduled
        payments under such Contract are applied in accordance with the Rule of
        78's method or the simple interest method and are due monthly in level
        payments through its Maturity Date sufficient to fully amortize the
        principal balance of such Contract by its Maturity Date, assuming timely
        payment by Obligors on Simple Interest Contracts, except that the
        payment in the first or last month in the life of the Contract may be
        minimally different from the level payment.

               (xvi) One Original. There is only one original of such Contract
        and such original, together with all other Contract Documents, is being
        held by the Master Servicer

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<PAGE>   37

        pursuant to Section 3.04. Each original Contract has been segregated and
        marked to show the Issuer as owner thereof, unless the Insurer has
        waived the requirement for such segregation and marking by notice in
        writing to the Owner Trustee, the Indenture Trustee and the Master
        Servicer.

               (xvii) Characteristics. With respect to each WFAL Contract, at
        the Cut-Off Date such Contract had (i) an Outstanding Principal Balance
        of not less than $_____ nor more than $_______, (ii) an original term
        not less than _ months nor greater than __ months, (iii) a remaining
        maturity of not less than _ months nor greater than __ months, and (iv)
        an APR of not less than ____%.

               (xviii) Characteristics. With respect to each WFSRC Contract, at
        the Cut-Off Date such Contract had (i) an Outstanding Principal Balance
        of not less than $_____ nor more than $_______, (ii) an original term
        not less than _ months nor greater than __ months, (iii) a remaining
        maturity of not less than _ months nor greater than __ months, and (iv)
        an APR of not less than ____%.

               (xix) Identification. The Master Servicer and WFS have clearly
        marked their electronic records to indicate that such Contract is owned
        by the Issuer.

               (xx) Maturity. At the Cut-Off Date such Contract did not have a
        Maturity Date later than the 90th day prior to the end of the Due Period
        immediately preceding the Certificate Final Distribution Date.

               (xxi) Scheduled Balance. At the Cut-Off Date the initial
        Scheduled Balance of such Contract was not greater than the purchase
        price of the related vehicle.

               (xxii) Location of Contract Files. The Contract Files are kept at
        one or more of the locations listed in Schedule B hereto.

               (xxiii) Finance Charge. With respect to each WFAL Contract, such
        Contract provides for the payment of a finance charge calculated at its
        APR based on the Rule of 78's or the simple interest method and such APR
        shall be equal to or greater than ___% for Rule of 78's Contracts and
        equal to or greater than ____% for Simple Interest Contracts.

               (xxiv) Finance Charge. With respect to each WFSRC Contract, such
        Contract provides for the payment of a finance charge calculated at its
        APR based on the Rule of 78's or the simple interest method and such APR
        shall be equal to or greater than ___% for Rule of 78's Contracts and
        equal to or greater than ____% for Simple Interest Contracts.

               (xxv) Bank and Third Party Lender Originations. With respect to
        WFAL Contracts, the aggregate Scheduled Balance as of the Cut-Off Date
        of such Contracts purchased or originated by the Bank and Third Party
        Lenders is not more than approximately ____% of the aggregate Scheduled
        Balance of all WFAL Contracts as of such date.

                                       32
<PAGE>   38

               (xxvi) Bank and Third Party Lender Originations. With respect to
        WFSRC Contracts, the aggregate Scheduled Balance as of the Cut-Off Date
        of such Contracts purchased or originated by the Bank and Third Party
        Lenders is not more than approximately ____% of the aggregate Scheduled
        Balance of all WFSRC Contracts as of such date.

               (xxvii) Simple Interest Contracts. As of the Cut-Off Date,
        approximately _____% of the aggregate Scheduled Balances of the WFAL
        Contracts shall be Simple Interest Contracts and approximately ____% of
        the aggregate Scheduled Balances of the Contracts shall be Rule of 78's
        Contracts.

               (xxviii) Simple Interest Contracts. As of the Cut-Off Date,
        approximately _____% of the aggregate Scheduled Balances of the WFSRC
        Contracts shall be Simple Interest Contracts and approximately ____% of
        the aggregate Scheduled Balances of the Contracts shall be Rule of 78's
        Contracts.

               (xxix) New or Used Vehicles. Approximately _____% of the WFAL
        Contracts by Cut-Off Date Aggregate Scheduled Balance shall be new
        vehicles and approximately _____% shall be used vehicles.

               (xxx) New or Used Vehicles. Approximately _____% of the WFSRC
        Contracts by Cut-Off Date Aggregate Scheduled Balance shall be new
        vehicles and approximately _____% shall be used vehicles.

               (xxxi) States of Origination. Approximately _____% of the WFAL
        Contracts by Cut-Off Date Aggregate Scheduled Balance were originated by
        WFS or the Bank in California and approximately ____% of the WFAL
        Contracts by Cut-Off Date Aggregate Scheduled Balance were originated in
        states other than California.

               (xxxii) States of Origination. Approximately _____% of the WFSRC
        Contracts by Cut-Off Date Aggregate Scheduled Balance were originated by
        WFS or the Bank in California and approximately ____% of the WFSRC
        Contracts by Cut-Off Date Aggregate Scheduled Balance were originated in
        states other than California.

               (xxxiii) No Government Entity Obligors. Each Contract shall have
        an Obligor that is not a local, state or federal governmental entity.

               (xxxiv) Transfer of Contracts. On the Closing Date, WFSRC will
        transfer to the Trust Contracts comprising __% of the Cut-Off Date
        Aggregate Principal Balance of Contracts and WFAL will sell to the Trust
        Contracts comprising __% of the Cut-Off Date Aggregate Principal Balance
        of Contracts.

        Section 3.02. Purchase of Certain Contracts. The representations and
warranties of the Sellers set forth in Section 3.01 shall survive delivery of
the Contract Documents to the Owner Trustee and shall continue until the
termination of this Agreement. Upon discovery by a Seller, the Master Servicer
or the Owner Trustee, as the case may be, that any of such representations and
warranties was incorrect as of the time made or that any of the Contract
Documents relating to any such Contract has not been properly executed by the
Obligor or contains a material defect

                                       33
<PAGE>   39

or has not been received by the Owner Trustee, such Person making such discovery
shall give prompt notice to the other such Persons. If any such defect,
incorrectness or omission materially and adversely affects the interest of the
Noteholders, the Certificateholders, the Indenture Trustee, the Owner Trustee,
the Issuer or the Insurer, the related Seller shall, within 90 days after
discovery thereof or receipt of notice thereof, cure the defect or eliminate or
otherwise cure the circumstances or condition in respect of which such
representation or warranty was incorrect as of the time made. If such Seller is
unable to do so, the Seller shall purchase such Contract on the Master Servicer
Report Date next succeeding the end of such 90-day period from the Issuer for an
amount equal to the related Repurchase Amount in the manner set forth in Section
5.04. Upon any such purchase, the Owner Trustee shall execute and deliver such
instruments of transfer or assignment, in each case without recourse, as shall
be necessary to vest in the related Seller title to any Contract purchased
hereunder. The sole remedy of the Issuer, the Owner Trustee, the Indenture
Trustee or the Securityholders with respect to a breach of a Seller's
representations and warranties pursuant to Section 3.01 shall be to require such
Seller to enforce the Master Servicer's obligation to repurchase Contracts
pursuant to Section 4.07; provided, however, that the Sellers shall jointly and
severally indemnify the Owner Trustee, the Indenture Trustee, the Insurer, the
Issuer and the Securityholders against all costs, expenses, losses, damages,
claims and liabilities, including reasonable fees and expenses of counsel, which
may be asserted against or incurred by any of them as a result of third-party
claims arising out of the events or facts giving rise to such breach.

        Section 3.03. Custody of Contract Files. Subject to Sections 3.07, 7.04
and 8.01, the Owner Trustee hereby irrevocably appoints the Master Servicer, and
the Master Servicer hereby accepts such appointment, to act as the agent of the
Owner Trustee as custodian of the Contract Documents and any and all other
documents that the Master Servicer shall keep on file, in accordance with its
customary procedures, relating to a Contract, Obligor or Financed Vehicle, which
are hereby constructively delivered to the Owner Trustee with respect to each
Contract:

               (i) the original of the Contract;

               (ii) documents evidencing the existence of physical damage
        insurance covering the Financed Vehicles;

               (iii) the original credit application fully executed by the
        Obligor; and

               (iv) the original certificate of title or such documents that the
        Master Servicer shall keep on file, in accordance with its customary
        procedures, evidencing the security interest of the Master Servicer in
        the Financed Vehicle.

        (b) The Master Servicer shall maintain the Contract Documents held by it
(by itself or through one or more Subservicers) in a file area physically
separate from the other installment sales contracts and installment loans owned
or serviced by it or any of its Affiliates, which area shall be clearly marked
to indicate the Trust as the owner of, and the security interest of the
Indenture Trustee and the Insurer in, the Contract Documents and shall mark the
Contracts in the same manner; except that if the Indenture Trustee and the
Insurer have waived the requirement for such segregation and marking by notice
in writing to the Owner Trustee, the Indenture Trustee and the Master Servicer,
such file area may contain contract documents for other motor

                                       34
<PAGE>   40

vehicle retail installment sales contracts and installment loans owned or
serviced by the Master Servicer.

        The Master Servicer shall cause the electronic record of the Contracts
maintained by it to be clearly marked to indicate that the Contracts have been
sold to the Trust and shall not in any way assert or claim an ownership interest
in the Contracts. It is intended by the Master Servicer's and the Sellers'
agreement pursuant to this Section that the Owner Trustee shall be deemed to
have possession of the Contract Documents for purposes of Section 9-305 of the
UCC of the state in which the Contract Documents are located.

        Section 3.04. Duties of Master Servicer as Custodian.

        (a) Safekeeping. The Master Servicer shall hold the Contract Files on
behalf of the Owner Trustee, the Indenture Trustee and the Insurer for the use
and benefit of all present and future Securityholders, and maintain such
accurate and complete accounts, records and computer systems pertaining to each
Contract File as shall enable the Issuer to comply with this Agreement. In
performing its duties as custodian the Master Servicer shall act with reasonable
care, using that degree of skill and attention that the Master Servicer
exercises with respect to the files relating to all comparable automobile
contracts that the Master Servicer owns or services for itself or others. The
Master Servicer shall conduct, or cause to be conducted, periodic physical
inspections of the Contract Files held by it under this Agreement and of the
related accounts, records and computer systems, and shall maintain them in such
a manner as shall enable the Owner Trustee, the Indenture Trustee and the
Insurer to verify the accuracy of the Master Servicer's record keeping. The
Master Servicer shall promptly report to the Owner Trustee, the Indenture
Trustee and the Insurer any failure on its part to hold the Contract Files and
maintain its accounts, records and computer systems as herein provided and shall
promptly take appropriate action to remedy any such failure.

        (b) Maintenance of and Access to Records. The Master Servicer shall
maintain each Contract File at one of its offices specified in Schedule B hereto
or at such other location as shall be specified to the Owner Trustee, the
Indenture Trustee and the Insurer by 30 days' prior written notice. The Master
Servicer shall permit the Owner Trustee, the Indenture Trustee and the Insurer
or their respective duly authorized representatives, attorneys or auditors to
inspect the Contract Files and the related accounts, records and computer
systems maintained by the Master Servicer at such times as such Persons may
request.

        (c) Release of Documents. Upon instruction from the Indenture Trustee (a
copy of which shall be furnished to the Owner Trustee and the Insurer), the
Master Servicer shall release any Contract File to the Indenture Trustee, the
Indenture Trustee's agent, or the Indenture Trustee's designee, as the case may
be, at such place or places as the Indenture Trustee may designate, as soon as
practicable.

        (d) Monthly Reports. On the tenth Business Day of each month, other than
a month in which a Distribution Date occurs, commencing with the month next
succeeding the month of the Closing Date, the Master Servicer shall mail to the
Indenture Trustee and the Owner Trustee, by first class mail, a certificate of a
Servicing Officer stating (i) the Contract Number and outstanding principal
balance of each Contract that has become a Liquidated Contract since the

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<PAGE>   41

Business Day next preceding the date of the last certificate delivered pursuant
to this subsection (or since the Closing Date in the case of the first such
certificate); (ii) that all proceeds received in respect of such Contract have
been deposited in or credited to the Collection Account or Holding Account as
required by Section 5.02; (iii) that, if such Contract has been the subject of a
Full Prepayment pursuant to clause (i) of the definition of the term "Full
Prepayment" or is a Liquidated Contract pursuant to clause (iii) of the
definition of the term "Liquidated Contract," all proceeds received in respect
thereof have been deposited in or credited to the Collection Account or Holding
Account in accordance with Section 5.02; (iv) that, if such Contract has been
the subject of a Full Prepayment pursuant to clause (ii) of the definition of
the term "Full Prepayment," the correct Repurchase Amount has been deposited in
or credited to the Collection Account in accordance with Section 4.07 or 5.04;
(v) that, if such Contract is a Liquidated Contract pursuant to clause (ii) of
the definition of the term "Liquidated Contract," there have been deposited in
or credited to the Collection Account or Holding Account the related Net
Liquidation Proceeds in accordance with Section 5.02; (vi) the current Aggregate
Scheduled Balance; (vii) the total dollar amount of charged-off Contracts;
(viii) the total dollar amount of delinquent Contracts; (ix) the total dollar
amount of all Contracts in respect of which the related Financed Vehicles have
been repossessed but have not been liquidated; (x) the current Charge-off
Percentage; and (xi) the current Delinquency Percentage. The information called
for in clauses (vi) through (xi) above shall be presented as of the Business Day
next preceding the date of the last certificate so delivered.

        (e) Title Documents. The Master Servicer shall deliver to the Indenture
Trustee, the Owner Trustee and the Insurer (i) within 120 days of the Closing
Date, a schedule of Title Documents for Financed Vehicles which, as of the
Closing Date did not show the Master Servicer as first lienholder and (ii)
within 180 days of the Closing Date, a schedule of Title Documents for Financed
Vehicles which as of the date prior to such delivery do not show the Master
Servicer as first lienholder and as to which the Seller is obligated to
repurchase pursuant to the provisions hereof.

        Section 3.05. Instructions; Authority to Act. The Master Servicer shall
be deemed to have received proper instructions (a copy of which shall be
furnished to the Owner Trustee and the Insurer) with respect to the Contract
Files upon its receipt of written instructions signed by a Responsible Officer
of the Indenture Trustee.

        Section 3.06. Indemnification. Subject to Section 8.02, the Master
Servicer shall indemnify the Trust, the Owner Trustee, the Indenture Trustee,
the Insurer and the Securityholders for any and all liabilities, obligations,
losses, compensatory damages, payments, costs or expenses of any kind whatsoever
(including the reasonable fees and expenses of counsel) that may be imposed on,
incurred by or asserted against the Trust, the Owner Trustee, the Indenture
Trustee, the Insurer, the Noteholders or the Certificateholders as the result of
any improper act or omission in any way relating to the maintenance and custody
by the Master Servicer of the Contract Files, or the failure of the Master
Servicer to perform its duties and service the Contracts in compliance with the
terms of this Agreement; provided, however, that the Master Servicer shall not
be liable to the Owner Trustee for any portion of any such amount resulting from
the willful misfeasance, bad faith or negligence of the Owner Trustee and the
Master Servicer shall not be liable to the Indenture Trustee for any portion of
any such amount resulting from the willful misfeasance, bad faith or negligence
of the Indenture Trustee. The Master

                                       36
<PAGE>   42

Servicer shall also indemnify and hold harmless the Trust, the Trust Estate and
the Securityholders against any taxes that may be asserted at any time against
any of them with respect to the Contracts, including any sales, gross receipts,
general corporation, personal property, privilege or license taxes (but
exclusive of federal or other income taxes arising out of payments on the
Contracts) and the costs and expenses in defending against such taxes. The
Master Servicer shall immediately notify the Owner Trustee and the Indenture
Trustee if a claim is made by a third party with respect to the Contracts, shall
assume, with the consent of the Owner Trustee and the Indenture Trustee, the
defense of any such claim, pay all expenses in connection therewith, including
counsel fees, and shall promptly pay, discharge and satisfy any judgment or
decree which may be entered against it or the Trust.

        Section 3.07. Effective Period and Termination. The Master Servicer's
appointment as custodian shall become effective as of the Cut-Off Date and shall
continue in full force and effect until terminated under to this Section or
until the Class A-3 Final Distribution Date. If the Master Servicer shall resign
in accordance with the provisions of this Agreement or if all of the rights and
obligations of the Master Servicer shall have been terminated pursuant to
Section 8.01, the appointment of the Master Servicer as custodian shall be
terminated by the Indenture Trustee, by the Holders of Notes evidencing not less
than 51% of the Outstanding Amount of the Notes, by the Owner Trustee, by
Certificateholders evidencing not less than 51% of the aggregate Certificate
Percentage Interest, or by the Insurer, in the same manner as the Indenture
Trustee, the Owner Trustee, the Insurer or such Holders may terminate the rights
and obligations of the Master Servicer pursuant to Section 8.01. As soon as
practicable after any termination of such appointment, the Master Servicer
shall, at its own expense, deliver the Contract Files to the Owner Trustee or
its agent at such place or places as the Owner Trustee may reasonably designate
and shall cooperate in good faith to effect such delivery.

        Section 3.08. Nonpetition Covenant.

        (a) Neither the Sellers nor the Master Servicer shall petition or
otherwise invoke the process of any court or government authority for the
purpose of commencing or sustaining a case against the Trust under any federal
or state bankruptcy, insolvency or similar law or appointing a receiver,
liquidator, assignee, trustee, custodian, sequestrator or other similar official
of the Trust or any substantial part of its property, or ordering the winding up
or liquidation of the affairs of the Trust.

        (b) The Master Servicer shall not, nor cause a Seller to, petition or
otherwise invoke the process of any court or government authority for the
purpose of commencing or sustaining a case against the Seller under any federal
or state bankruptcy, insolvency or similar law or appointing a receiver,
liquidator, assignee, trustee, custodian, sequestrator or other similar official
of the Seller or any substantial part of its property, or ordering the winding
up or liquidation of the affairs of the Seller.

        Section 3.09. Collecting Title Documents Not Delivered at the Closing
Date. In the case of any Contract in respect of which written evidence from the
Dealer selling or transferring the related Financed Vehicle that the Title
Document for such Financed Vehicle showing the Master Servicer as first
lienholder has been applied for from the Registrar of Titles was delivered to
the Owner Trustee on the Closing Date in lieu of a Title Document, the Master
Servicer shall use its

                                       37
<PAGE>   43

best efforts to collect such Title Document from the Registrar of Titles as
promptly as possible. If such Title Document showing the Master Servicer as
first lienholder is not received by the Master Servicer or the related
Subservicer within 180 days after the Closing Date, then the representation and
warranty in Section 3.01(b)(iii) in respect of such Contract shall be deemed to
have been incorrect in a manner that materially and adversely affects the
Certificateholders.

        Section 3.10. Optional Repurchase of Contracts by the Holder of the
WFSRC Certificate.

        (a) On each Distribution Date as of which the WFSRC Aggregate Scheduled
Balance is equal to or less than 20% of the Cut-Off Date WFSRC Aggregate
Scheduled Balance, the Holder of the WFSRC Certificate shall have the option to
purchase the remaining WFSRC Contracts. Notice of the exercise of such option
shall be given by the Holder of the WFSRC Certificate to the Owner Trustee, the
Indenture Trustee and the Insurer not later than the 5th day of the month in
which such Distribution Date occurs. To exercise such option, the Holder of the
WFSRC Certificate shall, on the Business Day immediately preceding the related
Distribution Date, pay to the Indenture Trustee for the benefit of the
Securityholders, by deposit in the Collection Account, the Optional Repurchase
Payment. Upon such deposit of the Optional Repurchase Payment, the Owner Trustee
shall execute and deliver such instruments of transfer or assignment, in each
case without recourse, as shall be necessary to vest in the Holder of the WFSRC
Certificate title to any Contract purchased hereunder.

        (b) Upon the exercise of the Holder of the WFSRC Certificate of its
right to repurchase the WFSRC Contracts pursuant to Section 3.10(a), the
Optional Repurchase Payment will be distributed pursuant to Section 5.05.

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<PAGE>   44

                                  ARTICLE FOUR

                    ADMINISTRATION AND SERVICING OF CONTRACTS

     Section 4.01. Duties of Master Servicer. The Master Servicer, acting alone
and/or through one or more Subservicers as provided in this Section, shall, as
agent for the Indenture Trustee, the Owner Trustee and the Insurer, manage,
service, administer and make collections on the Contracts. The Master Servicer
agrees that its servicing of the Contracts shall be carried out in accordance
with customary and usual procedures of financial institutions which service
motor vehicle retail installment sales contracts and installment loans and, to
the extent more exacting, the procedures used by the Master Servicer in respect
of such contracts serviced by it for its own account. In accordance with the
foregoing, the Master Servicer may, whenever an Obligor has become delinquent or
the Master Servicer believes an Obligor may become delinquent, in order to
preserve the ultimate collectability of amounts due on a Contract, modify the
payment schedule on any Contract by reducing the APR on such Contract without
the consent of the Insurer or any Rating Agency; provided, however, that the new
APR shall not be less than the sum of (i) the Class A-4 Rate, (ii) the Servicing
Fee Percent and (iii) the Retained Yield Percent. In addition, in order to
preserve the Trust Estate, the Master Servicer may, without the consent of any
Rating Agency or the Insurer, reduce the principal amount of a Contract (i.e.,
write-down a portion of the principal amount due on such Contract and,
accordingly, lower the Monthly P&I on such Contract) to the extent funds are
available in the Spread Account to cover such reduction; provided, however, the
total amount of such modifications pursuant to the immediately preceding
sentence and this sentence and reductions (i) may not affect more than 1% of the
Original Pool Balance through the Class A-4 Final Distribution Date and (ii)
during each three-month period between Distribution Dates (or in the case of the
first Distribution Date, from the Cut-Off Date to such Distribution Date) shall
not affect Contracts having an aggregate Scheduled Balance greater than 10/100
of one percent of the Pool Balance at the beginning of such period. Any such
modifications or reductions exceeding such limits may be made only with the
consent of the Insurer and each Rating Agency. The Master Servicer may also
extend the Maturity Date on a Contract in accordance with Section 4.02. The
Master Servicer's duties shall include collection and posting of all payments,
responding to inquiries of Obligors on the Contracts, investigating
delinquencies, sending payment coupons to Obligors, reporting tax information to
Obligors, accounting for collections, furnishing monthly and annual statements
to the Indenture Trustee, the Owner Trustee and the Insurer with respect to
distributions and filing applicable U.S. tax returns for the Trust on an annual
basis, based on a tax year for the Trust that is the calendar year. The Master
Servicer shall have, subject to the terms hereof, full power and authority,
acting alone, and subject only to the specific requirements and prohibitions of
this Agreement, to do any and all things in connection with such managing,
servicing, administration and collection that it may deem necessary or
desirable; provided, however, that the Master Servicer shall commence
repossession efforts in respect of any Financed Vehicle respecting which the
related Contract is four or more months delinquent. Without limiting the
generality of the foregoing, but subject to the provisions of this Agreement,
the Master Servicer is authorized and empowered by the Indenture Trustee and the
Owner Trustee to execute and deliver, on behalf of itself, the Trust, the
Insurer, the Noteholders, the Certificateholders, the Indenture Trustee, the
Owner Trustee or any of them, any and all instruments of satisfaction or
cancellation, or of partial or full release or discharge, and all other
comparable instruments, with respect to the Contracts or to the Financed
Vehicles. The Owner Trustee shall furnish the Master

                                       39
<PAGE>   45

Servicer all documents necessary or appropriate to enable the Master Servicer to
carry out its servicing and administrative duties hereunder.

        On the Closing Date, the Master Servicer shall deliver to the Insurer,
the Indenture Trustee and the Owner Trustee a list of Servicing Officers
involved in, or responsible for, the administration and servicing of the
Contracts, which list shall from time to time be updated by the Master Servicer
on request of the Owner Trustee, the Indenture Trustee or the Insurer.

        The Master Servicer may enter into Subservicing Agreements with one or
more Subservicers approved by the Insurer for the servicing and administration
of certain of the Contracts (including holding the related Contract Files as
custodian). The Master Servicer shall notify each Rating Agency promptly if a
Subservicer is hired. References herein to actions taken or to be taken by the
Master Servicer in servicing the Contracts include actions taken or to be taken
by a Subservicer on behalf of the Master Servicer and the Insurer. Each
Subservicing Agreement will be upon such terms and conditions as are not
inconsistent with this Agreement and as the Master Servicer and the Subservicer
have agreed. With the approval of the Master Servicer and the Insurer, a
Subservicer may delegate its servicing obligations to third-party servicers, but
such Subservicer will remain obligated under the related Subservicing Agreement.
The Master Servicer and a Subservicer may enter into amendments thereto or
different forms of Subservicing Agreements and the form attached as Exhibit D
hereto is merely provided for information and shall not be deemed to limit in
any respect the discretion of the Master Servicer to modify or enter into
different Subservicing Agreements; provided, however, that any such amendments
or different forms shall be consistent with and not violate the provisions of
this Agreement or materially adversely affect the rights of Noteholders,
Certificateholders or the Insurer hereunder.

        The Master Servicer shall be entitled to terminate any Subservicing
Agreement that may exist in accordance with the terms and conditions of such
Subservicing Agreement and without any limitation by virtue of this Agreement;
provided, however, that in the event of termination of any Subservicing
Agreement by the Master Servicer or the related Subservicer, the Master Servicer
shall either act directly as servicer of the related Contract or enter into a
Subservicing Agreement with a successor Subservicer approved by the Insurer
which will be bound by the terms of the related Subservicing Agreement.

        Notwithstanding any Subservicing Agreement, any of the provisions of
this Agreement relating to agreements or arrangements between the Master
Servicer or a Subservicer or reference to actions taken through such Persons or
otherwise, the Master Servicer shall remain obligated and liable to the
Indenture Trustee, the Owner Trustee and the Securityholders for the servicing
and administering of the Contracts in accordance with the provisions of this
Agreement without diminution of such obligation or liability by virtue of such
Subservicing Agreements or arrangements or by virtue of indemnification from a
Subservicer and to the same extent and under the same terms and conditions as if
the Master Servicer alone were servicing and administering the Contracts. The
Master Servicer shall be entitled to enter into an agreement with a Subservicer
for indemnification of the Master Servicer and nothing contained in this
Agreement shall be deemed to limit or modify such indemnification.

        Any Subservicing Agreement that may be entered into and any other
transactions or servicing arrangements relating to the Contracts involving a
Subservicer or other Affiliate of the

                                       40
<PAGE>   46

Master Servicer in its capacity as such and not as an originator shall be deemed
to be between the Subservicer or such other Affiliate, as the case may be, and
the Master Servicer alone, and none of the Indenture Trustee, the Owner Trustee,
the Noteholders nor the Certificateholders shall be deemed parties thereto and
shall have no claims, rights, obligations, duties or liabilities with respect to
the Subservicer except as set forth in the immediately succeeding paragraph;
provided that the Insurer may rely upon the representations and warranties of
the Subservicer contained therein.

        In the event the Master Servicer shall for any reason no longer be a
servicer (including, but not limited to, by reason of an Event of Default), the
Indenture Trustee or its designee may, at the sole discretion of the Indenture
Trustee, thereupon assume all of the rights and obligations of such Master
Servicer under each Subservicing Agreement selected by the Indenture Trustee in
its sole discretion. In such event, the Indenture Trustee, its designee or the
successor servicer for the Indenture Trustee shall be deemed to have assumed all
of the Master Servicer's interest therein and to have replaced the Master
Servicer as a party to each such Subservicing Agreement to the same extent as if
such Subservicing Agreement had been assigned to the assuming party except that
the Master Servicer shall not thereby be relieved of any liability or
obligations under the Subservicing Agreement. The Master Servicer shall, upon
request of the Indenture Trustee but at the expense of the Master Servicer,
deliver to the assuming party all documents and records relating to each such
Subservicing Agreement and the Contracts then being serviced and an accounting
of amounts collected and held by it and otherwise use its best efforts to effect
the orderly and efficient transfer of the Subservicing Agreement to the assuming
party.

        On the Closing Date, the Master Servicer shall deposit in the Collection
Account (i) all installments of Monthly P&I due on or after the Cut-Off Date and
received by the Master Servicer at least two Business Days prior to the Closing
Date; (ii) the proceeds of each Prepayment (excluding any portion allocable to
principal and interest due before the Cut-Off Date) of any such Contract
received by the Master Servicer on or after the Cut-Off Date) but no later than
two Business Days prior to the Closing Date; and (iii) all Net Liquidation
Proceeds and Net Insurance Proceeds realized in respect of a Financed Vehicle at
least two Business Days prior to the Closing Date.

        Subject to Section 5.02 respecting deposits in the Holding Account, the
Master Servicer shall deposit in or credit to the Collection Account within two
Business Days of receipt all collections of Monthly P&I due on or after the
Cut-Off Date received by it on or in respect of the Contracts together with the
proceeds of all Prepayments and any accompanying interest; provided, however,
that, to the extent any such installment of Monthly P&I or any such Prepayment
proceeds are received in respect of a Contract as to which there is an
outstanding and unreimbursed Advance or Advances, such installment or proceeds
shall, to the extent of any such unreimbursed Advance or Advances, be retained
by the Master Servicer in reimbursement of itself. The Master Servicer shall
likewise deposit in the Collection Account within two Business Days of receipt
all Net Liquidation Proceeds and Net Insurance Proceeds after deducting
therefrom the amount of any outstanding and unreimbursed Advances made by it in
respect of such Contract. The foregoing notwithstanding, the Master Servicer
may, in the event it determines that it has made a Nonrecoverable Advance or
Advances, reimburse itself from unrelated installments of Monthly P&I or
Prepayment proceeds to the extent it shall, concurrently with the withholding of
any such installment or proceeds from deposit in or credit to the Collection

                                       41
<PAGE>   47

Account as required above, furnish to the Indenture Trustee, the Owner Trustee
and the Insurer a certificate of a Servicing Officer setting forth the basis for
the Master Servicer's determination, the amount of and Contract with respect to
which such Nonrecoverable Advance was made and the installment or installments
or other proceeds respecting which reimbursement has been taken. The foregoing
requirements for deposit in the Collection Account are exclusive, it being
understood that collections in the nature of late payment charges or extension
fees or collections allocable to payments to be made by the Master Servicer on
behalf of Obligors for payment of insurance premiums or similar items need not
be deposited in the Collection Account and may be retained by the Master
Servicer as additional servicing compensation or for application on behalf of
Obligors, as the case may be.

        Amounts otherwise required to be deposited in the Collection Account
pursuant to the immediately preceding paragraph shall instead be deposited by
the Master Servicer in the Holding Account to the extent such amounts are
payments of Monthly P&I due in one or more months subsequent to the end of the
Due Period during which such payments are received.

        With respect to payments of Monthly P&I made by Obligors to the Master
Servicer's lock box, the Master Servicer shall direct the Person maintaining the
lock box to deposit the amount collected on or in respect of the Contracts to
the Collection Account.

        In those cases where a Subservicer is servicing a Contract pursuant to a
Subservicing Agreement, the Master Servicer shall cause the Subservicer to remit
to the Master Servicer for deposit in the Collection Account, on a daily basis,
within two Business Days after receipt by the Subservicer, all proceeds of
Contracts and all Net Liquidation Proceeds and Net Insurance Proceeds received
by the Subservicer.

        In order to facilitate the servicing of the Contracts by the Master
Servicer, the Master Servicer shall retain, subject to and only to the extent
permitted by the provisions of this Agreement, all collections on or in respect
of the Contracts prior to the time they are remitted or credited, in accordance
with such provisions, to the Collection Account or the Holding Account, as the
case may be. The Master Servicer acknowledges that the unremitted collections on
the Contracts are part of the Trust Estate and the Master Servicer agrees to act
as custodian and bailee of the Indenture Trustee, the Owner Trustee and the
Insurer in holding such monies and collections. The Master Servicer agrees, for
the benefit of the Indenture Trustee, the Owner Trustee, the Securityholders and
the Insurer, to act as such custodian and bailee, and to hold and deal with such
monies and such collections, as custodian and bailee for the Indenture Trustee,
the Owner Trustee and the Insurer, in accordance with the provisions of this
Agreement.

        The Master Servicer shall retain all data (including, without
limitation, computerized records) relating directly to or maintained in
connection with the servicing of the Contracts at the address of the Master
Servicer set forth as Schedule B to this Agreement, at the office of any
Subservicer or, upon 15 days' notice to the Insurer, the Indenture Trustee and
the Owner Trustee, at such other place where the servicing offices of the Master
Servicer are located, and shall give the Indenture Trustee, the Owner Trustee
and the Insurer access to all data at all reasonable times. While a Servicer
Default shall be continuing, the Master Servicer shall, on demand of the
Indenture Trustee, the Owner Trustee or the Insurer, deliver or cause to be
delivered to the Indenture Trustee, the Owner Trustee or the Insurer, as the
case may be, all data (including,

                                       42
<PAGE>   48

without limitation, computerized records and,
to the extent transferable, related operating software) necessary for the
servicing of the Contracts and all monies collected by it and required to be
deposited in or credited to the Collection Account or the Holding Account, as
the case may be.

        Section 4.02. Collection of Contract Payments. The Master Servicer shall
use its best efforts to collect all payments called for under the terms and
provisions of the Contracts as and when the same shall become due and shall use
its best efforts to cause each Obligor to make all payments in respect of his or
her Contract to the Master Servicer. Consistent with the foregoing, the Master
Servicer may in its discretion (i) waive any late payment charges in connection
with delinquent payments on a Contract or prepayment charges and (ii) in order
to work out a default or an impending default due to the financial condition of
the Obligor, modify the payment schedule of a delinquent Contract (subject to
the next sentence) or extend the Maturity Date of a delinquent Contract by up to
90 days in the aggregate past the originally scheduled date of the last payment
on such Contract; provided that in the case of any extension granted pursuant to
clause (ii) the Master Servicer makes an Advance in respect of such extension
and in no event can the last payment on such Contract be extended beyond the
last day of the Due Period ending immediately prior to the Class A-4 Final
Distribution Date. The Master Servicer shall not extend the Maturity Date of a
Contract except as provided in clause (ii) of the preceding sentence and shall
not modify any Contracts except in accordance with the criteria and limitations
specified in Section 4.01.

        Section 4.03. Realization upon Defaulted Contracts and Liquidated
Contracts. The Master Servicer shall use its best efforts, consistent with the
servicing standard specified in Section 4.01, to repossess or otherwise convert
the ownership of the Financed Vehicle securing any Contract as to which no
satisfactory arrangements can be made for collection of delinquent payments.
Such servicing procedures may include reasonable efforts to realize upon any
recourse to Dealers and selling the Financed Vehicle at public or private sale.
In connection with such repossession or other conversion, the Master Servicer
shall follow such practices and procedures as it shall deem necessary or
advisable and as shall be normal and usual for prudent holders of motor vehicle
retail installment sales contracts and installment loans and as shall be in
compliance with all applicable laws, and, in connection with the repossession of
any Financed Vehicle or any Contract in default, may commence and prosecute any
proceedings in respect of such Contract in its own name or, if the Master
Servicer deems it necessary, in the name of the Owner Trustee or on behalf of
the Owner Trustee. The Master Servicer's obligations under this Section are
subject to the provision that, in the case of damage to a Financed Vehicle from
an uninsured cause, the Master Servicer shall not be required to expend its own
funds in repairing such Financed Vehicle unless it shall determine (i) that such
restoration will increase the proceeds of liquidation of the related Contract,
after reimbursement to itself for such expenses, and (ii) that such expenses
will be recoverable by it either as Liquidation Expenses or as expenses
recoverable under an applicable Insurance Policy. In the event that the Master
Servicer determines that, in its best judgment, further collection efforts by it
as to a Liquidated Contract will not result in the realization of additional Net
Liquidation Proceeds to the Trust, the Master Servicer may, in the name of the
Owner Trustee, and for the benefit of the Trust, sell the Liquidated Contract to
any party not affiliated with the Master Servicer free and clear of the rights
of the Trust. The Master Servicer shall be responsible for all other costs and
expenses incurred by it in connection with any action taken in respect of a
defaulted Contract; provided,

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<PAGE>   49

however, that it shall be entitled to reimbursement of such costs and expenses
to the extent they constitute Liquidation Expenses or expenses recoverable under
an applicable Insurance Policy. All Net Liquidation Proceeds, Net Insurance
Proceeds and proceeds of the sale of Contracts hereunder shall be deposited
directly in or credited to the Collection Account (without deposit in any
intervening account) to the extent required by Section 5.02.

        Section 4.04. Insurance. To the extent the Obligor fails to maintain a
comprehensive and collision insurance policy in an amount at least equal to the
lesser of (i) the actual cash value of the Financed Vehicle or (ii) the
principal amount due from the Obligor under the related Contract, the Master
Servicer shall obtain the LDI Policy in respect of such Financed Vehicle;
provided, however, that the Master Servicer shall not be required to maintain
such insurance in respect of any Financed Vehicle as to which the related
Contract has an unpaid principal balance of less than $4,000 or the related
Contract has six or fewer months remaining before its Maturity Date.

        Section 4.05. Maintenance of Security Interests in Financed Vehicles.
The Master Servicer shall take such steps as are necessary to maintain
continuous perfection and priority of the security interest created by each
Contract in the related Financed Vehicle, including but not limited to,
obtaining the execution by the Obligors and the recording, registering, filing,
re-recording, re-registering and refiling of all security agreements, financing
statements, continuation statements or other instruments as are necessary to
maintain the security interest granted by Obligors under the respective
Contracts. The Owner Trustee and the Indenture Trustee each hereby authorizes
the Master Servicer to take such steps as are necessary to re-perfect such
security interest on behalf of the Trust in the event of the relocation of a
Financed Vehicle or for any other reason.

        Section 4.06. Covenants, Representations and Warranties of Master
Servicer. The Master Servicer hereby makes the following covenants,
representations and warranties on which (i) the Issuer is deemed to have relied
in acquiring the Contracts and (ii) the Insurer is deemed to have relied in
issuing the Note Policy. Such covenants, representations and warranties speak as
of the execution and delivery of this Agreement and as of the Closing Date, but
shall survive the sale, transfer and assignment of the Contracts to the Issuer
and the pledge thereof to the Indenture Trustee pursuant to the Indenture.

        (a) The Master Servicer covenants as to the Contracts:

               (i) Lien in Force. The Financed Vehicle securing each Contract
        shall not be released from the lien granted by the Contract in whole or
        in part, except as contemplated herein.

               (ii) Impairment. The Master Servicer shall not impair the rights
        of the Noteholders and Certificateholders in the Contracts.

               (iii) Amendments. The Master Servicer shall not amend the terms
        of any Contract, except that extensions or modifications may be granted
        in accordance with Section 4.02.

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<PAGE>   50

               (iv) Transfers. The Master Servicer may consent to the sale or
        transfer by an Obligor of any Financed Vehicle if the original Obligor
        under the related Contract remains liable under such Contract and the
        transferee assumes all of the Obligor's obligations thereunder.

        (b) The Master Servicer represents, warrants, and covenants:

               (i) Organization and Good Standing. The Master Servicer (A) has
        been duly organized and is validly existing as a corporation in good
        standing under the laws of the State of California, (B) has qualified to
        do business as a foreign corporation and is in good standing in each
        jurisdiction where the character of its properties or the nature of its
        activities makes such qualification necessary, and (C) has full power,
        authority and legal right to own its property, to carry on its business
        as presently conducted and to enter into and perform its obligations
        under this Agreement.

               (ii) Power and Authority. The execution and delivery by the
        Master Servicer of this Agreement are within the corporate power of the
        Master Servicer and have been duly authorized by all necessary corporate
        action on the part of the Master Servicer. Neither the execution and
        delivery of this Agreement, nor the consummation of the transactions
        herein contemplated, nor compliance with the provisions hereof, will
        conflict with or result in a breach of, or constitute a default under,
        any of the provisions of any law, governmental rule, regulation,
        judgment, decree or order binding on the Master Servicer or its
        properties or the articles of incorporation or bylaws of the Master
        Servicer, or any of the provisions of any indenture, mortgage, contract
        or other instrument to which the Master Servicer is a party or by which
        it is bound or result in the creation or imposition of any lien, charge
        or encumbrance upon any of its property pursuant to the terms of any
        such indenture, mortgage, contract or other instrument.

               (iii) Governmental Consents. The Master Servicer is not required
        to obtain the consent of any other party or consent, license, approval
        or authorization, or registration or declaration with, any governmental
        authority, bureau or agency in connection with the execution, delivery,
        performance, validity or enforceability of this Agreement, except (in
        each case) such as have been obtained and are in full force and effect.

               (iv) Binding Obligation. This Agreement has been duly executed
        and delivered by the Master Servicer and, assuming the due
        authorization, execution and delivery thereof by the Owner Trustee and
        the Indenture Trustee, constitutes a legal, valid and binding instrument
        enforceable against the Master Servicer in accordance with its terms
        (subject to applicable bankruptcy and insolvency laws and other similar
        laws affecting the enforcement of creditors' rights generally).

               (v) No Proceedings. There are no actions, suits or proceedings
        pending or, to the knowledge of the Master Servicer, threatened against
        or affecting the Master Servicer, before or by any court, administrative
        agency, arbitrator or governmental body with respect to any of the
        transactions contemplated by this Agreement, or which will, if
        determined adversely to the Master Servicer, materially and adversely
        affect it or its business, assets, operations or condition, financial or
        otherwise, or adversely affect the Master

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<PAGE>   51

        Servicer's ability to perform its obligations hereunder. The Master
        Servicer is not in default with respect to any order of any court,
        administrative agency, arbitrator or governmental body so as to
        materially and adversely affect the transactions contemplated by the
        above-mentioned documents.

               (vi) Other Consents. The Master Servicer has obtained or made all
        necessary consents, approvals, waivers and notifications of creditors,
        lessors and other nongovernmental persons, in each case in connection
        with the execution and delivery of, and the consummation of the
        transactions contemplated by, this Agreement.

        Section 4.07. Repurchase of Contracts upon Breach of Covenant. The
Master Servicer or the Owner Trustee shall inform the other party and the
Indenture Trustee and the Insurer promptly, in writing, upon the discovery of
any breach pursuant to Section 4.02, 4.05 or 4.06. Unless the breach shall have
been cured within 30 days following such discovery, the Master Servicer shall
purchase any Contract materially and adversely affected by such breach. In
consideration of the purchase of such Contract, the Master Servicer shall remit
the Repurchase Amount in the manner specified in Section 5.04. The sole remedy
of the Issuer, the Owner Trustee, the Indenture Trustee, the Certificateholders
or the Noteholders with respect to a breach pursuant to Section 4.02, 4.05 or
4.06 shall be to require the Master Servicer to purchase Contracts pursuant to
this Section; provided, however, that the Master Servicer shall indemnify the
Owner Trustee, the Indenture Trustee, the Insurer, the Issuer and the
Securityholders against all costs, expenses, losses, damages, claims and
liabilities, including reasonable fees and expenses of counsel, which may be
asserted against or incurred by any of them as a result of third-party claims
arising out of the events or facts giving rise to such breach. The Owner Trustee
shall have no duty to conduct any affirmative investigation as to the occurrence
of any condition requiring the repurchase of any Contract pursuant to this
Section.

        Section 4.08. Servicing Compensation. As compensation for the
performance of its obligations under this Agreement and subject to the terms of
this Section, the Master Servicer shall be entitled to receive on each
Distribution Date the Servicing Fee in respect of each Contract that was
Outstanding at the beginning of the Due Period ending immediately prior to such
Distribution Date, to the extent the related payment of Monthly P&I has been
collected or advanced pursuant to Section 5.04. As servicing compensation in
addition to the Servicing Fee, the Master Servicer shall be entitled (i) to
retain all late payment charges, extension fees and similar items paid in
respect of Contracts, and (ii) to receive, in respect of each Rule of 78's
Contract that is prepaid in full prior to its Maturity Date, the amount by which
the outstanding principal balance of such Contract exceeds the Scheduled Balance
of such Contract at the time of such prepayment; provided, however, that the
Master Servicer agrees that each amount payable to it pursuant to clause (ii)
above shall be deposited in the Spread Account and applied in accordance with
Article Five and the Insurance Agreement. The Master Servicer shall pay all
expenses incurred by it in connection with its servicing activities hereunder
and shall not be entitled to reimbursement of such expenses except to the extent
provided in Section 4.03.

        Section 4.09. Reporting by the Master Servicer.

        (a)On each Master Servicer Report Date, the Master Servicer shall
transmit to the Owner Trustee, the Indenture Trustee, each Rating Agency and the
Insurer a statement, substantially in

                                       46
<PAGE>   52
the form of Exhibit F hereto (the "Distribution Date Statement"), setting forth
with respect to the next succeeding Distribution Date:

               (i) the Note Interest Distributable Amount for such Distribution
        Date;

               (ii) the Note Principal Distributable Amount for such
        Distribution Date and the portion thereof constituting the Accelerated
        Principal Distributable Amount;

               (iii) the Net Collections and the Note Percentage for such
        Distribution Date;

               (iv) the amount otherwise distributable to each Class of
        Noteholders that will be distributed to a different Class of Noteholders
        on such Distribution Date;

               (v) the amount to be on deposit in the Spread Account on such
        Distribution Date, before and after giving effect to deposits thereto
        and withdrawals therefrom to be made in respect of such Distribution
        Date;

               (vi) the Servicing Fee with respect to the related Due Period;

               (vii) the amount of any Note Interest Carryover Shortfall and
        Note Principal Carryover Shortfall on such Distribution Date and the
        change in such amounts from those with respect to the immediately
        preceding Distribution Date;

               (viii) the aggregate amount of Monthly P&I which was due on the
        Contracts during the related Due Period and was delinquent as of the end
        of the related Due Period (any such payment of Monthly P&I being
        presumed to be delinquent to the extent that it was not deposited in or
        credited to the Collection Account during such Due Period);

               (ix) the amount set forth in clause (viii) above which is being
        advanced concurrently with such Distribution Date Statement by the
        Master Servicer pursuant to Section 5.04, the amount of any such Advance
        being deposited in or credited to the Collection Account on such Master
        Servicer Report Date;

               (x) the aggregate amount of any Nonrecoverable Advances deducted
        by the Master Servicer from amounts otherwise required to be deposited
        by the Master Servicer in the Collection Account during the related Due
        Period;

               (xi) the aggregate amount of Retained Yield for the related Due
        Period;

               (xii) the Aggregate Net Liquidation Losses for the related Due
        Period;

               (xiii) the Delinquency Percentage and the Charge-Off Percentage
        for the most recent Calculation Day;

               (xiv) the amount of Contracts which have had their APR or
        principal amount modified pursuant to Section 4.01 and the percentage
        that amount constitutes of the Original Principal Balance on a
        cumulative basis; in addition the aggregate Scheduled

                                       47
<PAGE>   53
        Balance of Contracts so modified as a percentage of the Pool Balance for
        the most recent Distribution Date;

               (xv) the Note Deficiency Claim Amount, if any, for such
        Distribution Date, separately setting forth the amount thereof payable
        in respect of each Class of Notes;

               (xvi) the Note Policy Claim Amount, if any, for such Distribution
        Date, separately setting forth the amount thereof payable in respect of
        each Class of Notes;

               (xvii) the Certificate Distributable Amount;

               (xviii) the Base Price and the Repurchase Premium paid for WFSRC
        Contracts repurchased pursuant to Section 3.10; and

               (xix) if the data becomes available, the principal amount of
        Contracts originated by WFS in respect of clauses (viii) and (xii)
        above.

Each such Distribution Date Statement shall be accompanied by an Officers'
Certificate of the Master Servicer stating that the computations reflected in
such statement were made in conformity with the requirements of this Agreement.

        (b) On each Master Servicer Report Date, the Master Servicer shall
deliver to the Owner Trustee, the Indenture Trustee, each Rating Agency and the
Insurer a report, in respect of the immediately preceding Due Period, setting
forth the following:

               (i) the aggregate amount, if any, paid by or due from it for the
        purchase of Contracts which the Sellers or the Master Servicer has
        become obligated to purchase pursuant to Section 3.02 or 4.07, the
        Sellers have elected to purchase pursuant to Section 9.01 or the Holder
        of the WFSRC Certificate has elected to purchase pursuant to Section
        3.10;

               (ii) the net amount of funds which have been deposited in or
        credited to the Collection Account or the Holding Account in respect of
        such Due Period (including amounts, if any, collected during the
        immediately preceding Due Period and deposited in the Holding Account
        pursuant to Section 5.02) after giving effect to all permitted
        deductions therefrom pursuant to Section 5.02;

               (iii) with respect to each Contract that became a Liquidated
        Contract during such Due Period, the following information:

                      (A) its Contract Number;

                      (B) the effective date as of which such Contract became a
               Liquidated Contract;

                      (C) its Monthly P&I and Scheduled Balance as of the
               immediately preceding Distribution Date (or as of the Cut-Off
               Date in the case of the first Distribution Date); and

                                       48
<PAGE>   54

                      (D) if less than 100% of the outstanding principal balance
               of and accrued and unpaid interest was recovered on such
               Liquidated Contract, the amount of the Net Liquidation Proceeds
               or Net Insurance Proceeds;

               (iv) with respect to each Contract which was the subject of a
        Partial Prepayment during such Due Period, the following information:

                      (A) its Contract Number;

                      (B) the date of such Partial Prepayment;

                      (C) its new Maturity Date;

                      (D) the total amount received with respect to such Partial
               Prepayment; and

                      (E) its Scheduled Balance as of the prior Distribution
               Date (or as of the Cut-Off Date in the case of the first
               Distribution Date) and its Scheduled Balance for each
               Distribution Date having a Due Period prior to the Due Period of
               its Maturity Date, computed on the basis set forth under the
               definition of the term "Scheduled Balance";

               (v) the Contract Numbers, Monthly P&I, Scheduled Balances and
        Maturity Dates of all Contracts which became Defaulted Contracts during
        such Due Period;

               (vi) any other information relating to the Contracts reasonably
        requested by the Owner Trustee, the Indenture Trustee, each Rating
        Agency or the Insurer; and

               (vii) the amount of Net Liquidation Proceeds and Net Insurance
        Proceeds which have been deposited in or credited to the Collection
        Account or the Holding Account in respect of the Due Period ending
        immediately prior to such Master Servicer Report Date and the cumulative
        amount of Net Liquidation Proceeds and Net Insurance Proceeds deposited
        in or credited to the Collection Account or the Holding Account during
        the preceding Due Periods.

        Section 4.10. Annual Statement as to Compliance. The Master Servicer
shall deliver to the Owner Trustee, the Indenture Trustee, each Rating Agency
and the Insurer, on or before 90 days after the end of each fiscal year of the
Master Servicer, beginning with the fiscal year ended December 31, 2000, an
Officers' Certificate of the Master Servicer stating that (i) a review of the
activities of the Master Servicer during the preceding fiscal year (or since the
Closing Date in the case of the first such Officers' Certificate) and of its
performance under this Agreement has been made under such officers' supervision
and (ii) to the best of such officers' knowledge, based on such review, the
Master Servicer has fulfilled all its obligations under this Agreement
throughout such year and that no default under this Agreement has occurred and
is continuing, or, if there has been a default in the fulfillment of any such
obligation, specifying each such default known to such officer and the nature
and status thereof. A copy of such certificate and the report referred to in
Section 4.11 may be obtained by any Certificateholder, Certificate Owner,
Noteholder or Note Owner by a request in writing to the Owner Trustee addressed
to the

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<PAGE>   55

Owner Trustee Corporate Trust Office. Upon the telephone request of the Owner
Trustee, the Indenture Trustee will promptly furnish the Owner Trustee a list of
Noteholders as of the date specified by the Owner Trustee.

        Section 4.11. Annual Independent Certified Public Accountants' Report.
On or before 90 days after the end of the first fiscal year of the Master
Servicer which ends more than three months after the Closing Date and each
fiscal year thereafter, the Master Servicer at its expense shall cause a firm of
nationally-recognized independent certified public accountants (who may also
render other services to the Master Servicer) to furnish a report to the
Indenture Trustee, the Owner Trustee, each Rating Agency and the Insurer to the
effect that (i) they have audited the balance sheet of the Master Servicer as of
the last day of said fiscal year and the related statements of operations,
retained earnings and cash flows for such fiscal year and have issued an opinion
thereon, specifying the date thereof, (ii) they have also audited certain
documents and the records relating to the servicing of the Contracts and the
distributions on the Notes and the Certificates hereunder, (iii) their audit as
described under clauses (i) and (ii) above was made in accordance with generally
accepted auditing standards and accordingly included such tests of the
accounting records and such other auditing procedures as they considered
necessary in the circumstances, and (iv) their audits described under clauses
(i) and (ii) above disclosed no exceptions which, in their opinion, were
material, relating to the servicing of such Contracts in accordance with this
Agreement and the making of distributions on the Notes and Certificates in
accordance with this Agreement, or, if any such exceptions were disclosed
thereby, setting forth such exceptions which, in their opinion, were material.

        Section 4.12. Access to Certain Documentation and Information Regarding
Contracts. The Master Servicer shall provide to the Insurer, the Indenture
Trustee and the Securityholders access to the Contract Files in such cases where
the Certificateholders or Noteholders shall be required by applicable statutes
or regulations to review such documentation. Access shall be afforded without
charge, but only upon reasonable request and during the normal business hours at
the designated offices of the Master Servicer and each related Subservicer, if
any. Nothing in this Section shall affect the obligation of the Master Servicer
to observe any applicable law prohibiting disclosure of information regarding
the Obligors and the failure of the Master Servicer to provide access to
information as a result of such obligation shall not constitute a breach of this
Section.

        Section 4.13. Fidelity Bond. The Master Servicer shall maintain a
fidelity bond in such form and amount as is customary for banks acting as
custodian of funds and documents in respect of mortgage loans or consumer
contracts on behalf of institutional investors.

        Section 4.14. Indemnification; Third Party Claims. Subject to Section
8.02, the Master Servicer agrees to indemnify and hold the Indenture Trustee,
the Owner Trustee and the Securityholders harmless against any and all claims,
losses, penalties, fines, forfeitures, reasonable legal fees and related costs,
judgments and any reasonable other costs, fees and expenses that the Indenture
Trustee, the Owner Trustee, the Noteholders or the Certificateholders may
sustain because of the failure of the Master Servicer to perform its duties and
service the Contracts in compliance with the terms of this Agreement. The Master
Servicer shall immediately notify the Indenture Trustee and the Owner Trustee if
a claim is made by a third party with respect to the Contracts, assume, with the
consent of the Indenture Trustee and the

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<PAGE>   56

Owner Trustee, the defense of any such claim and pay all expenses in connection
therewith, including counsel fees, and promptly pay, discharge and satisfy any
judgment or decree which may be entered against it or Indenture Trustee, the
Owner Trustee, the Noteholders or the Certificateholders.

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                                  ARTICLE FIVE

                         DISTRIBUTIONS; SPREAD ACCOUNT;
                          STATEMENTS TO SECURITYHOLDERS

        Section 5.01. Establishment of Trust Accounts.

        (a) Prior to the Closing Date, the Master Servicer shall open, at a
depository institution (which may be the Indenture Trustee, the Bank or the
Master Servicer), the following accounts (the "Trust Accounts"):

               (i) an account in the name of the Indenture Trustee (the
        "Collection Account"), bearing a designation clearly indicating that the
        funds deposited therein are held for the benefit of the Securityholders;

               (ii) an account in the name of the Indenture Trustee (the
        "Holding Account"), bearing a designation clearly indicating that the
        funds deposited therein are held for the benefit of the Securityholders;

               (iii) an account in the name of the Indenture Trustee (the
        "Spread Account"), bearing a designation clearly indicating that the
        funds deposited therein are held for the benefit of the Securityholders;

               (iv) an account in the name of the Indenture Trustee (the "Note
        Distribution Account") bearing a designation clearly indicating that the
        funds deposited therein are held for the benefit of the Noteholders; and

               (v) an account in the name of the Owner Trustee (the "Certificate
        Distribution Account") bearing a designation clearly indicating that the
        funds deposited therein are held for the benefit of the
        Certificateholders.

        The Trust Accounts shall be Eligible Accounts and relate solely to the
Securities and to the Contracts and Eligible Investments. The Master Servicer
shall give the Indenture Trustee, the Owner Trustee and the Insurer at least
five Business Days' written notice of any change in the location of any Trust
Account and any related account identification information. All monies
(exclusive of the Retained Yield) deposited in or credited to, from time to
time, the Trust Accounts shall be part of the Trust Estate and all monies
deposited in or credited to, from time to time, the Collection Account, the
Spread Account, the Certificate Distribution Account and the Note Distribution
Account shall be invested by the Indenture Trustee in Eligible Investments
pursuant to Section 5.01(b). On the Business Day following each Distribution
Date, all amounts, if any, on deposit in or credited to the Holding Account
(excluding any installments of Monthly P&I that are due in one or more Due
Periods ending subsequent to the Distribution Date immediately succeeding such
Distribution Date) shall be transferred to the Collection Account.

        (b) All funds in the Collection Account, the Spread Account, the Note
Distribution Account and the Certificate Distribution Account shall be invested
by the Indenture Trustee in Eligible Investments and/or Proprietary Funds.
Unless and until the RIC is no longer an Eligible Investment, all funds in such
Trust Accounts, in each case that are available for investment in

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<PAGE>   58

Eligible Investments or in Proprietary Funds, shall be invested in the RIC or in
Proprietary Funds. If the RIC is no longer an Eligible Investment then, subject
to the limitations set forth herein, the Master Servicer may direct the
Indenture Trustee in writing to invest funds in the foregoing Trust Accounts in
Eligible Investments or Proprietary Funds other than the RIC; provided that in
the absence of such directions from the Master Servicer, the Insurer may so
direct the Indenture Trustee. All such investments shall be in the name of the
Indenture Trustee for the benefit of the Noteholders and the Certificateholders,
as applicable. All income or other gain from investment of monies deposited in
or credited to the Collection Account (including without limitation the RIC
Reinvestment Earnings) shall be deposited in or credited to the Collection
Account immediately upon receipt, and any loss resulting from such investment
shall be charged to the Collection Account. All income or other gain from
investment of monies deposited in or credited to the Spread Account (including
without limitation the RIC Reinvestment Earnings) shall be deposited in or
credited to the Spread Account immediately upon receipt, and any loss resulting
from such investment shall be charged to the Spread Account. All income or other
gain from investment of monies deposited in or credited to the Note Distribution
Account (including without limitation the RIC Reinvestment Earnings) shall be
deposited in or credited to the Note Distribution Account immediately upon
receipt, and any loss resulting from such investment shall be charged to the
Note Distribution Account. All income or other gain from investment of monies
deposited in or credited to the Certificate Distribution Account (including
without limitation the RIC Reinvestment Earnings) shall be deposited in or
credited to the Certificate Distribution Account immediately upon receipt, and
any loss resulting from such investment shall be charged to the Certificate
Distribution Account. The maximum permissible maturities of any investments of
funds in the Collection Account, the Spread Account, the Note Distribution
Account and the Certificate Distribution Account on any date shall not be later
than the fifth Business Day immediately preceding the Distribution Date next
succeeding the date of such investment; provided, however, that such funds may
be invested by the Indenture Trustee in Eligible Investments (other than the
RIC) that mature on the Business Day before the Distribution Date or in
Proprietary Funds for a period not to exceed one Business Day. No investment in
Eligible Investments may be sold prior to its maturity and all investments in
Proprietary Funds shall be for a period not to exceed one Business Day.

        (c) Funds in the Holding Account shall not be invested.

        (d) (i) The Indenture Trustee shall possess all right, title and
interest in all funds on deposit from time to time in the Trust Accounts
(exclusive of Retained Yield, if any) and in all proceeds thereof (including all
income thereon) and all such funds, investments, proceeds and income shall be
part of the Trust Estate. The Trust Accounts, other than the Certificate
Distribution Account, shall be under the sole dominion and control of the
Indenture Trustee for the benefit of the Noteholders and the Certificateholders,
as the case may be. The Certificate Distribution Account shall be in the name of
the Owner Trustee for the benefit of the Certificateholders. If, at any time,
any of the Trust Accounts ceases to be an Eligible Account, the Indenture
Trustee (or the Master Servicer on its behalf) shall within ten Business Days
(or such longer period, not to exceed 30 calendar days, as to which each Rating
Agency may consent) establish a new Trust Account as an Eligible Account and
shall transfer any cash and/or any investments to such new Trust Account.

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<PAGE>   59

               (ii) With respect to the Trust Account Property, the Indenture
        Trustee agrees, by its acceptance hereof, that:

                      (A) any Trust Account Property that is held in deposit
               accounts shall be held solely in the Eligible Accounts, subject
               to the last sentence of Section 5.01(d)(i); and each such
               Eligible Account shall be subject to the exclusive custody and
               control of the Indenture Trustee, and the Indenture Trustee shall
               have sole signature authority with respect thereto;

                      (B) any Trust Account Property that constitutes Physical
               Property shall be delivered to the Indenture Trustee in
               accordance with paragraph (i) of the definition of the term
               "Delivery" and shall be held, pending maturity or disposition,
               solely by the Indenture Trustee or a Financial Intermediary
               acting solely for the Indenture Trustee;

                      (C) any Trust Account Property that is a book-entry
               security held through the Federal Reserve System pursuant to
               Federal book-entry regulations shall be delivered in accordance
               with paragraph (ii) of the definition of the term "Delivery" and
               shall be maintained by the Indenture Trustee, pending maturity or
               disposition, through continued book-entry registration of such
               Trust Account Property as described in such paragraph; and

                      (D) any Trust Account Property that is an "uncertificated
               security" under Article Eight of the UCC and that is not governed
               by clause (C) above shall be delivered to the Indenture Trustee
               in accordance with paragraph (iii) of the definition of the term
               "Delivery" and shall be maintained by the Indenture Trustee,
               pending maturity or disposition, through continued registration
               of the Indenture Trustee's (or its nominee's) ownership of such
               security.

               (iii) The Master Servicer shall have the power, revocable by the
        Indenture Trustee or by the Owner Trustee with the consent of the
        Indenture Trustee, to instruct the Indenture Trustee to make withdrawals
        and payments from the Trust Accounts for the purpose of permitting the
        Master Servicer or the Owner Trustee to carry out its respective duties
        hereunder or permitting the Indenture Trustee to carry out its duties
        under the Indenture.

        Section 5.02. Collections; Realization Upon Note Policy; Net Deposits.

        (a) Subject to Section 5.03 and subsections (b) and (e) hereof, the
Master Servicer shall remit or credit all payments by the Obligors on the
Contracts, all payments on behalf of Obligors on the Contracts, and all Net
Liquidation Proceeds and Net Insurance Proceeds to the Collection Account
(within two Business Days as specified in Section 4.01); provided that the
Master Servicer shall retain from collection of late payments and Net
Liquidation Proceeds or Net Insurance Proceeds in respect of a Contract an
amount equal to previously unreimbursed Advances in respect of such Contract
made pursuant to Section 5.04. Amounts otherwise required to be deposited in or
credited to the Collection Account pursuant to the immediately preceding
sentence shall instead be deposited in or credited to the Holding Account to the
extent

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<PAGE>   60

that such amounts are installments of Monthly P&I which are due in a Due Period
for a Distribution Date subsequent to the Distribution Date immediately
succeeding the date of receipt.

        (b) Notwithstanding anything in this Agreement to the contrary, the
Retained Yield will be collected by the Master Servicer and paid out on a
monthly basis to the Seller without ever becoming part of the Trust's assets.

        (c) Not later than 12:00 p.m., New York City time, on the fifth Business
Day prior to each Distribution Date, based on the information set forth in the
related Distribution Date Statement to the extent that there are insufficient
funds to make the distributions required to be made to each Class of Notes as
described in Sections 5.05 and 5.06, the Master Servicer shall deliver to the
Indenture Trustee, with a copy to the Insurer, the Owner Trustee and the Fiscal
Agent, if any, by hand delivery, telex or facsimile transmission, a written
notice (a "Deficiency Notice") specifying the Note Deficiency Claim Amount, if
any, for such Distribution Date, separately identifying the amount of the
applicable Deficiency Claim Amount payable in respect of each Class of Notes.
Such Deficiency Notice shall direct the Indenture Trustee to remit such
Deficiency Claim Amount (to the extent of funds then on deposit in the Spread
Account) to the Indenture Trustee for deposit in the Note Distribution Account.

        (d) Not later than 12:00 p.m., New York City time, on the fourth
Business Day prior to each Distribution Date, the Indenture Trustee shall make a
claim under the Note Policy for any Note Policy Claim Amount for such
Distribution Date by delivering to the Insurer and the Fiscal Agent, if any,
with a copy to the Master Servicer, by hand delivery, telex or facsimile
transmission, a claim for the related Note Policy Claim Amount, as the case may
be. In making any such claim, the Owner Trustee or the Indenture Trustee shall
comply with all the terms and conditions of the related Policy. The notice of
such claim shall direct the Insurer to remit such Note Policy Claim Amount to
the Owner Trustee or the Indenture Trustee for deposit in the Note Distribution
Account.

        (e) So long as the Master Servicer is WFS, the Master Servicer shall
have the right, on a basis not more frequently than once per month (although
deposits shall be made into the Collection Account within two Business Days
pursuant to Section 4.01), to deduct from amounts received that are otherwise
required to be deposited in or credited to the Collection Account and, to the
extent such amounts are insufficient, to require that the Indenture Trustee
withdraw and deliver to it from the Collection Account, amounts due to be paid
hereunder to the Master Servicer or to the Seller after giving effect to
application of the payment priorities specified in this Article for the month
(or other applicable period), and to pay such amounts to itself as Master
Servicer or to the Seller, as the case may be. Notwithstanding the foregoing,
the Master Servicer shall maintain the records and accounts for such deposits
and credits on a gross basis.

        Section 5.03. Application of Collections. As of each Record Date, all
collections for the related Due Period shall be applied by the Master Servicer
as follows: with respect to each Contract (including a Defaulted Contract),
payments by or on behalf of an Obligor shall be applied first to late payment
and extension fees, second to interest accrued on the Contract, third to
principal due on the Contract and fourth to administrative charges, if any. Any
excess shall be applied to prepay the principal balance of the Contract.

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<PAGE>   61

        Section 5.04. Advances and Nonrecoverable Advances; Repurchase Amounts.

        (a) If, as of the end of any Due Period, one or more payments of Monthly
P&I due under any Contract (other than a Liquidated Contract) Outstanding at the
end of such Due Period shall not have been received by the Master Servicer and
deposited in or credited to the Collection Account pursuant to Section 5.02(a),
the Master Servicer shall make, concurrently with the furnishing of the related
Distribution Date Statement to the Indenture Trustee and the Owner Trustee, the
Advance for such Due Period by depositing in or crediting to the Collection
Account (i) with respect to a Rule of 78's Contract, the amount of delinquent
Monthly P&I and (ii) with respect to a Simple Interest Contract, 30 days of
interest on the Outstanding Principal Balance of such Contract at a rate equal
to the sum of (A) the Class A-4 Rate and (B) the Servicing Fee Percent for each
month that the related Monthly P&I is delinquent at the end of such Due Period.
The Master Servicer shall account for such deposit or credit in accordance with
Section 4.01. The foregoing notwithstanding, the Master Servicer shall not make
an Advance in respect of a Contract if the Master Servicer shall have determined
that any such Advance, if made, would constitute a Nonrecoverable Advance. Any
such determination shall be evidenced by an Officers' Certificate furnished to
the Indenture Trustee, the Owner Trustee and the Insurer setting forth the basis
for such determination.

        (b) If the Master Servicer determines that it has made a Nonrecoverable
Advance or Advances, the Master Servicer shall reimburse itself, without
interest, from unrelated installments of Monthly P&I or Prepayment proceeds to
the extent it shall, concurrently with the withholding of any such installment
or proceeds from deposit in or credit to the Collection Account as required by
Section 5.02, furnish to the Indenture Trustee, the Owner Trustee and the
Insurer a certificate of a Servicing Officer setting forth the basis for the
Master Servicer's determination, the amount of, and Contract with respect to
which, such Nonrecoverable Advance was made and the installment or installments
or other proceeds respecting which reimbursement has been taken.

        (c) The Master Servicer or the Seller, as the case may be, shall remit
or credit to the Collection Account the aggregate Repurchase Amount with respect
to Repurchased Contracts on the Master Servicer Report Date next succeeding the
last day of the related cure period specified in Section 3.02 or 4.07, as the
case may be. In addition, the Master Servicer and the Seller shall deposit or
cause to be deposited in the Collection Account the aggregate Repurchase Amount
with respect to Repurchased Contracts and the Master Servicer shall deposit
therein all amounts to be paid under Section 9.01.

        (d) WFSRC shall remit or credit to the Collection Account the Optional
Repurchase Payment for WFSRC Contracts repurchased pursuant to Section 3.10.

        Section 5.05. Distributions.

        (a) On each Distribution Date, the Master Servicer shall instruct the
Indenture Trustee (based on the information contained in the Servicer's
Certificate delivered on the related Master Servicer Report Date pursuant to
Section 4.09) to make the following deposits and distributions for receipt by
the Master Servicer or deposit in the applicable account by 11:00 a.m. (New York
time),

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<PAGE>   62

               (i) to the extent of the Net Collections for such Distribution
        Date, in the following order of priority:

                      (A) to the Master Servicer, the Servicing Fee, including
               any unpaid Servicing Fees with respect to one or more prior Due
               Periods;

                      (B) to the Indenture Trustee and the Owner Trustee from
               Net Collections (after giving effect to the reduction in Net
               Collections described in clause (A) above), any accrued and
               unpaid Trustees' fees, in each case to the extent such fees have
               not been previously paid by the Master Servicer;

                      (C) to the Note Distribution Account, from Net Collections
               (after giving effect to the reduction in Net Collections
               described in clauses (A) and (B) above), the Note Interest
               Distributable Amount;

                      (D) to the Note Distribution Account, from Net Collections
               (after giving effect to the reduction in Net Collections
               described in clauses (A) through (C) above), the Note Principal
               Distributable Amount, (which amount includes, if such
               Distribution Date is a Note Final Distribution Date, the
               remaining principal amount of the related Class of Notes) first
               to the holders of the Class A-1 Notes until the principal amount
               of the Class A-1 Notes has been reduced to zero, second to the
               holders of the Class A-2 Notes until the principal amount of the
               Class A-2 Notes has been reduced to zero, third to the holders of
               the Class A-3 Notes until the principal amount of the Class A-3
               Notes has been reduced to zero; fourth to the holders of the
               Class A-4 Notes until the principal amount of the Class A-4 Notes
               has been reduced to zero and

                      (E) to the Insurer, from Net Collections (after giving
               effect to the reduction in Net Collections described in clauses
               (A) through (D) above), any Unreimbursed Insurer Amounts.

               (ii) if WFSRC has deposited the Optional Repurchase Amount in
        respect of the WFSRC Contracts that have been repurchased as of such
        Distribution Date, to the Note Distribution Account, the Repurchase
        Premium, for distribution pursuant to Section 8.02(d) of the Indenture.

        (b) On each Distribution Date, the Master Servicer shall instruct the
Indenture Trustee (based on the information contained in the Servicer's
Certificate delivered on the related Master Servicer Report Date pursuant to
Section 4.09), to distribute any excess amounts remaining from Net Collections
after making the distributions described in Section 5.05(a) ("Excess Amounts")
to the Spread Account. On each Distribution Date, the Master Servicer shall
instruct the Indenture Trustee to distribute the Excess Spread Amount pursuant
to Section 5.06(b).

        (c) To the extent that on any Distribution Date the amount on deposit in
the Note Distribution Account (after giving effect to any deposits thereto on
such Distribution Date) is less than the Note Distributable Amount, Noteholders
shall be entitled to receive distributions in respect of such deficiency first,
from amounts on deposit in the Spread Account pursuant to a

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Deficiency Notice; and second, if such amounts are still insufficient, from a
claim made under the Note Policy for the Note Policy Claim Amount pursuant to
Section 5.02(d).

        Section 5.06. Spread Account.

        (a) On or prior to the Closing Date, the Owner Trustee, on behalf of the
Seller, shall deposit the Spread Account Initial Deposit into the Spread Account
from the net proceeds of the sale of the Notes. The Spread Account will be held
for the benefit of the Securityholders and the Insurer in order to effectuate
the subordination of the rights of the Securityholders to the extent described
above.

        (b) On each Calculation Day and Distribution Date, the Master Servicer
shall instruct the Indenture Trustee to distribute the Excess Spread Amount, (i)
first, to the Insurer, to the extent of any Unreimbursed Insurer Amounts, (ii)
second, to WFAL until WFAL has received an aggregate amount equal to the Spread
Account Initial Deposit and (iii) third, to the Certificate Distribution Account
for distribution to Certificateholders in accordance with Section 5.02 of the
Trust Agreement. Upon any such distribution to the Insurer, neither Seller, nor
the Securityholders will have further rights in, or claims to, such amounts.

        (c) Amounts held in the Spread Account shall be invested in the manner
specified in Section 5.01(b), and such investments shall be made in accordance
with written instructions from the Master Servicer; provided that, if the
Indenture Trustee does not receive any such written instructions prior to any
date on which an investment decision must be made, the Indenture Trustee shall
invest such amounts held in the Spread Account in Eligible Investments
consisting of commercial paper given the highest rating by each Rating Agency at
the time of such investment. All such investments shall be made in the name of
the Indenture Trustee or its nominee and such investments shall not be sold or
disposed of prior to their maturity.

        (d) Upon termination of the Trust pursuant to Section 9.01, any amounts
on deposit in the Spread Account, after payments of amounts due to the
Securityholders or the Insurer (if there exists any Unreimbursed Insurer
Amounts), will be distributed first, to WFAL until WFAL has received an
aggregate amount equal to the Spread Account Initial Deposit and second, to the
Certificate Distribution Account for distribution to Certificateholders in
accordance with the Section 5.02 of the Trust Agreement.

        Section 5.07. Statements to Securityholders.

        (a) On each Distribution Date, the Indenture Trustee shall include with
each distribution to each Noteholder of record as of the related Record Date a
statement, prepared by the Master Servicer, based on the information in the
Distribution Date Statement furnished pursuant to Section 4.09, setting forth
for such Distribution Date the following information as of the related Record
Date or such Distribution Date, as the case may be:

               (i) the amount of such distribution allocable to principal
        (stated separately for each Class of Notes);

               (ii) the amount of such distribution allocable to interest
        (stated separately for each Class of Notes);

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<PAGE>   64

               (iii) the Aggregate Scheduled Balance as of the close of business
        on the last day of such Due Period;

               (iv) the amount of the Servicing Fee paid to the Master Servicer
        with respect to the related Due Period;

               (v) the amount of any Note Interest Carryover Shortfall and Note
        Principal Carryover Shortfall on such Distribution Date and the change
        in such amounts from those with respect to the immediately preceding
        Distribution Date;

               (vi) the Note Pool Factor for each Class of Notes as of such
        Distribution Date, after giving effect to payments allocated to
        principal reported under clause (i) above;

               (vii) the Certificate Distributable Amount;

               (viii) the amount on deposit in the Spread Account on such
        Distribution Date, after giving effect to distributions made on such
        Distribution Date, and the change in such balance from the immediately
        preceding Distribution Date; and

               (ix) the amount of any Base Price and Repurchase Premium payable
        on such Distribution Date.

Each amount set forth pursuant to subclauses (i), (ii), (iv) or (v) above shall
be expressed as a dollar amount per $1,000.00 of original principal amount of a
Note.

        (b) Within a reasonable period of time after the end of each calendar
year, but not later than the latest date permitted by law, the Indenture Trustee
shall mail to each Person who at any time during such calendar year shall have
been a Holder of a Note a statement or statements, prepared by the Master
Servicer, which in the aggregate contain the sum of the amounts set forth in
clauses (i), (ii), (iv) and (v) above for such calendar year or, in the event
such Person shall have been a Holder of a Note during a portion of such calendar
year, for the applicable portion of such year, for the purposes of such
Noteholder's preparation of federal income tax returns. In addition, the Master
Servicer shall furnish to the Indenture Trustee for distribution to such Person
at such time any other information necessary under applicable law for the
preparation of such income tax returns.

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                                   ARTICLE SIX

                                   THE SELLERS

        Section 6.01. Corporate Existence. During the term of this Agreement,
each Seller will keep in full force and effect its existence, rights and
franchises as a corporation under the laws of the jurisdiction of its
incorporation and will obtain and preserve its qualification to do business in
each jurisdiction in which such qualification is or shall be necessary to
protect the validity and enforceability of this Agreement, the other Basic
Documents and each other instrument or agreement necessary or appropriate to the
proper administration of this Agreement and the transactions contemplated
hereby. In addition, all transactions and dealings between each Seller and its
Affiliates will be conducted on an arm's-length basis.

        Section 6.02. Liability of Seller; Indemnities. Each Seller shall be
liable in accordance herewith only to the extent of the obligations specifically
undertaken by such Seller under this Agreement.

        Each Seller shall indemnify, defend and hold harmless the Issuer, the
Owner Trustee, the Indenture Trustee and the Master Servicer from and against
any taxes that may at any time be asserted against any such Person with respect
to the transactions contemplated herein and in the other Basic Documents,
including any sales, gross receipts, general corporation, tangible personal
property, privilege or license taxes (but, in the case of the Issuer, not
including any taxes asserted with respect to, and as of the date of, the sale of
the Contracts to the Issuer or the issuance and original sale of the Securities,
or asserted with respect to ownership of the Contracts, or federal or other
income taxes arising out of distributions on the Certificates or the Notes) and
costs and expenses in defending against the same.

        Each Seller shall indemnify, defend and hold harmless the Issuer, the
Owner Trustee, the Indenture Trustee and the Securityholders from and against
any loss, liability or expense incurred by reason of such Seller's willful
misfeasance, bad faith or negligence (other than errors in judgment) in the
performance of its duties under this Agreement, or by reason of reckless
disregard of its obligations and duties under this Agreement.

        Each Seller shall indemnify, defend and hold harmless the Issuer, the
Owner Trustee and the Indenture Trustee from and against all costs, expenses,
losses, claims, damages and liabilities arising out of or incurred in connection
with the acceptance or performance of the trusts and duties herein and, in the
case of the Owner Trustee, in the Trust Agreement and, in the case of the
Indenture Trustee, in the Indenture, except to the extent that such cost,
expense, loss, claim, damage or liability, in the case of (i) the Owner Trustee,
shall be due to the willful misfeasance, bad faith or negligence of the Owner
Trustee or shall arise from the breach by the Owner Trustee of any of its
representations or warranties set forth in Section 7.03 of the Trust Agreement,
or (ii) the Indenture Trustee, shall be due to the willful misfeasance, bad
faith or negligence of the Indenture Trustee.

        Indemnification under this Section shall include, without limitation,
reasonable fees and expenses of counsel and expenses of litigation. If a Seller
shall have made any indemnity payments pursuant to this Section and the Person
to or on behalf of whom such payments are

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<PAGE>   66

made thereafter shall collect any of such amounts from others, such Person shall
promptly repay such amounts to such Seller, without interest.

        Section 6.03. Merger or Consolidation of, or Assumption of the
Obligations of, a Seller; Certain Limitations.

        (a) Neither Seller shall consolidate with nor merge into any other
corporation or convey, transfer or lease substantially all of its assets as an
entirety to any Person unless the corporation formed by such consolidation or
into which such Seller has merged or the Person which acquires by conveyance,
transfer or lease substantially all the assets of the Seller as an entirety, can
lawfully perform the obligations of the Seller hereunder and executes and
delivers to the Insurer, the Owner Trustee and the Indenture Trustee an
agreement in form and substance reasonably satisfactory to the Owner Trustee,
the Indenture Trustee and the Insurer, which contains an assumption by such
successor entity of the due and punctual performance and observance of each
covenant and condition to be performed or observed by the Seller under this
Agreement. Each Seller shall provide notice of any merger, consolidation or
succession pursuant to this Section to each Rating Agency and will deliver to
the Insurer, the Owner Trustee and the Indenture Trustee a letter from each
Rating Agency to the effect that such merger, consolidation or succession will
not result in a qualification, downgrading or withdrawal of its then-current
ratings of each Class of Notes. Each Seller and WFS shall maintain separate
corporate offices.

        (b) (i) Subject to paragraph (ii) below, the purpose of each Seller
shall be to engage in any lawful activity for which a corporation may be
organized under the General Corporation Law of California and which is permitted
for operating subsidiaries of federally chartered savings associations other
than the banking business, the trust company business or the practice of a
profession permitted to be incorporated by the California Corporations Code.

            (ii) Notwithstanding paragraph (b)(i) above, the actual business
activities of (A) WFAL shall be limited to those activities permitted an
operating subsidiary of a federally chartered savings association pursuant to 12
CFR Section 559.3(e)(1) and (B) WFSRC shall be limited to those activities
permitted a service corporation of a federally chartered savings association
pursuant to 12 CFR Section 559.4 and, in each case, shall include the following
purposes and the activities incident to and necessary or convenient to
accomplish the such purposes: (1) to acquire, own, hold, sell, transfer, assign,
pledge, finance, refinance and otherwise deal with, retail installment sales
contracts and installment loans secured by automobiles and light duty trucks
(the "Vehicle Receivables"); (2) to authorize, issue, sell and deliver one or
more series of obligations, consisting of one or more classes of notes,
certificates or other securities (the "Offered Securities") that are
collateralized by or evidence an interest in Vehicle Receivables and are rated
in an investment grade category by at least one nationally recognized
statistical rating agency; and (3) to negotiate, authorize, execute, deliver and
assume the obligations of any agreement relating to the activities set forth in
clauses (1) and (2) above, including but not limited to any pooling and
servicing agreement, indenture, reimbursement agreement, credit support
agreement, receivables purchase agreement or underwriting agreement or to engage
in any lawful activity which is incidental to the activities contemplated by any
such agreement. So long as any outstanding debt of a Seller or Offered
Securities are rated by any nationally recognized statistical rating
organization, such Seller shall not issue notes or otherwise incur debt unless
(I) such Seller has made a written request to the related nationally recognized
statistical

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rating organization to issue notes or incur borrowings which notes or borrowings
are rated by the related nationally recognized statistical rating organization
the same as or higher than the rating afforded such debt or securities, or (II)
such notes or borrowings (X) are fully subordinated (and which shall provide for
payment only after payment in respect of all outstanding rated debt and/or
Offered Securities) or are nonrecourse against any assets of the Seller other
than the assets pledged to secure such notes or borrowings, (Y) do not
constitute a claim against the Seller in the event such assets are insufficient
to pay such notes or borrowings, and (Z) where such notes or borrowings are
secured by the rated debt or Offered Securities, are fully subordinated (and
which shall provide for payment only after payment in respect of all outstanding
rated debt and/or Offered Securities) to such rated debt or Offered Securities.

        (c) Notwithstanding any other provision of this Section and any
provision of law, neither Seller shall do any of the following:

               (i) engage in any business or activity other than as set forth in
        clause (b) above;

               (ii) without the affirmative vote of a majority of the members of
        the Board of Directors of the Seller (which must include the affirmative
        vote of at least two duly appointed Independent directors) (A) dissolve
        or liquidate, in whole or in part, or institute proceedings to be
        adjudicated bankrupt or insolvent, (B) consent to the institution of
        bankruptcy or insolvency proceedings against it, (C) file a petition
        seeking or consent to reorganization or relief under any applicable
        federal or state law relating to bankruptcy, (D) consent to the
        appointment of a receiver, liquidator, assignee, trustee, sequestrator
        (or other similar official) of the corporation or a substantial part of
        its property, (E) make a general assignment for the benefit of
        creditors, (F) admit in writing its inability to pay its debts generally
        as they become due, or (G) take any corporate action in furtherance of
        the actions set forth in clauses (A) through (F) above; provided,
        however, that no director may be required by any shareholder of the
        Seller to consent to the institution of bankruptcy or insolvency
        proceedings against the Seller so long as it is solvent; or

               (iii) merge or consolidate with any other corporation, company or
        entity or sell all or substantially all of its assets or acquire all or
        substantially all of the assets or capital stock or other ownership
        interest of any other corporation, company or entity (except for the
        acquisition of Vehicle Receivables and the sale of Vehicle Receivables
        to one or more trusts in accordance with the terms of clause (b)(ii)
        above, which shall not be otherwise restricted by this Section 6.03(c)).

        Section 6.04. Limitation on Liability of Sellers and Others. The Sellers
and any director or officer or employee or agent of the Sellers may rely in good
faith on any document of any kind, prima facie properly executed and submitted
by any Person respecting any matters arising hereunder. The Sellers and any
director or officer or employee or agent of the Sellers shall be reimbursed by
the Owner Trustee or the Indenture Trustee, as the case may be, for any
contractual damages, liability or expense incurred by reason of the Owner
Trustee's or the Indenture Trustee's willful misfeasance, bad faith or
negligence (except for errors in judgment) in the performance of their
respective duties hereunder, or by reason of reckless disregard of their
respective obligations and duties hereunder. The Sellers shall not be under any
obligation

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to appear in, prosecute or defend any legal action that shall not be incidental
to its obligations under this Agreement, and that in its opinion may involve it
in any expense or liability. The indemnities contained in this Section shall
survive the resignation or termination of the Owner Trustee or the termination
of this Agreement.

        Section 6.05. Sellers Not to Resign. Subject to the provisions of
Section 6.03, the Sellers shall not resign from the obligations and duties
hereby imposed on them as Sellers hereunder.

        Section 6.06. Sellers May Own Securities. Each Seller and any Affiliate
thereof may in its individual or any other capacity become the owner or pledgee
of Securities with the same rights as it would have if it were not such Seller
or an Affiliate thereof, except as expressly provided herein or in any Basic
Document. Securities so owned by or pledged to a Seller or an Affiliate thereof
shall have an equal and proportionate benefit under the provisions of this
Agreement, without preference, priority or distinction as among all of the
Notes.

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                                  ARTICLE SEVEN

                               THE MASTER SERVICER

        Section 7.01. Liability of Master Servicer; Indemnities. Subject to
Section 8.02, the Master Servicer shall be liable in accordance herewith only to
the extent of the obligations specifically undertaken by the Master Servicer
under this Agreement. Such obligations shall include the following:

               (a) The Master Servicer shall indemnify, defend and hold harmless
        the Issuer, the Owner Trustee, the Indenture Trustee, the
        Securityholders and the Insurer from and against any and all costs,
        expenses, losses, damages, claims and liabilities, arising out of or
        resulting from the use, ownership or operation by the Master Servicer,
        any Subservicer or any of their respective Affiliates of a Financed
        Vehicle.

               (b) The Master Servicer shall indemnify, defend and hold harmless
        the Issuer, the Owner Trustee, the Indenture Trustee and the Insurer
        from and against any taxes that may at any time be asserted against the
        Owner Trustee, the Indenture Trustee or the Issuer with respect to the
        transactions contemplated herein, including, without limitation, any
        sales, gross receipts, general corporation, tangible personal property,
        privilege or license taxes (but not including any taxes asserted with
        respect to, and as of the date of, the sale of the Contracts to the
        Issuer or the issuance and original sale of the Securities, or asserted
        with respect to ownership of the Contracts, or federal or other income
        taxes arising out of distributions on the Securities) and costs and
        expenses in defending against the same.

               (c) The Master Servicer shall indemnify, defend and hold harmless
        the Issuer, the Owner Trustee, the Indenture Trustee, the Insurer and
        the Securityholders from and against any and all costs, expenses,
        losses, claims, damages and liabilities to the extent that such cost,
        expense, loss, claim, damage or liability arose out of, or was imposed
        upon any such Person through, the negligence, willful misfeasance or bad
        faith of the Master Servicer in the performance of its duties under this
        Agreement or by reason of reckless disregard of its obligations and
        duties under this Agreement.

               (d) The Master Servicer shall indemnify, defend and hold harmless
        the Owner Trustee, the Indenture Trustee and the Insurer from and
        against any and all costs, expenses, losses, claims, damages and
        liabilities arising out of or incurred in connection with the acceptance
        or performance of the trusts and duties herein contained, except to the
        extent that such cost, expense, loss, claim, damage or liability (i)
        shall be due to the willful misfeasance, bad faith or negligence (except
        for errors in judgment) of the Owner Trustee or the Indenture Trustee,
        as the case may be; (ii) relates to any tax other than the taxes with
        respect to which either a Seller or Master Servicer shall be required to
        indemnify the Owner Trustee and the Indenture Trustee; (iii) shall arise
        from the Owner Trustee's or the Indenture Trustee's breach of any of
        their respective representations or warranties set forth herein, in the
        Trust Agreement or in the Indenture; or (iv) shall be one as to which a
        Seller is required to indemnify the Owner Trustee or the Indenture
        Trustee, as the case may be.

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        Indemnification under this Section shall survive the resignation or
removal of the Owner Trustee or the Indenture Trustee or the termination of this
Agreement and shall include, without limitation, reasonable fees and expenses of
counsel and expenses of litigation. If the Master Servicer shall have made any
indemnity payments pursuant to this Section and the Person to or on behalf of
whom such payments are made thereafter collects any of such amounts from others,
such Person shall promptly repay such amounts to the Master Servicer, without
interest.

        Section 7.02. Corporate Existence; Status as Master Servicer; Merger.
The Master Servicer shall not consolidate with or merge into any other
corporation or convey, transfer or lease all or substantially all of its assets
as an entirety to any Person unless the corporation formed by such consolidation
or into which the Master Servicer has merged or the Person which acquires by
conveyance, transfer or lease substantially all the assets of the Master
Servicer as an entirety can lawfully perform the obligations of the Master
Servicer hereunder and executes and delivers to the Indenture Trustee and the
Owner Trustee an agreement in form and substance reasonably satisfactory to the
Indenture Trustee, the Owner Trustee and the Insurer, which contains an
assumption by such successor entity of the due and punctual performance or
observance of each covenant and condition to be performed or observed by the
Master Servicer under this Agreement. Notice shall be sent to each Rating Agency
by the Master Servicer of any consolidation, merger or succession pursuant to
this Section.

        Section 7.03. Performance of Obligations.

        (a) The Master Servicer shall punctually perform and observe all of its
obligations and agreements contained in this Agreement.

        (b) The Master Servicer shall not take any action, or permit any action
to be taken by others, which would excuse any person from any of its covenants
or obligations under any of the Contract Documents or under any other instrument
included in the Trust Estate, or which would result in the amendment,
hypothecation, subordination, termination or discharge of, or impair the
validity or effectiveness of, any of the Contract Documents or any such
instrument, except as expressly provided herein and therein.

        Section 7.04. Master Servicer Not to Resign; Assignment.

        (a) The Master Servicer shall not resign from the duties and obligations
hereby imposed on it except upon determination by its Board of Directors that by
reason of change in applicable legal requirements the continued performance by
the Master Servicer of its duties hereunder would cause it to be in violation of
such legal requirements in a manner which would result in a material adverse
effect on the Master Servicer or its financial condition, said determination to
be evidenced by a resolution of its Board of Directors to such effect
accompanied by an Opinion of Counsel, satisfactory to the Owner Trustee and the
Indenture Trustee, to such effect. No such resignation shall become effective
unless and until (i) a new servicer acceptable to the Owner Trustee, the
Indenture Trustee and the Insurer is willing to service the Contracts and enters
into a servicing agreement with the Trust and the Insurer in form and substance
substantially similar to this Agreement and satisfactory to the Owner Trustee,
the Indenture Trustee and the Insurer and (ii) each Rating Agency confirms that
the selection of such new servicer will not result in the qualification,
reduction or withdrawal of its then-current rating of each Class of

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Notes assigned by such Rating Agency. No such resignation shall affect the
obligation of the Master Servicer to repurchase Contracts pursuant to Section
4.07.

        (b) Except as specifically permitted in this Agreement, the Master
Servicer may not assign this Agreement or any of its rights, powers, duties or
obligations hereunder; provided that (i) the Master Servicer may assign this
Agreement in connection with a consolidation, merger, conveyance, transfer or
lease made in compliance with Section 7.02.

        (c) Except as provided in Sections 7.04(a) and (b), the duties and
obligations of the Master Servicer under this Agreement shall continue until
this Agreement shall have been terminated as provided in Section 9.01 or the
Trust shall have been terminated as provided by the terms of the Trust
Agreement, and shall survive the exercise by the Owner Trustee, the Indenture
Trustee or the Insurer of any right or remedy under this Agreement, or the
enforcement by the Owner Trustee, the Indenture Trustee, any Certificateholder
or Noteholder, or the Insurer of any provision of the Notes, the Certificates,
the Insurance Agreement or this Agreement.

        (d) The resignation of the Master Servicer in accordance with this
Section shall not affect the rights of the Sellers hereunder. If the Master
Servicer resigns pursuant to this Section, its appointment as custodian can be
terminated pursuant to Section 3.07.

        Section 7.05. Limitation on Liability of Master Servicer and Others.

        (a) Neither the Master Servicer nor any of the directors, officers,
employees or agents of the Master Servicer shall be under any liability to the
Issuer, the Noteholders or the Certificateholders, except as provided under this
Agreement, for any action taken or for refraining from the taking of any action
pursuant to this Agreement or for errors in judgment; provided, however, that
this provision shall not protect the Master Servicer or any such person against
any liability that would otherwise be imposed by reason of willful misfeasance,
bad faith or negligence (except errors in judgment) in the performance of duties
or by reason of reckless disregard of obligations and duties under this
Agreement. The Master Servicer and any director, officer, employee or agent of
the Master Servicer may rely in good faith on any document of any kind prima
facie properly executed and submitted by any person respecting any matters
arising under this Agreement.

        (b) The Master Servicer and any director or officer or employee or agent
of the Master Servicer shall be reimbursed by the Owner Trustee or the Indenture
Trustee, as the case may be, for any contractual damages, liability or expense
incurred by reason of such Trustee's willful misfeasance, bad faith or
negligence (except errors in judgment) in the performance of such Trustee's
duties under this Agreement or by reason of reckless disregard of its
obligations and duties under this Agreement.

        Except as provided in this Agreement, the Master Servicer shall not be
under any obligation to appear in, prosecute or defend any legal action that
shall not be incidental to its duties to service the Contracts in accordance
with this Agreement, and that in its opinion may involve it in any expense or
liability; provided, however, that the Master Servicer may undertake any
reasonable action that it may deem necessary or desirable in respect of this
Agreement and

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the other Basic Documents and the rights and duties of the parties to this
Agreement and the other Basic Documents and the interests of the Securityholders
under the Basic Documents.

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                                  ARTICLE EIGHT

                                     DEFAULT

        Section 8.01. Servicer Default. If any one of the following events (a
"Servicer Default") shall occur and be continuing:

               (a) a claim being made under the Note Policy;

               (b) any failure by the Master Servicer or the Issuer, to deposit
        or credit, or to deliver to the Indenture Trustee for deposit, in any of
        the Trust Accounts any amount required hereunder to be as deposited,
        credited or delivered or to direct the Indenture Trustee to make any
        required distributions therefrom, that shall continue unremedied for a
        period of three Business Days after written notice of such failure is
        received from the Owner Trustee, the Indenture Trustee or the Insurer or
        after discovery of such failure by an officer of the Master Servicer;

               (c) any failure by the Master Servicer to deliver to the Insurer,
        the Indenture Trustee or the Owner Trustee a report in accordance with
        Section 4.09 and/or Section 4.10 by the fourth Business Day prior to the
        Distribution Date with respect to which such report is due, or the
        Master Servicer shall have defaulted in the due observance of any
        provision of Section 7.02 (other than failure to enter into an
        assumption agreement under Section 7.02, which is a Servicer Default
        only if such failure continues for ten Business Days);

               (d) failure on the part of a Seller, the Issuer or the Master
        Servicer duly to observe or to perform in any material respect any other
        covenants or agreements of the Master Servicer or the Sellers set forth
        in this Agreement or any other Basic Document, which failure shall (i)
        materially and adversely affect the rights of the Insurer, the Owner
        Trustee, the Indenture Trustee, the Certificateholders or Noteholders
        and (ii) continue unremedied for a period of 30 days after the date on
        which written notice of such failure, requiring the same to be remedied,
        shall have been given (A) to the Master Servicer or the Seller (as the
        case may be) by the Insurer, the Owner Trustee or the Indenture Trustee
        or (B) to the Master Servicer or a Seller (as the case may be), and to
        the Owner Trustee and the Indenture Trustee by the Holders of Notes
        evidencing not less than 25% of the Outstanding Amount of the Notes, or,
        if the Notes have been paid in full, by Certificateholders evidencing
        not less than 25% of the aggregate Certificate Percentage Interest, or
        so long as no default under the Note Policy has occurred and is
        continuing and no insolvency of the Insurer has occurred, by the
        Insurer;

               (e) the occurrence of an Insolvency Event with respect to a
        Seller, the Issuer or the Master Servicer; or

               (f) any representation, warranty or statement of the Master
        Servicer, the Issuer or a Seller made in this Agreement or any
        certificate, report or other writing delivered pursuant hereto shall
        prove to be incorrect in any material respect as of the time when the
        same shall have been made (excluding, however, any representation or
        warranty

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        to which Section 3.01 or 4.06 shall be applicable so long as the Master
        Servicer or the Sellers shall be in compliance with Section 3.02 or
        4.07, as the case may be), and the incorrectness of such representation,
        warranty or statement has a material adverse effect on the Noteholders
        or the Certificateholders and, within 30 days after written notice
        thereof shall have been given to the Master Servicer or the Seller by
        the Indenture Trustee or the Owner Trustee or by the Holders of Notes
        evidencing not less than 25% of the Outstanding Amount of the Notes, or
        Certificateholders evidencing not less than 25% of the aggregate
        Certificate Percentage Interest or, so long as no default has occurred
        under the Note Policy and is continuing and no Insurer Insolvency has
        occurred, by the Insurer, the circumstance or condition in respect of
        which such representation, warranty or statement was incorrect shall not
        have been eliminated or otherwise cured;

then, and in each and every case, so long as such Servicer Default shall not
have been remedied and subject to the limitations set forth in Section 6.07 of
the Insurance Agreement, either the Indenture Trustee, the Insurer, the Holders
of Notes evidencing not less than 25% of the Outstanding Amount of the Notes
(or, if the Notes have been paid in full and the Indenture has been discharged
in accordance with its terms, by the Owner Trustee or by Certificateholders
evidencing not less than 25% of the aggregate Certificate Percentage Interest),
by notice then given in writing to the Master Servicer (and to the Insurer, the
Indenture Trustee and the Owner Trustee if given by the Noteholders or the
Certificateholders) may terminate all the rights and obligations of the Master
Servicer under this Agreement. Upon such termination, termination of the Master
Servicer as custodian can be made pursuant to Section 3.07. On or after the
receipt by the Master Servicer of such written notice, all authority and power
of the Master Servicer under this Agreement, whether with respect to the Notes,
the Certificates, the Contracts or otherwise, shall, without further action,
pass to and be vested in the Indenture Trustee or such successor Master Servicer
as may be appointed under Section 8.02; and, without limitation, the Indenture
Trustee and the Owner Trustee are hereby authorized and empowered to execute and
deliver, for the benefit of the predecessor Master Servicer, as attorney-in-fact
or otherwise, any and all documents and other instruments, and to do or
accomplish all other acts or things necessary or appropriate to effect the
purposes of such notice of termination, whether to complete the transfer and
endorsement of the Contracts and related documents, or otherwise. The Master
Servicer shall cooperate with the Indenture Trustee and the Owner Trustee in
effecting the termination of the responsibilities and rights of the predecessor
Master Servicer under this Agreement, including the transfer to the Indenture
Trustee for administration by it of all cash amounts that shall at the time be
held by the predecessor Master Servicer for deposit, or shall thereafter be
received by it with respect to any Contract.

        Section 8.02. Indenture Trustee to Act; Appointment of Successor. Upon
the Master Servicer's receipt of notice of termination pursuant to Section 8.01
or resignation pursuant to Section 7.04, the Indenture Trustee shall be the
successor to the Master Servicer in its capacity as servicer under this
Agreement, and shall be subject to all the responsibilities, duties and
liabilities relating thereto placed on the Master Servicer by the terms and
provisions of this Agreement, except that the Indenture Trustee shall not be
obligated to purchase Contracts pursuant to Section 4.07 unless the obligation
to repurchase arose after the date of the notice of termination given to the
Master Servicer pursuant to Section 8.01 or be subject to any obligation of the
Master Servicer to indemnify or hold harmless any Person as set forth in this
Agreement arising from the acts or omissions of the previous Master Servicer. As
compensation therefor,

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the Indenture Trustee shall be entitled to such compensation (whether payable
out of the Collection Account or otherwise) as the Master Servicer would have
been entitled to under this Agreement if no such notice of termination shall
have been given. If, however, a bankruptcy trustee or similar official has been
appointed for the Master Servicer, and no Servicer Default other than such
appointment has occurred, such trustee or official may have the power to prevent
the Indenture Trustee, Insurer or the Noteholders from effecting a transfer of
servicing. Notwithstanding the above, the Indenture Trustee may, if it shall be
unwilling to act, or shall, if it shall be legally unable so to act, appoint, or
petition a court of competent jurisdiction to appoint, any established financial
institution, having a net worth of not less than $50,000,000 and whose regular
business shall include the servicing of motor vehicle retail installment sales
contracts, as the successor to the Master Servicer under this Agreement. Pending
appointment of any such successor Master Servicer, the Indenture Trustee shall
act in such capacity as provided above. In connection with such appointment, the
Indenture Trustee may make such arrangements for the compensation of such
successor out of payments on Contracts it and such successor shall agree;
provided, however, that no such compensation shall be in excess of that
permitted the Master Servicer under this Agreement without the consent of the
Insurer. The Indenture Trustee and such successor shall take such action,
consistent with this Agreement, as shall be necessary to effectuate any such
succession.

        Section 8.03. Repayment of Advances. If the identity of the Master
Servicer shall change, the predecessor Master Servicer shall be entitled to
receive reimbursement for outstanding Advances pursuant to Section 5.04 with
respect to all Advances made by the predecessor Master Servicer.

        Section 8.04. Notification to Noteholders and Certificateholders. Upon
any termination of, or appointment of a successor to, the Master Servicer
pursuant to this Article, the Owner Trustee shall give prompt written notice
thereof to Certificateholders at their respective addresses appearing in the
Certificate Register, and the Indenture Trustee shall give prompt written notice
thereof to Noteholders at their respective addresses appearing in the Note
Register and to each Rating Agency.

        Section 8.05. Waiver of Past Defaults. The Holders of Notes evidencing
not less than 51% of the Outstanding Amount of the Notes, or, if all the Notes
have been paid in full and the Indenture has been discharged in accordance with
its terms, Certificateholders evidencing not less than 51% of the aggregate
Certificate Percentage Interest (in the case of any default which does not
adversely affect the Indenture Trustee or the Noteholders) may, on behalf of all
Securityholders, with the consent of the Insurer, waive in writing any default
by the Master Servicer in the performance of its obligations hereunder and its
consequences, except a default in making any required deposits to or payments
from any of the Trust Accounts in accordance with this Agreement or in respect
of a covenant or provisions hereof which cannot be modified without the consent
of each Securityholder. Upon any such waiver of a past default, such default
shall cease to exist, and any Servicer Default arising therefrom shall be deemed
to have been remedied for every purpose of this Agreement. No such waiver shall
extend to any subsequent or other default or impair any right consequent
thereto.

        Section 8.06. Insurer Direction of Insolvency Proceedings. Upon receipt
of actual knowledge thereof by a Responsible Officer, the Indenture Trustee
shall promptly notify the

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Insurer of (i) the commencement of any of the events or proceedings
(individually, an "Insolvency Proceeding") described in the definition of the
term "Insolvency Event" or any such event or proceeding applicable to an Obligor
under a Contract and (ii) the making of any claim in connection with any
Insolvency Proceeding seeking the avoidance as a preferential transfer (a
"Preference Claim") of any payment of principal of, or interest on, a Contract
or any Notes or Certificates. Each Noteholder and Note Owner, by its purchase of
Notes or a beneficial interest therein, each Certificateholder, by its purchase
of Certificates or a beneficial interest therein, the Owner Trustee and the
Indenture Trustee hereby agree that, so long as neither a default under the Note
Policy nor an Insurer Insolvency has occurred and is continuing, the Insurer may
at any time during the continuation of an Insolvency Proceeding direct all
matters relating to such Insolvency Proceeding, including, without limitation,
(i) all matters relating to any Preference Claim, (ii) the direction of any
appeal of any order relating to any Preference Claim and (iii) the posting of
any surety, supersedes or performance bond pending any such appeal. The Insurer
shall be subrogated to the rights of the Indenture Trustee, the Owner Trustee
and each Securityholder in the conduct of any Insolvency Proceeding, including,
without limitation, all rights of any party to an adversary proceeding action
with respect to any court order issued in connection with any such Insolvency
Proceeding.

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                                  ARTICLE NINE

                                   TERMINATION

        Section 9.01. Optional Purchase of All Contracts.

        (a) On each Distribution Date as of which the Aggregate Scheduled
Balance is less than 10% of the Cut-Off Date Aggregate Scheduled Balance, the
Sellers shall have the option to purchase the remaining Contracts from the
Trust. Such option, if exercised by any Seller, shall be deemed to be exercised
by such Seller on behalf of all Sellers. Notice of the exercise of such option
shall be given by a Seller to the Owner Trustee, the Indenture Trustee and the
Insurer not later than the 25th day of the month immediately preceding the month
of the related Distribution Date. To exercise such option, each Seller shall pay
to the Indenture Trustee for the benefit of the Securityholders, by deposit in
the Collection Account on the Business Day immediately preceding the related
Distribution Date, the aggregate Repurchase Amount of all Related Contracts of
such Seller that were Outstanding at the beginning of the Due Period ending
immediately prior to such Distribution Date, and shall succeed to all interests
in and to the Trust. Such purchase shall be deemed to have occurred on the last
day of such Due Period. Notwithstanding the foregoing, the Sellers shall not be
permitted to exercise such option unless the amount to be deposited in the
Collection Account pursuant to the preceding sentence is greater than or equal
to the sum of the outstanding principal amount of the Notes and the aggregate
Certificate Percentage Interest and all unpaid interest (including any overdue
interest) thereon that has accrued through the related Interest Period. In
addition, if the Master Servicer or a Seller has outstanding senior debt and
such debt is not rated "investment grade" by Moody's at the time of exercising
the option pursuant to this Section, then the Master Servicer or such Seller
shall deliver to the Owner Trustee, the Indenture Trustee and Moody's, an
Opinion of Counsel to the effect that such optional purchase is not a fraudulent
conveyance.

        (b) Upon any sale of the assets of the Trust pursuant to Section 5.02(b)
of the Indenture, the Master Servicer shall instruct the Indenture Trustee to
deposit the proceeds from such sale after all payments and reserves therefrom
have been made (the "Insolvency Proceeds") in the Collection Account. On the
Distribution Date on which the Insolvency Proceeds are deposited in the
Collection Account (or, if such proceeds are not so deposited on a Distribution
Date, on the Distribution Date immediately following such deposit), the Master
Servicer shall instruct the Indenture Trustee to make the following deposits
(after the application on such Distribution Date of Net Collections and funds on
deposit in the Spread Account pursuant to Sections 5.05 and 5.06) from the
Insolvency Proceeds and any funds remaining on deposit in the Spread Account
(including the proceeds of any sale of investments therein as described in the
following sentence):

               (i) to the Note Distribution Account, any portion of the Note
        Interest Distributable Amount not otherwise deposited into the Note
        Distribution Account on such Distribution Date and

               (ii) to the Note Distribution Account, the outstanding principal
        amount of the Notes (after giving effect to the reduction in the
        outstanding principal amount of the

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        Notes to result from the deposits made in the Note Distribution Account
        on such Distribution Date and on prior Distribution Dates);

               (iii) to the Insurer, to the extent of any Unreimbursed Insurer
        Amounts;

               (iv) to WFAL until WFAL has received an aggregate amount equal to
        the Spread Account Initial Deposit; and

               (v) to the Certificate Distribution Account, for distribution to
        Certificateholders in accordance with Section 5.02 of the Trust
        Agreement.

        (c) As described in Article Nine of the Trust Agreement, notice of any
termination of the Trust shall be given by the Master Servicer to the Owner
Trustee, the Insurer and the Indenture Trustee as soon as practicable after the
Master Servicer has received notice thereof.

        (d) Following the satisfaction and discharge of the Indenture and the
payment in full of the principal of and interest on the Notes, the
Certificateholders will succeed to the rights of the Noteholders hereunder and
the Owner Trustee will succeed to the rights of, and assume the obligations of,
the Indenture Trustee pursuant to this Agreement.

        Section 9.02. Transfer to the Insurer. If (i) there is one or more
Outstanding Contracts at the end of the Due Period ending immediately prior to
the Class A-4 Final Distribution Date and (ii) an amount sufficient to pay the
Note Distributable Amount on the Class A-4 Final Distribution Date has been
deposited with the Indenture Trustee by the Insurer for the benefit of the Class
A-4 Noteholders, then on the Class A-4 Final Distribution Date the Class A-4
Notes shall be deemed to be transferred by the Class A-4 Noteholders to the
Insurer or its designee as purchaser thereof at the opening of business on the
Class A-4 Final Distribution Date and the Owner Trustee, on behalf of the Trust,
shall execute, and the Indenture Trustee shall authenticate and deliver to the
Insurer or its designee, in the name of the Insurer or its designee, as the case
may be, a new Class A-4 Note evidencing the entire Note Balance. Such new Class
A-4 Note shall have the same terms as the Class A-4 Notes deemed transferred by
the Class A-4 Noteholders. No service charge shall be made for the issuance of
such Class A-4 Note to the Insurer or its designee, but the Owner Trustee may
require payment of a sum sufficient to cover any tax or other governmental
charge imposed in connection therewith. Such transfer shall not diminish or
restrict the Insurer's rights hereunder or under the Insurance Agreement.

                                       73
<PAGE>   79

                                   ARTICLE TEN

                                  MISCELLANEOUS

        Section 10.01. Amendment.

        (a) This Agreement may be amended by the Sellers, the Master Servicer
and the Owner Trustee on behalf of the Issuer, collectively, without the consent
of any Securityholders, (i) to cure any ambiguity, to correct or supplement any
provisions in this Agreement which are inconsistent with the provisions herein,
or to add any other provisions with respect to matters or questions arising
under this Agreement that shall not be inconsistent with the provisions of this
Agreement, (ii) to add or provide any credit enhancement for any Class of Notes
and (iii) to change any provision applicable for determining the Specified
Spread Account Balance or the manner in which the Spread Account is funded (in
each case with the approval of the Insurer); provided, however, that any such
action shall not, as evidenced by an Opinion of Counsel, adversely affect in any
material respect the interests of any Securityholder and provided, further, that
in connection with any amendment pursuant to clause (ii) and (iii) above, the
Master Servicer shall deliver to the Owner Trustee, the Indenture Trustee and
the Insurer a letter from Standard & Poor's to the effect that such amendment
will not cause its then-current rating on any Class of Notes to be qualified,
reduced or withdrawn, without giving any consideration to the effect of the
guaranty under the Note Policy of payments owing to Noteholders, and the Master
Servicer shall provide Moody's notice of such amendment; and provided, further,
that this Agreement may not be amended to alter the rights or obligations of the
Indenture Trustee without the prior consent of the Indenture Trustee.

        (b) This Agreement may also be amended from time to time by the Seller,
the Master Servicer and the Owner Trustee on behalf of the Issuer, with the
consent of the Holders of Notes evidencing not less than 51% of the Outstanding
Amount of the Notes, and the consent of Certificateholders evidencing not less
than 51% of the Certificate Percentage Interest, for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Agreement or of modifying in any manner the rights of the Noteholders or
the Certificateholders; provided, however, that no such amendment shall increase
or reduce in any manner the amount of, or accelerate or delay the timing of
(i)(a) collections of payments on the Contracts or distributions that shall be
required to be made on any Note or Certificate or any Interest Rate, (b) except
as otherwise provided in Section 10.01(a), the Specified Spread Account Balance,
or the manner in which the Spread Account is funded or (ii) reduce the aforesaid
percentage of the Outstanding Amount of the Notes, the Holders of which are
required to consent to any such amendment, without the consent of the Insurer
and the Holders of all Notes and Certificates of the relevant Class then
outstanding.

        (c) Prior to the execution of any such amendment or consent, the
Indenture Trustee shall furnish written notification of the substance of such
amendment or consent, as prepared by the Seller, the Master Servicer and the
Owner Trustee on behalf of the Issuer, at the expense of the such party,
together with a copy thereof, to each Rating Agency and the Insurer.

        (d) Promptly after the execution of any such amendment or consent, the
Owner Trustee and the Indenture Trustee, as the case may be, shall furnish the
written notification of the

                                       74
<PAGE>   80

substance of the amendment or consent described in Section 10.01(c) above, at
the expense of the Seller, the Master Servicer or the Owner Trustee on behalf of
the Issuer, as the case may be, to each Certificateholder and Noteholder,
respectively. It shall not be necessary for the consent of Noteholders and
Certificateholders pursuant to Section 10.01(b) to approve the particular form
of any proposed amendment or consent, but it shall be sufficient if such consent
shall approve the substance thereof. The manner of obtaining such consents and
of evidencing the authorization by Noteholders and Certificateholders of the
execution thereof shall be subject to such reasonable requirements as the Owner
Trustee or the Indenture Trustee may prescribe.

        (e) Prior to the execution of any amendment to this Agreement, the Owner
Trustee shall be entitled to receive and rely upon an Opinion of Counsel stating
that the execution of such amendment is authorized or permitted by this
Agreement. The Owner Trustee may, but shall not be obligated to, enter into any
such amendment which affects the Owner Trustee's own rights, duties or
immunities under this Agreement or otherwise.

        Section 10.02. Protection of Title to Trust.

        (a) The Master Servicer shall execute and file such financing statements
and cause to be executed and filed such continuation statements, all in such
manner and in such places as may be required by law fully to preserve, maintain
and protect the interest of the Issuer, the Securityholders, the Indenture
Trustee, the Owner Trustee and the Insurer in the Contracts and in the proceeds
thereof. The Master Servicer shall deliver (or cause to be delivered) to the
Owner Trustee and the Indenture Trustee file-stamped copies of, or filing
receipts for, any document filed as provided above, as soon as available
following such filing.

        (b) Neither WFS, either Seller nor the Master Servicer shall change its
name, identity or corporate structure in any manner that would, could or might
make any financing statement or continuation statement filed in accordance with
Section 10.02(a) seriously misleading within the meaning of Section 9-402(7) of
the UCC, unless it shall have given the Insurer, the Owner Trustee and the
Indenture Trustee at least 60 days' prior written notice thereof and shall have
promptly filed appropriate amendments to all previously filed financing
statements or continuation statements.

        (c) WFS, the Sellers and the Master Servicer shall give the Insurer, the
Owner Trustee and the Indenture Trustee at least 60 days' prior written notice
of any relocation of the principal executive office of WFS or each Seller and
the Master Servicer or the Subservicers (in the case of notice provided by the
Master Servicer) if, as a result of such relocation, the applicable provisions
of the UCC would require the filing of any amendment of any previously filed
financing or continuation statement or of any new financing statement and shall
promptly file any such amendment or new financing statement. The Master Servicer
shall at all times maintain each office from which it shall service Contracts,
and its principal executive office, within the United States.

        (d) The Master Servicer shall maintain or cause to be maintained
accounts and records as to each Contract accurately and in sufficient detail to
permit (i) the reader thereof to know at any time the status of such Contract,
including payments and recoveries made and payments owing (and the nature of
each) and (ii) reconciliation between payments or recoveries

                                       75
<PAGE>   81

on (or with respect to) each Contract and the amounts from time to time
deposited in or credited to the Collection Account and the Holding Account in
respect of such Contract.

        (e) The Master Servicer shall maintain or cause to be maintained its
computer systems and those of Subservicers so that, from and after the time of
sale under this Agreement of the Contracts, the Master Servicer's and
Subservicer's master computer records (including any backup archives) that shall
refer to a Contract indicate clearly the interest of the Issuer and the
Indenture Trustee in such Contract and that such Contract is owned by the Issuer
and has been pledged to the Indenture Trustee. Indication of the Issuer's
ownership of and the Indenture Trustee's interest in a Contract shall be deleted
from or modified on the Master Servicer's computer systems when, and only when,
the related Contract shall have been paid in full or repurchased or shall have
become a Liquidated Contract.

        (f) If at any time any Seller, the Master Servicer or a Subservicer
shall propose to sell, grant a security interest in, or otherwise transfer any
interest in automotive retail installment sales contracts to any prospective
purchaser, lender or other transferee, the Master Servicer shall give or cause
to be given to such prospective purchaser, lender or other transferee computer
tapes, records or print-outs (including any restored from back-up archives)
that, if they shall refer in any manner whatsoever to any Contract, shall
indicate clearly that such Contract has been sold and is owned by the Issuer and
has been pledged to the Indenture Trustee.

        (g) The Master Servicer shall permit the Owner Trustee, the Indenture
Trustee and the Insurer and its agents, at any time during normal business
hours, to inspect, audit and make copies of and abstracts from the Master
Servicer's records regarding any Contract.

        (h) Upon request, the Master Servicer shall furnish to the Owner
Trustee, the Indenture Trustee and the Insurer, within five Business Days, a
list of all Contracts then held as part of the Trust Estate, together with a
reconciliation of such list to the Schedule of Contracts and to each of the
Distribution Date Statements furnished before such request indicating removal of
Contracts from the Trust.

        (i)The Master Servicer shall deliver to the Owner Trustee, the Indenture
Trustee, each Rating Agency and the Insurer:

               (1) promptly after the execution and delivery of this Agreement
        and of each amendment hereto, an Opinion of Counsel stating that, in the
        opinion of such counsel, the Indenture Trustee holds a perfected
        security interest in the Contracts, that the Trust holds title to the
        Contracts subject to the security interest of the Indenture Trustee and
        the lien of the Insurer pursuant to the Insurance Agreement, and that
        the Insurer holds a lien on the Contracts under the Insurance Agreement,
        subject to applicable subordination; and

               (2) within 90 days after the beginning of each calendar year
        beginning with the first calendar year beginning more than three months
        after the Cut-Off Date, an Opinion of Counsel, dated as of a date during
        such 90-day period, either (A) stating that, in the opinion of such
        counsel, all financing statements and continuation statements have been
        executed and filed that are necessary fully to preserve and protect the
        interest of the Owner Trustee and the Indenture Trustee in the
        Contracts, and reciting the details of such

                                       76
<PAGE>   82

        filings or referring to prior Opinions of Counsel in which such details
        are given, or (B) stating that, in the opinion of such counsel, no such
        action shall be necessary to preserve and protect such interest.

        Section 10.03. Governing Law. This Agreement shall be construed in
accordance with the laws of the State of California and the obligations, rights,
and remedies of the parties under the Agreement shall be determined in
accordance with such laws, except that the duties of the Owner Trustee and the
Indenture Trustee shall be governed by the laws of the State of New York.

        Section 10.04. Notices. All demands, notices and communications upon or
to the Seller, the Master Servicer, the Owner Trustee, the Indenture Trustee,
the Insurer or the Rating Agencies under this Agreement shall be in writing,
personally delivered or mailed by certified mail, return receipt requested, and
shall be deemed to have been duly given upon receipt in the case of (a) WFAL, at
23 Pasteur Road, Irvine, California 92618, Attention: Legal Department, (b)
WFSRC, at 23 Pasteur, Irvine, California 92618, Attention: Legal Department, (c)
the Master Servicer, 23 Pasteur, Irvine, California 92618, Attention: Legal
Department, (d) the Issuer or the Owner Trustee, at the Corporate Trust Office
(with, in the case of the Issuer, a copy to the Seller), (e) the Indenture
Trustee, at Four Albany Street - 10th Floor, New York, New York 10006,
Attention: Corporate Trust Department - Asset Backed Group, (f) Moody's, to
Moody's Investors Service, Inc., ABS Monitoring Department, 99 Church Street,
New York, New York 10007, (g) Standard & Poor's, to Standard & Poor's, 55 Water
Street, New York, New York 10041, Attention of Asset Backed Surveillance
Department and (i) the Insurer, at 350 Park Avenue, New York, New York 10022,
Attention: Surveillance Department, with a copy to the Senior Vice President
-Surveillance; or, as to each of the foregoing, at such other address as shall
be designated by written notice to the other parties. Any notice required or
permitted to be to be mailed to a Securityholder shall be given by first class
mail, postage prepaid, at the address of such Holder as shown in the Note
Register or the Certificate Register, as the case may be. Any notice so mailed
within the time prescribed herein shall be conclusively presumed to have been
duly given, whether or not such Securityholder shall receive such notice.

        Section 10.05. Severability of Provisions. If one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Notes or
Certificates or the rights of the Holders thereof.

        Section 10.06. Assignment. Notwithstanding anything to the contrary
contained herein, as provided in Sections 6.03, 7.02 and 8.04, this Agreement
may not be assigned by the Seller or the Master Servicer without the prior
written consent of Holders of Notes of each Class evidencing not less than 66
2/3% of the Outstanding Amount of Notes of such Class and Certificateholders
evidencing not less than 66 2/3% of the aggregate Certificate Percentage
Interest.

        Section 10.07. Third Party Beneficiaries. Except as otherwise
specifically provided herein, the parties hereto hereby manifest their intent
that no third party other than the Insurer

                                       77
<PAGE>   83

shall be deemed a third party beneficiary of this Agreement, and specifically
that the Obligors are not third party beneficiaries of this Agreement.

        Section 10.08. Insurer Default or Insolvency. If a default under the
Note Policy has occurred and is continuing or a Insurer Insolvency has occurred,
any provision giving the Insurer the right to direct, appoint or consent to,
approve of, or take any action under this Agreement, shall be inoperative during
the period of such default or the period from and after such Insurer Insolvency
and such consent or approval shall be deemed to have been given for the purpose
of such provisions.

        Section 10.09. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be an original and all of which shall together
constitute but one and the same instrument.

        Section 10.10. Headings. The headings of the various Articles and
Sections herein are for convenience of reference only and shall not define or
limit any of the terms or provisions hereof.

        Section 10.11. Assignment by Issuer. The Sellers hereby acknowledge and
consent to any mortgage, pledge, assignment and grant of a security interest by
the Issuer to the Indenture Trustee pursuant to the Indenture for the benefit of
the Noteholders of all right, title and interest of the Issuer in, to and under
the Contracts and/or the assignment of any or all of the Issuer's rights and
obligations hereunder to the Indenture Trustee.

        Section 10.12. Limitation of Liability of Owner Trustee. Notwithstanding
anything contained herein to the contrary, this instrument has been
countersigned by Chase Manhattan Bank Delaware not in its individual capacity
but solely in its capacity as Owner Trustee of the Issuer and in no event shall
Chase Manhattan Bank Delaware in its individual capacity or any beneficial owner
of the Issuer have any liability for the representations, warranties, covenants,
agreements or other obligations of the Issuer hereunder, as to all of which
recourse shall be had solely to the assets of the Issuer. For all purposes of
this Agreement, in the performance of any duties or obligations of the Issuer
hereunder, the Owner Trustee shall be subject to, and entitled to the benefits
of, the terms and provisions of Articles Six, Seven and Eight of the Trust
Agreement.

                                       78
<PAGE>   84

        IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective officers as of the day and year first above
written.

                                             WFS FINANCIAL 2000-A OWNER TRUST

                                             By:  CHASE MANHATTAN BANK DELAWARE,
                                                  not in its individual capacity
                                                  but solely as Owner Trustee on
                                                  behalf of the Trust

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

                                             WFS FINANCIAL AUTO LOANS, INC.,
                                                  as Seller

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

                                             WFS RECEIVABLES CORPORATION,
                                                  as Seller

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

                                             WFS FINANCIAL INC,
                                                 as Master Servicer

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

                                       79
<PAGE>   85

Acknowledged and accepted as of the day
and year first above written:

BANKERS TRUST COMPANY, not in its
individual capacity but solely as
Indenture Trustee

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

                                       80
<PAGE>   86

                                                                      SCHEDULE A

                              SCHEDULE OF CONTRACTS

      [Omitted--Schedule of Contracts on file at the offices of the Seller,
       the Master Servicer, the Owner Trustee and the Indenture Trustee.]

                                      SA-1
<PAGE>   87

                                                                      SCHEDULE B

                           LOCATION OF CONTRACT FILES

WFS Financial Inc                                 WFS Financial Inc
23 Pasteur Rd.                                    6061 N. State Highway 161
Irvine, CA  92618                                 Irving, TX  75038
714-727-1000                                      972-870-8060

WFS Financial Inc                                 WFS Financial Inc
201 Boston Post Road, Suite 101                   1883 NE 7th Street, Suite H
Marlboro, MA  01752                               Grants Pass, OR  97526
503-222-8855                                      503-955-1402

WFS Financial Inc                                 WFS Financial Inc
8548 SW Apple Way Suite 100                       3872 Center Street N.E.
Portland, OR  97225                               Salem, OR  97301
503-291-0010                                      503-581-9977

                                      SB-1

<PAGE>   88

                                                                       EXHIBIT A

                          [FORM OF INSURANCE AGREEMENT]

                                       A-1

<PAGE>   89

                                                                       EXHIBIT B

                              [FORM OF NOTE POLICY]

                                      B-1

<PAGE>   90

                                                                       EXHIBIT C

                                  [FORM OF RIC]

                                      C-1

<PAGE>   91

                                                                       EXHIBIT D

                        [FORM OF SUBSERVICING AGREEMENT]

                                      D-1

<PAGE>   92

                                                                       EXHIBIT E

                      [FORM OF DISTRIBUTION DATE STATEMENT]

                                      E-1<PAGE>   1
                                                                  EXHIBIT 10.3.1

                    INSURANCE, INDEMNITY AND PLEDGE AGREEMENT

                          Dated as of ________________

                                      among

                      WFS FINANCIAL _________ OWNER TRUST,

                         WFS FINANCIAL AUTO LOANS, INC.,

                               WFS FINANCIAL INC,

                             WFS INVESTMENTS, INC.,

                       FINANCIAL SECURITY ASSURANCE INC.,

                                       and

                             BANKERS TRUST COMPANY,

            as Collateral Agent, Proceeds Agent and Indenture Trustee

                       WFS FINANCIAL _________ OWNER TRUST

<PAGE>   2
                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                          Page
                                                                                          ----
<S>                                                                                       <C>
INTRODUCTION................................................................................1

AGREEMENTS..................................................................................2

ARTICLE I DEFINITIONS.......................................................................2

        Section 1.01. Definitions...........................................................2

ARTICLE II REPRESENTATIONS, WARRANTIES AND COVENANTS........................................5

        Section 2.01. Representations and Warranties of the Trust...........................5

        Section 2.02. Affirmative Covenants of the Trust....................................7

        Section 2.03. Negative Covenants of the Trust.......................................9

        Section 2.04. Representations and Warranties of WII................................10

        Section 2.05. Affirmative Covenants of WII.........................................11

        Section 2.06. Negative Covenants of WII............................................12

        Section 2.07. Representations and Warranties of the Seller.........................14

        Section 2.08. Representations and Warranties of WFS................................17

        Section 2.09. Affirmative Covenants of the Seller..................................18

        Section 2.10. Negative Covenants of the Seller.....................................20

        Section 2.11. Affirmative Covenants of WFS.........................................21

ARTICLE III THE POLICIES; INDEMNIFICATION..................................................22

        Section 3.01. Agreement to Issue Policy............................................22

        Section 3.02. Conditions Precedent to Issuance of Policy...........................22

        Section 3.03. Premium..............................................................25

        Section 3.04. Reimbursement Obligation.............................................26

        Section 3.05. Non-Recourse Obligation..............................................27

        Section 3.06. Indemnification......................................................28

        Section 3.07. Liability Absolute...................................................31

        Section 3.08. Liability of Financial Security......................................31

        Section 3.09. Payment of Costs, Fees and Expenses..................................32

        Section 3.10. Payment Procedure....................................................33

        Section 3.11. Business Days........................................................33

        Section 3.12. Waivers and Consents by Seller and WFS...............................33

ARTICLE IV PLEDGE OF COLLATERAL............................................................34

        Section 4.01. Obligations Secured Hereby...........................................34

        Section 4.02. Granting Clause......................................................34
</TABLE>

                                       i
<PAGE>   3
<TABLE>
<S>                                                                                        <C>
        Section 4.03. Release of Collateral................................................35

ARTICLE V INTERCREDITOR PROVISIONS.........................................................35

        Section 5.01. Financial Security's Direction Upon Servicer Default.................35

        Section 5.02. Financial Security's Direction of Insolvency Proceedings.............36

ARTICLE VI THE COLLATERAL AGENT; REMEDIES..................................................36

        Section 6.01. Appointment and Powers of Collateral Agent...........................36

        Section 6.02. Successor Collateral Agent...........................................36

        Section 6.03. Remedies Available to Collateral Agent...............................37

        Section 6.04. Waiver of Stay or Extension Laws; Marshalling of Assets..............38

        Section 6.05. Restoration of Rights and Remedies...................................38

        Section 6.06. Remedies Cumulative..................................................39

        Section 6.07. Control by Financial Security........................................39

        Section 6.08. Proceeds Agent as Custodian and Bailee of Collateral Agent...........39

        Section 6.09. Indemnification of Collateral Agent..................................39

        Section 6.10. Compensation Payable to Collateral Agent.............................40

        Section 6.11. Protection of Financial Security's Security Interest.................40

        Section 6.12. Representations and Warranties of Indenture Trustee..................41

        Section 6.13. Certain Guaranties...................................................41

ARTICLE VII EVENTS OF DEFAULT..............................................................41

        Section 7.01. Events of Default....................................................41

        Section 7.02. Remedies; Waivers....................................................42

ARTICLE VIII MISCELLANEOUS.................................................................43

        Section 8.01. Amendments, Changes and Modifications................................43

        Section 8.02. Notices..............................................................43

        Section 8.03. Method of Payment....................................................43

        Section 8.04. Further Assurances and Corrective Instruments........................43

        Section 8.05. Term of Agreement....................................................43

        Section 8.06. Assignments; Third-Party Rights; Reinsurance.........................44

        Section 8.07. Consent of Financial Security........................................44

        Section 8.08. Right to Enforce Sale and Servicing Agreement........................44

        Section 8.09. WFS and WII as Parties Only for Certain Provisions...................44

        Section 8.10. Severability.........................................................45

        Section 8.11. Reports..............................................................45

        Section 8.12. Counterparts.........................................................45

        Section 8.13. GOVERNING LAW........................................................45
</TABLE>

                                       ii
<PAGE>   4
<TABLE>
<S>                                                                                        <C>
        Section 8.14. Headings.............................................................45

        Section 8.15. Trial by Jury Waived.................................................45

        Section 8.16. Limited Liability....................................................45

        Section 8.17. Limited Liability of Chase Manhattan Bank Delaware...................46

        Section 8.18. Entire Agreement.....................................................46
</TABLE>

                                      iii
<PAGE>   5
                                    EXHIBITS

EXHIBIT A          Forms of WFS Assignment and Collateral Assignment

EXHIBIT B          Form of Financial Guaranty Insurance Policy with respect to
                   the Notes, together with form of Endorsement No. 1 thereto

EXHIBIT C          Form of Opinion of Counsel to the Seller, WFSRC and WFS

EXHIBIT D          Form of Opinion of Special Tax Counsel to WFS

EXHIBIT E          Form of Certificate of the Indenture Trustee and the
                   Collateral Agent

EXHIBIT F          Form of Opinion of Counsel to the Indenture Trustee and the
                   Collateral Agent

EXHIBIT G          Form of Opinion of Counsel to the Trust and the Owner Trustee

EXHIBIT H          Form of Letter of Independent Accountants

                                       i
<PAGE>   6
                    INSURANCE, INDEMNITY AND PLEDGE AGREEMENT

               THIS INSURANCE, INDEMNITY AND PLEDGE AGREEMENT is made as of
____________ 1, 20__, by and among WFS FINANCIAL 20____-___ OWNER TRUST, a
Delaware business trust (the "Trust"), WFS FINANCIAL AUTO LOANS, INC., a
California corporation (the "Seller"), WFS FINANCIAL INC, a California
corporation ("WFS"), WFS INVESTMENTS, INC., a California corporation ("WII"),
FINANCIAL SECURITY ASSURANCE INC., a New York financial guaranty insurance
company ("Financial Security"), and BANKERS TRUST COMPANY, a New York banking
corporation, in its capacities as Collateral Agent and Proceeds Agent (each as
defined below), and in its capacity as Indenture Trustee under the Indenture
referred to below (the "Indenture Trustee").

                                  INTRODUCTION

               The Seller is the owner of the Contracts. The Seller proposes to
sell and assign to the Trust all of its right, title and interest in and to the
Contracts and certain other property pursuant to the Sale and Servicing
Agreement. The Trust will issue Certificates pursuant to the Trust Agreement and
Notes pursuant to the Indenture.

               Each Certificate will represent a fractional undivided interest
in the Trust. Each Note will be secured by the Indenture Property.

               The Seller has agreed to convey a security interest in the
Collateral and all the property conveyed by it to the Trust (with the exception
of the Policy) pursuant to the Sale and Servicing Agreement in favor of
Financial Security prior in right to all liens, claims, rights or interests
other than those of the Trust.

               The Trust has requested that Financial Security issue the Note
Policy to the Indenture Trustee to guarantee payment of the Scheduled Payments
(as defined in such Note Policy) on each Distribution Date in respect of the
Notes.

               Financial Security is willing to issue the Policy for the purpose
stated above if the Trust, the Seller, WFS, WII and the Indenture Trustee enter
into this Agreement and, in order to secure its obligations hereunder, the
Seller pledges the Collateral to the Collateral Agent for the benefit of
Financial Security, subject to the provisions hereof.

               The parties hereto desire to specify the indemnity and
reimbursement obligations to be provided in respect of amounts paid by Financial
Security under the Policy, the security to be provided in respect of such
indemnity and reimbursement obligations, and certain other matters.

<PAGE>   7
                                   AGREEMENTS

               In consideration of the mutual promises, covenants,
representations and warranties hereinafter set forth, the parties hereto agree
to as follows:

                                    ARTICLE I

                                   DEFINITIONS

               Section 1.01. Definitions. All words and phrases defined in the
Trust Agreement and the Sale and Servicing Agreement shall have the same
meanings in this Agreement unless a different meaning is set forth in this
Agreement. In addition, the following words and phrases shall have the following
respective meanings:

               "Administration Agreement" means the Administration Agreement
dated as of the date hereof, among the Trust, WFS Financial Inc, as
Administrator, the Seller and the Indenture Trustee.

               "Agreement" means this Insurance, Indemnity and Pledge Agreement,
as the same may be amended, modified or supplemented from time to time.

               "Authorized Officer" means, with respect to WFS, WII, the Seller
or any corporation, the president, the chief financial officer or any vice
president.

               "Bank" means, Western Financial Bank, a federally-chartered
savings association.

               "Collateral" means all of the Contracts listed in the Schedule of
Contracts attached to the Sale and Servicing Agreement, including, without
limitation, all payments of Monthly P&I (exclusive of Retained Yield, if any)
due on or after the Cut-Off Date (excluding the amount allocable to principal
and interest due prior to the Cut-Off Date), all Net Liquidation Proceeds and
Net Insurance Proceeds with respect to any Financed Vehicle to which a Contract
relates received on or after the Cut-Off Date and all other proceeds received in
respect of such Contracts (other than payments of Monthly P&I due prior to the
Cut-Off Date), and any and all security interests in the Financed Vehicles; the
Contract Documents relating to the Contracts (except the Contract Documents for
Contracts which have been the subject of a Full Prepayment received on or after
the Cut-Off Date but no later than one Business Day prior to the Closing Date,
in lieu of which the Seller shall have deposited in or credited to the
Collection Account on or prior to the Closing Date an amount equal to such Full
Prepayment); all Spread Account Collateral; and all proceeds in any way
delivered with respect to the foregoing, all rights to payments with respect to
the foregoing and all rights to enforce the foregoing.

               "Collateral Agent" means, initially, Bankers Trust Company, as
collateral agent for Financial Security pursuant to this Agreement and,
thereafter, any successor Collateral Agent named pursuant to this Agreement.

               "Collateral Assignment" means, with respect to any Contracts, the
original instrument of collateral assignment of such Contracts by the Seller to
the Collateral Agent, substantially in the form included in Exhibit A hereto.

               "Controlling Party" means Financial Security so long as no
Financial Security Insolvency shall have occurred and no Financial Security
Default shall have occurred and be continuing and, at any other time, the
Indenture Trustee.

               "Event of Default" has the meaning set forth in Section 7.01
hereof.

               "Exchange Act" means the Securities Exchange Act of 1934, as
amended.

                                       2
<PAGE>   8
               "Financial Security's Authorized Agent" means each Authorized
Officer of Financial Security and each other Person that Financial Security
designates as its authorized agent with notice to the Seller.

               "Indemnification Agreement" means the Indemnification Agreement,
dated as of the date hereof, among the Seller, WFS, Financial Security and the
Representative.

               "Indenture Property" means the property pledged to the Indenture
Trustee on behalf of the Noteholders pursuant to the Indenture.

               "Independent Accountant" means an independent accountant within
the meaning of the Securities Act and the Exchange Act.

               "Late Payment Rate" means the greater of a per annum rate equal
to 3% in excess of (i) Financial Security's cost of funds, determined on a
monthly basis, or (ii) the arithmetic average of the prime or base lending rates
publicly announced by The Chase Manhattan Bank, N.A. (New York, New York) and
Citibank, N.A. (New York, New York), as in effect on the last day of the month
for which interest is being computed, but in no event greater than the maximum
rate permitted by law.

               "Note Policy" means the financial guaranty insurance policy,
including and endorsements thereto, issued by Financial Security with respect to
the Notes, substantially in the form attached as Exhibit B hereto.

               "Notice Address" means

                      (a)    as to the Seller:

                             23 Pasteur
                             Irvine, California  92618
                             Attention:  Thomas A. Wolfe

                      (b)    as to WFS:

                             23 Pasteur
                             Irvine, California  92618
                             Attention:  Joy Schaefer

                      (c)    as to WII:

                             23 Pasteur
                             Irvine, California  92618
                             Attention:  Mark Olson

                      (d)    as to the Trust:

                             WFS Financial ______ Owner Trust
                             c/o Chase Manhattan Bank Delaware
                             as Owner Trustee
                             1201 Market Street
                             Wilmington, Delaware  19801
                             Attention:  Corporate Trust Administration
                                         Department

                      (e)    as to Financial Security:

                             350 Park Avenue

                                       3
<PAGE>   9
                             New York, New York  10022
                             Attention: Surveillance Department
                             Telecopier Nos.:  (212) 339-3518
                                               (212) 339-3529

                      (in each case in which the notice or other communication
                      to Financial Security refers to an Event of Default or a
                      claim under the Policy or is a notice or other
                      communication as to which a failure on the part of
                      Financial Security to respond shall be deemed to
                      constitute consent or acceptance, then with a copy to the
                      attention of the Senior Vice President - Surveillance)

                      (f)    as to the Collateral Agent:

                             Four Albany Street
                             10th Floor
                             New York, New York  10006
                             Attention:  Corporate Trust
                                         Department - Asset Backed Group

                      (g)    as to the Proceeds Agent:

                             Four Albany Street
                             10th Floor
                             New York, New York  10006
                             Attention:  Corporate Trust
                                         Department - Asset Backed Group

                      (h)    as to the Indenture Trustee:

                             Four Albany Street
                             10th Floor
                             New York, New York  10006
                             Attention:  Corporate Trust
                                         Department - Asset Backed Group

               "Obligations" has the meaning set forth in Section 4.01 hereof.

               "Owner Trustee" means Chase Manhattan Bank Delaware or its
successors in interest, acting not individually but solely on owner trustee
under the Trust Agreement.

               "Policy" means the Note Policy.

               "Premium" means the premium payable to Financial Security by the
Sellers as consideration for the issuance of the Policy, as set forth in a
letter agreement between the Seller and Financial Security.

               "Proceeds Agent" means, initially, Bankers Trust Company, as
proceeds agent for Financial Security and, thereafter, any successor appointed
by the Indenture Trustee and Financial Security.

               "Prospectus" has the meaning set forth in Section 2.07(g) of this
Agreement.

               "Registration Statement" has the meaning set forth in Section
2.07(g) of this Agreement.

                                       4
<PAGE>   10
               "Representative" means ___________________, as representative of
the several Underwriters.

               "Rules and Regulations" has the meaning set forth in Section
2.07(g) of this Agreement.

               "Sale and Servicing Agreement" means the Sale and Servicing
Agreement, dated as of the date hereof, among the Seller, WFS and the Trust, as
the same may be amended or modified from time to time.

               "Securities Act" means the Securities Act of 1933, as amended.

               "Seller" means WFAL.

               "Seller Assignments" means the Assignments, as such term is
defined in the Sale and Servicing Agreement.

               "Spread Account" means the Spread Account established pursuant to
the Sale and Servicing Agreement, in favor of the Indenture Trustee on behalf of
the Holders of Notes and as Collateral Agent for Financial Security.

               "Spread Account Collateral" means (i) the Spread Account Initial
Deposit, (ii) all other amounts deposited in or credited to the Spread Account
from time to time under the Sale and Servicing Agreement, (iii) all Eligible
Investments made with amounts on deposit in such Account, and (iv) all earnings
and distributions on, and proceeds of, any and all of the foregoing.

               "Transaction Agreements" means this Agreement, the WFS
Assignments, the Seller Assignments, the Collateral Assignment, the Sale and
Servicing Agreement, the Trust Agreement, the Certificate of Trust, the
Indenture, the Administration Agreement, the Underwriting Agreement, the
Subservicing Agreement, the Indemnification Agreement and the RIC.

               "Trust Agreement" means the Trust Agreement, dated as of
___________, 2000 among the Seller, WFS, WII, Financial Security and Chase
Manhattan Bank Delaware, as Owner Trustee.

               "Underwriter Information" has the meaning set forth in Section
3.06(a)(i) of this Agreement.

               "Underwriters" means ______________________ and each other
institution, if any, named as an underwriter in the Underwriting Agreement.

               "Underwriting Agreement" means the Underwriting Agreement, dated
_____________, 2000 among the Seller, WFS and the Representative.

               "Western Entities" means the Seller, WFS and WII.

               "WFAL2" means Western Financial Auto Loans 2, Inc., a California
corporation.

               "WFS Assignments" means, with respect to the Contracts, the
original instrument or instruments of assignment of such Contracts by WFS, as
seller, to the Seller, substantially in the form included in Exhibit A hereto.

                                   ARTICLE II

                    REPRESENTATIONS, WARRANTIES AND COVENANTS

               Section 2.01. Representations and Warranties of the Trust. The
Trust represents and warrants to Financial Security as follows:

                                       5
<PAGE>   11
               (a) Due Organization and Qualification. The Trust is duly formed
and validly existing as a Delaware statutory business trust and is in good
standing under the laws of the State of Delaware, with power and authority to
own its properties and to conduct its business and had at all relevant times,
and has, power, authority, and legal right to acquire the Contracts; the Trust
is duly qualified to do business, is in good standing and has obtained all
necessary licenses, permits, charters, registrations and approvals (together,
"approvals") necessary for the conduct of its business as described in the
Prospectus and the performance of its obligations under the Transaction
Agreements, in each jurisdiction in which the failure to be so qualified or to
obtain such approvals would render the Contracts in such jurisdiction or any
Transaction Agreement unenforceable in any respect or would otherwise have a
material adverse effect upon the Trust; the Trust holds all material licenses,
certificates and permits from all governmental authorities necessary for the
conduct of its business as presently conducted.

               (b) Power and Authority. The Trust has all necessary trust power
and authority to conduct its business as presently conducted; the Trust has the
power and authority to execute and deliver this Agreement and each other
Transaction Agreement to which the Trust is a party and to carry out the terms
of each such agreement, and has full power and authority to issue the Notes and
the Certificates and pledge and assign its assets pursuant to the Indenture and
has duly authorized the issuance of the Notes and Certificates and the
assignment of its assets by all necessary trust proceedings, and the execution,
delivery and performance of this Agreement and each other Transaction Agreement
to which the Trust is a party has been duly authorized by all necessary action
on the part of the Trust.

               (c) Valid and Binding Obligations. Each of the Transaction
Agreements to which the Trust is a party constitutes a legal, valid and binding
obligation of the Trust enforceable in accordance with its terms, except as such
enforceability may be limited by (i) bankruptcy, insolvency, reorganization,
receivership or other similar laws affecting the enforcement of creditors'
rights generally and (ii) general equitable principles, regardless of whether
such enforceability shall be considered a proceeding in equity or at law. The
Certificates, when executed, authenticated and delivered in accordance with the
Trust Agreement, will be validly issued and outstanding and entitled to the
benefits of the Trust Agreement and will evidence the entire beneficial
ownership interest in the Trust. The Notes, when executed, authenticated and
delivered in accordance with the Indenture, will be entitled to the benefits of
the Indenture and will constitute legal, valid and binding obligations of the
Trust, enforceable in accordance with their terms.

               (d) Noncontravention. The consummation of the transaction
contemplated by this Agreement and by each other Transaction Agreement to which
the Trust is a party, and the fulfillment of the terms hereof and thereof shall
not conflict with, result in any breach of any of the terms and provisions of,
nor constitute a default (nor an event which, with the giving of notice or
passage of time, or both, would constitute a default) under the Certificate of
Trust or the Trust Agreement, or any indenture, agreement or other instrument to
which the Trust is a party or by which it shall be bound; nor result in the
creation or imposition of any Lien upon any of its properties pursuant to the
terms of any such indenture, agreement or other instrument (other than this
Agreement and the Collateral Assignment); nor violate any law or any order,
rule, or regulation applicable to the Trust of any court or of any federal or
state regulatory body, administrative agency, or other governmental
instrumentality having jurisdiction over the Trust or its properties.

               (e) No Consents. No consent, license, approval or authorization
from, or registration, or declaration with, any governmental authority, bureau
or agency, nor any consent, approval, waiver or notification of any creditor,
lessor or other non-governmental person, is required in connection with the
execution, delivery and performance by the Trust of this Agreement or of any
other Transaction Agreement to which the Trust is a party, except (in each case)
such as have been obtained and are in full force and effect.

                                       6
<PAGE>   12
               (f) Pending Litigation or Other Proceeding. To the Trust's best
knowledge, there are no proceedings or investigations pending, or threatened,
before any court, regulatory body, administrative agency, or other governmental
instrumentality having jurisdiction over the Trust or its properties: (A)
asserting the invalidity of this Agreement or any other Transaction Agreement to
which the Trust is a party; (B) seeking to prevent the issuance of the Notes or
the Certificates, or the consummation of the transactions contemplated by any of
the Transaction Agreements to which the Trust is a party; (C) seeking any
determination or ruling that might materially and adversely affect the validity
or enforceability of, this Agreement or any other Transaction Agreement to which
the Trust is a party, or (D) involving the Trust and which might adversely
affect the federal or state tax attributes of the Notes, the Certificates or the
Trust.

               (g) Incorporation of Representations and Warranties. The
representations and warranties of the Trust set forth in each Transaction
Document are (in each case) true and correct as if set forth herein.

               (h) Security Interest in Contracts. This Agreement, together with
possession of the Collateral by the Master Servicer pursuant to the Sale and
Servicing Agreement and the filing referred to below, creates as security for
the Seller's obligations under this Agreement a security interest in favor of
the Collateral Agent, as collateral agent for Financial Security, in each item
of the Collateral, as constituted as of the Closing Date; such security interest
has been perfected and is a valid, binding and enforceable first priority
security interest, subject only, to the extent set forth in Section 5.01(d)
hereof, to the interest of the Indenture Trustee with respect to the Indenture
Property and the Securityholders; a financing statement with respect to the
Contracts has been filed with the California Secretary of State pursuant to the
California UCC, and the marking required by Section 3.01(b)(xvi) of the Sale and
Servicing Agreement has been made on each Contract, except to the extent (if
any) that Financial Security has waived in writing compliance with such
requirement; no other filings in any jurisdiction or any other actions are
necessary to perfect the security interest of the Collateral Agent, as
collateral agent for Financial Security, in the Collateral, as constituted as of
the Closing Date, as against any third parties.

               (i) Security Interest in Other Collateral. Assuming the
acquisition of Eligible Investments in accordance with the Sale and Servicing
Agreement, such Eligible Investments will be subject to a valid, binding and
enforceable first priority security interest in favor of the Collateral Agent,
as collateral agent for Financial Security, subject only, to the extent set
forth in Section 5.01(d) hereof, to the interest of the Indenture Trustee with
respect to the Indenture Property and the Securityholders; assuming deposit of
each check constituting proceeds of the Contracts in the Collection Account or
Holding Account, as applicable, within ten days of receipt of such check by the
Master Servicer, such check will be subject to a valid, first priority perfected
security interest in favor of the Collateral Agent, subject, to the extent set
forth in Section 5.01(d) hereof, to the interest of the Indenture Trustee with
respect to the Indenture Property and the Securityholders; at such time as it is
received by the Master Servicer and until deposited in the Collection Account or
Holding Account, as applicable; the proceeds of such deposited check that remain
in the Collection Account or the Holding Account will be subject to a valid,
first priority security interest in favor of the Collateral Agent, subject, to
the extent set forth in Section 5.01(d) hereof, to the interest of the Trust
under the Sale and Servicing Agreement.

               Section 2.02. Affirmative Covenants of the Trust. The Trust
hereby covenants and agrees with Financial Security that, at all times during
the term of this Agreement:

               (a) Compliance with Agreements. The Trust will comply with all
terms and conditions of this Agreement and each other Transaction Agreement to
which it is a party. The Trust will not cause or permit to become effective any
amendment to or modification of any of the Transaction Agreements unless
Financial Security shall have previously approved in writing the form of such
amendment or modification.

                                       7
<PAGE>   13
               (b) Financial Statements; Accountants' Reports; Other
Information. The Trust shall keep or cause to be kept proper books and records
in which full and correct entries shall be made of financial transactions and
the assets and business of the Trust in accordance with generally accepted
accounting principles consistently applied. The Trust shall furnish to Financial
Security, simultaneously with the delivery of such documents to the Indenture
Trustee, the Noteholders or the Certificateholders, as the case may be, copies
of all reports, certificates, statements, financial statements or notices
furnished to the Indenture Trustee, the Noteholders or the Certificateholders,
as the case may be, pursuant to the Transaction Agreements.

               (c) Certificate of Compliance. The Trust shall deliver to
Financial Security concurrently with the delivery of the financial statements
required pursuant to paragraph (b) above, a certificate signed by an Authorized
Officer of the Administrator stating that:

                  (i) a review of the Trust's performance under this Agreement
        and the other Transaction Agreements to which the Trust is a party
        during such period has been made under such officer's supervision; and

                  (ii) to the best of such officer's knowledge based upon such
        review, the Trust has fulfilled all its obligations under this Agreement
        and the other Transaction Agreements to which the Trust is a party
        during such period, or, if there has been a default of any such
        obligation, specifying each such default known to such officer and the
        nature and status thereof.

               (d) Access to Records; Discussions with Officers and Accountants.
The Trust shall, upon the reasonable request of Financial Security, permit
Financial Security's Authorized Agent at reasonable times (i) to inspect such
books and records of the Trust as they may relate to the Notes, the Certificates
and the obligations of the Trust under this Agreement and the other Transaction
Agreements to which the Trust is a party; and (ii) to discuss the affairs,
finances and accounts of the Trust with any of its respective officers,
directors and representatives, including its Independent Accountants.

               (e) Financing Statements and Further Assurances. The Trust will
file all necessary financing statements, assignments or other instruments, and
any amendments or continuation statements relating thereto, necessary to be kept
and filed in such manner and in such places as may be required by law to
preserve and protect fully the lien and security interest in, and all rights of
the Collateral Agent with respect to the Collateral, and the Trust shall, upon
the request of Financial Security, from time to time, execute and deliver and,
if necessary, file such further instruments and take such further action as may
be reasonably necessary to effectuate the provisions of this Agreement or to
protect the security interest of the Collateral Agent in the Collateral.

               (f) Retirement of Notes. The Trust shall, upon retirement of the
Notes furnish to Financial Security a notice of such retirement, and, upon such
retirement and the expiration of the term of the Policy, to surrender the Policy
to Financial Security for cancellation.

               (g) Maintenance of Separate Existence. The Trust shall at all
times hold itself out to the public, including the Seller, WFS and the Bank,
under the Trust's own name and as a separate and distinct entity from the
Seller, WFS and the Bank. The Trust shall maintain trust records and books of
account separate from those of the Seller, WFS and the Bank, shall not commingle
its assets with any other Person (except to the limited extent (if any)
permitted by the approval of Financial Security) and shall obtain proper
authorization from its equity owners of all trust action in accordance with
applicable law. The Trust shall maintain an arm's-length relationship with the
Bank, the Seller and WFS and each Affiliate of any of them.

               (h) Compliance with Article 76 of New York Insurance Law. The
Trust shall ensure that the Prospectus, and any supplements or amendments
thereto, and every preliminary prospectus delivered

                                       8
<PAGE>   14
with respect to the Notes, clearly disclose that the Policy is not covered by
the property/casualty insurance security fund specified in Article 76 of the New
York Insurance Law.

               (i) Tax Matters. The Trust will take all actions necessary to
ensure that the Trust is taxable as a partnership for federal and state income
tax purposes and not as an association (or publicly traded partnership), taxable
as a corporation.

               Section 2.03. Negative Covenants of the Trust. The Trust agrees
and covenants with Financial Security that at all times during the term of this
Agreement:

               (a) Amendments to Organizational Documents. The Trust shall not
amend, supplement or otherwise modify or cause to permit any amendment,
supplement or other modification of, any of the provisions of the Certificate of
Trust or the Trust Agreement without the prior written consent of Financial
Security.

               (b) No Liens. Without the prior written consent of Financial
Security, the Trust shall not create, incur, assume or suffer to exist any
mortgage, deed of trust, security interest, assignment, deposit arrangement or
other preferential arrangement, charge or encumbrance (including without
limitation any conditional sale or other title retention agreement or finance
lease) of any nature upon or with respect to any of its properties or assets,
now owned or hereafter acquired, or sign or file under the Uniform Commercial
Code of any jurisdiction any financing statement that names the Trust as debtor,
or sign any security agreement authorizing any secured party thereunder to file
such a financing statement, except as contemplated in the Transaction
Agreements.

               (c) Creation of Indebtedness. Without the prior written consent
of Financial Security, the Trust shall not create, incur, assume or suffer to
exist any indebtedness other than indebtedness guaranteed or approved in writing
by Financial Security, except as contemplated in the Transaction Agreements.

               (d) Guarantees, Etc. Without the prior written consent of
Financial Security, the Trust shall not assume, guarantee, endorse or otherwise
be or become directly or contingently liable for the obligations of any Person
by, among other things, agreeing to purchase any obligation of another Person,
agreeing to advance funds to such Person or causing or assisting such Person to
maintain any amount of capital.

               (e) Subsidiaries. Without the prior written consent of Financial
Security, the Trust shall not form, or cause to be formed, any Subsidiaries.

               (f) Insolvency. The Trust shall not commence any case, proceeding
or other action (A) under any existing or future law of any jurisdiction,
domestic or foreign, relating to bankruptcy, insolvency, reorganization or
relief of debtors, seeking to have an order for relief entered with respect to
it, or seeking reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, consolidation or other relief with respect to it or (B) seeking
appointment of a receiver, trustee, custodian or other similar official for it
or for all or any substantial part of its assets or make a general assignment
for the benefit of its creditors. The Trust shall not take any action in
furtherance of, or indicating the consent to, approval of, or acquiescence in
any of the acts set forth above. The Trust shall not admit in writing its
inability to pay its debts.

               (g) Impairment of Rights. The Trust shall not take any action, or
fail to take any action that will interfere with the enforcement of any rights
under this Agreement or the other Transaction Agreements.

               (h) Successor Parties. The Trust will not remove or replace, or
cause to be removed or replaced, the Master Servicer, the Indenture Trustee, the
Owner Trustee or the Administrator.

                                       9
<PAGE>   15
               Section 2.04. Representations and Warranties of WII. WII
represents and warrants to Financial Security as follows:

               (a) Due Organization. WII is a corporation duly organized,
validly existing and in good standing under the laws of the State of California,
with power and authority to own its properties and to conduct its business and
had at all relevant times, and has, the power and authority to acquire its
beneficial ownership interest in the Certificates; WII is duly qualified to do
business as a foreign corporation in good standing under the laws of each
jurisdiction where the character of its properties or the nature of its
activities makes such qualification necessary, except such jurisdictions, if
any, in which the failure to be so qualified will not have a material adverse
effect on the business or properties of WII; WII holds all material licenses,
certificates and permits from all governmental authorities necessary for the
conduct of its business as presently conducted. WII's principal place of
business, chief executive office and the office where it keeps its records is
located at 23 Pasteur, Irvine, California 92618.

               (b) Corporate Power and Authority. WII has full right, power and
authority to own its properties and to conduct its business as presently
conducted; WII has the power and authority to execute and deliver this Agreement
and each other Transaction Agreement to which WII is a party and to carry out
the terms of each such agreement.

               (c) Valid and Binding Obligations. Each of the Transaction
Agreements to which WII is a party constitutes a legal, valid, and binding
obligation of WII, enforceable in accordance with its terms, except as such
enforceability may be limited by (i) bankruptcy, insolvency, reorganization,
receivership or other similar laws affecting the enforcement of creditors'
rights generally and (ii) general principles of equity, regardless of whether
such enforceability shall be considered in a proceeding in equity or at law.

               (d) Noncontravention. The consummation of the transactions
contemplated by this Agreement and by each other Transaction Agreement to which
WII is a party and the fulfillment of the terms hereof and thereof shall not
conflict with, result in any breach of any of the terms and provisions of, nor
constitute a default (nor an event which, with the giving of notice or passage
of time, or both, would constitute a default) under, the articles of
incorporation or by-laws of WII, or any indenture, agreement, or other
instrument to which WII is a party or by which it shall be bound; nor result in
the creation or imposition of any Lien upon any of its properties pursuant to
the terms of any such indenture, agreement, or other instrument; nor violate any
law or any order, rule, or regulation applicable to WII of any court or of any
federal or state regulatory body, administrative agency, or other governmental
instrumentality having jurisdiction over WII or its properties.

               (e) No Consents. No consent, license, approval or authorization
from, or registration or declaration with, any governmental authority, bureau or
agency, nor any consent, approval, waiver or notification of any creditor,
lessor or other non-governmental person, is required in connection with the
execution, delivery and performance by WII of this Agreement or of any other
Transaction Agreement to which WII is a party, except (in each case) such as
have been obtained and are in full force and effect.

               (f) Pending Litigation or Other Proceeding. To WII's best
knowledge, there are no proceedings or investigations pending, or threatened,
before any court, regulatory body, administrative agency, or other governmental
instrumentality having jurisdiction over WII or its properties: (A) asserting
the invalidity of this Agreement, any other Transaction Agreement to which WII
is a party, or the Notes, (B) seeking to prevent the issuance of the Notes or
the consummation of any of the transactions contemplated by any of the
Transaction Agreements to which WII is a party, (C) seeking any determination or
ruling that might materially and adversely affect the performance by WII of its
obligations under, or the validity or enforceability of, this Agreement or any
other Transaction Agreement to which WII is a party, or (D) involving WII and
which might adversely affect the federal income tax attributes of the Notes, the
Certificates or the Trust.

                                       10
<PAGE>   16
               (g) Incorporation of Representations and Warranties. All of the
representations and warranties made by WII in the Transaction Agreements are
incorporated herein as if set forth herein and each such representation and
warranty is true and correct as of the Closing Date.

               Section 2.05. Affirmative Covenants of WII. WII covenants and
agrees with Financial Security that, at all times during the term of this
Agreement:

               (a) Compliance with Agreements. WII will comply with all terms
and conditions of this Agreement and each other Transaction Agreement to which
it is a party. WII will not cause or permit to become effective any amendment to
or modification of the Transaction Agreements unless Financial Security shall
have previously approved in writing the form of such amendment or modification.

               (b) Financial Statements, Accountants' Reports, Other
Information. WII shall keep proper books and records, in which full and correct
entries shall be made of financial transactions and the assets and business of
WII in accordance with generally accepted accounting principles consistently
applied. WII shall furnish to Financial Security, simultaneously with the
delivery of such documents to the Owner Trustee, the Indenture Trustee, the
Noteholders or the Certificateholders, as the case may be, copies of all
reports, certificates, statements or notices furnished to the Owner Trustee, the
Indenture Trustee, the Noteholders or the Certificateholders, as the case may
be, pursuant to the Sale and Servicing Agreement.

               (c) Certificate of Compliance. WII shall deliver to Financial
Security, concurrently with the delivery of the financial statements required
pursuant to paragraph (b) above, a certificate signed by an Authorized Officer
of WII stating that:

                  (i) a review of WII's performance under this Agreement and the
        other Transaction Agreements to which WII is a party during such period
        has been made under such officer's supervision; and

                  (ii) to the best of such officer's knowledge, based upon such
        review, WII has fulfilled all its obligations under this Agreement and
        the other Transaction Agreements to which WII is a party during such
        period, or, if there has been a default of any such obligation,
        specifying each such default known to such officer and the nature and
        status thereof.

               (d) Access to Records; Discussions With Officers and Accountants.
WII shall, upon the reasonable request of Financial Security, permit Financial
Security's Authorized Agent at reasonable times (i) to inspect such books and
records of WII as may relate to the Notes, the Certificates and the obligations
of WII under this Agreement and the other Transaction Agreements to which WII is
a party; and (ii) to discuss the affairs, finances and accounts of WII with any
of its respective officers, directors and representatives, including its
Independent Accountants.

               (e) Maintain Licenses. WII shall maintain all licenses, permits,
charters and registrations that are material to the performance by WII of its
obligations under the Transaction Agreements to which it is a party or by which
WII is bound.

               (f) Maintain Existence; Merger. WII shall keep in full effect its
existence, rights and franchises under the laws of the State of California, and
shall at all times continue to be duly organized, duly qualified and duly
authorized (as described in Sections 2.04(a) and (b) hereof) and shall conduct
its business in accordance with the terms of its corporate charter and bylaws.
WII shall not consolidate with or merge into any other Person or convey,
transfer or lease substantially all of its assets as an entirety to any Person
unless the Person formed by such consolidation or into which WII has merged or
the Person which acquires by conveyance, transfer or lease substantially all the
assets of WII as an entirety, can lawfully perform the obligations of WII
hereunder and executes and delivers to the Owner Trustee an agreement, in form
and substance reasonably satisfactory to the Owner Trustee and Financial
Security,

                                       11
<PAGE>   17
which contains an assumption by such Person of the due and punctual performance
and satisfaction of each covenant and condition to be performed or satisfied by
WII under this Agreement.

               (g) Maintenance of Separate Corporate Existence. WII shall at all
times hold itself out to the public, including the Seller, WFS and the Bank,
under WII's own name and as a separate and distinct entity from the Seller, WFS
and the Bank. At all times at least one director and one executive officer of
WII (or one individual serving in both capacities) shall be a Person who is not
a director, officer or employee of any Person owning beneficially more than 10%
of the outstanding common stock of WII. WII shall maintain separate corporate
records and books of account from those of the Seller, WFS and the Bank, shall
not commingle its assets with any other Person (except to the limited extent (if
any) permitted by the approval of Financial Security) and shall authorize its
corporate actions in accordance with applicable law. WII shall not engage in
business transactions with any of its Affiliates on terms and conditions less
favorable to WII than those available to WII for comparable transactions from
Persons who are not Affiliates of WII. WII shall maintain its chief executive
office, principal place of business and the office where it keeps its records in
the State of California and separate and apart from any office of the Seller,
the Bank, the Master Servicer or any Affiliate of any of them.

               (h) Retirement of Notes. WII shall cause the Trust, upon
retirement of the Notes, to furnish to Financial Security a notice of such
retirement, and, upon such retirement and the expiration of the term of the
Policy, to surrender the Policy to Financial Security for cancellation.

               (i) Incorporation of Covenants. WII agrees to comply with each of
the covenants of WII set forth in the Transaction Agreements and hereby
incorporates such covenants by reference as if each were set forth herein.

               (j) Tax Matters. As of the Closing Date, the Trust is, and shall
remain during the term of this Agreement, taxable as a partnership for federal
and state income tax purposes and not as an association (or publicly traded
partnership) taxable as a corporation.

               (k) Certificates. Except as may be agreed to by Financial
Security in its sole discretion, WII shall purchase from the Underwriters and
thereafter retain beneficial and record ownership of Certificates representing
at least 1% of the Certificate Balance.

               Section 2.06. Negative Covenants of WII. WII agrees and covenants
with Financial Security that at all times during the term of this Agreement:

               (a) Amendments to Organizational Documents. WII shall not amend,
supplement or otherwise modify, or cause to permit any amendment, supplement or
other modification of, Articles 2 or 4 of its charter (or any other Articles of
its charter that relate to the matters addressed by such Articles 2 or 4) or its
bylaws without the prior written consent of Financial Security.

               (b) No Liens. Without the prior written consent of Financial
Security, WII shall not create, incur, assume or suffer to exist any mortgage,
deed of trust, security interest, assignment, deposit arrangement or other
preferential arrangement, charge or encumbrance (including, without limitation,
any conditional sale or other title retention agreement or finance lease) of any
nature upon or with respect to any of its properties or assets, now owned or
hereafter acquired, or sign or file under the Uniform Commercial Code of any
jurisdiction any financing statement that names WII as a debtor, or sign any
security agreement authorizing any secured party thereunder to file such
financing statement.

               (c) Creation of Indebtedness. Without the prior written consent
of Financial Security, WII shall not create, incur, assume or suffer to exist
any indebtedness other than indebtedness guaranteed or approved in writing by
Financial Security.

               (d) Guarantees, Etc. Without the prior written consent of
Financial Security, WII shall not assume, guarantee, endorse or otherwise be or
become directly or contingently liable for the

                                       12
<PAGE>   18
obligations of any Person by, among other things, agreeing to purchase any
obligation of another Person, agreeing to advance funds to such Person or
causing or assisting such Person to maintain any amount of capital.

               (e) Subsidiaries. Without the prior written consent of Financial
Security, WII shall not form, or cause to be formed, any subsidiaries.

               (f) Insolvency. WII shall not commence any case, proceeding or
other action (A) under any existing or future law of any jurisdiction, domestic
or foreign, relating to bankruptcy, insolvency, reorganization or relief of
debtors, seeking to have an order for relief entered with respect to it, or
seeking reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to it or its debts, or (B)
seek appointment of a receiver, trustee, custodian or other similar official for
it or for all or any substantial part of its assets, or make a general
assignment for the benefit of its creditors. WII shall not take any action in
furtherance of, or indicating its consent to, approval of, or acquiescence in
any of the acts set forth above. WII shall not be unable to, or admit in writing
its inability to, pay its debts.

               (g) Impairment of Rights. WII shall not take any action or fail
to take any action that will interfere with the enforcement of any rights under
this Agreement or the other Transaction Agreements.

               (h) Insolvency of Trust. WII shall not, for any reason, institute
proceedings for the Trust to be adjudicated a bankrupt or insolvent, or consent
to the institution of bankruptcy or insolvency proceedings against the Trust, or
file a petition seeking or consenting to reorganization or relief under any
applicable federal or state law relating to the bankruptcy of the Trust, or
consent to the appointment of a receiver, liquidator, assignee, trustee,
sequestrator (or other similar official) of the Trust or a substantial part of
the property of the Trust or cause or permit the Trust to make any assignment
for the benefit of creditors, or admit in writing the inability of the Trust to
pay its debt generally as they become due, or declare or effect a moratorium on
the debt of the Trust or take any action in furtherance of any such action.

               (i) No Withdrawal. WII shall not, for any reason, withdraw or
attempt to withdraw from the Trust Agreement, dissolve, institute proceedings
for it to be adjudicated a bankrupt or insolvent, or consent to the institution
of bankruptcy or insolvency proceedings against it, or file a petition seeking
or consenting to reorganize or relief under any applicable federal or state law
relating to bankruptcy, or consent to the appointment of a receiver, liquidator,
assignee, trustee, sequestrator (or other similar official) of it or a
substantial part of its property, or make any assignment for the benefit of
creditors, or admit in writing its inability to pay its debts generally as they
become due, or declare or effect a moratorium on its debt or take any action in
furtherance of any such action.

               (j) Compliance with Transaction Agreements and similar
transactions. The provisions of subsections 2.06(c), (d) and (g),
notwithstanding, WII's execution and performance of its covenants and
obligations under the Transaction Agreements and under any similar documents
executed in connection with one or more other owner trust transactions as to
which Financial Security has issued one or more insurance policy similar to the
Policy shall not require the prior written consent of Financial Security and
shall not be deemed to impair the rights of WII under this Agreement or the
other Transaction Agreements.

               Section 2.07. Representations and Warranties of the Seller. The
Seller represents and warrants to Financial Security as follows:

               (a) Due Organization. The Seller is a corporation duly organized,
validly existing and in good standing under the laws of the State of California,
with power and authority to own its properties and to conduct its business and
had at all relevant times, and has, power, authority, and legal right to

                                       13
<PAGE>   19
acquire, pledge and sell the Contracts; the Seller is duly qualified to do
business as a foreign corporation in good standing under the laws of each
jurisdiction where the character of its properties or the nature of its
activities makes such qualification necessary, except such jurisdictions, if
any, in which the failure to be so qualified will not have a material adverse
effect on the business or properties of the Seller; the Seller holds all
material licenses, certificates and permits from all governmental authorities
necessary for the conduct of its business as presently conducted. the Seller's
principal place of business, chief executive office and the office where it
keeps its records is located at 23 Pasteur, Irvine, California 92618.

               (b) Corporate Power and Authority. The Seller has full right,
power and authority to own its properties and to conduct its business as
presently conducted; the Seller has the power and authority to execute and
deliver this Agreement and each other Transaction Agreement to which the Seller
is a party and to carry out the terms of each such agreement, and has full power
and authority to sell and assign the property to be sold and assigned to the
Owner Trustee and deposited with the Owner Trustee as part of the Trust and has
duly authorized such sale and assignment to the Trustee by all necessary
corporate action; and the execution, delivery, and performance of this Agreement
and each other Transaction Agreement to which the Seller is a party has been
duly authorized by the Seller by all necessary corporate action.

               (c) Valid and Binding Obligations. Each of the Transaction
Agreements to which the Seller is a party constitutes a legal, valid, and
binding obligation of the Seller, enforceable in accordance with its terms,
except as such enforceability may be limited by (i) bankruptcy, insolvency,
reorganization, receivership or other similar laws affecting the enforcement of
creditors' rights generally and (ii) general principles of equity, regardless of
whether such enforceability shall be considered in a proceeding in equity or at
law. The Certificates, when executed, authenticated and delivered in accordance
with the Trust Agreement, will be validly issued and outstanding and entitled to
the benefits of the Trust Agreement and will evidence the entire beneficial
ownership in the Trust. The Notes when executed, authenticated and delivered in
accordance with the Indenture, will be entitled to the benefits of the Indenture
and will constitute legal, valid and binding obligations of the Trust,
enforceable in accordance with their terms.

               (d) Noncontravention. The consummation of the transactions
contemplated by this Agreement and by each other Transaction Agreement to which
the Seller is a party and the fulfillment of the terms hereof and thereof shall
not conflict with, result in any breach of any of the terms and provisions of,
nor constitute a default (nor an event which, with the giving of notice or
passage of time, or both, would constitute a default) under, the articles of
incorporation or by-laws of the Seller, or any indenture, agreement, or other
instrument to which the Seller is a party or by which it shall be bound; nor
result in the creation or imposition of any Lien upon any of its properties
pursuant to the terms of any such indenture, agreement, or other instrument
(other than this Agreement and the Collateral Assignment); nor violate any law
or any order, rule, or regulation applicable to the Seller of any court or of
any federal or state regulatory body, administrative agency, or other
governmental instrumentality having jurisdiction over the Seller or its
properties.

               (e) No Consents. No consent, license, approval or authorization
from, or registration or declaration with, any governmental authority, bureau or
agency, nor any consent, approval, waiver or notification of any creditor,
lessor or other non-governmental person, is required in connection with the
execution, delivery and performance by the Seller of this Agreement or of any
other Transaction Agreement to which the Seller is a party, except (in each
case) such as have been obtained and are in full force and effect.

               (f) Pending Litigation or Other Proceeding. To the Seller's best
knowledge, there are no proceedings or investigations pending, or threatened,
before any court, regulatory body, administrative agency, or other governmental
instrumentality having jurisdiction over the Seller or its properties: (A)
asserting the invalidity of this Agreement, any other Transaction Agreement to
which the Seller is a

                                       14
<PAGE>   20
party, the Notes or the Certificates, (B) seeking to prevent the issuance of the
Notes or the Certificates or the consummation of any of the transactions
contemplated by any of the Transaction Agreements to which the Seller is a
party, (C) seeking any determination or ruling that might materially and
adversely affect the performance by the Seller of its obligations under, or the
validity or enforceability of, this Agreement or any other Transaction Agreement
to which the Seller is a party, or (D) involving the Seller and which might
adversely affect the federal income tax attributes of the Notes, the
Certificates or the Trust.

               (g) Registration Statement; Prospectus. The Seller has filed with
the Securities and Exchange Commission (the "Commission") a registration
statement on Form S-3 (No.___), including a preliminary prospectus and
prospectus supplement for the registration of the Notes under the Securities
Act, has filed such amendments thereto, if any, and such amended preliminary
prospectuses and prospectus supplements as may have been required to the date
hereof, and will file such additional amendments thereto and such amended
prospectuses and prospectus supplements as may hereafter be required. Such
registration statement (as amended, if applicable) and the prospectus together
with the prospectus supplement relating to the Notes, constituting a part
thereof (including in each case all documents, if any, incorporated by reference
therein and the information, if any, deemed to be part thereof pursuant to the
rules and regulations of the Commission under the Securities Act (the "Rules and
Regulations")), as from time to time amended or supplemented pursuant to the
Securities Act or otherwise, are hereinafter referred to as the "Registration
Statement" and the "Prospectus," respectively, except that if any revised
prospectus or prospectus supplement shall be provided by the Seller for use in
connection with the offering of the Notes which differs from the Prospectus on
file at the Commission pursuant to Rule 424 of the Rules and Regulations
(whether or not such revised prospectus is required to be filed by the Seller
pursuant to Rule 424 of the Rules and Regulations), the term "Prospectus" shall
refer to such revised prospectus and prospectus supplement from and after the
time it is first provided to the Underwriters for such use. As of the date
hereof, the Registration Statement and Prospectus filed under the Securities Act
or pursuant to the Rules and Regulations complies in all material respects with
the Securities Act and the Rules and Regulations, and the Registration Statement
at the time it became effective and at all times subsequent thereto complied,
and at each time that the Prospectus is provided to the Underwriters for use in
connection with the offering or sale of any Note will comply, in all material
respects with the requirements of the Securities Act and the Rules and
Regulations. The Registration Statement and the Prospectus at the time the
Registration Statement became effective did not and on the date hereof does not,
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading and the Prospectus at the time it was filed under the Securities Act
or the Rules and Regulations and at the time it was first provided to the
Underwriters for use in connection with the offering of the Notes did not, and
on the Closing Date does not, contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein not misleading, except that the representations and
warranties in this subparagraph shall not apply to statements in or omissions
from the Registration Statement or the Prospectus or any preliminary prospectus
made in reliance upon information furnished to the Seller in writing by
Financial Security expressly for use therein.

               (h) Incorporation of Representations and Warranties. All of the
representations and warranties made by the Seller as Seller in Section 3.01(b)
of the Sale and Servicing Agreement and as Depositor in, Section 2.10 of the
Trust Agreement and in the Underwriting Agreement are incorporated herein as if
set forth herein and each such representation and warranty is true and correct
as of the Closing Date.

               (i) Security Interest in Contracts. This Agreement, together with
possession of the Collateral by the Master Servicer pursuant to the Sale and
Servicing Agreement and the filing referred to below, creates as security for
the Seller's obligations under this Agreement a security interest in favor of
the Collateral Agent, as collateral agent for Financial Security, in each item
of the Collateral, as

                                       15
<PAGE>   21
constituted as of the Closing Date; such security interest has been perfected
and is a valid, binding and enforceable first priority security interest,
subject only, to the extent set forth in Section 5.01(d) hereof, to the interest
of the Indenture Trustee with respect to the Indenture Property and the
Securityholders; a financing statement with respect to the Contracts has been
filed with the California Secretary of State pursuant to the California UCC, and
the marking required by Section 3.01(b)(xvi) of the Sale and Servicing Agreement
has been made on each Contract, except to the extent (if any) that Financial
Security has waived in writing compliance with such requirement; no other
filings in any jurisdiction or any other actions are necessary to perfect the
security interest of the Collateral Agent, as collateral agent for Financial
Security, in the Collateral, as constituted as of the Closing Date, as against
any third parties.

               (j) Security Interest in Other Collateral. Assuming the
acquisition of Eligible Investments in accordance with the Sale and Servicing
Agreement, such Eligible Investments will be subject to a valid, binding and
enforceable first priority security interest in favor of the Collateral Agent,
as collateral agent for Financial Security, subject only, to the extent set
forth in Section 5.01(d) hereof, to the interest of the Indenture Trustee with
respect to the Indenture Property and the Securityholders; assuming deposit of
each check constituting proceeds of the Contracts in the Collection Account or
Holding Account, as applicable, within ten days of receipt of such check by the
Master Servicer, such check will be subject to a valid, first priority perfected
security interest in favor of the Collateral Agent, subject, to the extent set
forth in Section 5.01(d) hereof, to the interest of the Indenture Trustee with
respect to the Indenture Property and the Securityholders; at such time as it is
received by the Master Servicer and until deposited in the Collection Account or
Holding Account, as applicable; the proceeds of such deposited check that remain
in the Collection Account or the Holding Account will be subject to a valid,
first priority security interest in favor of the Collateral Agent, subject, to
the extent set forth in Section 5.01(d) hereof, to the interest of the Trust
under the Sale and Servicing Agreement.

               (k) Valid Transfer of Contracts. The Sale and Servicing Agreement
and the Seller Assignments constitute a valid sale, transfer and assignment of
the Contracts, enforceable against creditors of and purchasers from the Seller,
except as such enforceability may be limited by (i) bankruptcy, insolvency,
reorganization, receivership or other similar laws affecting the enforcement of
creditors' rights generally and (ii) general principles of equity, regardless of
whether such enforceability shall be considered in a proceeding in equity or at
law.

               (l) Financial Information. The audited financial statements of
the Seller for the fiscal year ended December 31, _____ and the unaudited
financial statements of the Seller for the fiscal quarter ended
_________________, copies of which have been furnished to Financial Security, as
of the dates and for the periods referred to therein (i) are true, complete and
correct in all material respects, (ii) fairly present the financial condition of
the Seller and the results of operations and changes in financial position of
the Seller and (iii) have been prepared in accordance with generally accepted
accounting principles consistently applied (subject, in the case of the
quarterly financial statements, to normal year-end adjustments), and such
financial statements indicate that the Seller is solvent and will not be
rendered insolvent by the execution, delivery and performance of the Transaction
Agreements. Since ________________, there has been no material adverse change in
the business, financial condition or operations of the Seller.

               Section 2.08. Representations and Warranties of WFS. WFS
represents and warrants to Financial Security as follows:

               (a) Due Organization. WFS is duly organized and validly existing
as a licensed consumer finance company organized and existing and in good
standing under the laws of the State of California, with power and authority to
own its properties and to conduct its business and had at all relevant times,
and has, power, authority, and legal right to acquire and own the Contracts and
is duly qualified to do business as a foreign corporation in good standing, and
shall have obtained all necessary

                                       16
<PAGE>   22
licenses and approvals, in all jurisdictions in which the ownership or lease of
property or the conduct of its business requires such qualification.

               (b) Corporate Power and Authority. WFS has the power and
authority to execute and deliver this Agreement and each other Transaction
Agreement to which WFS is a party and to carry out the terms of each such
agreement, and has full power and authority to sell and assign the property to
be sold and assigned to the Seller for inclusion in the Trust and the Spread
Account and has duly authorized such sale and assignment to the Seller by all
necessary corporate action; and the execution, delivery, and performance of this
Agreement and each other Transaction Agreement to which WFS is a party has been
duly authorized by WFS by all necessary corporate action.

               (c) Valid and Binding Obligations. The WFS Assignments constitute
a valid sale, transfer, and assignment of the Contracts to the Seller,
enforceable against creditors of and purchasers from WFS, and each of the
Transaction Agreements to which WFS is a party constitutes a legal, valid, and
binding obligation of WFS, enforceable in accordance with its terms, except as
such enforceability may be limited by (i) bankruptcy, insolvency,
reorganization, receivership or other similar laws affecting the enforcement of
creditors' rights generally and (ii) general principles of equity, regardless of
whether such enforceability shall be considered in a proceeding in equity or at
law. The Certificates, when executed, authenticated and delivered in accordance
with the Trust Agreement, will be validly issued and outstanding and entitled to
the benefits of the Trust Agreement and will evidence the entire beneficial
ownership in the Trust. The Notes when executed, authenticated and delivered in
accordance with the Indenture, will be entitled to the benefits of the Indenture
and will constitute legal, valid and binding obligations of the Trust,
enforceable in accordance with their terms.

               (d) Noncontravention. The consummation of the transactions
contemplated by this Agreement and by each other Transaction Agreement to which
WFS is a party and the fulfillment of the terms hereof and thereof shall not
conflict with, result in any breach of any of the terms and provisions of, nor
constitute a default (nor an event which, with the giving of notice or passage
of time, or both, would constitute a default) under, the articles of
organization or by-laws of WFS, or any indenture, agreement, or other instrument
to which WFS is a party or by which it shall be bound; nor result in the
creation or imposition of any Lien upon any of its properties pursuant to the
terms of any such indenture, agreement, or other instruments; nor violate any
law or any order, rule, or regulation applicable to WFS of any court or of any
federal or state regulatory body, administrative agency, or other governmental
instrumentality having jurisdiction over WFS or its properties.

               (e) No Consents. No consent, license, approval or authorization
from, or registration or declaration with, any governmental authority, bureau or
agency, nor any consent, approval, waiver or notification of any creditor,
lessor or other non-governmental person, is required in connection with the
execution, delivery and performance by WFS of this Agreement or of any other
Transaction Agreement to which WFS is a party, except (in each case) such as
have been obtained and are in full force and effect.

               (f) Pending Litigation or Other Proceeding. To WFS's best
knowledge, there are no proceedings or investigations pending, or threatened,
before any court, regulatory body, administrative agency, or other governmental
instrumentality having jurisdiction over WFS or its properties: (A) asserting
the invalidity of this Agreement or any other Transaction Agreement to which WFS
is a party, (B) seeking to prevent the consummation of any of the transactions
contemplated by any of the Transaction Agreements to which WFS is a party, (C)
seeking any determination or ruling that might materially and adversely affect
the performance by WFS of its obligations under, or the validity or
enforceability of, this Agreement or any other Transaction Agreement to which
WFS is a party, or (D) involving WFS and which might adversely affect the
federal income tax attributes of the Certificates.

               (g) Affirmation and Incorporation of Certain Representations and
Warranties. WFS represents and warrants to Financial Security that the
representations and warranties of the Seller set forth

                                       17
<PAGE>   23
in Section 2.07 hereof, in the Underwriting Agreement and in Section 3.01(b) of
the Sale and Servicing Agreement and Section 2.10 of the Trust Agreement are (in
each case) true and correct as if set forth herein and that the representations
and warranties of WFS set forth in the Underwriting Agreement and by WFS as
Master Servicer set forth in Section 4.06 of the Sale and Servicing Agreement
are (in each case) true and correct as if set forth herein.

               (h) Valid Transfer of Contracts. The WFS Assignments constitute a
valid sale, transfer and assignment of the Contracts to the Company, enforceable
against creditors of and purchasers from WFS, except as such enforceability may
be limited by (i) bankruptcy, insolvency, reorganization or similar laws
affecting the enforcement of creditors' rights generally and (ii) general
principles of equity, regardless of whether such enforceability shall be
considered in a proceeding in equity or at law.

               (i) Random Selection; No Adverse Selection. The Contracts that
are being transferred to the Seller were randomly selected by WFS. No selection
procedures adverse to the interests of the Seller, the Trust, the Noteholders,
the Certificateholders or the Insurer have been utilized in selecting the
Contracts.

               (j) Financial Information. The audited consolidated financial
statements of WFS for the fiscal year ended December 31, ______ and the
unaudited consolidated financial statements of WFS for the fiscal quarter ended
_____________, copies of which have been furnished to Financial Security, as of
the dates and for the periods referred to therein (i) are true, complete and
correct in all material respects, (ii) fairly present the consolidated financial
condition of WFS and the consolidated results of operations and changes in cash
flows of WFS and its consolidated subsidiaries, and (iii) have been prepared in
accordance with generally accepted accounting principles consistently applied
(subject, in the case of the quarterly financial statements, to normal year-end
adjustments), and such financial statements indicate that WFS is solvent and
will not be rendered insolvent by the execution, delivery and performance of the
Transaction Agreements. Since _______________, there has been no material
adverse change in the business, financial condition or operations of WFS.

               Section 2.09. Affirmative Covenants of the Seller. The Seller
covenants and agrees with Financial Security that, at all times during the term
of this Agreement:

               (a) Compliance with Agreements. The Seller will comply with all
terms and conditions of this Agreement and each other Transaction Agreement to
which it is a party. The Seller will not cause or permit to become effective any
amendment to or modification of the Transaction Agreements unless Financial
Security shall have previously approved in writing the form of such amendment or
modification.

               (b) Financial Statements, Accountants' Reports, Other
Information. The Seller shall keep proper books and records, in which full and
correct entries shall be made of financial transactions and the assets and
business of the Seller in accordance with generally accepted accounting
principles consistently applied. The Seller shall furnish to Financial Security,
simultaneously with the delivery of such documents to the Owner Trustee,
Indenture Trustee, the Noteholders or the Certificateholders, as the case may
be, copies of all reports, certificates, statements or notices furnished to the
Owner Trustee, the Noteholders or the Certificateholders, as the case may be,
pursuant to the Transaction Agreements.

               (c) Certificate of Compliance. The Seller shall deliver to
Financial Security, concurrently with the delivery of the financial statements
required pursuant to paragraph (b) above, a certificate signed by an Authorized
Officer of the Company stating that:

                  (i) a review of the Seller's performance under this Agreement
        and the other Transaction Agreements to which the Seller is a party
        during such period has been made under such officer's supervision; and

                                       18
<PAGE>   24
                  (ii) to the best of such officer's knowledge, based upon such
        review, the Seller has fulfilled all its obligations under this
        Agreement and the other Transaction Agreements to which the Seller is a
        party during such period, or, if there has been a default of any such
        obligation, specifying each such default known to such officer and the
        nature and status thereof.

               (d) Access to Records; Discussions With Officers and Accountants.
The Seller shall, upon the reasonable request of Financial Security, permit an
authorized agent of Financial Security at reasonable times (i) to inspect such
books and records of the Seller as may relate to the Notes, the Certificates and
the obligations of the Seller under this Agreement and the other Transaction
Agreements to which the Seller is a party; and (ii) to discuss the affairs,
finances and accounts of the Seller with any of its respective officers,
directors and representatives, including its Independent Accountants.

               (e) Maintain Licenses. The Seller shall maintain all licenses,
permits, charters and registrations that are material to the performance by the
Seller of its obligations under the Transaction Agreements to which it is a
party or by which the Seller is bound.

               (f) Financing Statements and Further Assurances. The Seller will
file all necessary financing statements, assignments or other instruments, and
any amendments or continuation statements relating thereto, necessary to be kept
and filed in such manner and in such places as may be required by law to
preserve and protect fully the Lien and security interest in and all rights of
Financial Security with respect to the Collateral, subject to the Sale and
Servicing Agreement, and the Seller shall, upon the request of Financial
Security, from time to time, execute and deliver and, if necessary, file such
further instruments and take such further action as may be reasonably necessary
to effectuate the provisions of this Agreement or to protect the security
interest of Financial Security, subject to the Sale and Servicing Agreement, in
the Collateral.

               (g) Maintain Existence; Merger. The Seller shall keep in full
effect its existence, rights and franchises under the laws of the State of
California, and will obtain and preserve its qualification to do business as a
foreign corporation in each jurisdiction in which such qualification is or shall
be necessary to protect the validity and enforceability of the Contract
Documents and the Transaction Agreements to which the Seller is a party. The
Seller shall not consolidate with or merge into any other Person or convey,
transfer or lease substantially all of its assets as an entirety to any Person
unless the Person formed by such consolidation or into which the Seller has
merged or the Person which acquires by conveyance, transfer or lease
substantially all the assets of the Seller as an entirety, can lawfully perform
the obligations of the Seller hereunder and executes and delivers to the Owner
Trustee an agreement, in form and substance reasonably satisfactory to the Owner
Trustee and Financial Security, which contains an assumption by such Person of
the due and punctual performance and satisfaction of each covenant and condition
to be performed or satisfied by the Seller under this Agreement.

               (h) Maintenance of Separate Corporate Existence. The Seller shall
at all times hold itself out to the public, including WFS and the Bank, under
the Seller's own name and as a separate and distinct entity from WFS and the
Bank. At all times at least one director and one executive officer of the Seller
(or one individual serving in both capacities) shall be a Person who is not a
director, officer or employee of any Person owning beneficially more than 10% of
the outstanding common stock of the Seller. The Seller shall maintain separate
corporate records and books of account from those of WFS and the Bank, shall not
commingle its assets with any other Person (except to the limited extent (if
any) permitted by the approval of Financial Security) and shall authorize its
corporate actions in accordance with applicable law. The Seller shall not engage
in business transactions with any of its Affiliates on terms and conditions less
favorable to the Seller than those available to the Seller for comparable
transactions from Persons who are not Affiliates the Seller. The Seller shall
maintain its chief executive office, principal place of business and the office
where it keeps its records in the State of California and separate and apart
from any office of the Master Servicer.

                                       19
<PAGE>   25
               (i) Random Selection; No Adverse Selection. The Contracts that
are being transferred by the Seller to the Trust were randomly selected by the
Seller. No selection procedures adverse to the interests of the Trust, the
Noteholders, the Certificateholders or the Insurer have been utilized in
selecting the Contracts.

               (j) Compliance with Article 76 of New York Insurance Law. The
Seller shall ensure that the Prospectus, and any supplements or amendments
thereto, and every preliminary prospectus delivered with respect to the Notes,
clearly disclose that the Policy is not covered by the property/casualty
insurance security fund specified in Article 76 of the New York Insurance Law.

               Section 2.10. Negative Covenants of the Seller. The Seller agrees
and covenants with Financial Security that at all times during the term of this
Agreement:

               (a) Amendments to Organizational Documents. The Seller shall not
amend, supplement or otherwise modify, or cause to permit any amendment,
supplement or other modification of, Articles 2 or 5 of its charter (or any
other Articles of its charter that relate to the matters addressed by such
Article 2 or 5) or its bylaws without the prior written consent of Financial
Security.

               (b) No Liens. Without the prior written consent of Financial
Security, the Seller shall not create, incur, assume or suffer to exist any
mortgage, deed of trust, security interest, assignment, deposit arrangement or
other preferential arrangement, charge or encumbrance (including, without
limitation, any conditional sale or other title retention agreement or finance
lease) of any nature upon or with respect to any of its properties or assets,
now owned or hereafter acquired, or sign or file under the Uniform Commercial
Code of any jurisdiction any financing statement that names the Seller as a
debtor, or sign any security agreement authorizing any secured party thereunder
to file such financing statement.

               (c) Creation of Indebtedness. Except as contemplated in
connection with the transaction to which this Agreement relates, without the
prior written consent of Financial Security, the Seller shall not create, incur,
assume or suffer to exist any indebtedness other than indebtedness guaranteed or
approved in writing by Financial Security.

               (d) Guarantees, Etc. Except as contemplated in connection with
the transaction to which this Agreement relates, without the prior written
consent of Financial Security, the Seller shall not assume, guarantee, endorse
or otherwise be or become directly or contingently liable for the obligations of
any Person by, among other things, agreeing to purchase any obligation of
another Person, agreeing to advance funds to such Person or causing or assisting
such Person to maintain any amount of capital.

               (e) Subsidiaries. Without the prior written consent of Financial
Security, the Seller shall not form, or cause to be formed, any subsidiaries.

               (f) Insolvency. The Seller shall not commence any case,
proceeding or other action (A) under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for relief entered
with respect to it, or seeking reorganization, arrangement, adjustment,
winding-up, liquidation, dissolution, composition or other relief with respect
to it or its debts, or (B) seek appointment of a receiver, trustee, custodian or
other similar official for it or for all or any substantial part of its assets,
or make a general assignment for the benefit of its creditors. The Seller shall
not take any action in furtherance of, or indicating its consent to, approval
of, or acquiescence in any of the acts set forth above. The Seller shall not be
unable to, or admit in writing its inability to, pay its debts.

               (g) Impairment of Rights. The Seller shall not take any action or
fail to take any action that will interfere with the enforcement of any rights
under this Agreement or the other Transaction Agreements.

                                       20
<PAGE>   26
               Section 2.11. Affirmative Covenants of WFS. WFS covenants and
agrees with Financial Security that, at all times during the term of this
Agreement:

               (a) Compliance With Agreements. WFS will comply with all terms
and conditions of this Agreement and each other Transaction Agreement to which
it is a party. WFS will not cause or permit to become effective any amendment to
or modification of the Transaction Agreements to which it is a party unless
Financial Security shall have previously approved in writing the form of such
amendment or modification.

               (b) Financial Statements, Accountants' Reports, Other
Information. WFS shall keep proper books and records, in which full and correct
entries shall be made of financial transactions and the assets and business of
WFS in accordance with generally accepted accounting principles consistently
applied. WFS shall furnish to Financial Security, simultaneously with the
delivery of such documents to the Indenture Trustee, the Noteholders or the
Certificateholders, as the case may be, copies of all reports, certificates,
statements or notices furnished to the Indenture Trustee or the
Certificateholders, as the case may be, pursuant to the Sale and Servicing
Agreement. WFS shall also deliver to Financial Security, simultaneously with the
delivery of such documents to the relevant federal or state department or agency
copies of all Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and
periodic reports on Form 8-K required to be filed by WFS with the Securities and
Exchange Commission.

               (c) Certificate of Compliance. WFS shall deliver to Financial
Security, concurrently with the delivery of the financial statements required
pursuant to paragraph (b) above, a certificate signed by an Authorized Officer
of WFS stating that:

                  (i) a review of WFS's performance under this Agreement and the
        other Transaction Agreements to which WFS is a party during such period
        has been made under such officer's supervision; and

                  (ii) to the best of such officer's knowledge, based upon such
        review, WFS has fulfilled all its obligations under this Agreement and
        the other Transaction Agreements to which WFS is a party during such
        period, or, if there has been a default of any such obligation,
        specifying each such default known to such officer and the nature and
        status thereof.

               (d) Access to Records; Discussions With Officers and Accountants.
WFS shall, upon the reasonable request of Financial Security, permit Financial
Security's Authorized Agent at reasonable times (i) to inspect such books and
records of WFS as may relate to the Notes, the Certificates and the obligations
of WFS under this Agreement and the other Transaction Agreements to which WFS is
a party; and (ii) to discuss the affairs, finances and accounts of WFS with any
of its respective officers, directors and representatives, including its
Independent Accountants.

               (e) Maintain Licenses. WFS shall maintain all licenses, permits,
charters and registrations that are material to the performance by WFS of its
obligations under the Transaction Agreements to which it is a party or by which
WFS is bound.

               (f) Maintain Existence; Merger. WFS shall keep in full effect its
existence, rights and franchises under the laws of the State of California, and
will obtain and preserve its qualification to do business as a foreign
corporation in each jurisdiction in which such qualification is or shall be
necessary to protect the validity and enforceability of the Contract Documents
and the Transaction Agreements to which WFS is a party. WFS shall not
consolidate with or merge into any other Person or convey, transfer or lease
substantially all of its assets as an entirety to any Person unless the Person
formed by such consolidation or into which WFS has merged or the Person which
acquires by conveyance, transfer or lease substantially all the assets of WFS as
an entirety, can lawfully perform the obligations of WFS hereunder and executes
and delivers to the Owner Trustee an agreement, in form and substance reasonably
satisfactory to the Owner Trustee and Financial Security, which contains an
assumption by

                                       21
<PAGE>   27
such Person of the due and punctual performance and satisfaction of each
covenant and condition to be performed or satisfied by WFS under this Agreement.

               (g) Subservicing. WFS, as Master Servicer, shall not appoint,
pursuant to Section 4.01 of the Sale and Servicing Agreement, any Subservicer
that has not been approved in advance by Financial Security. WFS as Master
Servicer shall not cause or permit to become effective any Subservicing
Agreement that is in a form that varies substantially from the form thereof set
forth as Exhibit E to the Sale and Servicing Agreement unless the form of such
varying agreement shall have been approved in writing by Financial Security.

               (h) No Petition Agreement. WFS covenants and agrees that, for a
period of one year plus one day after payment in full of all amounts payable in
respect of the Notes and the Certificates, it will not institute against, or
join any other Person in instituting against the Seller any bankruptcy,
reorganization, arrangement, conservatorship, receivership, insolvency or
liquidation proceedings, or other proceedings under any federal or state
bankruptcy, receivership or similar law, in connection with any amounts due WFS
(or any Affiliate or parent thereof) under any Transaction Agreement or
otherwise without the prior written consent of Financial Security. The
provisions of this paragraph shall survive termination of this Agreement.

                                   ARTICLE III

                          THE POLICIES; INDEMNIFICATION

               Section 3.01. Agreement to Issue Policy. Financial Security
agrees to issue the Policy subject to the satisfaction of the conditions
hereinafter set forth.

               Section 3.02. Conditions Precedent to Issuance of Policy.

               (a) The obligation of Financial Security to issue the Policy is
subject to the following having occurred or being true (as the case may be): (i)
WFS shall have assigned, conveyed and transferred, or caused to be assigned,
conveyed and transferred, the Collateral to the Seller, (ii) the Seller shall
have created a valid security interest in the Collateral in favor of the
Collateral Agent, (iii) the Seller shall have assigned, conveyed and transferred
the Collateral to the Trust, (iv) no stop order suspending the effectiveness of
the Registration Statement shall have been issued and no proceeding for that
purpose shall have been instituted or, to the best knowledge of the Seller,
threatened by the Commission and any request for additional information on the
part of the Commission (to be included in the Registration Statement, the
Prospectus or otherwise) shall have been complied with to the reasonable
satisfaction of the Commission, (v) the Premium shall have been paid in
accordance with Section 3.03 hereof, (vi) the representations and warranties of
the Trust and each Western Entity set forth or incorporated by reference in this
Agreement shall be true and correct on and as of the Closing Date, and (vii)
each Transaction Agreement shall be in full force and effect as of the Closing
Date and no default (or event which, with the giving of notice or passage of
time, or both, would become a default) thereunder shall have occurred and be
continuing.

               (b) The obligation of Financial Security to issue the Policy is
further subject to the condition precedent that Financial Security shall have
received on the Closing Date, or, in its sole and absolute discretion, received
the opportunity to review prior to and on the Closing Date, the following, each
dated the Closing Date and in full force and effect on such date, except as
otherwise provided herein, in form and substance satisfactory to Financial
Security and its counsel:

                  (i) a certificate of an Authorized Officer of each Western
        Entity stating that nothing has come to the attention of such Western
        Entity to indicate that the Registration Statement, the Prospectus or
        the Prospectus Supplement, on the date the Registration Statement became
        effective, contained an untrue statement of a material fact or omitted
        to state a material

                                       22
<PAGE>   28
        fact required to be stated therein or necessary to make the statements
        therein not misleading, or that the Prospectus on any date on which it
        was furnished to the Underwriters for use in connection with the
        offering of the Notes contained, or on the Closing Date contains, any
        untrue statement of a material fact or omits to state a material fact
        required to be stated therein or necessary in order to make the
        statements made therein not misleading;

                  (ii) copies, certified to be true copies by the Secretary or
        an Assistant Secretary of each Western Entity, of (i) the resolutions of
        the Board of Directors of such Western Entity authorizing the execution,
        delivery and performance of this Agreement and each other Transaction
        Agreement to which such Western Entity is a party and all other
        transactions and documents contemplated hereby and thereby, and of all
        other documents evidencing any other necessary action of such Western
        Entity (which certification shall state that such resolutions have not
        been modified, are in full force and effect and constitute the only
        resolutions adopted by such Western Entity's Board of Directors or any
        committee thereof with respect thereto), (ii) the articles of
        association, as amended, of such Western Entity and (iii) the by-laws,
        as amended, of such Western Entity;

                  (iii) copies, certified to be true copies by an Authorized
        Officer of the Owner Trustee, of (i) the resolutions of the board of
        directors of the Owner Trustee authorizing the execution, delivery and
        performance by the Owner Trustee of this Agreement and each other
        Transaction Agreement to which the Owner Trustee is a party and all
        transactions and documents contemplated hereby and thereby, and of all
        other documents evidencing any other necessary action of the Owner
        Trustee (which certification shall state that such resolutions have not
        been modified, are in full force and effect and constitute the only
        resolutions adopted by the Owner Trustee's board of directors or any
        committee thereof with respect thereto and (ii) the Certificate of
        Trust, certified by the Secretary of State or other appropriate official
        of the State of Delaware;

                  (iv) a certificate of an Authorized Officer of each Western
        Entity stating that (i) attached thereto are true and complete copies,
        if any, of all consents, licenses and approvals necessary for each
        Western Entity to execute, deliver and perform this Agreement, the other
        Transaction Agreements to which such Western Entity is a party and all
        other documents and instruments on the part of such Western Entity to be
        delivered pursuant hereto or thereto, and (ii) all such consents,
        licenses and approvals are in full force and effect, such Western Entity
        has not received any notice of any proceeding for the revocation of any
        such license, charter, permit or approval, and, to such Western Entity's
        knowledge, there is no threatened action or proceeding or any basis
        therefor;

                  (v) a certificate of an Authorized Officer of the Owner
        Trustee stating that (i) attached thereto are true and complete copies,
        if any, of all consents, licenses and approvals necessary for the Owner
        Trustee to execute, deliver and perform this Agreement, the other
        Transaction Agreements to which the Owner Trustee is a party and all
        other documents and instruments on the part of the Owner Trustee to be
        delivered pursuant hereto or thereto have been obtained, and (ii) all
        such consents, licenses and approvals are in full force and effect, the
        Owner Trustee has not received any notice of any proceeding for the
        revocation of any such license, charter, permit or approval, and, to the
        Owner Trustee's knowledge, there is no threatened action or proceeding
        or any basis therefor;

                  (vi) a certificate of the Secretary or an Assistant Secretary
        of such Western Entity certifying (i) the names and true signatures of
        the officers of such Western Entity executing and delivering this
        Agreement, the other Transaction Agreements to which such Western Entity
        is a party and the other documents to be executed and delivered by such
        Western Entity hereunder and thereunder, (ii) that approval by such
        Western Entity's stockholders of the execution and delivery of this
        Agreement, the other Transaction Agreements and all other such documents
        to be

                                       23
<PAGE>   29
        executed and delivered, by such Western Entity hereunder, has been
        obtained or is not required, and (iii) that no resolution for the
        dissolution of such Western Entity has been adopted or contemplated and
        that no such proceedings have been commenced or are contemplated;

                  (vii) a certificate of an Authorized Officer of the Owner
        Trustee certifying (i) the names and the true signatures of the officers
        of the Owner Trustee executing and delivering this Agreement, the other
        Transaction Agreements to which the Owner Trustee is a party and the
        other documents to be executed and delivered by the Owner Trustee
        hereunder and thereunder, (ii) that approval by the Owner Trustee's
        equity holders of the execution and delivery of this Agreement, the
        other Transaction Agreements and all other such documents to be executed
        and delivered, by the Owner Trustee hereunder, has been obtained or its
        not required, and (iii) that no action for the dissolution of the Owner
        Trustee has been adopted or contemplated and that no such proceedings
        have commenced or contemplated;

                  (viii) a certificate of an Authorized Officer of each Western
        Entity to the effect that (x) the representations and warranties of such
        Western Entity set forth or incorporated by reference in this Agreement
        are true and correct on and as of the Closing Date and (y) confirming
        that the conditions precedent set forth herein with respect to such
        Western Entity are satisfied;

                  (ix) a certificate of an Authorized Officer of the Trust to
        the effect that (x) the representations and warranties of the Trust set
        forth or incorporated by reference in this Agreement are true and
        correct on and as of the Closing Date and (y) confirming that the
        conditions precedent set forth herein with respect to the Trust are
        satisfied;

                  (x) a favorable opinion of Messrs. Mitchell, Silberberg &
        Knupp, LLP, counsel to the Seller, WFS, the Bank and WII, as to certain
        corporate, securities law and other matters, and such counsel shall have
        been instructed by its client to deliver such opinion to the addressees
        thereof, in form and substance satisfactory to counsel to Financial
        Security;

                  (xi) a favorable opinion of Messrs. Mitchell, Silberberg &
        Knupp, LLP, counsel to the Seller, WFS and the Bank, as to certain
        bankruptcy and insolvency matters, and such counsel shall have been
        instructed by its client to deliver such opinion to the addressees
        thereof, in form and substance satisfactory to Financial Security;

                  (xii) a favorable opinion of Messrs. Mitchell, Silberberg &
        Knupp, LLP, special tax counsel to the Seller, WFS, the Bank and WII as
        to certain tax matters (which may be included in the opinion referred to
        in clause (x) above), and such counsel shall have been instructed by its
        client to deliver such opinion to the addressees thereof, in form and
        substance satisfactory to counsel to Financial Security;

                  (xiii) a favorable opinion of Richards, Layton & Finger,
        counsel to the Trust and the Owner Trustee, and such counsel shall have
        been instructed by its client to deliver such opinion to the addressees
        thereof, substantially in the form of Exhibit G hereto;

                  (xiv) a certificate from the Collateral Agent and the
        Indenture Trustee, substantially in the form of Exhibit E hereto;

                  (xv) a favorable opinion of White & Case, counsel to the
        Collateral Agent, the Proceeds Agent and the Indenture Trustee, and such
        counsel shall have been instructed by its client to deliver such opinion
        to the addressees thereof, substantially in the form of Exhibit F
        hereto;

                  (xvi) evidence that amounts due and payable to Financial
        Security under Section 3.03 of this Agreement have been paid or that
        acceptable provisions therefor have been made;

                                       24
<PAGE>   30
                  (xvii) a fully executed copy of each of the Transaction
        Agreements;

                  (xviii) evidence that all actions necessary or, in the opinion
        of Financial Security, desirable to perfect and protect the interests
        transferred by the Sale and Servicing Agreement and the liens and
        security interests created by this Agreement, including, without
        limitation, the filing of any financing statements required by Financial
        Security or its counsel, have been taken or promptly shall be taken;

                  (xix) a certificate or opinion of Independent Accountants
        addressed to Financial Security to the effect set forth in Exhibit H
        hereto;

                  (xx) a certificate of the Master Servicer, signed by an
        Authorized Officer, identifying those Contracts as to which the Title
        Documents are not in the possession of the Seller and certifying that
        such Title Documents showing WFS or the Bank as first lienholder have
        been applied for and as to which Section 3.09 of the Sale and Servicing
        Agreement applies;

                  (xxi) evidence that the Seller shall have deposited, or caused
        to have been deposited, in the Collection Account, the deposits required
        under the eighth paragraph of Section 4.01 of the Sale and Servicing
        Agreement, the deposits required in the Spread Account and any other
        deposits required to be made on the Closing Date under the Transaction
        Agreements to which the Seller is a party; and

                  (xxii) such other documents, instruments, approvals (and, if
        requested by Financial Security, certified duplicates of executed copies
        thereof) or opinions as Financial Security may reasonably request.

               Section 3.03. Premium. In consideration of the issuance by
Financial Security of the Policy, the Seller shall pay to Financial Security the
initial installment of the Premium at the time of delivery of the Policy and
further installments of the Premium, all in accordance with the terms of the
letter agreement between the Seller and Financial Security referred to in the
definition of "Premium" set forth herein. Failure by the Seller to pay any such
further installments of the Premium shall not cause the Policy to be cancelled
and shall not in any way relieve Financial Security of its obligations to make
any payments under the Policy. Anything herein to the contrary notwithstanding,
it is hereby agreed between the parties hereto that the full amount of the
Premium shall have been earned by Financial Security upon its issuance of the
Policy on the Closing Date and upon the occurrence of a Servicer Default under
Section 8.01 of the Sale and Servicing Agreement (including without limitation,
the failure of the Seller to pay any installment of the Premium as and when
due), the entire outstanding balance of further installments of the Premium
shall be immediately due and payable. The Premium shall be nonrefundable without
regard to whether Financial Security makes any payment under the Policy, any
prepayment or early retirement of the Notes or the Certificates occur or any
other circumstances occur relating to the Notes or the Certificates.

               Section 3.04. Reimbursement Obligation.

               (a) Each of the Trust and the Seller agrees absolutely and
unconditionally to pay to Financial Security, in the manner provided in Section
3.04(b), as follows:

                  (i) a sum equal to the total of all amounts which may be paid
        by Financial Security under the Policy;

                  (ii) any accrued but unpaid installments of the Premium and
        any and all reasonable charges and expenses which Financial Security may
        pay or incur relating to any payment under the Policy, including, but
        not limited to, any fees and charges in connection with any accounts
        established to facilitate payments under the Policy, to the extent
        Financial Security

                                       25
<PAGE>   31
        has not been immediately reimbursed on the date that any amount is paid
        by Financial Security under the Policy;

                  (iii) the amount of any reasonable costs or expenses
        (including attorneys' and accountants' fees and expenses) incurred by
        Financial Security (A) in connection with the enforcement of this
        Agreement or any of the other Transaction Agreements or (B) in
        connection with the foreclosure upon, sale or other disposition of the
        Collateral, to the extent that such costs and expenses are not recovered
        from such foreclosure, sale or other disposition;

                  (iv) the amount of any payments made by Financial Security on
        behalf of the Seller other than amounts specified under Section
        3.04(a)(i) above, including, without limitation, the fees and expenses
        of the Collateral Agent, the Indenture Trustee, the Owner Trustee, the
        Trust and any Independent Accountants, and the amount of any payments
        made by Financial Security to (i) the Owner Trustee in respect of
        amounts (if any) owing by the Trust to the Owner Trustee pursuant to,
        Section 8.02 of the Trust Agreement and (ii) the Indenture Trustee
        pursuant to Section 6.07 of the Indenture to the extent that such
        amounts shall not have been paid by the Trust and are paid by Financial
        Security;

                  (v) any federal, state or local tax (other than taxes payable
        in respect of the gross income of Financial Security) or other
        governmental charge imposed in connection with the issuance of the
        Policy or the business or operations of the Seller including, without
        limitation, by reason of the Seller being deemed to do business in the
        State of California;

                  (vi) Financial Security's cost of providing to the Seller (or
        to any Person at the request of the Seller) any audited or unaudited
        financial statements, including, without limitation, the fees and
        expenses of Financial Security's Independent Accountants in reviewing
        such financial statements in connection with such provision and mailing
        and incremental printing costs;

                  (vii) any amount otherwise required to be paid to or on behalf
        of Financial Security under this Agreement;

                  (viii) any payments made by Financial Security as, or in lieu
        of, servicing, management, trustee, custodial or administrative fees
        payable, in the sole discretion of Financial Security, to third parties
        in connection with the transaction, to the extent (in each case) that
        such payment occurs following (i) the occurrence of an Event of Default
        (or event or circumstance that, with the giving of notice or the passage
        of time or both, would become an Event of Default) or (ii) the failure
        of any Person to perform its obligation to pay any such amount at the
        time and in the manner specified in this Agreement or any other
        Transaction Agreement; and

                  (ix) interest on any and all such amounts from the date of
        payment by Financial Security of such amounts until payment thereof in
        full and interest on any and all amounts described in Sections 3.03 and
        3.09 hereof, from the date due until payment thereof in full, in each
        case, payable at the Late Payment Rate.

               (b) All amounts to be paid by the Trust or the Seller pursuant to
subsection (a) above shall be due and payable without demand, in full without
any requirement on the part of Financial Security to seek reimbursement from any
other sources of indemnity therefor or to allocate expenses to other
transactions benefiting therefrom, and all such amounts shall be payable in the
priority and in the manner provided in the Sale and Servicing Agreement;
provided, however, that upon the occurrence of any Servicer Default under the
Sale and Servicing Agreement, Financial Security shall have the rights provided
for herein and therein.

                                       26
<PAGE>   32
               Section 3.05. Non-Recourse Obligation.

               (a) Notwithstanding any provision to the contrary contained in
Section 3.04(a), the payment obligations provided in Sections 3.04(a)(i) (to the
extent that such payment obligations do not arise from any failure or default in
the performance by the Bank or the WFAL2 of any of its payment obligations under
the RIC), 3.04(a)(ii) and (to the extent that such payment obligations do not
arise from any failure or default in the performance by the Seller of any of its
obligations under the Transaction Agreements) 3.04(a)(iii)(A) and (B), and any
interest on the foregoing in accordance with Section 3.04(a)(ix), shall not be
recourse to the Seller, WFS, WII, the Owner Trustee, the Indenture Trustee, the
Collateral Agent or the Proceeds Agent, but shall be payable solely by
application of moneys (excluding the Retained Yield) received from time to time
in accordance with the Sale and Servicing Agreement (including but not limited
to all amounts paid into the Collection Account, the Note Distribution Account,
the Certificate Distribution Account or the Holding Account pursuant to the Sale
and Servicing Agreement by any Western Entity, but not including the Retained
Yield to the extent that any amount thereof is deposited into any such Account)
and by realization on the Collateral pursuant to Section 6.03 hereof. Such
payment obligations shall be limited, except as set forth in the preceding
sentence, solely to application of monies, if any, in the Spread Account from
time to time in accordance with Transaction Agreements.

               (b) Limited Recourse. Notwithstanding anything to the contrary
contained in this Agreement, the obligations of the Seller under Section 3.04
are solely the corporate obligations of the Seller, and shall be payable by the
Seller, solely as provided in Section 3.04. The Seller shall only be required
to pay (i) any fees, expenses, indemnities or other liabilities that it may
incur under Section 3.04 (y) from funds available pursuant to, and in
accordance with the payment priorities set forth in Section 5.06 of the Sale
and Servicing Agreement and (z) to the extent the Seller has additional funds
available (other than funds described in the preceding clause (y)) that would
be in excess of amounts that would be necessary to pay the debt and other
obligations of the Seller incurred in accordance with its certificate of
incorporation and all financing documents to which it is a party and (ii) any
expenses, indemnities or other liabilities that it may incur under Section 3.04
(y) from funds available pursuant to, and in accordance with the payment
priorities set forth in Section 5.06 of the Sale and Servicing Agreement and
(z) only to the extent it receives additional funds designated for such
purposes or to the extent it has additional funds available (other than funds
described in the preceding clause (y)) that would be in excess of amounts that
would be necessary to pay its debt and other obligations incurred in accordance
with its certificate of incorporation and all financing documents to which it
is a party. In addition, no amount owing by the hereunder in excess of the
liabilities that it is required to pay in accordance with the preceding
sentence shall constitute a "claim" (as defined in Section 101(5) of the
Bankruptcy Code) against it. No recourse shall be had for the payment of any
amount owing hereunder or for the payment of any fee hereunder or any other
obligation of, or claim against, the Seller arising out of or based upon
Section 3.04, against any stockholder, employee, officer, agent, director or
authorized person of the Seller or Affiliate thereof; provided, however, that
the foregoing shall not relieve any such person or entity of any liability they
might otherwise have as a result of fraudulent actions or omissions taken by
them.
               Section 3.06. Indemnification.

               (a) In addition to any and all rights of indemnification or any
other rights of Financial Security pursuant hereto or under law or equity, the
Seller agrees to pay, and to protect, indemnify and save harmless, Financial
Security and its officers, directors, shareholders, employees, agents and each
person, if any, who controls Financial Security within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act, from and
against any and all claims, losses, liabilities (including penalties), actions,
suits, judgments, demands, damages, costs or expenses (including, without
limitation, fees and expenses of attorneys, consultants and auditors and
reasonable costs of investigations) or obligations whatsoever (herein
collectively referred to as "Liabilities") of any nature arising out of or
relating to the transactions contemplated by this Agreement and the other
Transaction Agreements by reason of:

                  (i) any untrue statement or alleged untrue statement of a
        material fact contained in the Registration Statement or the Prospectus
        or in any amendment or supplement thereto or in any preliminary
        prospectus, or arising out of or based upon any omission or alleged
        omission to state therein a material fact required to be stated therein
        or necessary to make the statements therein not misleading, except
        insofar as such Liabilities arise out of or are based upon any such
        untrue statement or omission or allegation thereof based upon (A)
        information set forth in the Prospectus under the caption "Financial
        Security" or in the financial statements of Financial Security,
        including any information in any amendment or supplement to the
        Prospectus furnished by Financial Security in writing expressly for use
        therein that amends or supplements such information (all such
        information being referred to herein as "Financial Security
        Information"), or (B) information set forth under the caption
        "Underwriting" in the Prospectus, including any information in any
        amendment or supplement to the Prospectus furnished by the Underwriters
        through the Representative in writing expressly for use therein that
        amends or supplements such information (all such information being
        referred to herein as "Underwriter Information");

                  (ii) to the extent not covered by clause (i) above, any act or
        omission of WII, the Seller or the Trust in connection with the
        offering, issuance, sale or delivery of the Notes or the Certificates
        other than by reason of false or misleading Financial Security
        Information;

                  (iii) the misfeasance or malfeasance of, or theft committed
        by, any director, officer, employee or agent of WII, the Seller or the
        Trust;

                                       27
<PAGE>   33
                  (iv) the violation by the Seller, the Trust or WII of any
        federal or state securities, banking or antitrust laws, rules or
        regulations in connection with the issuance, offer and sale of the Notes
        or the transactions contemplated by this Agreement and the other
        Transaction Agreements;

                  (v) the violation by WII, the Seller or the Trust of any
        federal or state laws, rules or regulations relating to the maximum
        amount of interest permitted to be received on account of the loan of
        money or with respect to the Contracts;

                  (vi) the negligence or willful misconduct of the Seller, the
        Trust or WII or any of its directors, officers, employees or agents;

                  (vii) the breach by WII, the Seller or the Trust of its
        obligations under this Agreement or any of the other Transaction
        Agreements;

                  (viii) the breach by WII, the Seller or the Trust of any
        representation or warranty on the part of WII, the Seller or the Trust,
        respectively, contained in or incorporated by reference in this
        Agreement or any other Transaction Agreement or in any certificate
        furnished or delivered to Financial Security hereunder and thereunder,
        or the occurrence, in respect of the Seller or the Trust, under any of
        the Transaction Agreements of any event of default or any event which,
        with the giving of notice or lapse of time or both, would constitute any
        event of default; and

                  (ix) the use, ownership or operation by the Seller, the Trust,
        WII or any affiliate of the Seller, of a Financed Vehicle.

               (b) In addition to any and all rights of indemnification or any
other rights of Financial Security pursuant hereto or under law or equity, WFS
agrees to pay, and to protect, indemnify and save harmless, Financial Security
and its officers, directors, shareholders, employees, agents and each person, if
any, who controls Financial Security within the meaning of either Section 15 of
the Securities Act or Section 20 of the Exchange Act, from and against any and
all claims, losses, liabilities (including penalties), actions, suits,
judgments, demands, damages, costs or expenses (including, without limitation,
fees and expenses of attorneys, consultants and auditors and reasonable costs of
investigations) or obligations whatsoever (herein collectively referred to as
"Liabilities") of any nature arising out of or relating to the transactions
contemplated by this Agreement and the other Transaction Agreements by reason
of:

                  (i) any untrue statement or alleged untrue statement of a
        material fact contained in the Registration Statement or the Prospectus
        or in any amendment or supplement thereto or in any preliminary
        prospectus, or arising out of or based upon any omission or alleged
        omission to state therein a material fact required to be stated therein
        or necessary to make the statements therein not misleading, except
        insofar as such Liabilities arise out of or are based upon any such
        untrue statement or omission or allegation thereof based upon (A)
        information set forth in the Prospectus under the caption "Financial
        Security" or in the financial statements of Financial Security,
        including any information in any amendment or supplement to the
        Prospectus furnished by Financial Security in writing expressly for use
        therein that amends or supplements such information (all such
        information being referred to herein as "Financial Security
        Information"), or (B) information set forth under the caption
        "Underwriting" in the Prospectus, including any information in any
        amendment or supplement to the Prospectus furnished by the Underwriters
        through the Representative in writing expressly for use therein that
        amends or supplements such information (all such information being
        referred to herein as "Underwriter Information");

                  (ii) to the extent not covered by clause (i) above, any act or
        omission of WFS in connection with the offering, issuance, sale or
        delivery of the Notes or the Certificates other than by reason of false
        or misleading Financial Security Information;

                                       28
<PAGE>   34
                  (iii) the misfeasance or malfeasance of, or theft committed
        by, any director, officer, employee or agent of WFS;

                  (iv) the violation by WFS or any Affiliate (other than
        Westcorp) thereof of any federal or state securities, banking or
        antitrust laws, rules or regulations in connection with the issuance,
        offer and sale of the Notes or the Certificates or the transactions
        contemplated by this Agreement and the other Transaction Agreements;

                  (v) the violation by WFS or any Affiliate (other than
        Westcorp) thereof of any federal or state laws, rules or regulations
        relating to the maximum amount of interest permitted to be received on
        account of the loan of money or with respect to the Contracts;

                  (vi) the negligence or willful misconduct of WFS or any of
        their respective directors, officers, employees or agents;

                  (vii) the breach by WFS of its obligations under this
        Agreement or any of the other Transaction Agreements;

                  (viii) the breach by WFS of any representation or warranty on
        the part of WFS contained in or incorporated by reference in this
        Agreement or any other Transaction Agreement or in any certificate
        furnished or delivered to Financial Security hereunder and thereunder;

                  (ix) the use, ownership or operation by WFS, or any Affiliate
        thereof (other than Westcorp), of a Financed Vehicle; and

                  (x) the violation by the Seller, the Trust or WII of any of
        the provisions of (a) above caused by or at the direction of WFS.

               (c) If any action or proceeding (including any governmental
investigation) shall be brought or asserted against Financial Security or any
person controlling Financial Security (hereinafter collectively referred to as a
Financial Security Indemnified Party) in respect of which indemnity may be
sought from the Seller pursuant to Section 3.06(a)(i) or (ii) or WFS pursuant to
Section 3.06(b)(i), (ii) or (x) (such Western Entity or Western Entities, as the
case may be, herein referred to as the Indemnifying Western Entity), then
Financial Security or such controlling person shall give the Indemnifying
Western Entity written or telegraphic notice of such action or claim reasonably
promptly after receipt of written notice thereof. The Indemnifying Western
Entity shall be entitled to participate in the defense of any such action or
claim in reasonable cooperation with, and with the reasonable cooperation of,
the Financial Security Indemnified Party. The Financial Security Indemnified
Party shall have the right to employ its own counsel in any such action in
addition to the counsel of the Indemnifying Western Entity, but fees and
expenses of such counsel will be at the expense of the Financial Security
Indemnified Party unless (1) the employment of counsel by the Financial Security
Indemnified Party has been authorized in writing by the Indemnifying Western
Entity or (2) the Indemnifying Western Entity has not in fact employed counsel
to assume the defense of such action within a reasonable time after receiving
notice of the commencement of the action or (3) the named parties to any such
action or proceeding (including any impleaded parties) include both the
Indemnifying Western Entity on the one hand and the Financial Security
Indemnified Party on the other hand, and the Financial Security Indemnified
Party shall have been advised by counsel that there may be one or more legal
defenses available to it that are different from or additional to those
available to the Indemnifying Western Entity (it being understood, however, that
the Indemnifying Western Entity shall not, in connection with any one such
action or proceeding or separate but substantially similar or related actions or
proceedings in the same jurisdiction arising out of the same general allegations
or circumstances, be liable for the reasonable fees and expenses of more than
one separate firm of attorneys at any time for the Financial Security
Indemnified Party, which firm shall be designated in writing by the Financial
Security Indemnified Party), in each of which cases the fees and expenses of
counsel will be at the expense of the Indemnifying Western Entity and all such
fees and

                                       29
<PAGE>   35
expenses will be reimbursed promptly as they are incurred. No settlement of any
such claim or action shall be entered into without the consent of Financial
Security on the one hand and the Indemnifying Western Entity who is subject to
such claim or action on the other hand. Any failure by Financial Security to
comply with the provisions of this Section shall relieve the Indemnifying
Western Entity of liability only if substantially prejudicial to the position of
the Indemnifying Western Entity and then only to the extent of such prejudice.

               (d) The rights to indemnification provided for in this Section
3.06 shall survive the termination of this Agreement and shall survive until the
statute of limitations has run on any causes of action that arise from these
provisions and until all suits filed as a result thereof have been finally
concluded.

               (e) Limited Recourse. Notwithstanding anything to the contrary
contained in this Agreement, the obligations of the Seller under this Section
3.06 are solely the corporate obligations of the Seller, and shall be payable
by the Seller, solely as provided in Section 3.06. The Seller shall only be
required to pay (i) any fees, expenses, indemnities or other liabilities that
it may incur under this Section 3.06 (y) from funds available pursuant to, and
in accordance with, the payment priorities set forth in Section 5.06 of the
Sale and Servicing Agreement and (z) to the extent the Seller has additional
funds available (other than funds described in the preceding clause (y)) that
would be in excess of amounts that would be necessary to pay the debt and other
obligations of the Seller incurred in accordance with its certificate of
incorporation and all financing documents to which it is a party and (ii) any
expenses, indemnities or other liabilities that it may incur under this Section
3.06 (y) from funds available pursuant to, and in accordance with, the payment
priorities set forth in Section 5.06 of the Sale and Servicing Agreement and
(z) only to the extent it receives additional funds designated for such
purposes or to the extent it has additional funds available (other than funds
described in the preceding clause (y)) that would be in excess of amounts that
would be necessary to pay its debt and other obligations incurred in accordance
with its certificate of incorporation and all financing documents to which it
is a party. In addition, no amount owing by the Seller hereunder in excess of
the liabilities that it is required to pay in accordance with the preceding
sentence shall constitute a "claim" (as defined in Section 101(5) of the
Bankruptcy Code) against it. No recourse shall be had for the payment of any
amount owing hereunder or for the payment of any fee hereunder or any other
obligation of, or claim against, the Seller arising out of or based upon this
Section 3.06, against any stockholder, employee, officer, agent, director or
authorized person of the Seller or Affiliate thereof; provided, however, that
the foregoing shall not relieve any such person or entity of any liability they
might otherwise have as a result of fraudulent actions or omissions taken by
them.

               Section 3.07. Liability Absolute. The obligations of the Seller,
WFS, WII and the Trust hereunder shall be absolute, unconditional and
irrevocable and shall be paid and performed strictly in accordance with the
terms of this Agreement under all circumstances whatsoever, including, without
limitation, the following circumstances:

               (a) any lack of validity or enforceability of the Policy or all
or any provision of this Agreement or of any of the other Transaction
Agreements;

               (b) any amendment or waiver of or any consent to departure from
all or any provision of this Agreement or of any other Transaction Agreement;

               (c) the existence of any claim, setoff, defense, reduction,
abatement or other right which either Western Entity may have at any time
against Financial Security or any other Person;

               (d) any statement, instrument of assignment or any other document
presented to Financial Security in connection with the Policy proving to be
forged, fraudulent, invalid or insufficient in any respect or any statement
therein being untrue or inaccurate in any respect whatsoever;

               (e) payment by Financial Security under the Policy against
presentation of a certificate or other document which does not comply with the
terms of the Policy, provided that such payment shall not have been the result
of the gross negligence or willful misconduct of Financial Security;

               (f) any nonapplication or misapplication by the Indenture
Trustee, the Owner Trustee, or any paying agent of the proceeds of the demand
for payment under the Policy;

               (g) the failure of the Seller or, indirectly, WFS, to receive the
proceeds of the sale of the Notes or the Certificates; or

               (h) any other circumstance or happening whatsoever, whether or
not similar to any of the foregoing, provided that such circumstance or
happening shall not have been the result of the gross negligence or willful
misconduct of Financial Security.

               Section 3.08. Liability of Financial Security. Neither Financial
Security nor any of its officers, directors or employees shall be liable or
responsible for (a) the unauthorized use which may be made of the Policy by the
Indenture Trustee or the Owner Trustee or any unauthorized acts or omissions of
the Indenture Trustee or the Owner Trustee in connection with the Policy; or (b)
the validity, sufficiency, accuracy or genuineness of documents, or of any
endorsement(s) thereto, even if such documents should in fact prove to be in any
or all respects invalid, insufficient, fraudulent or forged; or (c) any acts or
omissions to act of the Indenture Trustee in connection with the Collateral
other than such acts or omissions that are at the direction of Financial
Security. In furtherance and not in limitation of the foregoing, Financial
Security (or its Fiscal Agent) may accept documents that appear on their face to
be in order, without responsibility for further investigation. Each of the Owner
Trustee, the Indenture Trustee and each Western Entity acknowledges that it has
not relied on any information or materials provided by

                                       30
<PAGE>   36
Financial Security in connection with the issuance of the Notes and the
Certificates except for the information furnished in writing by Financial
Security for inclusion in the Registration Statement. Each of them also
acknowledges that it has not relied on any investigation by Financial Security
of the Collateral or of the financial statements or other financial statistical
data used in connection with the issuance of the Notes and Certificates.

               Section 3.09. Payment of Costs, Fees and Expenses.

               (a) The Seller shall pay on demand any and all charges, fees,
costs and expenses which Financial Security may reasonably pay or incur,
including, but not limited to, attorneys' and accountants' fees and expenses, in
connection with (A) the enforcement, defense or preservation of any rights in
respect of any of this Agreement or any other Transaction Agreements, including
defending, monitoring or participating in any litigation or proceeding
(including any bankruptcy proceeding in respect of any transaction participant
or any Affiliate (other than WII or Westcorp) thereof) relating to any of the
Transaction Agreements and this Agreement, any party to any of the Transaction
Agreements and this Agreement, or the transaction, (B) any amendment, waiver or
other action with respect to, or related to, any Transaction Agreements and this
Agreement whether or not executed or completed or (C) any review or approval by
Financial Security in connection with the delivery of any additional or
substitute collateral under any of the Transaction Agreements and this
Agreement. In addition, the Seller shall reimburse Financial Security for its
expenses, including, without limitation, legal fees and disbursements, incurred
in connection with the preparation of this Agreement and the Transaction
Agreements and the consummation of the initial transactions contemplated hereby
and thereby, it being understood that the Seller's obligations to reimburse
Financial Security pursuant to this sentence shall be limited in the aggregate
to the dollar amount set forth in the letter agreement between the Seller and
Financial Security referred to in the definition of "Premium" set forth herein,
plus rating agency fees, to the extent paid by Financial Security.

               (b) WFS shall pay on demand any and all charges, fees, costs and
expenses not paid by the Seller which Financial Security may reasonably pay or
incur, including, but not limited to, attorneys' and accountants' fees and
expenses, in connection with (A) the enforcement, defense or preservation of any
rights in respect of this Agreement or any other Transaction Agreements,
including defending, monitoring or participating in any litigation or proceeding
(including any bankruptcy proceeding in respect of any transaction participant
or any Affiliate (other than Westcorp) thereof) relating to this Agreement or
any other Transaction Agreements, any party to any of the Transaction Agreements
and this Agreement, or the transaction, (B) any amendment, waiver or other
action with respect to, or related to, this Agreement or any other Transaction
Agreements, whether or not executed or completed or (C) any review or approval
by Financial Security in connection with the delivery of any additional or
substitute collateral under any of the Transaction Agreements and this
Agreement.

               (c) Limited Recourse. Notwithstanding anything to the contrary
contained in this Agreement, the obligations of the Seller under this Section
3.09 are solely the corporate obligations of the Seller, and shall be payable
by the Seller, solely as provided in Section 3.09. The Seller shall only be
required to pay (i) any fees, expenses or other liabilities that it may incur
under this Section 3.09 (y) from funds available pursuant to, and in accordance
with, the payment priorities set forth in Section 5.06 of the Sale and
Servicing Agreement and (z) to the extent the Seller has additional funds
available (other than funds described in the preceding clause (y)) that would
be in excess of amounts that would be necessary to pay the debt and other
obligations of the Seller incurred in accordance with its certificate of
incorporation and all financing documents to which it is a party and (ii) any
expenses, indemnities or other liabilities that it may incur under this Section
3.09 (y) from funds available pursuant to, and in accordance with, the payment
priorities set forth in Section 5.06 of the Sale and Servicing Agreement and
(z) only to the extent it receives additional funds designated for such
purposes or to the extent it has additional funds available (other than funds
described in the preceding clause (y)) that would be in excess of amounts that
would be necessary to pay its debt and other obligations incurred in accordance
with its certificate of incorporation and all financing documents to which it
is a party. In addition, no amount owing by the Seller hereunder in excess of
the liabilities that it is required to pay in accordance with the preceding
sentence shall constitute a "claim" (as defined in Section 101(5) of the
Bankruptcy Code) against it. No recourse shall be had for the payment of any
amount owing hereunder or for the payment of any fee hereunder or any other
obligation of, or claim against, the Seller arising out of or based upon this
Section 3.09, against any stockholder, employee, officer, agent, director or
authorized person of the Seller or Affiliate thereof; provided, however, that
the foregoing shall not relieve any such person or entity of any liability they
might otherwise have as a result of fraudulent actions or omissions taken by
them.

               Section 3.10. Payment Procedure. All payments made pursuant to
this Agreement shall be made to Financial Security in lawful currency of the
United States of America and in one-day clearing-house funds at Financial
Security's Notice Address before 1:00 p.m. (New York City time) on the date when
due.

               Section 3.11. Business Days. In any case where the date of any
payment to Financial Security or the expiration of any time period hereunder
occurs on a day which is not a Business Day, then such payment may be made, or
such expiration shall occur, on the next succeeding Business Day with the same
force and effect as if made on the day of maturity or expiration of such period,
except that interest shall continue to accrue for the period after such date to
the next Business Day.

               Section 3.12. Waivers and Consents by Seller and WFS. The Seller,
WFS and any and all others who are now or may become liable for all or part of
the obligations of the Seller and WFS under this Agreement (all of the foregoing
being referred to collectively in this Section as the "Obligors") agree

                                       31
<PAGE>   37
to be bound by this Agreement and (a) waive and renounce any and all redemption
and exemption rights and the benefit of all valuation and appraisement
privileges against any amounts to be paid hereunder or any extension or renewal
hereof; (b) waive presentment and demand for payment, notices of nonpayment and
of dishonor, protest of dishonor and notice of protest; (c) waive all notices in
connection with the delivery and acceptance hereof and all other notices in
connection with the performance, default or enforcement of the payment hereof
except as required by this Agreement; (d) waive any and all lack of diligence
and delays in the enforcement of the payment hereof; (e) agree that the
liability of each of the Obligors shall be unconditional and without regard to
the liability of any other person or entity for the payment hereof and shall not
in any manner be affected by any indulgence or forbearance granted or consented
to by Financial Security with respect hereto; (f) consent to any and all
extensions of time, renewals, waivers or modifications that may be granted by
Financial Security with respect to the payment or other provisions hereof, and
to the release of any security at any time given for the payment hereof, or any
part thereof, with or without substitution, and to the release of any person or
entity liable for the payment hereof; and (g) consent to the addition of any and
all other makers, endorsers, guarantors and other obligors for the payment
hereof, and to the acceptance of any and all other security for the payment
hereof or thereof, and agree that the addition of any such obligors or security
shall not affect the liability of any of the Obligors for the payment hereof.

                                   ARTICLE IV

                              PLEDGE OF COLLATERAL

               Section 4.01. Obligations Secured Hereby. The agreements
contained in this Article IV are made to provide for and secure repayment of the
following indebtedness and liabilities of the Seller (such indebtedness and
liabilities being herein called the "Obligations") in the order of priority
indicated:

                      First, (i) the repayment of all amounts, if any, advanced
        or expended by the Collateral Agent, in its capacity as Collateral
        Agent, for the account of the Seller hereunder, (ii) the payment of all
        reasonable costs and expenses at any time and from time to time incurred
        by the Collateral Agent, in its capacity as Collateral Agent, in
        connection with the administration or enforcement of this Agreement or
        any related document (including, without limitation, the fees and
        out-of-pocket expenses of counsel employed by the Collateral Agent in
        connection therewith) and (iii) the payment of all indemnities at any
        time and from time to time payable hereunder to the Collateral Agent, by
        the Seller, and

                      Second, (i) the repayment of all amounts advanced or paid
        by Financial Security under the Policy pursuant to this Agreement and
        (ii) the payment of any accrued but unpaid installments of the Premium
        and all costs and expenses at any time and from time to time incurred by
        Financial Security in connection with the administration or enforcement
        of this Agreement or any other Transaction Agreement or any related
        document (including, without limitation, the fees and out-of-pocket
        expenses of counsel employed by Financial Security in connection
        therewith) and under or in connection with this Agreement and the
        Policy.

               Section 4.02. Granting Clause. Conveyance by the Seller. In order
to secure and to provide for the repayment of the Obligations, the Seller hereby
sells, assigns, conveys, transfers, delivers and sets over unto the Collateral
Agent, as collateral agent for Financial Security, and hereby grants the
Collateral Agent, as collateral agent for Financial Security, a security
interest in all of its right, title and interest in the Collateral, to have and
to hold said Collateral unto the Collateral Agent, its successors and assigns,
forever in pledge and trust for the benefit and security of Financial Security,
subject to the terms and provisions set forth in Article V of this Agreement.
The assignment and security

                                       32
<PAGE>   38
interest so granted to the Collateral Agent shall not relieve the Seller from
the performance of any term, covenant, condition or agreement on the Seller's
part to be performed or observed under or in connection with this Agreement or
any other Transaction Agreement, or impose any obligation on the Collateral
Agent or Financial Security to perform or observe any such term, covenant,
condition or agreement on the Seller's part to be so performed or observed or
impose any liability on the Collateral Agent or Financial Security for any act
or omission on the part of the Seller relative thereto or for any breach of any
representation or warranty on the part of the Seller contained therein, or made
in connection therewith, and the Seller hereby agrees to indemnify and hold
harmless the Collateral Agent and Financial Security from and against any and
all losses, liabilities (including liabilities for penalties), claims, demands,
actions, suits, judgments, costs and expenses arising out of or resulting from
the assignment and security interest granted hereby by virtue of any act or
omission on the part of the Seller (other than an act or omission on the part of
the Seller pursuant to or in accordance with an express direction from the
Collateral Agent or Financial Security), including, without limitation, the
reasonable costs, expenses and disbursements (including attorneys' fees)
incurred by the Collateral Agent or Financial Security in enforcing this
Agreement or any other Transaction Agreement. The assignment and security
interest granted to the Collateral Agent pursuant to this Section shall become
effective prior to the effectiveness of the Seller Assignments, and the
assignment by the Seller to the Trust under Section 2.01 of the Sale and
Servicing Agreement and the assignment by the Trust to the Indenture Trustee
under the Indenture and, upon the effectiveness of such assignment and security
interest, such assignment and security interest shall be subject to the
provisions of Section 5.01(d) hereof.

               Section 4.03. Release of Collateral. Financial Security hereby
instructs the Collateral Agent that, at such time as a Contract is reconveyed by
the Trust pursuant to Section 9.01 of the Sale and Servicing Agreement, the
Collateral Agent shall release such Contract from the lien of the security
interest created hereby upon receipt by Financial Security of a Certificate of
the Seller that the conditions set forth in Section 9.01 of the Sale and
Servicing Agreement have been satisfied.

                                    ARTICLE V

                            INTERCREDITOR PROVISIONS

               Section 5.01. Financial Security's Direction Upon Servicer
Default.

               (a) So long as no Financial Security Insolvency has occurred and
no Financial Security Default has occurred and is continuing, if there exists
any Servicer Default pursuant to Section 8.01 of the Sale and Servicing
Agreement, Financial Security shall, notwithstanding the provisions of Article
VIII of the Sale and Servicing Agreement, have the sole right to direct the
Indenture Trustee as to any and all actions to be taken under the Indenture or
the Sale and Servicing Agreement, as applicable, including, without limitation,
all actions with respect to (i) the giving of directions to the Master Servicer
and any Subservicer with respect to the servicing of the Contracts and any of
the respective obligations of the Seller under the Sale and Servicing Agreement,
(ii) the exercise of all rights, remedies, powers, privileges and claims against
any obligor under the Sale and Servicing Agreement and (iii) the giving or
withholding of all consents, requests, notices, directions, approvals,
extensions or waivers under or with respect to the Indenture or the Sale and
Servicing Agreement, as applicable, in each case to the same extent as the
Noteholders or the Certificateholders might do but for the collateral assignment
and security interests granted to Financial Security hereunder, provided,
however, that the Indenture Trustee, without obtaining the consent or direction
of Financial Security, may at all times take any action permitted or required to
be taken by it under the terms of the Indenture or as a fiduciary in order to
protect the Indenture Trustee's, the Noteholders' and the Certificateholders'
interest in the Trust Estate or to preserve any available claims against the
Seller on behalf of the Noteholders and the Certificateholders. Financial
Security shall indemnify the Indenture Trustee in full for any costs and
expenses incurred (including the reasonable fees and expenses of the Indenture
Trustee's counsel) in connection with the Indenture Trustee's due

                                       33
<PAGE>   39
performance of directions pursuant to this subsection (a) or in connection with
any inaction of the Indenture Trustee as a result of a direction from Financial
Security at any time when Financial Security holds the right to direct the
Indenture Trustee as provided for in this paragraph (a).

               (b) Financial Security shall not unreasonably withhold any
consent required of it under the Sale and Servicing Agreement or the Indenture,
as applicable, and shall promptly respond when any approval or consent is
required of it under the Sale or Servicing Agreement and the Indenture, as
applicable.

               (c) Notwithstanding any provision of the Sale and Servicing
Agreement or the Indenture, as applicable, to the contrary, so long as no
Financial Security Insolvency has occurred and no Financial Security Default has
occurred and is continuing,

                  (i) without the prior written consent of Financial Security,
        the Owner Trustee shall not (A) terminate the rights and powers of the
        Master Servicer pursuant to Section 8.01 of the Sale and Servicing
        Agreement or (B) waive any Servicer Default thereunder;

                  (ii) without the prior written consent of Financial Security,
        (A) neither the Seller nor the Trust shall cause to be appointed any
        successor Indenture Trustee, and, (B) neither the Indenture Trustee nor
        the Administrator shall cause to be appointed any Co-Trustee under the
        Indenture;

                  (iii) without the prior written consent of Financial Security,
        neither the Seller or WFS nor the Owner Trustee or the Indenture Trustee
        shall appoint new Independent Accountants;

                  (iv) without the prior written consent of Financial Security,
        neither the Seller or WFS nor the Owner Trustee or the Indenture Trustee
        shall consent to the amendment of or supplement to any of the
        Transaction Agreements; and

                  (v) Financial Security shall have the power to direct the
        actions to be taken by the Seller pursuant to Section 3.02 of the Sale
        and Servicing Agreement.

               (d) Financial Security agrees that, until such time that all
required payments shall have been made with respect to the Notes, the security
interest in the Collateral granted to Financial Security under this Agreement
shall be junior and subordinate to the interest of the Indenture Trustee and the
Securityholders. Financial Security further agrees that, until such time that
all required payments shall have been made with respect to the Notes, neither
Financial Security nor any Person acting on its behalf may take any action to
foreclose or otherwise pursue remedies with respect to the Collateral other than
in accordance with the Sale and Servicing Agreement and the Indenture.

               Section 5.02. Financial Security's Direction of Insolvency
Proceedings. Financial Security shall have the rights provided for in Section
8.06 of the Sale and Servicing Agreement.

                                   ARTICLE VI

                         THE COLLATERAL AGENT; REMEDIES

               Section 6.01. Appointment and Powers of Collateral Agent.
Financial Security hereby appoints Bankers Trust Company as the Collateral
Agent, and Bankers Trust Company accepts such appointment hereunder, and
Financial Security hereby authorizes the Collateral Agent to take such action on
its behalf and to exercise such rights, remedies, powers and privileges
hereunder as Financial Security may direct and as are specifically authorized to
be exercised by the Collateral Agent by the terms hereof, together with such
rights, remedies, powers and privileges as are reasonably incidental thereto.
The Collateral Agent may execute any of its duties as agent hereunder by or
through agents or employees and shall be entitled to retain counsel and to act
in reliance upon the advice of such counsel concerning all

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<PAGE>   40
matters pertaining to the agencies hereby created and its duties hereunder, and
shall not be liable for any action taken or omitted to be taken by it in good
faith in accordance with the advice of counsel selected by it. The Collateral
Agent shall have no duties or responsibilities except those expressly set forth
in this Agreement. The duties of the Collateral Agent shall be mechanical and
administrative in nature. The Collateral Agent shall not have by reason of this
Agreement a fiduciary relationship. Nothing in this Agreement, express or
implied, is intended to or shall be so construed as to impose upon the
Collateral Agent any obligations in respect of this Agreement except as
expressly set forth herein. Neither the Collateral Agent nor Financial Security,
nor any of its or their respective directors, officers or employees, shall be
liable for any action taken or omitted to be taken by it or them hereunder, or
in connection herewith, except for its or their own gross negligence or willful
misconduct; nor shall the Collateral Agent or Financial Security be responsible
for the validity, effectiveness, value, sufficiency or enforceability against
the Seller of this Agreement or any other document furnished pursuant hereto or
in connection herewith, or of the Collateral (or any part thereof). The
Collateral Agent shall be entitled to rely on any communication, instrument,
paper or other document believed by it to be genuine and correct and to have
been signed or sent by the proper Person or Persons.

               Section 6.02. Successor Collateral Agent. The Collateral Agent
acting hereunder at any time may resign by an instrument in writing addressed
and delivered to the Seller and Financial Security. If the Collateral Agent is
also the Indenture Trustee and, as such, determines that it has a conflicting
interest on account of its acting as Collateral Agent, the Collateral Agent
shall eliminate such conflicting interest by resigning as Collateral Agent
hereunder rather than resigning as Indenture Trustee. Financial Security shall
appoint a successor to the Collateral Agent upon any such resignation by an
instrument of substitution complying with the requirements of applicable law,
or, in the absence of any such requirements, without formality other than
appointment and designation in writing, a copy of which instrument or writing
shall be sent to the Seller; provided, however, that the validity of any such
appointment shall not be impaired or affected by any failure to give any such
notice to the Seller or by any defect therein. Upon the making and acceptance of
such appointment, the execution and delivery by such successor Collateral Agent
of a ratifying instrument pursuant to which such successor Collateral Agent
agrees to assume the duties and obligations imposed on the Collateral Agent by
the terms of this Agreement, and the delivery to such successor Collateral Agent
of the Collateral and related documents then held by the retiring Collateral
Agent, such successor Collateral Agent shall thereupon succeed to and become
vested with all the estate, rights, powers, remedies, privileges, immunities,
indemnities, duties and obligations hereby granted to or conferred or imposed
upon the Collateral Agent named herein, and one such appointment and designation
shall not exhaust the right to appoint and designate further successor
Collateral Agents hereunder. No Collateral Agent shall be discharged from its
duties or obligations hereunder until the Collateral and related documents then
held by such Collateral Agent shall have been transferred and delivered to the
successor Collateral Agent and such retiring Collateral Agent shall have
executed and delivered to the successor Collateral Agent appropriate instruments
establishing the successor Collateral Agent as the record holder of all liens
and security interests in favor of Financial Security in the Collateral and
transferring to such successor Collateral Agent all power given to it by the
Indenture Trustee to act as attorney-in-fact of the Indenture Trustee for
purposes of this Agreement. Each such successor Collateral Agent shall provide
the Seller and Financial Security with its address (which shall thereupon become
such successor Collateral Agent's Notice Address for purposes of this
Agreement), and its telephone, Telex, TWX and telecopier numbers, to be used for
purposes of Section 7.02 hereof, in a notice complying with the terms of said
Section.

               Section 6.03. Remedies Available to Collateral Agent.

               (a) To the fullest extent permitted by applicable law and subject
to Article V hereof, if the Master Servicer shall have been terminated upon the
occurrence of any Servicer Default pursuant to Section 8.01 of the Sale and
Servicing Agreement, then in every such case, the Collateral Agent may, to

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<PAGE>   41
the extent permitted by applicable law and subject to Article V hereof, exercise
the following rights, privileges and remedies:

                  (i) Collection of the Collateral. The Collateral Agent shall
        have the right to collect all proceeds of the Collateral, to pay all
        expenses of such collection, including the reasonable expenses and
        compensation of the Collateral Agent, its agents and attorneys, and to
        apply the remainder of the moneys so received as provided herein.

                  (ii) Sale of Collateral. The Collateral Agent may sell, or
        cause to be sold, the Collateral or any part thereof or interest
        therein, at public auction to the highest bidder for cash or at private
        sale or auction with or without demand, advertisement or notice of the
        date, time or place of sale or any adjournment thereof, upon such terms
        as Financial Security may approve, and upon such sale the Collateral
        Agent shall make and deliver to the purchaser or purchasers an
        appropriate instrument or instruments of transfer. The Collateral Agent
        is hereby irrevocably appointed the true and lawful attorney of the
        Indenture Trustee, in its name and stead, to make all necessary
        transfers of property thus sold; and for that purpose it may execute all
        necessary instruments of transfer, and may substitute one or more
        Persons with like power, the Indenture Trustee hereby ratifying and
        confirming all that its said attorney, or such substitute or
        substitutes, shall lawfully do by virtue hereof. Nevertheless, if so
        requested by the Collateral Agent or any purchaser of the Collateral or
        any part thereof, the Indenture Trustee shall ratify and confirm any
        such sale or transfer by executing and delivering to the Collateral
        Agent or such purchaser all proper instruments of transfer and releases
        as may be designated in any such request. The Collateral Agent may
        proceed at law or in equity to foreclose the lien of this Agreement
        against all or any part of the Collateral and to have the same sold
        under the judgment or decree of a court having jurisdiction or as
        otherwise may be required or permitted by law. Upon any such sale,
        whether made under the power of sale hereby given or by virtue of
        judicial proceedings, any Noteholder, Certificateholder or Financial
        Security may bid for and purchase the Collateral or any part thereof
        and, upon compliance with the terms of such sale, may hold, retain,
        possess or dispose of such property in its or their own absolute right
        without accountability; and any purchaser at any such sale may, in
        paying the purchase money, turn in any of the Notes or Certificates, as
        applicable, in lieu of cash up to the amount which shall, upon
        distribution of the net proceeds of such sale, be payable thereon. Said
        Notes or Certificates, in case the amounts so payable thereon shall be
        less than the amount due thereon, shall be returned to the Holders
        thereof after being properly stamped to show partial payment. Upon any
        sale, whether made under the power of sale hereby given or by virtue of
        judicial proceedings, a receipt of the Collateral Agent, or of the
        officer making such sale under judicial proceedings, shall be a
        sufficient discharge to the purchaser or purchasers at such sale for its
        or their purchase money, and such purchaser or purchasers shall not be
        obliged to see to the application thereof. Any such sale, whether under
        the power of sale hereby given or by virtue of judicial proceedings,
        shall bind the Collateral Agent, the Seller, the Indenture Trustee, the
        Noteholders and the Certificateholders, shall operate to divest all
        right, title and interest whatsoever, either at law or in equity, of
        each of them in and to the property sold, and shall be a perpetual bar,
        both at law and in equity, against each of them and their successors and
        assigns, and against any and all Persons claiming through or under them.

                  (iii) Other Actions. The Collateral Agent shall have the right
        to cause any other action permitted at law or in equity to be initiated
        and prosecuted to enforce this Agreement and any rights granted by
        virtue of the pledge of the Collateral hereunder and to collect or
        enforce the Notes and the Certificates.

               Section 6.04. Waiver of Stay or Extension Laws; Marshalling of
Assets. Each of the Seller, the Owner Trustee, and the Indenture Trustee (in
each case to the extent permitted by applicable law) covenants that it will not
at any time insist upon, plead, or in any manner whatsoever claim or take

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<PAGE>   42
the benefit or advantage of, any appraisement, valuation, stay, extension or
redemption law wherever enacted, now or at any time hereafter in force, in order
to prevent or hinder the enforcement of this Agreement or the absolute sale of
the Collateral or any part thereof, or the possession thereof by any purchaser
at any sale under this Article; and each of the Seller and the Indenture Trustee
(in each case to the extent permitted by applicable law), for itself and all who
may claim under it, hereby waives the benefit of all such laws, and covenants
that none of them will hinder, delay or impede the execution of any power herein
granted to the Collateral Agent, but will suffer and permit the execution of
every such power as though no such law had been enacted. Each of the Seller, the
Owner Trustee and the Indenture Trustee, for itself and all who may claim under
it, waives (in each case to the extent permitted by applicable law) all right to
have the Collateral marshalled upon any foreclosure hereof, and agrees that any
court having jurisdiction to foreclose this Agreement may order the sale of the
Collateral as an entirety without the marshalling thereof.

               Section 6.05. Restoration of Rights and Remedies. If the
Collateral Agent has instituted any proceeding to enforce any right or remedy
under this Agreement, and such proceeding has been discontinued or abandoned for
any reason, or has been determined adversely to the Collateral Agent, then and
in every such case the Seller, the Collateral Agent and the Indenture Trustee
shall, subject to any determination in such proceeding, be restored severally
and respectively to their former positions hereunder, and thereafter all rights
and remedies of the Collateral Agent shall continue as though no such proceeding
had been instituted.

               Section 6.06. Remedies Cumulative. No right or remedy herein
conferred upon or reserved to the Collateral Agent is intended to be exclusive
of any other right or remedy, and every right shall, to the extent permitted by
law, be cumulative and in addition to every other right and remedy given
hereunder or now or hereafter existing at law, in equity or otherwise, and each
and every right, power and remedy, whether specifically herein given or
otherwise existing, may be exercised from time to time and as often and in such
order as may be deemed expedient by the Collateral Agent, and the exercise or
the beginning of the exercise of any power or remedy shall not be construed to
be a waiver of the right to exercise at the same time or thereafter any other
right, power or remedy.

               Section 6.07. Control by Financial Security. So long as no
Financial Security Insolvency has occurred and no Financial Security Default has
occurred and is continuing, Financial Security shall, upon the occurrence and
during the continuation of any of the Servicer Default described in Section 8.01
of the Sale and Servicing Agreement, subject to Article V hereof, have the right
to direct the time, method and place of conducting any proceeding for any remedy
available to the Collateral Agent hereunder or otherwise or exercising any trust
or power conferred upon the Collateral Agent hereunder provided that:

                      (1) such direction shall not be in conflict with any rule
        of law or with this Agreement or the Sale and Servicing Agreement; and

                      (2) such Collateral Agent may take any other action deemed
        proper by such Collateral Agent that is not inconsistent with such
        direction.

               Section 6.08. Proceeds Agent as Custodian and Bailee of
Collateral Agent. In order to facilitate the making of payments under the
Contracts, such payments shall be deposited by the Master Servicer in the
Collection Account or the Holding Account, and certain amounts in the Collection
Account shall be deposited in the Spread Account, in accordance with the Sale
and Servicing Agreement. The Proceeds Agent shall retain all proceeds deposited
in the Collection Account, the Spread Account and Holding Account as custodian
and bailee of the Collateral Agent for Financial Security. Financial Security
hereby acknowledges that the Proceeds Agent will also hold all such proceeds for
the benefit of the Noteholders and the Certificateholders. Solely for purposes
of perfection under Section 9-305 of the UCC, Financial Security and the
Proceeds Agent hereby acknowledge that the Proceeds Agent is acting as

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<PAGE>   43
agent and bailee of the Collateral Agent for Financial Security in holding such
property in the Collection Account, the Spread Account and the Holding Account,
and any other items constituting a part of the Collateral which from time to
time come into the possession of the Proceeds Agent. It is intended that, by the
Proceeds Agent's acceptance of such custodianship and bailment pursuant to this
Agreement, the Collateral Agent for Financial Security, as secured party, will
be deemed to have possession of such Collateral, items, moneys and such other
items for purposes of Section 9-305 of the UCC.

               Section 6.09. Indemnification of Collateral Agent. Financial
Security hereby indemnifies and holds the Collateral Agent harmless from and
against any and all judgments, claims, defenses, charges, losses, liabilities,
costs or expenses that the Collateral Agent may incur or that may be claimed
against the Collateral Agent by any Person by reason of any action taken, or any
failure to act, in connection with the duties and responsibilities of the
Collateral Agent under the terms of this Agreement; provided, however, that
Financial Security shall not be required to indemnify the Collateral Agent
pursuant to this Section for any judgments, claims, defenses, charges, losses,
liabilities, costs or expenses to the extent caused by such Collateral Agent's
willful misconduct or gross negligence in any action taken, or any failure to
act, in connection with the duties and responsibilities of the Collateral Agent
under the terms of this Agreement. The Collateral Agent shall have the right to
retain counsel in any action for which indemnification from Financial Security
is provided herein, and the reasonable fees and expenses of such counsel shall
constitute costs and expenses of such Collateral Agent for which indemnification
from Financial Security is provided herein. The Collateral Agent shall be
entitled to submit a written request, with supporting documentation, for any
amounts expended by it for which indemnification is provided herein, as such
amounts are expended or on a periodic basis, as the Collateral Agent shall
choose, and Financial Security shall reimburse to the Collateral Agent the
amount specified in each such written request promptly. The indemnity agreements
contained in this Section shall remain operative and in full force and effect
regardless of the termination of this Agreement.

               Section 6.10. Compensation Payable to Collateral Agent. In
consideration of the Collateral Agent's services to be rendered hereunder, the
Master Servicer agrees to pay to the Collateral Agent, on behalf of Financial
Security, the compensation set forth in a separate letter agreement dated as of
the date hereof between the Master Servicer and the Collateral Agent
incorporated herein by this reference. The Collateral Agent acknowledges,
notwithstanding the fact that, in the event that payments from the Collection
Account are insufficient, it shall look solely to the Master Servicer for
payment of its compensation hereunder, that the Collateral Agent is acting
solely as the agent for Financial Security for purposes of this Agreement.
Failure by the Master Servicer to pay the Collateral Agent's compensation
hereunder shall not cause this Agreement to be cancelled, void or voidable or
otherwise terminated or otherwise affect the Collateral Agent's obligations
hereunder.

               Section 6.11. Protection of Financial Security's Security
Interest.

               (a) The Seller shall execute and file (or cause to be executed
and filed) such financing statements and execute and file (or cause to be
executed and filed) such continuation statements, against the Seller, all in
such manner and in such places as may be required by law (whether in the event
of a change of the Seller's name, identity or corporate structure, or otherwise)
fully to preserve, maintain, and protect the interest of Financial Security in
the Collateral. The Seller shall deliver (or cause to be delivered) to Financial
Security file-stamped copies of, or filing receipts for, any document filed as
provided above, as soon as available following such filing.

               (b) The Seller shall not change its name, identity, or corporate
structure in any manner that would, could, or might make any financing statement
or continuation statement filed by the Seller, in accordance with paragraph (a)
above, seriously misleading within the meaning of Section 9-402(7) of the UCC,
unless it shall have given the Collateral Agent and Financial Security at least
60 days' prior written notice thereof.

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<PAGE>   44
               (c) The Seller shall give Financial Security at least 60 days'
prior written notice of any relocation of either the Seller's principal
executive offices, as applicable if, as a result of such relocation, the
applicable provisions of the UCC would require the filing of any amendment of
any previously filed financing or continuation statement or of any new financing
statement. WFS shall at all times maintain each office from which it shall
service the Contracts, and its principal executive office, within the United
States of America.

               (d) The Seller agrees that, upon request by Financial Security,
the Seller shall furnish to Financial Security, within seven Business Days, a
list of the Contracts then held as part of the Trust, together with a
reconciliation of such list to the Schedule of Contracts and to each of the
Master Servicer's certificates furnished pursuant to the Sale and Servicing
Agreement before such request; provided, however, that Financial Security shall
not make such request more than four times in any calendar year. Neither of the
Seller nor the Master Servicer shall grant a security interest in, or lien upon,
or in any manner encumber the Collateral, or release or waive the security
interest granted hereunder, except as contemplated herein.

               (e) In the event that either the Master Servicer or the Seller
relocates its principal executive office, such party shall provide an Opinion of
Counsel to Financial Security, in form and substance satisfactory to Financial
Security, to the effect that upon the filing of any necessary amendment to any
previously filed financing or continuation statement or a new financing
statement, the Collateral Agent's security interest in the Collateral granted
hereunder shall remain valid and effective.

               (f) The Seller shall be obligated to pay all reasonable costs and
disbursements in connection with the perfection and the maintenance of
perfection, as against all third parties, of Financial Security's right, and
security interest in and to the Collateral.

               Section 6.12. Representations and Warranties of Indenture
Trustee. The representations and warranties of the Indenture Trustee, made as
Indenture Trustee, in Section 6.13 of the Indenture are incorporated by
reference herein as if set forth in full herein and Financial Security may rely
upon such representations and warranties.

               Section 6.13. Certain Guaranties. Each of the Indenture Trustee
and the Master Servicer agrees that it (i) shall not treat any ledger account or
deposit account as an "Eligible Account" by reason of a guaranty of the type
described in clause (ii)(a) of the definition of "Eligible Account" in the Sale
and Servicing Agreement unless Financial Security shall have previously approved
in writing the form of such guaranty and (ii) shall not treat any investment as
an "Eligible Investment" by reason of a guaranty of the type described in clause
(iii)(b) or clause (vii) of the definition of "Eligible Investments" in the Sale
and Servicing Agreement unless Financial Security shall have previously approved
in writing the form of such guaranty.

                                   ARTICLE VII

                                EVENTS OF DEFAULT

               Section 7.01. Events of Default. The occurrence of any of the
following events shall constitute an Event of Default hereunder:

               (a) any demand for payment shall be made under the Policy;

               (b) any representation or warranty made by the Trust, the Seller
or WFS, WII under any of the Transaction Agreements, or in any certificate or
report furnished under any of the Transaction Agreements, shall prove to be
untrue or incorrect in any material respect, provided however, a violation of
Section 3.01(b) of the Sale and Servicing Agreement as to which the Seller shall
have in a timely

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<PAGE>   45
manner cured or repurchased the Contract as to each such Financed Vehicle
pursuant to Section 3.02 of the Sale and Servicing Agreement shall not
constitute an Event of Default hereunder;

               (c) (i) the Trust, the Seller or WFS shall fail to pay when due
any amount payable by it under any of the Transaction Agreements (other than
payments of principal and interest on the Notes and the Certificates); (ii) the
Trust, WII, the Seller or WFS shall have asserted that any of the Transaction
Agreements to which it is a party is not valid and binding on the parties
thereto; or (iii) any court, governmental authority or agency having
jurisdiction over any of the parties to any of the Transaction Agreements or
property thereof shall find or rule that any material provision of any of the
Transaction Agreements is not valid and binding on the parties thereto; provided
that as a result of such finding or ruling the rights or remedies of Financial
Security under this Agreement shall have been directly or indirectly impaired in
any material respect;

               (d) the Trust, WII, the Seller or WFS shall fail to perform or
observe any other covenant or agreement by it contained in any of the
Transaction Agreements (except for the obligations described under clause (b) or
(c) above) and such failure shall continue for a period of 30 days after written
notice shall have been given to it; provided that, if such failure shall be of a
nature that it cannot be cured within 30 days, such failure shall not constitute
an Event of Default hereunder if within such 30-day period such party shall have
given notice to Financial Security of corrective action it proposes to take,
which corrective action is agreed in writing by Financial Security to be
satisfactory and such party shall thereafter pursue such corrective action
diligently until such default is cured, and provided further as a result of such
failure the rights or remedies of Financial Security under this Agreement shall
have been directly or indirectly impaired in any material respect;

               (e) there shall have occurred an "Event of Default" as specified
in Section 5.01 of the Indenture;

               (f) the Trust shall adopt a voluntary plan of liquidation or
shall fail to pay its debts generally as they come due, or shall admit in
writing its inability to pay its debts generally, or shall make a general
assignment for the benefit of creditors, or shall institute any proceeding
seeking to adjudicate the Trust insolvent or seeking a liquidation, or shall
take advantage of any insolvency act, or shall commence a case or other
proceeding naming the Trust as debtor under the United States Bankruptcy Code or
similar law, domestic or foreign, or a case or other proceeding shall be
commenced against the Trust under the United States Bankruptcy Code or similar
law, domestic or foreign, or any proceeding shall be instituted against the
Trust seeking liquidation of its assets and the Trust shall fail to take
appropriate action resulting in the withdrawal or dismissal of such proceeding
within 30 days or there shall be appointed or the Trust consent to, or acquiesce
in, the appointment of a receiver, liquidator, conservator, trustee or similar
official in respect of the Trust or the whole or any substantial part of its
properties or assets, or the Trust shall take any corporate action in
furtherance of any of the foregoing or the Trust terminates pursuant to Section
9.02 of the Trust Agreement;

               (g) the Trust becomes taxable as an association (or publicly
traded partnership) taxable as a corporation for federal or state income tax
purposes;

               (h) on any Distribution Date, the sum of Net Collections with
respect to such Distribution Date and the amounts available in the Spread
Account is less than the sum of the amounts payable on such Distribution Date
pursuant to clauses (i) through (ix) of Section 5.05 of the Sale and Servicing
Agreement; and

               Section 7.02. Remedies; Waivers

               (a) Upon the occurrence of an Event of Default, Financial
Security may exercise any one or more of the rights and remedies set forth
below:

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<PAGE>   46
                  (i) declare all indebtedness of every type or description owed
        by the Trust, the Seller, WFS or WII to Financial Security, including,
        without limitation, the entire outstanding balance of further
        installments of the Premium, to be immediately due and payable, and
        shall there upon be immediately due and payable; and

                  (ii) the Collateral Agent, subject to Article V hereof, shall
        have the right to take any action or initiate any proceeding at law or
        equity available to it to enforce the terms of this Agreement.

               (b) Financial Security shall have the right, to be exercised in
its complete discretion, to waive any Event of Default hereunder, by a writing
setting forth terms, conditions, and extent of such waiver signed by Financial
Security and delivered to an Authorized Officer of the Seller. Unless such
writing expressly provides to the contrary, any waiver so granted shall extend
only to the specific event or occurrence that gave rise to the Event of Default
so waived and not to any other similar event or occurrence that occurs
subsequent to the date of such waiver.

               (c) Unless otherwise expressly provided, no remedy herein
conferred upon or reserved is intended to be exclusive of any other available
remedy, but each remedy shall be cumulative and shall be in addition to other
remedies given under the Transaction Agreements or existing at law or in equity.
No delay or failure to exercise any right or power accruing under any
Transaction Agreements upon the occurrence of any Event of Default or otherwise
shall impair any such right or power or shall be construed to be a waiver
thereof, but any such right and power may be exercised from time to time and as
often as may be deemed expedient. In order to entitle Financial Security to
exercise any remedy reserved to Financial Security in this Article, it shall not
be necessary to give any notice.

                                  ARTICLE VIII

                                  MISCELLANEOUS

               Section 8.01. Amendments, Changes and Modifications. This
Agreement may be amended, changed, modified, altered or terminated only by
written instrument or written instruments signed by the parties hereto.

               Section 8.02. Notices. All notices, certificates or other
communications hereunder shall be in writing and shall be deemed to have been
duly given when delivered by hand, sent by overnight courier, or sent by
certified or registered mail, postage prepaid, return receipt requested,
addressed to the appropriate Notice Address. A duplicate copy of each notice,
certificate or other communication given hereunder to the Seller, WFS, WII,
Financial Security, the Trust, the Indenture Trustee or the Collateral Agent
shall also be given to each of the others. Each party hereto may, by telecopy
notice or by such other notice described hereunder, designate any further or
different address to which subsequent notices, certificates or other
communications shall be sent without any requirement of execution of any
amendment to this Agreement.

               Section 8.03. Method of Payment. Except as otherwise expressly
provided herein, all payments to be made hereunder shall be made by wire
transfer or by certified or bank check payable to the appropriate party.

               Section 8.04. Further Assurances and Corrective Instruments.

               (a) To the fullest extent permitted by law, the parties hereto
agree that they will, from time to time, execute, acknowledge and deliver, or
cause to be executed, acknowledged and delivered, such supplements hereto and
such further instruments as Financial Security may reasonably request and as may
be reasonably required in Financial Security's judgment to effectuate the
intention of or facilitate the performance of this Agreement and to protect the
interests of Financial Security and the Collateral

                                       41
<PAGE>   47
Agent, including, without limitation, the creation and maintenance of Financial
Security's security interest in the Collateral pursuant to this Agreement,
subject to the Intercreditor Agreement. The Seller and the Master Servicer
hereby authorize the Collateral Agent to file, at the direction of Financial
Security, financing statements and amendments thereto relating to all or any
part of the Collateral without the signature of an officer of such entity where
permitted by law in order to maintain and perfect the security interests granted
by this Agreement.

               (b) In order to facilitate the servicing of the Contracts by the
Master Servicer, the Master Servicer is hereby authorized, in the name and on
behalf of Financial Security, the Trust, the Indenture Trustee and the Seller,
to execute instruments of satisfaction or cancellation, or of partial or full
release or discharge, and other comparable instruments with respect to the
Contracts and with respect to the Financed Vehicles (and the Indenture Trustee
shall execute any such documents on request of the Master Servicer), subject to
the obligations of the Master Servicer under the Sale and Servicing Agreement.

               Section 8.05. Term of Agreement. This Agreement shall continue in
effect until the later of (a) the date on which Financial Security has no
further liability under the Policy or (b) the date on which each Western Entity
shall have paid or caused to be paid to Financial Security all amounts to be
paid by such Western Entity hereunder.

               Section 8.06. Assignments; Third-Party Rights; Reinsurance.

               (a) This Agreement shall be a continuing obligation of the
parties hereto and shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns. Neither the
Seller, WFS, WII, nor the Collateral Agent may assign its rights or obligations
under this Agreement, or delegate any of its duties hereunder, without the prior
written consent of Financial Security. Any assignment made in violation of this
Agreement shall be null and void.

               (b) Financial Security shall have the right to give
participations in its rights under this Agreement and to enter into contracts of
reinsurance with respect to the Policy upon such terms and conditions as
Financial Security may in its discretion determine; provided, however, that no
such participation or reinsurance agreement or arrangement shall relieve
Financial Security of any of its obligations hereunder or under the Policy and
provided further that Financial Security shall reimburse the Seller, WFS or WII
as the case may be, for any expense incurred by such Western Entity in
connection with the giving by Financial Security of participations or the
entering into such contracts of reinsurance.

               (c) In addition, Financial Security shall be entitled to assign
or pledge to any bank or other lender providing liquidity or credit with respect
to the transactions contemplated by the Transaction Agreements or this Agreement
or the obligations of Financial Security in connection therewith any rights of
Financial Security under the Transaction Agreements or this Agreement or with
respect to any real or personal property or other interests pledged to Financial
Security, or in which Financial Security has a security interest, in connection
with the transactions contemplated by the Transaction Agreements or this
Agreement; provided that Financial Security shall reimburse the Seller, WFS or
WII as the case may be, for any expense incurred by either such Western Entity
in connection with the making by Financial Security of any such assignment or
pledge.

               (d) Except as provided herein with respect to participants and
reinsurers, nothing in this Agreement shall confer any right, remedy or claim,
express or implied, upon any Person, including, particularly, any Noteholder or
Certificateholder, other than Financial Security, against the Seller, WFS or WII
and all the terms, covenants, conditions, promises and agreements contained
herein shall be for the sole and exclusive benefit of the parties hereto and
their successors and permitted assigns. Neither the Owner Trustee or the
Indenture Trustee nor any Noteholder or Certificateholder shall have any right
to payment from any premiums paid or payable hereunder or from any other amounts
paid by the Seller, WFS or WII pursuant to Section 3.03 or 3.04 hereof.

                                       42
<PAGE>   48
               Section 8.07. Consent of Financial Security. In the event that
Financial Security's consent is required under the terms hereof, or under the
terms of any other Transaction Agreement, it is understood and agreed that,
except as otherwise provided expressly herein or in any other Transaction
Agreement, the determination whether to grant or withhold such consent shall be
made solely by Financial Security in its absolute discretion.

               Section 8.08. Right to Enforce Sale and Servicing Agreement. The
parties hereto acknowledge that Financial Security is a beneficiary of the Sale
and Servicing Agreement, and without limiting or restricting any of the
provisions thereof or hereof, Financial Security shall have the right to enforce
the provisions of the Sale and Servicing Agreement to the extent that it could
if it were a signatory of such agreement.

               Section 8.09. WFS and WII as Parties Only for Certain Provisions.

               (a) Notwithstanding any provision to the contrary contained in
this Agreement, the parties hereto agree that WFS is joined as a party to this
Agreement solely for purposes of Sections 2.08, 2.11, 3.02, 3.06, 3.07, 3.08,
3.09, 3.10, 3.11, 3.12 and 6.13 of this Agreement and the other Sections
contained in Article VII of this Agreement.

               (b) Notwithstanding any provisions to the contrary contained in
this Agreement, the parties hereto agree that WII is joined as a party to this
Agreement solely for purposes of Sections 2.04, 2.05, 2.06, 3.02, 3.07 and 3.08,
of this Agreement and the other Sections contained in Article VII of this
Agreement.

               Section 8.10. Severability. In the event that any provision of
this Agreement shall be held invalid or unenforceable by any court of competent
jurisdiction, the parties hereto agree that such holding shall not invalidate or
render unenforceable any other provision hereof. The parties hereto further
agree that the holding by any court of competent jurisdiction that any remedy
pursued by Financial Security hereunder is unavailable or unenforceable shall
not affect in any way the ability of Financial Security to pursue any other
remedy available to it.

               Section 8.11. Reports. Any report, certificate, statement or
notice which the Seller, WFS as the Master Servicer, and any successor Master
Servicer, is required to provide to the Owner Trustee, Indenture Trustee,
Noteholders or the Certificateholders under the Sale and Servicing Agreement
shall also be provided to Financial Security within the same time period
specified in the Sale and Servicing Agreement.

               Section 8.12. Counterparts. This Agreement may be executed in
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 8.13. GOVERNING LAW. THIS AGREEMENT SHALL BE 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 8.14. Headings. The headings of articles and sections and
the table of contents contained in this Agreement are provided for convenience
only. They form no part of this Agreement and shall not affect its construction
or interpretation. Unless otherwise indicated, all references to articles and
sections in this Agreement refer to the corresponding articles and sections of
this Agreement.

               Section 8.15. Trial by Jury Waived. EACH PARTY HERETO HEREBY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION ARISING DIRECTLY OR INDIRECTLY OUT OF, UNDER OR IN
CONNECTION WITH ANY OF THE TRANSACTION AGREEMENTS OR ANY OF THE

                                       43
<PAGE>   49
TRANSACTIONS CONTEMPLATED THEREUNDER. EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY PARTY HERETO HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT IT WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THE
TRANSACTION AGREEMENTS TO WHICH IT IS A PARTY BY, AMONG OTHER THINGS, THIS
WAIVER.

               Section 8.16. Limited Liability. No recourse under any
Transaction Agreement shall be had against, and no personal liability shall
attach to, any officer, employee, director, affiliate or shareholder of any
party hereto, as such, by the enforcement of any assessment or by any legal or
equitable proceeding, by virtue of any statute or otherwise in respect of any of
the Transaction Agreements, the Notes, the Certificates or the Policy, it being
expressly agreed and understood that each Transaction Agreement is solely a
corporate obligation of each party hereto, and that any and all personal
liability, either in common law or in equity, or by statute or constitution, of
every such officer, employee, director, affiliate or shareholder for breaches by
any party hereto of any obligations under any Transaction Agreement is hereby
expressly waived as a condition of and in consideration for the execution and
delivery of this Agreement.

               Section 8.17. Limited Liability of Chase Manhattan Bank Delaware.
It is expressly understood and agreed by the parties hereto that (a) this
Agreement is executed and delivered by Chase Manhattan Bank Delaware not
individually or personally but solely as Owner Trustee on behalf of the Trust,
(b) each of the representations, undertakings and agreements herein made on the
part of the Trust is made and intended not as personal representations,
undertakings and agreements by Chase Manhattan Bank Delaware, but are made and
intended for the purpose of binding only the Trust Estate, (c) nothing herein
contained shall be construed as creating any liability on Chase Manhattan Bank
Delaware, individually or personally, to perform any covenant of the Trust
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 Chase Manhattan Bank
Delaware be personally liable for the payment of any indebtedness or expenses of
the Trust or be liable for the breach or failure of any obligation,
representation, warranty or covenant made or undertaken by the Trust under this
Agreement.

               Section 8.18. Entire Agreement. This Agreement and the Policy set
forth the entire agreement between the parties with respect to the subject
matter thereof, and this Agreement supersedes and replaces any agreement or
understanding that may have existed between the parties prior to the date hereof
in respect of such subject matter.

                                       44
<PAGE>   50
               IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above mentioned.

                                   WFS FINANCIAL _________ OWNER TRUST

                                   By:  CHASE MANHATTAN BANK DELAWARE
                                          not in its individual capacity, but
                                          solely in its capacity as Owner
                                          Trustee under the Trust Agreement

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

                                   WFS FINANCIAL AUTO LOANS, INC.

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

                                   WFS FINANCIAL INC.

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

                                   WFS INVESTMENTS, INC.

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

                                   FINANCIAL SECURITY ASSURANCE INC.

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

                                   BANKERS TRUST COMPANY,
                                      as Collateral Agent, Proceeds Agent
                                      and Indenture Trustee

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

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