Document:

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                          SALE AND SERVICING AGREEMENT

                                      among

                        WFS FINANCIAL 2002-1 OWNER TRUST,
                                   as Issuer,

                          WFS RECEIVABLES CORPORATION,
                                   as Seller,

                                       and

                               WFS FINANCIAL INC,
                               as Master Servicer

                            Dated as of March 1, 2002

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                                TABLE OF CONTENTS

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                                              ARTICLE ONE

                                              DEFINITIONS

Section 1.01.  Definitions............................................................................     2
Section 1.02.  Usage of Terms.........................................................................    25
Section 1.03.  Section References.....................................................................    26
Section 1.04.  Calculations...........................................................................    26
Section 1.05.  Accounting Terms.......................................................................    26

                                               ARTICLE TWO

                                        CONVEYANCE OF CONTRACTS

Section 2.01.  Conveyance of Contracts................................................................    27

                                               ARTICLE THREE

                                              THE CONTRACTS

Section 3.01.  Representations and Warranties of the Seller...........................................    29
Section 3.02.  Purchase of Certain Contracts..........................................................    35
Section 3.03.  Custody of Contract Files..............................................................    35
Section 3.04.  Duties of Master Servicer as Custodian.................................................    36
Section 3.05.  Instructions; Authority to Act.........................................................    37
Section 3.06.  Indemnification........................................................................    37
Section 3.07.  Effective Period and Termination.......................................................    38
Section 3.08.  Nonpetition Covenant...................................................................    38
Section 3.09.  Collecting Title Documents Not Delivered at the Closing Date...........................    39
Section 3.10.  Optional Repurchase of Contracts by the Certificateholders.............................    39

                                               ARTICLE FOUR

                                ADMINISTRATION AND SERVICING OF CONTRACTS

Section 4.01.  Duties of Master Servicer..............................................................    40
Section 4.02.  Collection of Contract Payments........................................................    44
Section 4.03.  Realization upon Defaulted Contracts and Liquidated Contracts..........................    44
Section 4.04.  Insurance..............................................................................    45
Section 4.05.  Maintenance of Security Interests in Financed Vehicles.................................    45
Section 4.06.  Covenants, Representations and Warranties of the Master Servicer.......................    45
Section 4.07.  Repurchase of Contracts upon Breach of Covenant........................................    47
Section 4.08.  Servicing Compensation.................................................................    47
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Section 4.09.  Reporting by the Master Servicer.......................................................    48
Section 4.10.  Annual Statement as to Compliance......................................................    51
Section 4.11.  Annual Independent Certified Public Accountants' Report................................    51
Section 4.12.  Access to Certain Documentation and Information Regarding Contracts....................    51
Section 4.13.  Fidelity Bond..........................................................................    52
Section 4.14.  Indemnification; Third Party Claims....................................................    52
Section 4.15.  Maintenance of Interest Rate Swap Agreements...........................................    52

                                                   ARTICLE FIVE

                             XXX DISTRIBUTIONS; SPREAD ACCOUNT; STATEMENTS TO SECURITYHOLDERS

Section 5.01.  Establishment of Trust Accounts........................................................    53
Section 5.02.  Collections; Realization Upon Note Policy; Net Deposits................................    55
Section 5.03.  Application of Collections.............................................................    56
Section 5.04.  Advances and Nonrecoverable Advances; Repurchase Amounts...............................    57
Section 5.05.  Distributions..........................................................................    58
Section 5.06.  Spread Account.........................................................................    59
Section 5.07.  Statements to Securityholders..........................................................    59
Section 5.08.  Calculation of the Class A-3B Rate and Class A-4B Rate.................................    61

                                               ARTICLE SIX

                                               THE SELLER

Section 6.01.  Corporate Existence....................................................................    62
Section 6.02.  Liability of Seller; Indemnities.......................................................    62
Section 6.03.  Merger or Consolidation of, or Assumption of the Obligations of, the
               Seller; Certain Limitations............................................................    63
Section 6.04.  Limitation on Liability of Seller and Others...........................................    64
Section 6.05.  Seller Not to Resign...................................................................    65
Section 6.06.  Seller May Own Securities..............................................................    65

                                             ARTICLE SEVEN

                                         THE MASTER SERVICER

Section 7.01.  Liability of Master Servicer; Indemnities..............................................    66
Section 7.02.  Corporate Existence; Status as Master Servicer; Merger.................................    67
Section 7.03.  Performance of Obligations.............................................................    67
Section 7.04.  Master Servicer Not to Resign; Assignment..............................................    67
Section 7.05.  Limitation on Liability of Master Servicer and Others..................................    68
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                                             ARTICLE EIGHT

                                                DEFAULT

Section 8.01.  Servicer Default.......................................................................    70
Section 8.02.  Indenture Trustee to Act; Appointment of Successor.....................................    71
Section 8.03.  Repayment of Advances..................................................................    72
Section 8.04.  Notification to Noteholders and Certificateholders.....................................    72
Section 8.05.  Waiver of Past Defaults................................................................    72
Section 8.06.  Insurer Direction of Insolvency Proceedings............................................    72

                                           ARTICLE NINE

                                           TERMINATION

Section 9.01.  Optional Purchase of All Contracts.....................................................    74
Section 9.02.  Transfer to the Insurer................................................................    75

                                           ARTICLE TEN

                                          MISCELLANEOUS

Section 10.01.  Amendment.............................................................................    77
Section 10.02.  Protection of Title to Trust..........................................................    78
Section 10.03.  Governing Law.........................................................................    80
Section 10.04.  Notices...............................................................................    80
Section 10.05.  Severability of Provisions............................................................    80
Section 10.06.  Assignment............................................................................    80
Section 10.07.  Third Party Beneficiaries.............................................................    80
Section 10.08.  Insurer Default or Insolvency.........................................................    81
Section 10.09.  Counterparts..........................................................................    81
Section 10.10.  Headings..............................................................................    81
Section 10.11.  Assignment by Issuer..................................................................    81
Section 10.12.  Limitation of Liability of Owner Trustee..............................................    81
Section 10.13.  Effect of Policy Expiration Date......................................................    81
Section 1.1.    Limitation on Recourse Against WFSRC..................................................    82
Section 10.14.  Replacement Interest Rate Swap Agreement..............................................    82
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                                             SCHEDULES

Schedule A         Schedule of Contracts.............................................................     SA-1
Schedule B         Location of Contract Files........................................................     SB-1
Schedule C         Charge-Off Percentage Triggers....................................................     SC-1

                                             EXHIBITS

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 March 1, 2002, is among
WFS Financial 2002-1 Owner Trust, as issuer (the "Issuer"), WFS Receivables
Corporation, as seller (the "Seller"), and WFS Financial Inc ("WFS"), as master
servicer (the "Master Servicer").

         WHEREAS, the Issuer desires to purchase from the Seller 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 Seller;

         WHEREAS, the Seller is 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:

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                                   ARTICLE ONE

                                   DEFINITIONS

         Section 1.01. Definitions.

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

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

         "Aggregate Repurchase Amount" means, with respect to the purchase of
Contracts pursuant to Section 9.01(a), an amount equal to the outstanding
principal amount of the Notes and all unpaid interest (including any overdue
interest) thereon that has accrued through the related Interest Period.

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         "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 Seller to the Issuer (or in the case of any Contract acquired by the Seller
from another Person, from such other Person to the Seller and from the Seller to
the Issuer), and (ii) the original instrument granting a security interest in
such Contract and other documents made by the Issuer 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 Issuer
and the Insurer.

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

         "Base Price" means, with respect to any Repurchase Distribution Date,
the lesser of (i) the sum of the Principal Balances of the Contracts purchased
pursuant to Section 3.10 on such Repurchase Distribution Date or (ii) the sum of
the outstanding principal amount on the Notes and all unpaid interest thereon
that has accrued through the related Interest Period on such Repurchase
Distribution Date.

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

         "Business Day" means any day that is not a Saturday, Sunday or other
day on which banking institutions in Los Angeles, California, Newark, Delaware,
London, England 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
5.06(b).

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

         "Certificate Final Principal Distribution Date" means the September
2009 Distribution Date.

         "Certificateholders" 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 Issuer. The initial Certificate Percentage Interest held by
the Seller shall be 100%.

         "Certificate Register" 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 Calculation Day, a
fraction, expressed as a percentage, the numerator of which is equal to (A) the
sum of (i) the Principal Balance of each Contract which is 120 days or more
delinquent, excluding Contracts which are subject to a Chapter 13 bankruptcy
proceeding, (ii) the difference between the Principal Balance of each Contract
which is less than 120 days delinquent but as to which the Financed Vehicle has
been repossessed and the estimated fair value of the Financed Vehicle as
determined in good faith by the Master Servicer and (iii) the difference between
the Principal Balance of each Contract which is subject to a bankruptcy court
approved Chapter 13 plan and the principal amount due under that approved plan,
less (B) all Net Liquidation Proceeds received with respect to the Financed
Vehicle and any other proceeds or other payments received from or for the
benefit of the Obligor as to any Contract subject to part (A), provided,
however, if the Net Liquidation Proceeds received with respect to the Financed
Vehicle is less than the estimated fair value of the Financed Vehicle used in
clause (ii), that difference shall be deducted from the amount otherwise
calculated pursuant to this part (B) and if the Net Liquidation Proceeds
received with respect to the Financed Vehicle is greater than the estimated fair
value of the Financed Vehicle used in clause (ii), that difference shall be
added to the amount otherwise calculated pursuant to this part (B), and the
denominator of which is the Cut-Off Date Aggregate Principal Balance.

         "Charge-Off Percentage Trigger" means, with respect to any Calculation
Day, the percentage set forth in Schedule C.

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

         "Class A-1 Final Scheduled Distribution Date" means the March 2003
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.

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         "Class A-1 Rate" means 2.04% per annum.

         "Class A-2 Final Scheduled Distribution Date" means the March 2005
Distribution Date.

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

         "Class A-2 Rate" means 3.04% per annum.

         "Class A-3 Final Scheduled Distribution Date" means the December 2006
Distribution Date.

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

         "Class A-3A Rate" means 4.15% per annum.

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

         "Class A-3B Rate" means the sum of (i) the LIBOR Rate and (ii) 0.13%
per annum.

         "Class A-4 Final Scheduled Distribution Date" means the September 2009
Distribution Date.

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

         "Class A-4A Rate" means 4.87% per annum.

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

         "Class A-4B Rate" means the sum of (i) the LIBOR Rate and (ii) 0.17%
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 March 20, 2002.

         "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.

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         "Commercial Paper" means 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
"Aaa" from Moody's and "AAA" from Standard & Poor's or have a short-term
unsecured debt rating of at least "Prime-1" from Moody's and "A-1+" from
Standard & Poor's.

         "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 Issuer 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); (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, the interest rate
borne by such Contract.

         "Contracts" means the Contracts sold to the Issuer by the Seller.

         "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 the Seller.

         "Cut-Off Date" means March 15, 2002.

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         "Cut-Off Date Aggregate Principal Balance" means $1,800,000,000, the
aggregate of the Principal Balances of the 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 Principal Balance of all Outstanding Contracts 60 days
or more delinquent (after taking into account permitted extensions), plus (ii)
the aggregate Principal 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 Principal Balance of all outstanding
Contracts, in each case, on the last day of such calendar month.

         "Delinquent Contract" means any Contract that is 60 days or more
delinquent.

                  "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

                                        7
<PAGE>

         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

                      (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.

         "Depositor" means the Seller in its capacity as Depositor under the
Trust Agreement, and its successors.

         "Distribution Date" means each March 20, June 20, September 20 and
December 20, or, if any such date shall not be a Business Day, the next
succeeding Business Day, commencing June 20, 2002.

         "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.

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<PAGE>

         "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 period
commencing on the first day of the third month preceding the month in which such
Distribution Date occurs (or from the Cut-Off Date 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, 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 "Prime-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 "Prime-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:

                      (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 "Prime-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

                                        9
<PAGE>

         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 "Prime-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 "Prime-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 Issuer to exceed 10% of the sum of the Aggregate 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 "A-1" from Moody's and "AAA" from Standard & Poor's;

                      (vii) the RIC, if guaranteed by an entity which has
         long-term, unsecured debt obligations rated "AAA" by Standard & Poor's
         and at least "Aa2" by Moody's or otherwise 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 or the Certificates
         (without giving effect to the guaranty under either Policy of payments
         owing to Securityholders); 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.

                                       10
<PAGE>

         "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 Scheduled Distribution Date" means the Class A-1 Final Scheduled
Distribution Date, the Class A-2 Final Scheduled Distribution Date, the Class
A-3 Final Scheduled Distribution Date or the Class A-4 Final Scheduled
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.

         "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 Seller 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 or 4.07, or payment by
the Seller or the Certificateholder, as the case may be, of the purchase price
of a Contract in connection with the purchase of all Contracts pursuant to
Section 9.01 or 3.10.

         "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 March 1, 2002, between the
Issuer and the Indenture Trustee.

                                       11
<PAGE>

         "Indenture Trustee" means the Person acting as trustee under the
Indenture, its successors in interest and any successor trustee under the
Indenture and, initially, will be Bankers Trust Company.

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

                                       12
<PAGE>

         "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 and (i)
the Class A-1 Notes, the Class A-3B Notes and Class A-4B Notes, 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 March 20,
2002) to but excluding such Distribution Date and (ii) the Class A-2 Notes, the
Class A-3A Notes and the Class A-4A Notes, the period from and including the
20th day of the month in which the Distribution Date immediately preceding such
Distribution Date occurs (or in the case of the first Distribution Date from and
including March 20, 2002) to but excluding the 20th day of the month of such
Distribution Date.

         "Interest Rate" means the Class A-1 Interest Rate, the Class A-2
Interest Rate, the Class A-3A Interest Rate, the Class A-3B Interest Rate, the
Class A-4A Interest Rate or the Class A-4B Interest Rate, as applicable.

         "Interest Rate Swap Agreements" means the interest rate swap
agreements, dated as of March 1, 2002, between the Issuer and the Swap
Counterparty.

         "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 2002-1 Owner Trust.

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

                                       13
<PAGE>

         "LIBOR Determination Date" means the second London Business Day prior
to the Closing Date with respect to the first Distribution Date and, as to each
subsequent Distribution Date, the second London Business Day prior to the
immediately preceding Distribution Date.

         "LIBOR Rate" means, with respect to any Interest Period, the London
interbank offered rate for deposits in U.S. dollars having a maturity of three
months commencing on the related LIBOR Determination Date which appears on
Telerate Page 3750 as of 11:00 a.m., London time, on such LIBOR Determination
Date; provided, however, that if such rate does not appear on the Telerate Page
3750, the LIBOR Rate will equal the Reference Bank Rate.

         "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.

         "London Business Day" means any day other than a Saturday, Sunday or a
day on which banking institutions in London, England are authorized or obligated
by law or government decree to be closed.

         "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

                                       14
<PAGE>

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 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) Net Swap Receipts excluding any Swap Termination Payments paid
by the Swap Counterparty to the extent such amounts are used to enter into a
replacement interest rate swap agreement; and (vi) 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.

         "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.

         "Net Swap Payment" means any net amount owed by the Issuer to the Swap
Counterparty pursuant to an Interest Rate Swap Agreement including Swap
Termination Payments.

         "Net Swap Receipt" means any amount paid by the Swap Counterparty to
the Issuer pursuant to an Interest Rate Swap Agreement including any Swap
Termination Payments.

         "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

                                       15
<PAGE>

recoverable by the Master Servicer from late payments, Insurance Proceeds or
Liquidation Proceeds.

         "Note" has the meaning set forth in the Indenture.

         "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-3A Notes, Class A-3B, Class A-4A and Class A-4B 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.

         "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 Scheduled Distribution Date" means the Class A-1 Final
Scheduled Distribution Date, the Class A-2 Final Scheduled Distribution Date,
the Class A-3 Final Scheduled Distribution Date and the Class A-4 Final
Scheduled 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 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, Class A-3B Notes and Class A-4B 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 March 20, 2002) and (ii) Class A-2 Notes,
Class A-3A Notes and Class A-4A Notes shall be computed on the basis of a
360-day year consisting of twelve 30-day months.

                                       16
<PAGE>

         "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 B 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.

         "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
for such Distribution Date 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 the related Distribution Date.

         "Note Principal Distributable Amount" means, with respect to any
Distribution Date, the sum of the Note Quarterly Principal Distributable Amount,
the Accelerated Principal Distributable Amount, if any, for such Distribution
Date and the 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 Scheduled 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, the sum of all 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 Aggregate Principal Balance Decline 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.

                                       17
<PAGE>

         "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.

         "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" means the repurchase of Contracts by the
Certificateholders pursuant to Section 3.10.

         "Optional Repurchase Payment" means, with respect to the repurchase by
the Seller of Contracts pursuant to Section 3.10, an amount equal to the sum of
accrued but unpaid interest on such Contracts, the Base Price and the Repurchase
Premium; provided, however, on any Repurchase Distribution Date on which the
Aggregate Principal Balance is less than $360,000,000, the Optional Repurchase
Payment will equal the greater of (i) an amount equal to the sum of accrued but
unpaid interest on such Contracts, the Base Price and the Repurchase Premium and
(ii) an amount equal to the sum of the outstanding principal on the Notes and
all unpaid interest thereon that has accrued through the related Interest
Period.

         "Original Class A-1 Note Balance" means $330,000,000.

         "Original Class A-2 Note Balance" means $440,000,000.

         "Original Class A-3A Note Balance" means $380,000,000.

         "Original Class A-3B Note Balance" means $230,000,000.

         "Original Class A-4A Note Balance" means $260,000,000.

         "Original Class A-4B Note Balance" means $160,000,000.

         "Original Pool Balance" means $1,800,000,000.

         "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

                                       18
<PAGE>

                  (ii) to the 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, the Seller, WFS or any of their
respective Affiliates shall be disregarded and deemed not to be Outstanding
prior to the Policy Expiration Date, 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, the 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.

         "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 and, initially, will be Chase Manhattan Bank USA,
National Association.

         "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

                                       19
<PAGE>

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".

         "Policy Expiration Date" means the date on which the Notes have been
paid in full and all outstanding Reimbursement Obligations and other amounts due
to the Insurer have been paid in full and the Term Of this Policy (as defined in
the Note Policy) has expired.

         "Pool Balance" as of the time of determination means the Aggregate
Principal Balance, exclusive of the Principal 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.

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

         "Principal Balance" means, with respect to a Contract that is a (i)
Rule of 78's Contract, the amount set forth as the Principal Balance of such
Contract on the Schedule of Contracts, such amount being the total of all
Monthly P&I due on or after March 15, 2002 less any unearned interest as of the
Due Date for such Contract immediately preceding March 15, 2002, computed in
accordance with the Rule of 78's, less all amounts received on or in respect of
such Contract on or after March 15, 2002 that are allocable to principal and
(ii) Simple Interest Contract, the actual principal balance under the terms
thereof.

         "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.

         "Reference Bank Rate" means with respect to any Interest Period, the
arithmetic mean to the nearest 1/100,000 of 1% (0.0000001), with five
one-millionths of a percentage point rounded

                                       20
<PAGE>

upward, of the rates, as of 11:00 A.M., London time, on the related LIBOR
Determination Date, at which deposits in United States dollars, having a
maturity of three months and a principal amount of not less than $1,000,000,
offered by the Reference Banks from which the Indenture Trustee has received
quotations; provided however, in the event that the Indenture Trustee has not
received quotations from at least two Reference Banks, the Reference Bank Rate
will be the arithmetic mean to the nearest 1/100,000 of 1% (0.0000001), with
five one-millionths of a percentage point rounded upward, of the rates quoted by
two or more major banks in New York City, selected by the Indenture Trustee, as
of 11:00 A.M., New York City time, on the LIBOR Determination Date for loans in
United States dollars to leading European Banks having a maturity of three
months and a principal in amounts not less than $1,000,000; provided, further,
if less than two such quotations can be obtained, the Reference Bank Rate shall
be the Reference Bank Rate for the preceding Interest Period.

         "Reference Banks" means four major banks that are engaged in the London
interbank market that are selected by the Indenture Trustee.

         "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 Issuer by such Seller.

         "Replacement Interest Rate Swap Agreement" has the meaning set forth in
Section 3.13 of the Insurance Agreement.

         "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" means any Distribution Date on which
Contracts are purchased pursuant to Section 3.10.

         "Repurchase Premium" means an amount equal to:

               (i) on any Distribution Date on or prior to the March 2003
         Distribution Date, the product of the Base Price and 15%;

               (ii) on a Distribution Date from, but excluding, the March
         2003 Distribution Date to, and including, the March 2004 Distribution
         Date, the product of the Base Price and 10%;

               (iii) on a Distribution Date from, but excluding, the
         March 2004 Distribution Date to, and including, the March 2005
         Distribution Date Distribution Date, the product of the Base Price and
         7%; and

                                       21
<PAGE>

                 (iv) on a Distribution Date from, but excluding, the March
         2005 Distribution Date to, and including, the September 2009
         Distribution Date, the product of the Base Price and 4%.

         Notwithstanding the foregoing, the Repurchase Premium shall equal zero
if the Aggregate Principal Balance of the Contracts is less than or equal to
$180,000,000.

         "Repurchased Contract" means a Contract repurchased as of the related
Master Servicer Report Date by the Master Servicer pursuant to Section 4.07 or
by the Seller 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, 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 Principal 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
Principal 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-4A 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-4A 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).

                                       22
<PAGE>

         "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:

<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
Principal Balance ("PRIN BAL")........................................                16 Bottom
Discount Rate ("APR").................................................                 7
</TABLE>

         "Securities" means the Notes and the Certificates.

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

         "Seller" means WFSRC, 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 an amount equal to, for each month in such Due Period, the product
of the Servicing Fee Percent and the Principal 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.

         "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, 4.0% of the Aggregate Principal Balance on
such Calculation Day, except that if on any Calculation Day (i) the Charge-Off
Percentage for the related Calculation Day exceeds the Charge-Off Percentage
Trigger or (ii) the Delinquency Percentage for the three calendar

                                       23
<PAGE>

month period ending on such Calculation Day exceeds 2.5%, then the Specified
Spread Account Balance shall equal 9.0% of the Aggregate Principal Balance on
such Calculation Day (but only for so long as such Charge-Off Percentage or
Delinquency Percentage thresholds continue to be exceeded on any subsequent
Calculation Day). Notwithstanding the foregoing, in no event shall the Specified
Spread Account Balance be greater than $162,000,000 or less than $32,400,000;
provided, however, the Specified Spread Account Balance shall not be greater
than the Outstanding Amount of the Securities if such amount is less
$32,400,000.

         "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 $36,000,000, 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 D hereto.

         "Swap Counterparty" means Bank of America, N.A., as the swap
counterparty under the Interest Rate Swap Agreements.

         "Swap Termination Payments" means payment due to the Swap Counterparty
by the Issuer or to the Issuer by the Swap Counterparty due to the termination
of an Interest Rate Swap Agreement pursuant to the occurrence of an event of
default or termination event under such Interest Rate Swap Agreement or as
otherwise agreed between the parties to the Interest Rate Swap Agreement and
consented to by the Insurer.

         "Telerate Page 3750" is the display page named that on the Dow Jones
Telerate Services (or any other page that replaces that page on that service for
the purpose of displaying comparable name or rates).

         "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.

                                       24
<PAGE>

         "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) 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 March 11, 2002, as
amended and restated as of March 20, 2002, among the Depositor, 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.

         "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.

         "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.

         (b) Except as otherwise specified herein or as the context may
otherwise require, capitalized terms used herein that are not otherwise defined
shall have the meanings ascribed thereto in the Indenture.

         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."

                                       25
<PAGE>

         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 the actual number of days elapsed since the immediately
preceding Distribution Date or the Closing Date, in the case of the first
Distribution Date (or, in the case of the Class A-2 Notes, Class A-3A and Class
A-4A Notes, on the basis of a 360-day year and twelve 30-day months) 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 Principal 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.

                                       26
<PAGE>

                                   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
the Seller of the Certificates and $1,800,000,000 aggregate principal balance of
Notes, the Seller hereby 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
Contracts, and (ii) the amount, if any, allocable to any rebatable insurance
premium financed by any Contract) in, to and under the 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 the Seller as provided in Section 5.02(b)) 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 on or 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
March 1, 2002 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); 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 $2,431.85 of the principal amount of
Contract 815029320 is retained by the Seller.

         (b) The Bank has caused the filing of UCC-1 financing statements,
naming the Bank as debtor and 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 caused the filing of UCC-1 financing statements naming WFS as debtor and
the Seller as secured party and describing the Contracts as collateral with the
office of the Secretary of State of the State of California. The Seller has
caused the filing of UCC-1 financing statements, naming the Seller as debtor and
the Collateral Agent, on behalf of the Insurer, as secured party and describing
the Contracts as collateral, with the Office of the Secretary of State of the
State of California. 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.
The Seller has caused the filing of UCC-1 financing statements, naming the
Seller as debtor and the Trust as secured party and describing the Contracts
being sold by it to the Trust as collateral, with the Office of the Secretary of
State of the State of California. The Trust has caused the filing of UCC-1
financing statements, naming the Trust as debtor and 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 State of Delaware.
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

                                       27
<PAGE>

necessary to continue the perfection of the respective interests of the
Indenture Trustee, the 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 the
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 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, the 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.

                                       28
<PAGE>

                                  ARTICLE THREE

                                  THE CONTRACTS

         Section 3.01. Representations and Warranties of the Seller. The Seller
hereby 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 the 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

                                       29
<PAGE>

                  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 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 Principal
                  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,
                  the Seller has taken all steps necessary to perfect its
                  security interest against the Obligors in the Financed
                  Vehicles securing the Contracts and 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). The Seller has caused
                  the filing of all appropriate financing statements in the
                  proper filing office in the appropriate jurisdictions under
                  applicable law in order to perfect the security interest in
                  the Contracts granted to the Issuer hereunder. All financing
                  statements filed against the Seller in favor of the Issuer in
                  connection herewith describing the Contracts contain a
                  statement to the following effect: "A purchase of or security
                  interest in any collateral described in this financing
                  statement will violate the rights of the Issuer unless the
                  Issuer authorizes it."

                                       30
<PAGE>

                               (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 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 any
                  Person 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, claims, encumbrances and rights of any
                  Person, 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

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<PAGE>

                  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 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 (1) 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, (2) naming WFS as a loss payee and (3)
                  insuring against loss and damage due to fire, theft,
                  transportation, collision and other risks generally covered by
                  comprehensive and collision coverage or (B) a LDI Policy;
                  provided, however, that if such Financed Vehicle has an unpaid
                  principal balance of less than $4,000.00 or the related

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<PAGE>

                  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 Seller, 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
                  pursuant to Section 3.04. The Seller has received a written
                  acknowledgement from the Master Servicer that the Master
                  Servicer is holding the Contract Documents that constitute or
                  evidence the Contracts solely on behalf and for the benefit of
                  the Issuer. None of the Contract Documents that constitute or
                  evidence each Contract has any marks or notations indicating
                  that it has been pledged, assigned or otherwise conveyed to
                  any Person other than the Issuer. 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. As of the Cut-Off Date
                  such Contract had (A) an Principal Balance of not less than
                  $509.04 nor more than $104,049.06, (B) an original term of not
                  less than 10 months nor greater than 84 months, (C) a
                  remaining maturity of not less than three months nor greater
                  than 84 months and (D) an APR of not less than 5.09%.

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

                               (xix) 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 Principal Distribution Date.

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<PAGE>

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

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

                               (xxii) Finance Charge. With respect to each
                  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 5.50% for Rule of 78's Contracts and equal to or
                  greater than 5.09% for Simple Interest Contracts.

                               (xxiii) WFS, Bank and Third Party Lender
                  Originations. With respect to the Contracts, the aggregate
                  Principal Balance as of the Cut-Off Date of such Contracts
                  purchased by WFS from the Bank and Third Party Lenders or
                  originated directly by WFS is not more than approximately
                  1.68% of the Cut-Off Date Principal Balance.

                               (xxiv) Simple Interest Contracts. As of the
                  Cut-Off Date, approximately 94.85% of the aggregate Principal
                  Balances of the Contracts shall be Simple Interest Contracts
                  and approximately 5.13% of the aggregate Principal Balances of
                  the Contracts shall be Rule of 78's Contracts.

                               (xxv) New or Used Vehicles. At least 24.12% of
                  the Contracts by Cut-Off Date Aggregate Principal Balance
                  shall be new vehicles and not greater than 75.88% shall be
                  used vehicles.

                               (xxvi) States of Origination. Approximately
                  40.80% of the Contracts by Cut-Off Date Aggregate Principal
                  Balance were originated or purchased by WFS or the Bank in
                  California and approximately 59.20% of the Contracts by
                  Cut-Off Date Aggregate Principal Balance were originated in
                  states other than California.

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

                               (xxviii) Chattel Paper. Each Contract constitutes
                  "chattel paper" within the meaning of the applicable UCC.

                               (xxix) Priority of Interest. This Agreement
                  creates a valid and continuing security interest (as defined
                  in the UCC) in the Contracts in favor of the Issuer, which
                  security interest is prior to all other Liens, and is
                  enforceable as such as against creditors of and purchasers
                  from the Seller. Other than the security interest granted to
                  the Issuer pursuant to this Agreement and subject to the
                  Insurance Agreement, the Seller has not pledged, assigned,
                  sold, granted a security interest in, or otherwise conveyed
                  any of the Contracts. The Seller has not authorized the filing
                  of and is not aware of any financing statements against the
                  Seller that include a description of collateral covering the
                  Contracts other than

                                       34
<PAGE>

                  any financing statement relating to the security interest
                  granted to the Issuer hereunder, the security interest granted
                  to the Indenture Trustee under the Indenture and the security
                  interest granted to the Insurer under the Insurance Agreement
                  or that has been terminated.

         Section 3.02. Purchase of Certain Contracts. The representations and
warranties of the Seller 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 the 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 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 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 the Seller is unable to do so, it 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 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 the
Seller's representations and warranties pursuant to Section 3.01 shall be to
enforce the Seller's obligation to repurchase Contracts pursuant to this
Section; provided, however, that the Seller 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.

         Section 3.03. Custody of Contract Files.

         (a) 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

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<PAGE>

                      (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 Issuer 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 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 Issuer 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
Seller's agreement pursuant to this Section that the Owner Trustee shall be
deemed to have possession of the Contract Documents for purposes of Section
9-313 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.

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<PAGE>

         (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
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
Principal 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 Issuer, the Owner Trustee, the Indenture Trustee,
the Insurer and the Securityholders for

                                       37
<PAGE>

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
Issuer, 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 Servicer shall also indemnify and hold harmless the Issuer, 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 Issuer.

         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 this Section, upon the
termination of the Issuer or the repurchase of all of the Contracts by the
Seller, whichever is first to occur. 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 or as designated by the Owner Trustee 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 Seller 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 Issuer 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 Issuer or any substantial part of its property, or ordering the winding
up or liquidation of the affairs of the Issuer.

                                       38
<PAGE>

         (b) The Master Servicer shall not, nor cause the 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 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
Certificateholders.

         (a) On each Distribution Date, the Certificateholders shall have the
option to repurchase Contracts randomly selected by the Master Servicer from the
Issuer; provided, however, such option shall only be exercised once during the
term of this Agreement. The sum of the Principal Balances of the Contracts
purchased pursuant to this Section may not exceed $360,000,000. Notice of the
exercise of such option shall be given by the Certificateholders to the Owner
Trustee, the Indenture Trustee and the Insurer not later than 15 days prior to
such Distribution Date. To exercise such option, the Certificateholders 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 requested by the Certificateholder to vest in such Certificateholder title to
any Contract purchased hereunder.

         (b) The Optional Repurchase Payment other than the Repurchase Premium
shall constitute Net Collections and shall be distributed in accordance with
Section 5.05(a); provided, however, if, upon the exercise of its right to
repurchase pursuant to Section 3.10(a), the Certificateholders repurchase all
remaining Contracts, the Optional Repurchase Payment will be distributed
pursuant to Section 9.01(e).

         (c) Upon instruction of the Master Servicer, the Indenture Trustee
shall deposit the Repurchase Premium into the Note Distribution Account for
distribution on the related Distribution Date to each Class of Notes, pro rata,
based on the outstanding principal balance of each Class of Notes after making
the distributions (other than the distribution of the Base Price) described in
Section 5.05(a); provided, however, if, upon the exercise of its right to
repurchase pursuant to Section 3.10(a), the Certificateholders repurchase all
remaining Contracts, the Repurchase Premium will be distributed pursuant to
Section 9.01(e).

                                       39
<PAGE>

                                  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-4A 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 Scheduled 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 Principal Balance greater
than one-tenth 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 Issuer on an annual
basis, based on a tax year for the Issuer 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

                                       40
<PAGE>

Trustee shall furnish the Master 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

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<PAGE>

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

                                       42
<PAGE>

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; provided,
however, that the Master Servicer must provide such certificate within three
months of such Nonrecoverable Advance or Advances. 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

                                       43
<PAGE>

Indenture Trustee, the Owner Trustee or the Insurer, as the case may be, all
data (including, 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, however, the Master Servicer shall
not defer payments more than three times over the life of such Contract;
provided, further, 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 Scheduled
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

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<PAGE>

rights of the Issuer. 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, 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 Issuer in the event of the relocation of a
Financed Vehicle or for any other reason.

         Section 4.06. Covenants, Representations and Warranties of the 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.

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<PAGE>

                               (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.

                               (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.

                               (v) Security Interest. The Master Servicer shall
                  maintain the perfection and priority of the Issuer's and the
                  Indenture Trustee's security interests in the Contracts.

                  (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

                                       46
<PAGE>

                  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
                  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

                                       47
<PAGE>

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 Principal 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, the
Swap Counterparty and the Insurer a statement, substantially in the form of
Exhibit E 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 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;

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<PAGE>

                      (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 Principal 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) with respect to Contracts repurchased pursuant to
         Section 3.10, the Base Price, the accrued but unpaid interest on such
         Contracts, the Repurchase Spread Account Amount and the Repurchase
         Premium;

                      (xix) the amount otherwise distributable to the
         Certificateholders;

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

                      (xxi) the Net Swap Receipts and Net Swap Payments, if any.

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 Seller or the Master Servicer
         has become obligated to purchase pursuant to Section 3.02 or 4.07, the
         Seller has elected to purchase pursuant to Section 9.01 or the
         Certificateholder has elected to purchase pursuant to Section 3.10;

                                       49
<PAGE>

                      (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 Principal Balance as of the
                  immediately preceding Distribution Date (or as of the Cut-Off
                  Date in the case of the first Distribution Date); and

                           (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 Principal Balance as of the prior
                  Distribution Date (or as of the Cut-Off Date in the case of
                  the first Distribution Date) and its Principal 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 "Principal Balance";

                      (v) the Contract Numbers, Monthly P&I, Principal 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

                                       50
<PAGE>

         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,
the Swap Counterparty 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, 2002, 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 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

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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 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.

         Section 4.15. Maintenance of Interest Rate Swap Agreements. As long as
the Class A-3B Notes and the Class A-4B Notes are Outstanding, the Master
Servicer shall cause the Trust to maintain in effect an interest rate swap
agreement acceptable to the Insurer with respect to each of the Class A-3B Notes
and the Class A-4B Notes; provided, that, the issuance of the Note Policy on the
Closing Date shall demonstrate the Insurer's approval of the Interest Rate Swap
Agreements.

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                                 ARTICLE FIVEXXX

          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, Commercial Paper 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 Eligible Investments in Proprietary Funds or Commercial Paper, shall be

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invested in the RIC, Commercial Paper 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, Commercial Paper 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 Commercial Paper or
Proprietary Funds that mature on the Distribution Date 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

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<PAGE>

         new Trust Account as an Eligible Account and shall transfer any cash
         and/or any investments to such new Trust Account.

                      (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

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<PAGE>

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 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 Note Deficiency Claim Amount payable in respect of each Class of
Notes. Such Deficiency Notice shall direct the Indenture Trustee to remit such
Note Deficiency Claim Amount (to the extent of funds then on deposit in the
Spread Account are insufficient) 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

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<PAGE>

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.

         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 Principal Balance of such Contract at a
rate equal to the sum of (A) the Class A-4A 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; provided,
however, that the Master Servicer must provide such certificate within three
months of such Nonrecoverable Advance or Advances.

         (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.

         (d) The Certificateholders shall remit or credit to the Collection
Account the Optional Repurchase Payment for the Seller Contracts repurchased
pursuant to Section 3.10 and the Master Servicer and the Seller shall deposit or
caused to be deposited into the Collection Account the Aggregate Repurchase
Amount of Contracts purchased pursuant to Section 9.01(a).

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<PAGE>

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

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

                      (ii) from Net Collections (after giving effect to the
         reduction in Net Collections described in clause (i) above), to the
         Swap Counterparty, the Net Swap Payment;

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

                      (iv) to the Note Distribution Account, from Net
         Collections (after giving effect to the reduction in Net Collections
         described in clauses (i) through (iii) above), the Note Interest
         Distributable Amount;

                      (v) to the Note Distribution Account, from Net Collections
         (after giving effect to the reduction in Net Collections described in
         clauses (i) through (iv) above), the Note Principal Distributable
         Amount, (which amount includes, if such Distribution Date is a Note
         Final Scheduled 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-3A Notes and the Class A-3B Notes, pro rata
         based on their respective principal amounts, until the principal amount
         of the Class A-3A Notes and the Class A-3B Notes has been reduced to
         zero; and fourth to the holders of the Class A-4A Notes and the Class
         A-4B Notes, pro rata based on their respective principal amounts, until
         the principal amount of the Class A-4A Notes and the Class A-4B Notes
         has been reduced to zero; and

                      (vi) from Net Collections (after giving effect to the
         reduction in Net Collections described in clauses (i) through (v)
         above), to the Insurer, any Unreimbursed Insurer Amounts.

         (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)

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<PAGE>

("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 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, WFSRC shall deposit the Spread
Account Initial Amount into the Spread Account. 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 WFSRC until WFSRC has received full payment of the Spread Account
Initial Deposit and (iii) third, on a Calculation Day that is not a Distribution
Date, all remaining funds to the Certificateholders in accordance with their
Certificate Percentage Interests and in the case of a Distribution Date, 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 the 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 Issuer pursuant to Section 3.10 or 9.01,
any amounts on deposit in the Spread Account, after payments of amounts due to
the Securityholders and the Insurer (if there exists any Unreimbursed Insurer
Amounts), will be distributed first, to WFSRC until WFSRC has received full
repayment of 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, (i) the Indenture Trustee shall include
with each distribution to each Noteholder of record as of the related Record
Date and (ii) the Owner

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<PAGE>

Trustee shall include with each distribution to each Certificateholder 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);

                      (iii) the Aggregate Principal 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 the Optional Repurchase Payment 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 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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<PAGE>

         Section 5.08. Calculation of the Class A-3B Rate and Class A-4B Rate.
With respect to the Class A-3B Notes and Class A-4B Notes, on each LIBOR
Determination Date, the Indenture Trustee shall determine the LIBOR Rate for the
Interest Period commencing on such Distribution Date and inform the Master
Servicer (at the facsimile number given to the Indenture Trustee in writing) of
such rates. If necessary to calculate the LIBOR Rate, the Indenture Trustee
will, in a timely manner, request the principal London office of each Reference
Bank to provide a quotation of its rates. On or prior to each Determination
Date, the Indenture Trustee shall determine the Interest Rate for the Class A-3B
Notes and Class A-4B Notes for the related Distribution Date.

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                                   ARTICLE SIX

                                   THE SELLER

         Section 6.01. Corporate Existence. During the term of this Agreement,
the 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 the Seller and its
Affiliates will be conducted on an arm's-length basis.

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

         The 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.

         The 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.

         The 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 the
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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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, the Seller; Certain Limitations.

         (a) The Seller shall not 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. The 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. The Seller and WFS each shall maintain separate
corporate offices.

         (b)

                      (i) Subject to paragraph (ii) below, the purpose of the
         Seller shall be to engage in any lawful activity for which a
         corporation may be organized under the laws of California Revised
         Statutes.

                      (ii) Notwithstanding paragraph (b)(i) above, the actual
         business activities of the Seller shall be limited to those activities
         incident to and necessary or convenient to accomplish the following
         purposes: (A) 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"); (B) 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 (C) to
         negotiate, authorize, execute, deliver and assume the obligations of
         any agreement relating to the activities set forth in clauses (A) and
         (B) 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
         the Seller or Offered Securities are rated by any nationally recognized
         statistical rating organization, such Seller shall not issue notes or
         otherwise incur debt unless (1) the Seller has made a written request
         to the related nationally recognized statistical rating organization to
         issue notes or incur borrowings which notes or borrowings are rated by

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         the related nationally recognized statistical rating organization the
         same as or higher than the rating afforded such debt or securities or
         (2) such notes or borrowings (a) 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, (b) do not constitute a claim against
         the Seller in the event such assets are insufficient to pay such notes
         or borrowings and (c) 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, the Seller shall not 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 Seller and Others. The Seller
and any director or officer or employee or agent of the Seller 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 Seller and any
director or officer or employee or agent of the Seller 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 Seller shall not be under any
obligation to

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

         Section 6.06. Seller May Own Securities. The 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 the 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 or the Trust
         Agreement 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
         the 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 the Seller is
         required to indemnify the Owner Trustee or the Indenture Trustee, as
         the case may be.

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<PAGE>

                  (e) The Master Servicer shall pay the Owner Trustee
         compensation, reimbursement or other payments owed to it by the Seller
         pursuant to Sections 8.01 and 8.02 of the Trust Agreement if the Seller
         fails to remit such compensation, reimbursement or payment in a timely
         manner.

         Indemnification under this Section shall survive the resignation or
removal of the Owner Trustee or the Indenture Trustee or the termination of this
Agreement of the Trust 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

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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 Issuer 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 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 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
Issuer 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 Seller 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.

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<PAGE>

         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 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 the 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 Seller
         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 the 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 the
         Seller, the Issuer or the Master Servicer; or

                  (f) any representation, warranty or statement of the Master
         Servicer, the Issuer or the 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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<PAGE>

         to which Section 3.01 or 4.06 shall be applicable so long as the Master
         Servicer or the Seller 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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<PAGE>

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. In addition, for so long as the Insurer guarantees amounts owing
under the RIC and has not defaulted in the making of any payment required to be
made by it pursuant to such guaranty, the Insurer shall have the right to
initiate and control a proceeding against the obligor under the RIC but only to
the extent such proceeding relates to the amounts so guaranteed and no
settlement of any other proceeding or claim that would adversely affect the
Insurer's rights to recover such amounts shall be effected without the prior
written consent of the Insurer.

                                       73
<PAGE>

                                  ARTICLE NINE

                                   TERMINATION

         Section 9.01. Optional Purchase of All Contracts.

         (a) On each Distribution Date as of which the sum of the Principal
Balances of the Contracts is less than or equal to $180,000,000, the Seller
shall have the option to purchase the remaining Contracts from the Issuer.
Notice of the exercise of such option shall be given by the 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, the 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, and shall succeed to all interests in and to the Issuer. Such
purchase shall be deemed to have occurred on the last day of such Due Period. In
addition, if the Master Servicer or the 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 Issuer 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;

                      (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 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 WFSRC until WFSRC has received full repayment of
         the Spread Account Initial Deposit; and

                                       74
<PAGE>

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

         (c) As described in Article Nine of the Trust Agreement, notice of any
termination of the Issuer shall be given by the Master Servicer to the Owner
Trustee, the Insurer, the Swap Counterparty 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.

         (e) On a Distribution Date on which an optional purchase pursuant to
Section 9.01(a) or an Optional Repurchase of all remaining Contracts in the
Issuer occur, the Master Servicer shall instruct the Indenture Trustee to make
the following distributions of the Optional Repurchase Payment or the Aggregate
Repurchase Amount, as the case may be, and any Net Collections on deposit in the
Collection Account in the following priorities:

                      (i) to the Master Servicer, any accrued and unpaid
         Servicing Fees with respect to one or more prior Due Periods;

                      (ii) to the Owner Trustee and Indenture Trustee, any
         accrued and unpaid fees and expenses;

                      (iii) to the Note Distribution Account, the Redemption
         Price for full payment of outstanding principal and accrued interest on
         the Notes;

                      (iv) in the case of an Optional Repurchase, to the Note
         Distribution Account, the Repurchase Premium for pro rata distribution
         to the Noteholders based on the principal balance of each Noteholder
         reduced by the Note Principal Distributable Amount calculated for the
         Due Period preceding the date of the Optional Repurchase;

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

                      (vi) to WFSRC until WFSRC has received full repayment of
         the Spread Account Initial Deposit; and

                      (vii) to the Certificate Distribution Account, for
         distribution to Certificateholders in accordance with Section 5.02 of
         the Trust Agreement as determined by the Master Servicer.

         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 Scheduled Distribution Date and (ii) an amount sufficient to
pay the Note Distributable Amount on the Class A-4 Final Scheduled Distribution
Date has been deposited with the Indenture Trustee by the Insurer for the
benefit of the Class A-4A Noteholders and Class A-4B Noteholders then on

                                       75
<PAGE>

the Class A-4 Final Scheduled Distribution Date the Class A-4A Notes and Class
A-4B Notes shall be deemed to be transferred by the Class A-4A Noteholders and
Class A-4B Noteholders, respectively, to the Insurer or its designee as
purchaser thereof at the opening of business on the Class A-4 Final Scheduled
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, new
Class A-4A Note and Class A-4B Note evidencing the entire Note Balance. Such new
Class A-4A Note and Class A-4B Note shall have the same terms as the Class A-4A
Notes and Class A-4B Notes, respectively, deemed transferred by the Class A-4A
Noteholders and Class A-4B Noteholders. No service charge shall be made for the
issuance of such Class A-4A Note and Class A-4B 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.

                                       76
<PAGE>

                                   ARTICLE TEN

                                  MISCELLANEOUS

         Section 10.01. Amendment.

         (a) This Agreement may be amended by the Seller, 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,
the Swap Counterparty 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

                                       77
<PAGE>

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 perfection and priority of 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, the 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 9-507 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 Seller 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 the 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

                                       78
<PAGE>

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 the 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 Issuer.

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

                      (i) 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 Issuer 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

                      (ii) 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

                                       79
<PAGE>

         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 (i) WFSRC,
at 6655 West Sahara Avenue, Las Vegas, Nevada 89146, Attention: Keith Ford, (ii)
the Master Servicer, 23 Pasteur, Irvine, California 92618, Attention: Legal
Department, (iii) the Issuer or the Owner Trustee, at the Corporate Trust Office
(with, in the case of the Issuer, a copy to the Seller), (iv) the Indenture
Trustee, at Four Albany Street - 10th Floor, New York, New York 10006,
Attention: Corporate Trust Department - Asset Backed Group, (v) Moody's, to
Moody's Investors Service, Inc., ABS Monitoring Department, 99 Church Street,
New York, New York 10007, (vi) Standard & Poor's, to Standard & Poor's, 55 Water
Street, New York, New York 10041, Attention of Asset Backed Surveillance
Department and (vii) the Insurer, at 350 Park Avenue, New York, New York 10022,
Attention: Transaction Oversight Department, with a copy to the Senior Vice
President -- Transaction Oversight; 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
662/3% of the Outstanding Amount of Notes of such Class and Certificateholders
evidencing not less than 662/3% 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

                                       80
<PAGE>

and the Swap Counterparty 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 an 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 Seller hereby acknowledges and
consents 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 USA, National Association not in its
individual capacity but solely in its capacity as Owner Trustee of the Issuer
and in no event shall Chase Manhattan Bank USA, National Association 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.

         Section 10.13. Effect of Policy Expiration Date. Notwithstanding
anything to the contrary set forth herein, all references to any right of the
Insurer to direct, appoint, consent to, accept, approve of, take or omit to take
any action under this Sale and Servicing Agreement or any other Basic Document
shall be inapplicable at all times after the Policy Expiration Date, and (i) if
such reference provides for another party or parties to take or omit to take any
such action following an Insurer Default, such party or parties shall be
entitled to take or omit to take such action following the Policy Expiration
Date and (ii) if such reference does not provide for another party or parties to
take or omit to take any such action following an Insurer Default, then the
Trustee acting at the written direction of the Certificateholders holding in the
aggregate more than 51% of the outstanding Certificateholders Note Balance shall
have the right to take or omit to take any such action following the Policy
Expiration Date. In addition, any other provision of this Sale and Servicing
Agreement or any other Basic Document which is operative based in

                                       81
<PAGE>

whole or in part on whether an Insurer Default has or has not occurred shall, at
all times on or after the Policy Expiration Date, be deemed to refer to whether
or not the Policy Expiration Date has occurred.

         Section 1.1. Limitation on Recourse Against WFSRC. Notwithstanding
anything to the contrary contained in this Agreement, the obligations of WFSRC
under the Basic Documents are solely the corporate obligations of WFSRC, and
shall be payable by WFSRC, solely as provided by the Basic Documents. WFSRC
shall only be required to pay (i) any fees, expenses, indemnities or other
liabilities that it may incur under the Basic Documents from funds available
pursuant to, and in accordance with, the payment priorities set forth in this
Agreement and (ii) to the extent WFSRC has additional funds available (other
than funds described in the preceding clause (i)) that would be in excess of
amounts that would be necessary to pay the debt and other obligations of WFSRC
incurred in accordance with WFSRC's certificate of incorporation and all
financing documents to which WFSRC is a party. The agreement set forth in the
preceding sentence shall constitute a subordination agreement for purposes of
Section 510(a) of the Bankruptcy Code. In addition, no amount owing by WFSRC
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.

         Section 10.14. Replacement Interest Rate Swap Agreement. Upon a request
by the Insurer pursuant to Section 3.13 of the Insurance Agreement, the
Collateral Agent shall cause the Issuer to enter into a Replacement Interest
Rate Swap Agreement with a replacement swap provider(s) in form and substance
satisfactory to the Insurer. Any payment by a replacement swap provider(s) to
enter into a Replacement Interest Rate Swap Agreement shall be applied first to
pay all Net Swap Payments payable to the Swap Counterparty until such payment
obligations are satisfied.

                                       82
<PAGE>

         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 2002-1 OWNER TRUST

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

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

                                WFS RECEIVABLES CORPORATION,
                                      as Seller

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

                                WFS FINANCIAL INC,
                                      as Master Servicer

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

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:

                                       83
<PAGE>

                                                                      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>

                                                                      SCHEDULE B

                           LOCATION OF CONTRACT FILES

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

                                      SB-1
<PAGE>

                                                                      SCHEDULE C

                         CHARGE-OFF PERCENTAGE TRIGGERS

<TABLE>
<CAPTION>
                                                   Charge-Off Percentage
              Calculation Day                            Trigger
-------------------------------------------        ---------------------
<S>                                                <C>
March 2002                                               0.00%
March 2002 -- May 2002                                   0.34%
June 2002 -- August 2002                                 1.03%
September 2002 -- November 2002                          1.72%
December 2002 -- February 2003                           2.32%
March 2003 -- May 2003                                   2.87%
June 2003 -- August 2003                                 3.35%
September 2003 -- November 2003                          3.77%
December 2003 -- February 2004                           4.12%
March 2004 -- May 2004                                   4.39%
June 2004 -- August 2004                                 4.61%
September 2004 -- November 2004                          4.77%
December 2004 -- February 2005                           4.90%
March 2005 -- May 2005                                   5.00%
June 2005 -- August 2005                                 5.07%
September 2005 -- November 2005                          5.11%
December 2005 -- February 2006                           5.15%
March 2006 -- May 2006                                   5.18%
June 2006 -- August 2006                                 5.21%
September 2006 -- November 2006                          5.22%
December 2006 -- February 2007                           5.24%
March 2007 -- May 2007                                   5.24%
June 2007 -- September 2009                              5.25%
</TABLE>

                                      SC-1
<PAGE>

                                                                       EXHIBIT A

                          [FORM OF INSURANCE AGREEMENT]

                                       A-1
<PAGE>

                                                                       EXHIBIT B

                              [FORM OF NOTE POLICY]

                                       B-1
<PAGE>

                                                                       EXHIBIT C

                                  [FORM OF RIC]

                                       C-1
<PAGE>

                                                                       EXHIBIT D

                        [FORM OF SUBSERVICING AGREEMENT]

                                       D-1
<PAGE>

                                                                       EXHIBIT E

                      [FORM OF DISTRIBUTION DATE STATEMENT]

                                       E-1<PAGE>
                                                                    EXHIBIT 10.3

                    INSURANCE, INDEMNITY AND PLEDGE AGREEMENT

                            Dated as of March 1, 2002

                                      among

                        WFS FINANCIAL 2002-1 OWNER TRUST,

                           WFS RECEIVABLES CORPORATION

                               WFS FINANCIAL INC,

                       FINANCIAL SECURITY ASSURANCE INC.,

                                       and

                             BANKERS TRUST COMPANY,

            as Collateral Agent, Proceeds Agent and Indenture Trustee

                        WFS FINANCIAL 2002-1 OWNER TRUST

<PAGE>

                                TABLE OF CONTENTS

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

AGREEMENTS ..........................................................................................1

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

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

ARTICLE II REPRESENTATIONS, WARRANTIES AND COVENANTS.................................................7

         Section 2.01.  Representations and Warranties of the Trust..................................7

         Section 2.02.  Affirmative Covenants of the Trust...........................................9

         Section 2.03.  Negative Covenants of the Trust.............................................11

         Section 2.04.  [Reserved]..................................................................12

         Section 2.05.  Representations and Warranties of WFSRC.....................................12

         Section 2.06.  Representations and Warranties of WFS.......................................16

         Section 2.07.  [Reserved]..................................................................18

         Section 2.08.  Affirmative Covenants of WFSRC..............................................18

         Section 2.09.  [Reserved]..................................................................21

         Section 2.10.  Negative Covenants of WFSRC.................................................21

         Section 2.11.  Affirmative Covenants of WFS................................................22

ARTICLE III THE POLICIES; INDEMNIFICATION...........................................................24

         Section 3.01.  Agreement to Issue Policy...................................................24

         Section 3.02.  Conditions Precedent to Issuance of Policy..................................24

         Section 3.03.  Premium.....................................................................28

         Section 3.04.  Reimbursement Obligation....................................................28

         Section 3.05.  Non-Recourse Obligation.....................................................30

         Section 3.06.  Indemnification.............................................................31

         Section 3.07.  Liability Absolute..........................................................35

         Section 3.08.  Liability of Financial Security.............................................36

         Section 3.09.  Payment of Costs, Fees and Expenses.........................................37

         Section 3.10.  Payment Procedure...........................................................37

         Section 3.11.  Business Days...............................................................37

         Section 3.12.  Waivers and Consents by Seller and WFS......................................38

         Section 3.13.  Purchase of Replacement Swap Agreement......................................38
</TABLE>

                                        i
<PAGE>

<TABLE>
<CAPTION>
                                                                                                   Page
<S>      <C>                                                                                       <C>
ARTICLE IV PLEDGE OF COLLATERAL.....................................................................39

         Section 4.01.  Obligations Secured Hereby..................................................39

         Section 4.02.  Granting Clause.............................................................40

         Section 4.03.  Release of Collateral.......................................................40

ARTICLE V INTERCREDITOR PROVISIONS..................................................................40

         Section 5.01.  Financial Security's Direction Upon Servicer Default........................40

         Section 5.02.  Financial Security's Direction of Insolvency Proceedings....................42

ARTICLE VI THE COLLATERAL AGENT; REMEDIES...........................................................42

         Section 6.01.  Appointment and Powers of Collateral Agent..................................42

         Section 6.02.  Successor Collateral Agent..................................................43

         Section 6.03.  Remedies Available to Collateral Agent......................................44

         Section 6.04.  Waiver of Stay or Extension Laws; Marshalling of Assets.....................45

         Section 6.05.  Restoration of Rights and Remedies..........................................45

         Section 6.06.  Remedies Cumulative.........................................................46

         Section 6.07.  Control by Financial Security...............................................46

         Section 6.08.  Proceeds Agent as Custodian and Bailee of Collateral Agent..................46

         Section 6.09.  Indemnification of Collateral Agent.........................................47

         Section 6.10.  Compensation Payable to Collateral Agent....................................47

         Section 6.11.  Protection of Financial Security's Security Interest........................47

         Section 6.12.  Representations and Warranties of Indenture Trustee.........................48

         Section 6.13.  Certain Guaranties..........................................................49

ARTICLE VII EVENTS OF DEFAULT.......................................................................49

         Section 7.01.  Events of Default...........................................................49

         Section 7.02.  Remedies; Waivers...........................................................50

ARTICLE VIII MISCELLANEOUS..........................................................................51

         Section 8.01.  Amendments, Changes and Modifications.......................................51

         Section 8.02.  Notices.....................................................................51

         Section 8.03.  Method of Payment...........................................................51

         Section 8.04.  Further Assurances and Corrective Instruments...............................52

         Section 8.05.  Term of Agreement...........................................................52

         Section 8.06.  Assignments; Third-Party Rights; Reinsurance................................52

         Section 8.07.  Consent of Financial Security...............................................53
</TABLE>

                                       ii
<PAGE>

<TABLE>
<CAPTION>
                                                                                                   Page
<S>      <C>                                                                                       <C>
         Section 8.08.  Right to Enforce Sale and Servicing Agreement...............................53

         Section 8.09.  WFS as Party Only for Certain Provisions....................................53

         Section 8.10.  Severability................................................................53

         Section 8.11.  Reports.....................................................................54

         Section 8.12.  Counterparts................................................................54

         Section 8.13.  GOVERNING LAW...............................................................54

         Section 8.14.  Headings....................................................................54

         Section 8.15.  Trial by Jury Waived........................................................54

         Section 8.16.  Limited Liability...........................................................54

         Section 8.17.  Limited Recourse............................................................55

         Section 8.18.  Limited Liability of Chase Manhattan Bank USA, National Association.........55

         Section 8.19.  Entire Agreement............................................................56
</TABLE>

                                       iii
<PAGE>

                                    EXHIBITS
<TABLE>
<S>          <C>
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 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
</TABLE>

                                        i
<PAGE>

                    INSURANCE, INDEMNITY AND PLEDGE AGREEMENT

                  THIS INSURANCE, INDEMNITY AND PLEDGE AGREEMENT is made as of
March 1, 2002, by and among WFS FINANCIAL 2002-1 OWNER TRUST, a Delaware
business trust (the "Trust"), WFS RECEIVABLES CORPORATION, a California
corporation ("WFSRC" or "Seller"), WFS FINANCIAL INC, a California corporation
("WFS"), 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

                  WFSRC is the owner of the Contracts. WFSRC proposes to pledge
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 the 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
Policy to the Indenture Trustee to guarantee payment of the Scheduled Payments
(as defined in such 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 and the Indenture Trustee
enter into this Agreement and, in order to secure the Seller's 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.

                                   AGREEMENTS

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

<PAGE>

                                    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, 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.

                                        2
<PAGE>

                  "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.

                  "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 WFSRC.

                  "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.

                  "Notice Address" means

                          (a) as to WFSRC:

                              6655 West Sahara Avenue
                              Las Vegas, Nevada 89146
                              Attention:  Keith Ford

                          (b) as to WFS:

                              23 Pasteur
                              Irvine, California  92618
                              Attention:  Joy Schaefer

                                        3
<PAGE>

                          (c) as to the Trust:

                              WFS Financial 2002-1 Owner Trust
                              c/o Chase Manhattan Bank USA, National Association
                              as Owner Trustee
                              c/o JP Morgan Chase
                              500 Stanton Christiana Road
                              OPS4/3rd Floor
                              Newark, Delaware  19713
                              Attention:  Institutional Trust Services

                          (d) as to Financial Security:

                              350 Park Avenue
                              New York, New York  10022
                              Attention:  Transaction Oversight
                              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
                          -- Transaction Oversight)

                          (e) as to the Collateral Agent:

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

                          (f) as to the Proceeds Agent:

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

                                        4
<PAGE>

                          (g) 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 USA, National
Association or its successors in interest, acting not individually but solely on
owner trustee under the Trust Agreement.

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

                  "Premium" means the premium payable to Financial Security by
the Seller 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 2.05(g) of
this Agreement. "Registration Statement" has the meaning set forth in Section
2.05(g) of this Agreement.

                  "Representative" means Banc of America Securities LLC, as
representative of the several Underwriters.

                  "Rules and Regulations" has the meaning set forth in Section
2.05(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 WFSRC.

                                        5
<PAGE>

                  "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 the 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.

                  "Swap Agreement" means the ISDA Master Interest Rate Swap
Agreement dated July 27, 2001 between the Trust and the Swap Provider, including
the Schedule thereto, the Credit Support Annex thereto, the Confirmation
relating to the Class A-3B Notes, the Confirmation relating to the Class A-4B
Notes, and together with any replacement swap agreements thereafter approved by
the Insurer.

                  "Swap Provider" means Bank of America, N.A.

                  "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 Swap Agreement, the Indemnification Agreement and
the RIC.

                  "Trust Agreement" means the Trust Agreement, dated as of March
11, 2002, as amended and restated as of March 20, 2002, among the Seller, WFS,
Financial Security and Chase Manhattan Bank USA, National Association, as Owner
Trustee.

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

                  "Underwriters" means Banc of America Securities LLC, Credit
Suisse First Boston Corporation, Deutsche Banc Alex. Brown Inc., Salomon Smith
Barney Inc., and Barclays Capital Inc., and each other institution, if any,
named as an underwriter in the Underwriting Agreement.

                  "Underwriting Agreement" means the Underwriting Agreement,
dated March 12, 2002 among the Seller, WFS and the Representative.

                  "Western Entities" means WFSRC and WFS.

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

                                        6
<PAGE>

                  "WFS Assignments" means, with respect to the Contracts, the
original instrument or instruments of assignment of such Contracts by WFS, as
seller, to WFSRC, 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:

                  (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 the 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

                                        7
<PAGE>

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.

                  (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

                                       8
<PAGE>

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 Noteholders; 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 Noteholders; 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 Noteholders; 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.

                  (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

                                        9
<PAGE>

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, 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

                                       10
<PAGE>

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 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, state and local
income and franchise 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.

                                       11
<PAGE>

                  (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.

                  Section 2.04.     [Reserved].

                  Section 2.05. Representations and Warranties of WFSRC. WFSRC
represents and warrants to Financial Security as follows:

                  (a) Due Organization. WFSRC 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
acquire, pledge and sell the Contracts; WFSRC 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 WFSRC; WFSRC holds all material licenses, certificates and permits
from all governmental authorities necessary for the conduct of its business as
presently conducted. WFSRC's principal place of business, chief executive office
and the office where it keeps its records is located at 6655 West Sahara Avenue,
Las Vegas, Nevada, 89146.

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

                                       12
<PAGE>

to be transferred and assigned to and deposited with the Owner Trustee as part
of the Trust and has duly authorized such transfer 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 WFSRC is a party
has been duly authorized by WFSRC by all necessary corporate action.

                  (c) Valid and Binding Obligations. Each of the Transaction
Agreements to which WFSRC is a party constitutes a legal, valid, and binding
obligation of WFSRC, 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
WFSRC 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 WFSRC, or any indenture, agreement, or other
instrument to which WFSRC 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 WFSRC of any court or of any federal or state
regulatory body, administrative agency, or other governmental instrumentality
having jurisdiction over WFSRC 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 WFSRC of this
Agreement or of any other Transaction Agreement to which WFSRC 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 WFSRC'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 WFSRC or its properties: (A) asserting
the invalidity of this Agreement, any other Transaction Agreement to which WFSRC
is a party, the Notes or

                                       13
<PAGE>

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 WFSRC is a party, (C) seeking any
determination or ruling that might materially and adversely affect the
performance by WFSRC of its obligations under, or the validity or enforceability
of, this Agreement or any other Transaction Agreement to which WFSRC is a party,
or (D) involving WFSRC 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. 333-62784), including a base prospectus and
prospectus supplement for the registration of the Notes under the Securities
Act, (the "Original Registration Statement") and an abbreviated registration
statement on Form S-3 (No. 333-84062) pursuant to Rule 462(b) under the
Securities Act (the "Rule 462(b) Registration Statement"), and Seller 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. As used herein, the term
"Registration Statement" means the Original Registration Statement, including
the Rule 462(b) Registration Statement, at their respective effective dates,
including the exhibits thereto and any material incorporated by reference
therein pursuant to the Securities Act and the Exchange Act, 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"). In addition, "Base Prospectus" means the base prospectus included
in the Registration Statement, as amended at the time of the filing of the
Prospectus. "Prospectus" means the Base Prospectus dated March 12, 2002, that
was filed pursuant to Rule 424(b) on March 18, 2002, together with the
Prospectus Supplement, also dated March 12, 2002. "Prospectus Supplement" means
the supplement to the Base Prospectus included in the Prospectus. 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

                                       14
<PAGE>

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 WFSRC 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 WFSRC'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 owned by WFSRC, 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 Noteholders; 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 Noteholders; 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 Noteholders; 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.

                                       15
<PAGE>

                  (k) Valid Transfer of Contracts. The Sale and Servicing
Agreement and the Seller Assignments constitute a valid sale, transfer and
assignment, as applicable, of the Contracts, enforceable against creditors of
and purchasers from WFSRC, 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) [Reserved].

                  Section 2.06. 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 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 WFSRC for inclusion in the Trust and the Spread Account
and has duly authorized such sale and assignment to WFSRC 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 WFSRC,
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.

                                       16
<PAGE>

                  (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 Notes or the Certificates.

                  (g) Affirmation and Incorporation of Certain Representations
and Warranties. WFS represents and warrants to Financial Security that the
representations and warranties of WFSRC set forth in Section 2.05 hereof, in the
Underwriting Agreement, in Section 3.01(b) of the Sale and Servicing Agreement
and in 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

                                       17
<PAGE>

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) Financial Information. The audited consolidated financial
statements of WFS for the fiscal year ended December 31, 2000 and the unaudited
consolidated financial statements of WFS for the fiscal quarter ended December
31, 2001, 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 December 31, 2001, there has been no material
adverse change in the business, financial condition or operations of WFS.

                  Section 2.07. [Reserved].

                  Section 2.08. Affirmative Covenants of WFSRC. WFSRC covenants
and agrees with Financial Security that, at all times during the term of this
Agreement:

                  (a) Compliance with Agreements. WFSRC will comply with all
terms and conditions of this Agreement and each other Transaction Agreement to
which it is a party. WFSRC 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. WFSRC shall keep proper books and records, in which full and
correct entries shall be made of financial transactions and the assets and
business of WFSRC in accordance with generally accepted accounting principles
consistently applied. WFSRC 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. WFSRC 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 WFSRC stating that:

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

                                       18
<PAGE>

                           (ii) to the best of such officer's knowledge, based
         upon such review, WFSRC has fulfilled all its obligations under this
         Agreement and the other Transaction Agreements to which WFSRC 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. WFSRC 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 WFSRC as may relate to the Notes, the
Certificates and the obligations of WFSRC under this Agreement and the other
Transaction Agreements to which WFSRC is a party; and (ii) to discuss the
affairs, finances and accounts of WFSRC with any of its respective officers,
directors and representatives, including its Independent Accountants.

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

                  (f) Financing Statements and Further Assurances. WFSRC 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 WFSRC 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. WFSRC 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 WFSRC is a party. WFSRC 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 WFSRC has merged or the Person which
acquires by conveyance, transfer or lease substantially all the assets of WFSRC
as an entirety, can lawfully perform the obligations of WFSRC 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
WFSRC under this Agreement.

                                       19
<PAGE>

                  (h) Maintenance of Separate Corporate Existence. WFSRC shall
at all times hold itself out to the public, including WFS and the Bank, under
WFSRC'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 WFSRC (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 WFSRC. WFSRC 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. WFSRC shall not engage in
business transactions with any of its Affiliates on terms and conditions less
favorable to WFSRC than those available to WFSRC for comparable transactions
from Persons who are not Affiliates of WFSRC. WFSRC shall maintain its chief
executive office, principal place of business and the office where it keeps its
records in the State of Nevada and separate and apart from any office of the
Master Servicer.

                  (i) Exercise of Optional Repurchase under the Sale and
Servicing Agreement. Except as otherwise consented to by the Insurer, WFSRC
shall ensure that as Holder of the WFSRC Certificate, if the optional repurchase
is exercised pursuant to Section 3.10 of the Sale and Servicing Agreement, no
more than 50% of any funds used for the exercise of such repurchase option shall
be obtained from WFS or the Bank; provided however, that if WFSRC is the Holder
of the WFSRC Certificate and seeks to exercise the optional repurchase pursuant
to Section 3.10 in connection with a further securitization of such Contracts,
at such time as the sum of the Scheduled Balances of such Contracts is greater
than or equal to 10% of the Cut-Off Date Aggregate Scheduled Principal Balance,
then WFSRC may borrow from either WFS or the Bank an amount up to 10% of the
Aggregate Scheduled Principal Balance; provided further, that any such borrowing
must be on an arms-length basis and the term of such borrowing shall be limited
to no more than 90 days.

                  (j) Compliance with Article 76 of New York Insurance Law.
WFSRC 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.

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

                  (l) Certificates. Except as may be agreed to by Financial
Security, in its sole discretion, WFSRC shall purchase from the Trust and
thereafter retain beneficial and record ownership of the WFSRC Certificate.

                  (m) Notification of Failure to Perform or Observe Certain
Covenants or Agreements. WFSRC shall promptly deliver to WFS a copy of any
written notice

                                       20
<PAGE>

delivered to WFSRC pursuant to Section 5.01(d) concerning any
failure to perform or observe any covenant or agreement contained in any of the
Transaction Agreements by WFS.

                  Section 2.09. [Reserved].

                  Section 2.10. Negative Covenants of WFSRC. WFSRC agrees and
covenants with Financial Security that at all times during the term of this
Agreement:

                  (a) Amendments to Organizational Documents. WFSRC 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. Except as contemplated in connection with the
transaction to which this Agreement relates, without the prior written consent
of Financial Security, WFSRC 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 WFSRC 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, WFSRC 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, WFSRC 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, WFSRC shall not form, or cause to be formed, any
subsidiaries.

                  (f) Insolvency. WFSRC 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

                                       21
<PAGE>

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. WFSRC 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. WFSRC shall not be unable to,
or admit in writing its inability to, pay its debts.

                  (g) Impairment of Rights. WFSRC 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. WFSRC 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.

                  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, the Noteholders 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.

                                       22
<PAGE>

                  (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 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

                                       23
<PAGE>

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 WFSRC 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 WFSRC, (ii) WFSRC shall have created
a valid security interest in the Collateral in favor of the Collateral Agent,
(iii) WFSRC shall have assigned, conveyed, pledged 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 WFSRC, 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:

                                       24
<PAGE>

                           (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 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

                                       25
<PAGE>

         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 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;

                                       26
<PAGE>

                           (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 Mitchell, Silberberg &
         Knupp, LLP, counsel to the Seller, WFS and the Bank, 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 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 Mitchell, Silberberg &
         Knupp, LLP, special tax counsel to the Seller, WFS and the Bank, 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, P.A., 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 LLP, 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;

                           (xvii) a fully executed copy of each of the
         Transaction Agreements;

                                       27
<PAGE>

                           (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 WFSRC 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.

                                       28
<PAGE>

                  Section 3.04. Reimbursement Obligation.

                  (a) Each of the Trust and WFSRC 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 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;

                                       29
<PAGE>

                           (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 WFSRC 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.

                  Section 3.05. Non-Recourse Obligation. Notwithstanding
anything to the contrary contained in this Agreement, the obligations of WFSRC
under Section 3.04(a) are solely the corporate obligations of WFSRC, and shall
be payable by WFSRC, solely as provided in Section 3.04(a). WFSRC shall only be
required to pay (a) any fees, expenses, indemnities or other liabilities that it
may incur under Section 3.04(a) (i) from funds available pursuant to, and in
accordance with, the payment priorities set forth in Section 5.05 of the Sale
and Servicing Agreement and (ii) to the extent WFSRC has additional funds
available (other than funds described in the preceding clause (i)) that would be
in excess of amounts that would be necessary to pay the debt and other
obligations of WFSRC incurred in accordance with WFSRC's certificate of
incorporation and all financing documents to which WFSRC is a party and (b) any
expenses, indemnities or other liabilities that it may incur under Section
3.04(a) (i) from funds available pursuant to, and in accordance with, the
payment priorities set forth in Section 5.05 of the Sale and Servicing Agreement
and (ii) 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 (i)) that would be in excess of amounts that
would be necessary to pay the debt and other obligations of WFSRC incurred in
accordance with WFSRC's certificate of incorporation and all financing documents
to

                                       30
<PAGE>

which WFSRC is a party. In addition, no amount owing by WFSRC 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, WFSRC arising out of or based upon Section
3.04(a), against any stockholder, employee, officer, agent, director or
authorized person of WFSRC 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,
WFSRC 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 Assurance Inc." in the Prospectus and "Capitalization of
         Financial Security Assurance Inc." in the prospectus supplement 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 WFSRC or the Trust in connection with the
         offering, issuance, sale or

                                       31
<PAGE>

         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 WFSRC or the
         Trust;

                           (iv) the violation by WFSRC or the Trust 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 WFSRC 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 WFSRC or
         the Trust or any of its directors, officers, employees or agents;

                           (vii) the breach by WFSRC or the Trust of its
         obligations under this Agreement or any of the other Transaction
         Agreements;

                           (viii) the breach by WFSRC or the Trust of any
         representation or warranty on the part of WFSRC 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 WFSRC 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 WFSRC or the
         Trust, or any affiliate of WFSRC, 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:

                                       32
<PAGE>

                           (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 Assurance Inc." 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;

                           (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

                                       33
<PAGE>

         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 WFSRC or the Trust 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 WFSRC 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 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

                                       34
<PAGE>

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) Notwithstanding anything to the contrary contained in this
Agreement, the obligations of WFSRC under this Section 3.06 are solely the
corporate obligations of WFSRC, and shall be payable by WFSRC, solely as
provided in this Section 3.06. WFSRC shall only be required to pay (a) any fees,
expenses, indemnities or other liabilities that it may incur under this Section
3.06(i) from funds available pursuant to, and in accordance with, the payment
priorities set forth in Section 5.05 of the Sale and Servicing Agreement and
(ii) to the extent WFSRC has additional funds available (other than funds
described in the preceding clause (i)) that would be in excess of amounts that
would be necessary to pay the debt and other obligations of WFSRC incurred in
accordance with WFSRC's certificate of incorporation and all financing documents
to which WFSRC is a party and (b) any expenses, indemnities or other liabilities
that it may incur under this Section 3.06(i) from funds available pursuant to,
and in accordance with, the payment priorities set forth in Section 5.05 of the
Sale and Servicing Agreement and (ii) 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 (i)) that would be
in excess of amounts that would be necessary to pay the debt and other
obligations of WFSRC incurred in accordance with WFSRC's certificate of
incorporation and all financing documents to which WFSRC is a party. The
agreement set forth in the preceding sentence shall constitute a subordination
agreement for purposes of Section 510(a) of the Bankruptcy Code. In addition, no
amount owing by WFSRC 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, WFSRC arising out of
or based upon this Section 3.06, against any stockholder, employee, officer,
agent, director or authorized person of WFSRC 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 WFSRC,
WFS 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;

                                       35
<PAGE>

                  (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 WFSRC, or, indirectly, WFS, to receive the
proceeds of the sale of the Notes; 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
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

                                       36
<PAGE>

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) WFSRC 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 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, WFSRC 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
WFSRC'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 WFSRC 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.

                  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.

                                       37
<PAGE>

                  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. WFSRC,
WFS and any and all others who are now or may become liable for all or part of
the obligations of WFSRC and WFS under this Agreement (all of the foregoing
being referred to collectively in this Section as the "Obligors") agree 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.

                  Section 3.13. Purchase of Replacement Swap Agreement. Upon the
occurrence of (i) an Event of Default or Termination Event under the Swap
Agreement and (ii) the failure of the Swap Provider to pay when due any amounts
payable by the Swap Provider pursuant to the Swap Agreement or otherwise to
perform under the Swap Agreement, Financial Security shall have the right, but
no obligation, to purchase, in Financial Security's sole and absolute
discretion, a replacement swap agreement or agreements (collectively, the
"Replacement Swap Agreement") with a replacement swap provider or providers in
form and substance satisfactory to Financial Security, and the parties hereto
agree that they shall direct the Collateral Agent in writing to cause the Trust
to enter into such Replacement Swap Agreement; provided, however, that under the
Replacement Swap Agreement (a) the Swap Interest Rate shall not be lower than
the Swap Interest Rate under the Swap Agreement and (b) the aggregate Fixed
Amount shall not be greater than the Fixed Amount under the Swap Agreement,
provided further,

                                       38
<PAGE>

however, that in connection with the purchase of each replacement swap agreement
that shall collectively constitute the Replacement Swap Agreement, Financial
Security shall, prior to such purchase, obtain quotes from at least two
potential replacement swap providers (each a "Potential Replacement Swap
Provider") and the parties hereto shall direct the Collateral Agent in writing
to cause the Trust to enter into such Replacement Swap Agreement with the
Potential Replacement Provider that quoted a less expensive purchase price than
the other Potential Replacement Swap Provider or, if Financial Security shall
obtain quotes from more than two Potential Replacement Swap Providers, the least
expensive purchase price of all the Potential Replacement Swap Providers. For
the purposes of this Section 3.14 the terms "Event of Default", "Termination
Event", "Swap Interest Rate" and "Fixed Amount" shall have the meanings assigned
thereto in the Swap Agreement.

                                   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 WFSRC (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 WFSRC 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 WFSRC, 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.

                                       39
<PAGE>

                  Section 4.02. Granting Clause. In order to secure and to
provide for the repayment of the Obligations, WFSRC hereby 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 owned by it, 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
interest so granted to the Collateral Agent shall not relieve WFSRC from the
performance of any term, covenant, condition or agreement on WFSRC'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 WFSRC'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 WFSRC relative thereto or for any breach of any representation or
warranty on the part of WFSRC contained therein, or made in connection
therewith, and WFSRC 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 WFSRC (other than an act or omission on the part of such party 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 WFSRC 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 assignments 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 3.10 or 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 and the
Collateral Agent of a Certificate of the Seller that the conditions set forth in
Section 3.10, with respect to the Optional Repurchase under such Section 3.10
and Section 9.01 with respect to the Optional Purchase under that Section 9.01,
in each case, of the Sale and Servicing Agreement have been satisfied.

                                    ARTICLE V

                            INTERCREDITOR PROVISIONS

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

                                       40
<PAGE>

                  (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 WFSRC 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 WFSRC
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 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 WFSRC 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;

                                       41
<PAGE>

                           (iii) without the prior written consent of Financial
         Security, neither WFSRC, 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 WFSRC 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 WFSRC 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
Noteholders. 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 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

                                       42
<PAGE>

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
WFSRC 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 WFSRC 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 WFSRC; provided, however, that the validity of any such
appointment shall not be impaired or affected by any failure to give any such
notice to WFSRC 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
WFSRC and Financial Security with its address (which shall thereupon become such
successor Collateral Agent's Notice Address for purposes of this Agreement), and

                                       43
<PAGE>

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
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

                                       44
<PAGE>

         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, WFSRC, 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 WFSRC, 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 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 WFSRC 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 WFSRC, 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 WFSRC, 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.

                                       45
<PAGE>

                  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 Defaults 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 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.

                                       46
<PAGE>

                  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. Furthermore, to
effectuate the provisions and purposes of this Agreement, including for the
purpose of perfecting the

                                       47
<PAGE>

security interest granted hereunder, the Trust, WFS and the Seller,
respectively, hereby authorize the filing by Financial Security, on or prior to
the Closing Date and any subsequent Closing Dates, an appropriate Uniform
Commercial Code financing statement in California in form sufficient to assure
that the Collateral Agent, as agent for Financial Security, has a first priority
perfected security interest in all Collateral which can be perfected by the
filing of a financing statement.

                  (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 9-507(c)
of the UCC, unless it shall have given the Collateral Agent and Financial
Security at least 60 days' prior written notice thereof.

                  (c) The Seller shall give Financial Security at least 60 days'
prior written notice of any relocation of 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, such 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. None of WFSRC
or 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 WFSRC
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) WFSRC 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

                                       48
<PAGE>

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, WFSRC,
or WFS 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 either Seller shall have
in a timely 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, WFSRC 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); (ii) the Trust, WFSRC 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, WFSRC 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
given to the Trust and WFSRC; provided that, if such failure shall be of a
nature that it cannot be cured within 30 days, such failure shall

                                       49
<PAGE>

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 (v) of Section 5.05(a) 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:

                           (i) declare all indebtedness of every type or
         description owed by the Trust, WFSRC or WFS 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

                                       50
<PAGE>

                           (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 WFSRC. 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 WFSRC, WFS, 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.

                                       51
<PAGE>

                  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 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. WFSRC 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 WFSRC, 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 WFSRC,
WFS, 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 WFSRC or WFS, as the
case may be, for any expense incurred by such Western Entity in connection with

                                       52
<PAGE>

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 WFSRC or WFS,
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 WFSRC or WFS, 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 WFSRC or
WFS pursuant to Section 3.03 or 3.04 hereof.

                  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 as Party Only for Certain Provisions.
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 2.06, 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.

                  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,

                                       53
<PAGE>

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 WFSRC, 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 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

                                       54
<PAGE>

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 Recourse. Notwithstanding anything to
the contrary contained in this Agreement, the obligations of WFSRC under
Sections 2.08(i), 3.04, 3.06 and 3.09 are solely the corporate obligations of
WFSRC, and shall be payable by WFSRC solely as provided in Sections 2.08(i),
3.04, 3.06 and 3.09. WFSRC shall only be required to pay (i) any fees, expenses,
indemnities or other liabilities that it may incur under Sections 2.08(i), 3.04,
3.06 or 3.09, as applicable, (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 WFSRC 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 such entity 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 Sections
2.08(i), 3.04, 3.06 or 3.09, as applicable, (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
WFSRC 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, WFSRC arising out of or
based upon Sections 2.08(i), 3.04, 3.06 or 3.09, as applicable, against
any stockholder, employee, officer, agent, director or authorized person of the
WFSRC 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 8.18. Limited Liability of Chase Manhattan Bank USA,
National Association. It is expressly understood and agreed by the parties
hereto that (a) this Agreement is executed and delivered by Chase Manhattan Bank
USA, National Association 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
USA, National Association, 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 USA, National Association,
individually or personally, to perform any covenant of the Trust either

                                       55
<PAGE>

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
USA, National Association 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 8.19. 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.

                                       56
<PAGE>

                  IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above mentioned.

                                    WFS FINANCIAL 2002-1 OWNER TRUST

                                    By:  CHASE MANHATTAN BANK USA,
                                         NATIONAL ASSOCIATION
                                             not in its individual capacity, but
                                             solely in its capacity as Owner
                                             Trustee under the Trust Agreement

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

                                    WFS RECEIVABLES CORPORATION

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

                                    WFS FINANCIAL INC

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

                                    FINANCIAL SECURITY ASSURANCE INC.

                                    By:
                                       -----------------------------------------
                                        Title:  Authorized Officer

                                    BANKERS TRUST COMPANY,
                                        as Collateral Agent, Proceeds Agent
                                        and Indenture Trustee

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

                                       57

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