<PAGE>

                                                                  EXECUTION COPY


                              PURCHASE AGREEMENT

                                    between

                          THE FINANCE COMPANY, Seller

                                      and

                   TFC RECEIVABLES CORPORATION 2, Purchaser

                         dated as of December 1, 1999
<PAGE>

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                  Page
                                                                                                  ----
<S>                                                                                               <C>
PURCHASE AGREEMENT................................................................................   1
------------------
W I T N E S S E T H:..............................................................................   1
-------------------

ARTICLE I DEFINITIONS.............................................................................   1

     SECTION 1.1  General.........................................................................   1
     SECTION 1.2  Specific Terms..................................................................   2
     SECTION 1.3  Usage of Terms..................................................................   3
     SECTION 1.4  Certain References..............................................................   3
     SECTION 1.5  No Recourse.....................................................................   3
     SECTION 1.6  Action by or Consent of Noteholders and Certificateholders......................   3
     SECTION 1.7  Material Adverse Effect.........................................................   4

ARTICLE II CONVEYANCE OF THE RECEIVABLES AND THE OTHER CONVEYED PROPERTY..........................   4

     SECTION 2.1  Conveyance of the Receivables and the Other Conveyed Property...................   4

ARTICLE III REPRESENTATIONS AND WARRANTIES........................................................   6

     SECTION 3.1  Representations and Warranties of Seller........................................   6
     SECTION 3.2  Representations and Warranties of Purchaser.....................................   9

ARTICLE IV COVENANTS OF SELLER....................................................................  12

     SECTION 4.1  Protection of Title of Purchaser................................................  12
     SECTION 4.2  Other Liens or Interests........................................................  13
     SECTION 4.3  Costs and Expenses..............................................................  13
     SECTION 4.4  Indemnification.................................................................  13

ARTICLE V REPURCHASES.............................................................................  15

     SECTION 5.1  Repurchase of Receivables Upon Breach of Warranty...............................  15
     SECTION 5.2  Reassignment of Purchased Receivables...........................................  16
     SECTION 5.3  Waivers.........................................................................  17

ARTICLE VI MISCELLANEOUS..........................................................................  17

     SECTION 6.1  Liability of Seller.............................................................  17
     SECTION 6.2  Merger or Consolidation of Seller or Purchaser..................................  17
     SECTION 6.3  Limitation on Liability of Seller and Others....................................  18
</TABLE>

                                       i
<PAGE>

<TABLE>
<S>                                                                                                 <C>
     SECTION 6.4  Seller May Own Notes or Certificates............................................  18
     SECTION 6.5  Amendment.......................................................................  18
     SECTION 6.6  Notices.........................................................................  19
     SECTION 6.7  Merger and Integration..........................................................  19
     SECTION 6.8  Severability of Provisions......................................................  20
     SECTION 6.9  Intention of the Parties........................................................  20
     SECTION 6.10 Governing Law...................................................................  20
     SECTION 6.11 Counterparts....................................................................  20
     SECTION 6.12 Conveyance of the Receivables and the Other Conveyed Property to the Issuer.....  20
     SECTION 6.13 Nonpetition Covenant............................................................  21
     SECTION 6.14 Third Party Beneficiary.........................................................  21

SCHEDULE A........................................................................................  23

SCHEDULE OF RECEIVABLES...........................................................................  23

SCHEDULE B........................................................................................  24

REPRESENTATIONS AND WARRANTIES OF SELLER..........................................................  24

SCHEDULE C........................................................................................  30

THE FINANCE COMPANY CHARGE-OFF POLICY.............................................................  30
</TABLE>

                                    EXHIBITS

SCHEDULE A   Schedule of Receivables
SCHEDULE B   Representations and Warranties of Seller
SCHEDULE C   The Finance Company Charge-Off Policy
SCHEDULE D   Assignment

                                      ii
<PAGE>

                              PURCHASE AGREEMENT
                              ------------------

THIS PURCHASE AGREEMENT, dated as of December 1, 1999, executed between TFC
Receivables Corporation 2, a Delaware corporation, as purchaser ("Purchaser"),
and The Finance Company, a Virginia corporation, as seller ("Seller").

                             W I T N E S S E T H:
                             -------------------

WHEREAS, Seller and Purchaser are entering into this Agreement to provide for,
among other things, the acquisition by Purchaser of all of the right, title and
interests of Seller in and to the Receivables and the Other Conveyed Property on
the Closing Date;

WHEREAS, as a precondition to the effectiveness of this Agreement, the Seller,
the Trustee, the Trust Collateral Agent, the Back-up Servicer, the Insurer and
the Issuer will enter into the Sale and Servicing Agreement to provide for the
servicing of the Receivables;

WHEREAS, Purchaser is and will be conveying to the Issuer, among other things,
all of Purchaser's rights derived under this Agreement and the Sale and
Servicing Agreement, and Seller and Purchaser each agree that all covenants,
representations, warranties and agreements made by it in this Agreement with
respect to itself or the Receivables shall also be for the benefit of the
Trustee, on behalf of the Noteholders, and the Insurer;

WHEREAS, in connection with the issuance of the Notes, Seller will transfer the
Receivables or other consideration to Purchaser in exchange for such Notes;

WHEREAS, the transfer will be effected by this Agreement and an Assignment
between the Seller and Purchaser, and the list of Receivables so conveyed will
be listed on Schedule A attached hereto;

WHEREAS, Purchaser has agreed to purchase from Seller, and Seller, pursuant to
this Agreement, is transferring to Purchaser the Receivables and Other Conveyed
Property;

NOW, THEREFORE, in consideration of the premises and the mutual agreements
hereinafter contained, and for other good and valuable consideration, the
receipt of which is acknowledged, Purchaser and Seller, intending to be legally
bound, hereby agree as follows:

                                   ARTICLE I

                                  DEFINITIONS
                                  -----------

          SECTION 1.1  General. Capitalized terms used herein without definition
                       -------
shall have the respective meanings assigned to such terms in the Sale and
Servicing Agreement dated as of December 1, 1999, by and among Asset Guaranty
Insurance Company, as insurer, Seller, in its capacity as Servicer, TFC
Automobile Receivables
<PAGE>

Trust 1999-1, as Issuer, Purchaser, as Seller, and Norwest Bank Minnesota,
National Association, as Trust Collateral Agent and Back-up Servicer.

          SECTION 1.2  Specific Terms. Whenever used in this Agreement, the
                       --------------
following words and phrases, unless the context otherwise requires, shall have
the following meanings:

          "Agreement" means this Purchase Agreement and all amendments hereof
and supplements hereto.

          "Closing Date" means December 1, 1999.

          "Contracts Purchase Price" shall mean $81,438,389.

          "Indenture Trustee" means Norwest Bank Minnesota, National
Association, and any successor Indenture Trustee appointed and acting pursuant
to the Indenture.

          "Issuer" means TFC Automobile Receivables Trust 1999-1.

          "Other Conveyed Property" means all money, instruments, rights and
other property that are subject or intended to be subject to the lien and
security interest of the Indenture (including all property and interests granted
to the Trust Collateral Agent), including all proceeds thereof, other than the
Receivables.

          "Owner Trustee" means Wilmington Trust Company, not in its individual
capacity but solely as Owner Trustee appointed and acting pursuant to the Trust
Agreement.

          "Receivables" means the Receivables listed on the Schedule of
Receivables attached hereto as Schedule A.

          "Related Documents" means the Notes, the Certificates, the Custodian
Agreement (if any), the Sale and Servicing Agreement, the Indenture, the Trust
Agreement, the Policy, Servicer Termination Side Letter, the Insurance
Agreement, the Certificate to the Trustee, the Indemnification Agreement, the
Note Purchase Agreement, the Standby Processing Agreement, and the Premium
Letter. The Related Documents to be executed by any party are referred to herein
as "such party's Related Documents" or "its Related Documents" or by a similar
expression.

          "Repurchase Event" means the occurrence of a breach of any of Seller's
representations and warranties hereunder or any other event which requires the
repurchase of a Receivable by Seller or Purchaser under the Sale and Servicing
Agreement.

          "Sale and Servicing Agreement" means the Sale and Servicing Agreement
referred to in Section 1.1 hereof.

                                       2
<PAGE>

          "Schedule of Receivables" means the schedule of Receivables sold and
transferred pursuant to this Agreement which is attached hereto as Schedule A.

          "Schedule of Representations" means the Schedule of Representations
and Warranties attached hereto as Schedule B.

          "Security Majority" means a majority by principal amount of the
Noteholders so long as the Notes are outstanding and a majority by principal
amount of the Certificateholders thereafter.

          "Trust Collateral Agent" means Norwest Bank Minnesota, National
Association, as trust collateral agent and any successor trust collateral agent
appointed and acting pursuant to the Sale and Servicing Agreement.

          SECTION 1.3  Usage of Terms. With respect to all terms used in this
                       --------------
Agreement, the singular includes the plural and the plural includes the
singular; words importing any gender include the other gender; 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 subsequent amendments thereto or changes therein entered
into in accordance with their respective terms and not prohibited by this
Agreement or the Sale and Servicing Agreement; references to Persons include
their permitted successors and assigns; any form of the word "include" shall be
deemed to be followed by the words "without limitation"; "the words "herein",
"hereof" and "hereunder" and other words of similar import refer to this
Agreement as a whole and not to any particular Article, Section or other
subdivision; and Article, Section, Schedule and Exhibit references, unless
otherwise specified, refer to Articles and Sections of and Schedules and
Exhibits to this Agreement.

          SECTION 1.4  Certain References. All references to the Principal
                       ------------------
Balance of a Receivable as of any date of determination shall refer to the close
of business on such day, or as of the first day of a Monthly Period shall refer
to the opening of business on such day. All references to the last day of a
Monthly Period shall refer to the close of business on such day.

          SECTION 1.5  No Recourse. Without limiting the obligations of Seller
                       -----------
hereunder, no recourse may be taken, directly or indirectly, under this
Agreement or any certificate or other writing delivered in connection herewith
or therewith, against any stockholder, officer or director, as such, of Seller,
or of any predecessor or successor of Seller.

          SECTION 1.6  Action by or Consent of Noteholders and
                       ---------------------------------------
Certificateholders.  Whenever any provision of this Agreement refers to action
------------------
to be taken, or consented to, by Noteholders or Certificateholders, such
provision shall be deemed to refer to the Certificateholder or Noteholder, as
the case may be, of record as of the Record Date immediately preceding the date
on which such action is to be taken, or consent given, by Noteholders or
Certificateholders. Solely for the purposes of any action to be taken, or
consented to, by Noteholders or Certificateholders, any Note or

                                       3
<PAGE>

Certificate registered in the name of Seller or any Affiliate thereof shall be
deemed not to be outstanding; provided, however, that, solely for the purpose of
determining whether the Indenture Trustee or the Trust Collateral Agent is
entitled to rely upon any such action or consent, only Notes or Certificates
which the Owner Trustee, the Indenture Trustee or the Trust Collateral Agent,
respectively, knows to be so owned shall be so disregarded.

          SECTION 1.7  Material Adverse Effect. Whenever used in the Basic
                       -----------------------
Documents, "Material Adverse Effect" or "material adverse effect" means (i) when
used with respect to any action, event, fact or other matter or thing, means
that such action, event, fact or other matter or thing will not, individually or
in the aggregate, have a material adverse effect on (a) the Trust, the Trust
Property or Collateral, (b) the existence, perfection or priority of the
security interests of the Trust Collateral Agent in the Collateral, (c) the
ability of the Trust Collateral Agent on behalf of the Noteholders to collect
on, liquidate, or foreclose against, the Collateral in accordance with the
Indenture, (d) the validity, enforceability, or the performance of any Person's
obligations under, or with respect to, the Basic Documents, or the validity,
enforceability, or performance of any Person's obligations under or with respect
to, or the payment of, the Notes, (e) the transactions contemplated by the Basic
Documents, (f) the business, operations, condition (financial or otherwise) or
prospects of TFC, the Purchaser or the Issuer, (g) or the interests, right
and/or remedies hereunder, or otherwise with respect to the Collateral, or the
Trust Collateral Agent, the Trustee, the Insurer or any of the Noteholders
(which determination shall be made, in each case, without giving effect to the
existence of the Note Policy) and (ii) when used in relation to or in connection
with any Person also means that such action, event, fact or other matter or
thing shall not, individually or in the aggregate, have a material adverse
effect on the business, operations, condition (financial otherwise) or prospects
of such Person.


                                  ARTICLE II

                         CONVEYANCE OF THE RECEIVABLES
                        AND THE OTHER CONVEYED PROPERTY
                        -------------------------------

          SECTION 2.1  Conveyance of the Receivables and the Other
                       -------------------------------------------
Conveyed Property.
-----------------

               (a)  Subject to the terms and conditions of this Agreement,
Seller hereby sells, transfers, assigns, and otherwise conveys to Purchaser
without recourse (but without limitation of its obligations in this Agreement),
and Purchaser hereby purchases, all right, title and interest of Seller in and
to:

          (i)  the Receivables and all monies paid or payable thereon on or
     after the Cutoff Date (including amounts due on or before the Cutoff Date
     but received by Seller on or after the Cutoff Date);

                                       4
<PAGE>

          (ii)   the security interests in the Financed Vehicles granted by
     Obligors pursuant to the Receivables and any other interest of Seller in
     such Financed Vehicles;

          (iii)  any proceeds and the right to receive proceeds with respect to
     the Receivables from claims on any physical damage, credit life or
     disability insurance policies, if any, covering Financed Vehicles or
     Obligors, and any proceeds from the liquidation of the Receivables;

          (iv)   all rights of Seller against Dealers pursuant to Dealer
     Agreements or Dealer Assignments;

          (v)    all rights under any Service Contracts on the related Financed
     Vehicles;

          (vi)   the related Receivables Files and any and all other documents
     that Seller keeps on file in accordance with its customary procedures
     relating to the Receivables, the Obligors or the Financed Vehicles;

          (vii)  property (including the right to receive future Net Liquidation
     Proceeds) that secures a Receivable and that has been acquired by or on
     behalf of Purchaser pursuant to liquidation of such Receivable;

          (viii) the rights under the Standby Processing Agreement;

          (ix)   all of the Other Conveyed Property; and

          (x)    the proceeds of any and all of the foregoing.

It is the intention of Seller and Purchaser that the transfer and assignment
contemplated by this Agreement shall constitute a valid and enforceable sale of
the Receivables and the Other Conveyed Property from Seller to Purchaser,
conveying good title thereto, free and clear of any encumbrances or liens, and
the beneficial interest in and title to the Receivables and the Other Conveyed
Property shall not be part of Seller's estate in the event of the filing of a
bankruptcy petition by or against Seller under any bankruptcy or similar law,
and Seller delivers to Purchaser an assignment in the form attached hereto as
Schedule D with respect to the Receivables to be sold (the "Assignment").
However, in the event that, notwithstanding the intent of the parties hereto,
the Receivables are held to be property of Seller's estate, or if for any reason
this Agreement is held or deemed to create a security interest in the
Receivables, then (a) this agreement and the Assignment shall also be deemed to
be a security agreement within the meaning of Article 1, Article 8 and Article 9
of the Uniform Commercial Code as in effect in the State of New York and (b) the
transfers of the Receivables provided for in this Agreement and the Assignment
shall be deemed to be a grant by Seller to Purchaser of, and Seller hereby
grants to Purchaser, a security interest in all of Seller's rights, title and
interest in and to the Receivables. Seller hereby represents and warrants that
all Receivables transferred, assigned to and originated on behalf of Purchaser
hereunder shall be eligible contracts and that all assets conformed with the
Schedule of Representations and that all the Receivables acquired by Purchaser
do and shall conform with all of the requirements

                                       5
<PAGE>

hereof. Seller hereby acknowledges that its transfer and assignment of the
Receivables to Purchaser is absolute and irrevocable, without reservation or
retention of any interests whatsoever by Seller.

To the extent that Seller shall retain any files or documentation, written or
electronic (collectively, "documents") pertaining to the Receivables, it shall
hold such documents in trust for the benefit of the Indenture Trustee as the
owner thereof. The possession of any such documents pertaining to the
Receivables by Seller (or any affiliate thereof other than Purchaser) is at the
will of Purchaser and for the sole purpose of servicing such Receivables, and
such retention and possession by Seller (or any affiliate thereof other than
Purchaser) is in a custodial capacity in its role as Servicer under the Sale and
Servicing Agreement and the Related Documents. The documents retained by Seller
relating to the Receivables shall be segregated from the books and records of
Seller and shall be marked appropriately to reflect clearly the transfer by
Seller of the Receivables to Purchaser.

          (b)  Simultaneously with the conveyance of the Receivables and the
Other Conveyed Property to Purchaser, Purchaser shall pay or cause to be paid to
or upon the order of Seller the Contracts Purchase Price. An amount equal to
[__]% of the Contracts Purchase Price shall be paid to the Seller in cash. The
remaining [__]% of the Contracts Purchase Price shall be deemed paid and
returned to the Purchaser and be considered a contribution to capital. The
portion of the Contracts Purchase Price to be paid in cash shall be by wire
transfer of immediately available funds.

                                  ARTICLE III

                        REPRESENTATIONS AND WARRANTIES
                        ------------------------------

          SECTION 3.1  Representations and Warranties of Seller. Seller makes
                       ----------------------------------------
the following representations and warranties as of the date hereof on which
Purchaser relies in purchasing the Receivables and the Other Conveyed Property
and in transferring the Receivables and the Other Conveyed Property to the
Issuer under the Sale and Servicing Agreement and on which the Insurer will rely
in issuing the Note Policy, on which the Noteholders rely in purchasing the
Notes, and on which the Indenture Trustee relies in entering into the Related
Documents. Such representations are made as of the execution and delivery of
this Agreement but shall survive the sale, transfer and assignment of the
Receivables and the Other Conveyed Property hereunder, and the sale, transfer
and assignment thereof by Purchaser to the Issuer under the Sale and Servicing
Agreement. Seller and Purchaser agree that Purchaser will assign to Issuer all
Purchaser's rights under this Agreement and that the Trust Collateral Agent will
thereafter be entitled to enforce this Agreement against Seller in the Trust
Collateral Agent's own name on behalf of the Noteholders.

          (i)   Schedule of Representations. The representations and warranties
                ---------------------------
     set forth on the Schedule of Representations with respect to the
     Receivables are true and correct as of the date hereof.

                                       6
<PAGE>

          (ii)   Organization and Good Standing. Seller has been duly organized
                 ------------------------------
     and is validly existing as a corporation in good standing under the laws of
     the Commonwealth of Virginia, with power and authority to own its
     properties and to conduct its business as such properties are currently
     owned and such business is currently conducted, or is proposed to be
     conducted, and had at all relevant times, and now has, power, authority and
     legal right to acquire, own and sell the Receivables and the Other Conveyed
     Property to be transferred to Purchaser.

          (iii)  Due Qualification. Seller is duly qualified to do business
                 -----------------
     as a foreign corporation and is in good standing, and has obtained all
     necessary licenses and approvals in all jurisdictions in which the
     ownership or lease of its property or the conduct of its business,
     including without limitation, the acquisition and sale of the Receivables,
     requires such qualification.

          (iv)   Power and Authority. Seller has the power and authority to
                 -------------------
     execute and deliver this Agreement and its Related Documents and to perform
     its obligations under this Agreement and its Related Documents; Seller has
     full power and authority to sell and assign the Receivables and the Other
     Conveyed Property to be sold and assigned to and deposited with Purchaser
     hereunder and has duly authorized such sale and assignment to Purchaser by
     all necessary corporate action; and the execution, delivery and performance
     of this Agreement and Seller's Related Documents have been duly authorized
     by Seller by all necessary corporate action.

          (v)    Valid Sale; Binding Obligations.  This Agreement and Seller's
                 -------------------------------
     Related Documents have been duly executed and delivered, shall effect a
     valid sale, transfer and assignment of the Receivables and the Other
     Conveyed Property to Purchaser, enforceable against Seller and creditors of
     and purchasers from Seller and as a result of such sale, transfer and
     assignment, Purchaser shall have a valid, first priority perfected
     ownership interest in such Receivables and the Other Conveyed Property.
     This Agreement and Seller's Related Documents constitute legal, valid and
     binding obligations of Seller enforceable in accordance with their
     respective terms, except as enforceability may be limited by bankruptcy,
     insolvency, reorganization or other similar laws affecting the enforcement
     of creditors' rights generally and by equitable limitations on the
     availability of specific remedies, regardless of whether such
     enforceability is considered in a proceeding in equity or at law.

          (vi)   No Violation.  The consummation of the transactions
                 ------------
     contemplated by this Agreement and the Related Documents and the
     fulfillment of the terms of this Agreement and the Related Documents shall
     not conflict with, result in any breach of any of the terms and provisions
     of or constitute (with or without notice, lapse of time or both) a default
     under, the articles of incorporation or bylaws of Seller, or any indenture,
     agreement, mortgage, deed of trust or other instrument to which Seller is a
     party or by which it is bound, or result in the creation or imposition of
     any Lien upon any of its properties pursuant to the terms of any such
     indenture, agreement, mortgage, deed of trust or other instrument (other
     than

                                       7
<PAGE>

     this Agreement, the Sale and Servicing Agreement and the Indenture and any
     instruments, certificates and other documents executed pursuant to the
     provisions thereof), or violate any law, order, rule or regulation
     applicable to Seller of any court or of any federal or state regulatory
     body, administrative agency or other governmental instrumentality having
     jurisdiction over Seller or any of its properties.

          (vii)  No Proceedings.  There are no proceedings or investigations
                 --------------
     pending or, to Seller's knowledge, after due inquiry, threatened against
     Seller, before any court, regulatory body, administrative agency or other
     tribunal or governmental instrumentality having jurisdiction over Seller or
     its properties (i) asserting the invalidity of this Agreement or any of the
     Related Documents, (ii) seeking to prevent the issuance of the Notes or the
     consummation of any of the transactions contemplated by this Agreement or
     any of the Related Documents, (iii) seeking any determination or ruling
     that might materially and adversely affect the performance by Seller of its
     obligations under, or the validity or enforceability of, this Agreement or
     any of the Related Documents, (iv) seeking to affect adversely the federal
     income tax or other federal, state or local tax attributes of, or seeking
     to impose any excise, franchise, transfer or similar tax upon, the transfer
     and acquisition of the Receivables and the Other Conveyed Property
     hereunder or under the Sale and Servicing Agreement or (v) that have a
     material adverse effect on the Receivables.

          (viii) Chief Executive Office.  The chief executive office of Seller
                 ----------------------
     is located at 5425 Robin Hood Road, Suite 101B, Norfolk, Virginia 23513.

          (ix)   No Consents.  Seller is not required to obtain the consent of
                 -----------
     any other party or any 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 which has not already been obtained.

          (x)    Approvals.  All approvals, authorizations, consents, order or
                 ---------
     other actions of any person, corporation or other organization, or of any
     court, governmental agency or body or official, required in connection with
     the execution and delivery by Seller of this Agreement and the consummation
     of the transactions contemplated hereby or will be taken or obtained on or
     prior to the Closing Date.

          (xi)   Name.  The legal name of the Seller is as set forth in this
                 ----
     Agreement, the Seller has not changed its name during the six years prior
     to the Closing Date and does not have any trade names, fictitious names,
     assumed names or "doing business" names.

          (xii)  Solvency.  The Seller is solvent and will not become insolvent
                 --------
     after giving effect to the transactions contemplated by the Basic
     Documents. The Seller is paying its debts as they become due and, after
     giving effect to the

                                       8
<PAGE>

     transactions contemplated by the Basic Documents, will have adequate
     capital to conduct its business.

          (xiii)  Pension Plan.  All pension or profit sharing plans of Seller
                  ------------
     have been fully funded in accordance with applicable obligations.

          (xiv)   Substantive Consolidation. Seller, in its individual capacity
                  -------------------------
     and as Servicer confirms that the statement contained under "assumptions of
     fact" in the opinion of Weil, Gotshal & Manges LLP regarding substantive
     consolidation matters delivered to the Seller on the Closing Date are true
     and correct with respect to itself, and that the Seller will comply with
     any covenants or obligations assumed to be complied with by it therein as
     if such covenants and obligations were set forth herein.

          (xv)    Sole Stockholder. Seller is the sole stockholder of Purchaser,
                  ----------------
     and all of the shares of stock have been fully paid for and are owned of
     record, free and clear of all mortgages, assignments, pledges and security
     interests.

              SECTION 3.2  Representations and Warranties of Purchaser.
                           -------------------------------------------
Purchaser makes the following representations and warranties, on which Seller
relies in selling, assigning, transferring and conveying the Receivables and the
Other Conveyed Property to Purchaser hereunder, on which the Noteholders rely in
purchasing the Notes, and on which the Indenture Trustee relies in entering into
the Related Documents. Such representations are made as of the execution and
delivery of this Agreement, but shall survive the sale, transfer and assignment
of the Receivables and the Other Conveyed Property hereunder and the sale,
transfer and assignment thereof by Purchaser to the Issuer under the Sale and
Servicing Agreement.

          (i)  Organization and Good Standing. Purchaser has been duly organized
               ------------------------------
     and is validly existing and in good standing as a corporation under the
     laws of the State of Delaware, with the power and authority to own its
     properties and to conduct its business as such properties are currently
     owned and such business is currently conducted, and had at all relevant
     times, and has, full power, authority and legal right to acquire and own
     the Receivables and the Other Conveyed Property, and to transfer the
     Receivables and the Other Conveyed Property to the Issuer pursuant to the
     Sale and Servicing Agreement.

          (ii) Due Qualification.  Purchaser is duly qualified to do business
               -----------------
     as a foreign corporation in good standing, and has obtained all necessary
     licenses and approvals in all jurisdictions where the failure to do so
     would materially and adversely affect Purchaser's ability to acquire the
     Receivables or the Other Conveyed Property, and to transfer the Receivables
     and the Other Conveyed Property to the Issuer pursuant to the Sale and
     Servicing Agreement, or the validity or enforceability of the Receivables
     and the Other Conveyed Property or to perform Purchaser's obligations
     hereunder and under Purchaser's Related Documents.

                                       9
<PAGE>

          (iii)  Power and Authority.  Purchaser has the power, authority and
                 -------------------
     legal right to execute and deliver this Agreement and to carry out the
     terms hereof and to acquire the Receivables and the Other Conveyed Property
     hereunder; and the execution, delivery and performance of this Agreement
     and all of the documents required pursuant hereto have been duly authorized
     by Purchaser by all necessary action.

          (iv)   No Consent Required.  Purchaser is not required to obtain the
                 -------------------
     consent of any other Person, or any consent, license, approval or
     authorization or registration or declaration with, any governmental
     authority, bureau or agency in connection with the execution, delivery or
     performance of this Agreement and the Related Documents, except for such as
     have been obtained, effected or made.

          (v)    Binding Obligation.  This Agreement constitutes a legal, valid
                 ------------------
     and binding obligation of Purchaser, enforceable against Purchaser in
     accordance with its terms, subject, as to enforceability, to applicable
     bankruptcy, insolvency, reorganization, conservatorship, receivership,
     liquidation and other similar laws and to general equitable principles.

          (vi)   No Violation.  The execution, delivery and performance by
                 ------------
     Purchaser of this Agreement, the consummation of the transactions
     contemplated by this Agreement and the Related Documents and the
     fulfillment of the terms of this Agreement and the Related Documents do not
     and will 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 certificate of incorporation or bylaws of Purchaser, or
     conflict with or breach any of the terms or provisions of, or constitute
     (with or without notice or lapse of time) a default under, any indenture,
     agreement, mortgage, deed of trust or other instrument to which Purchaser
     is a party or by which Purchaser is bound or to which any of its properties
     are subject, or result in the creation or imposition of any Lien upon any
     of its properties pursuant to the terms of any such indenture, agreement,
     mortgage, deed of trust or other instrument (other than the Sale and
     Servicing Agreement, and the Indenture and any instruments, certificates
     and other documents executed pursuant to the provisions thereof), or
     violate any law, order, rule or regulation, applicable to Purchaser or its
     properties, of any federal or state regulatory body, any court,
     administrative agency, or other governmental instrumentality having
     jurisdiction over Purchaser or any of its properties.

          (vii)  No Proceedings.  There are no proceedings or investigations
                 --------------
     pending, or, to the knowledge of Purchaser, threatened against Purchaser,
     before any court, regulatory body, administrative agency, or other tribunal
     or governmental instrumentality having jurisdiction over Purchaser or its
     properties: (i) asserting the invalidity of this Agreement or any of the
     Related Documents, (ii) seeking to prevent the consummation of any of the
     transactions contemplated by this Agreement or any of the Related
     Documents, (iii) seeking any determination or ruling that might materially
     and adversely affect the performance by Purchaser of its obligations under,
     or the validity or enforceability of, this Agreement or any

                                       10
<PAGE>

     the Related Documents or (iv) that may adversely affect the federal or
     state income tax attributes of, or seeking to impose any excise, franchise,
     transfer or similar tax upon, the transfer and acquisition of the
     Receivables and the Other Conveyed Property hereunder or the transfer of
     the Receivables and the Other Conveyed Property to the Issuer pursuant to
     the Sale and Servicing Agreement.

          (viii) Approvals.  All approvals, authorizations, consents, licenses,
                 ---------
     orders or other actions of any person, corporation or other organization,
     or of any court, governmental agency or body or official, required in
     connection with the execution and delivery by Purchaser of this Agreement
     and the consummation of the transactions contemplated hereby, including,
     without limitation, the purchase of the Receivables, has been taken, or
     will be taken or obtained on or prior to the Closing Date.

          (ix)   Since the formation of Purchaser (a) Purchaser has incurred no
     debt other than trade payables and expense accruals in connection with its
     operations in the normal course of business; (b) Purchaser has maintained
     its books and records separate from the books and records of any other
     entity, has maintained separate bank accounts and no funds of Purchaser
     have been commingled with funds of any other entity; (c) Purchaser has kept
     in full effect its existence, rights and franchises as a corporation under
     the laws of the Commonwealth of Virginia, and has obtained and preserved
     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 Receivables; (d) Purchaser
     does not own any subsidiary and has not loaned or advanced any moneys to,
     or made an investment in, any Person; (e) Purchaser has not made any
     capital expenditures; (f) Purchaser has not guaranteed, except with respect
     to its obligation to repurchase or substitute Receivables pursuant to the
     terms of this Agreement and the Indenture (directly or indirectly),
     endorsed or is otherwise contingently liable (directly or indirectly) for
     the obligations of, or owned or purchased any stock, obligations or
     securities of or any other interest in, or made any capital contribution
     to, any Person; and (g) Purchaser has not engaged in any other action that
     bears on whether the separate legal identity of Purchaser will be
     respected, including without limitation (l) has not held itself out as
     being liable for the debts of any of any other party, (2) has not acted
     other than in its corporate name and through its duly authorized officers
     or agents, and (3) has not created, incurred, assumed, or in any manner
     become liable in respect of any indebtedness except trade payables and
     expense accruals incurred in the ordinary course of business and which are
     incidental to its business purpose.

In the event of any breach of a representation and warranty made by Purchaser
hereunder, Seller covenants and agrees that it will not take any action to
pursue any remedy that it may have hereunder, in law, in equity or otherwise,
until a year and a day have passed since the date on which all Notes,
Certificates, pass-through certificates or other similar securities issued by
Purchaser, or a trust or similar vehicle formed by Purchaser, have been paid in
full. Seller and Purchaser agree that damages will not be an adequate remedy for
such breach and that this covenant may be specifically enforced by Purchaser,

                                       11
<PAGE>

Issuer or by the Indenture Trustee on behalf of the Noteholders and Owner
Trustee on behalf of the Certificateholders.

                                   ARTICLE IV

                              COVENANTS OF SELLER
                              -------------------

               SECTION 4.1  Protection of Title of Purchaser.
                            --------------------------------

          (a)  At or prior to the Closing Date, Seller shall have filed or
caused to be filed a UCC-1 financing statement, executed by Seller as seller or
debtor, naming Purchaser as purchaser or secured party and describing the
Receivables and the Other Conveyed Property being sold by it to Purchaser as
collateral, with the office of the Secretary of State of the Commonwealth of
Virginia, the office of the Clerk of the City of Norfolk, Virginia and in such
other locations as Purchaser shall have required and as shall be necessary to
perfect the security interest of Purchaser in the collateral.  From time to time
thereafter, Seller shall execute and file such additional financing statements
and cause to be executed and filed such continuation statements, all in such
manner and in such places as may be required by law fully to preserve, maintain
and protect the interest of Purchaser under this Agreement, of the Issuer under
the Sale and Servicing Agreement and of the Trust Collateral Agent under the
Indenture in the Receivables and the Other Conveyed Property and in the proceeds
thereof.  Seller shall deliver (or cause to be delivered) to Purchaser, the
Trust Collateral Agent and the Insurer file-stamped copies of, or filing
receipts for, any document filed as provided above, as soon as available
following such filing.  In the event that Seller fails to perform its
obligations under this subsection, Purchaser, Issuer or the Trust Collateral
Agent may do so, at the expense of Seller.

          (b)  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 Seller (or by Purchaser, Issuer or the Trust
Collateral Agent on behalf of Seller) in accordance with paragraph (a) above
misleading within the meaning of (S) 9-402(7) of the UCC, unless it shall have
given Purchaser, Issuer and the Trust Collateral Agent at least 60 days' prior
written notice thereof, and shall have provided evidence of appropriate
amendments to all previously filed financing statements and continuation
statements acceptable to the Controlling Party.

          (c)  Seller shall give Purchaser, the Issuer, the Insurer (so long as
an Insurer Default shall not have occurred and be continuing) and the Trust
Collateral Agent at least 60 days' prior written notice of any relocation of its
principal place of business or chief executive office 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 Seller shall provide evidence of appropriate filings
required by the UCC acceptable to the Controlling Party.  Seller shall at all
times maintain each office from which it services Receivables and its principal
place of business and chief executive office within the United States of
America.

                                       12
<PAGE>

           (d) Prior to the Closing Date, Seller has maintained accounts and
records as to each Receivable accurately and in sufficient detail to permit (i)
the reader thereof to know at any time as of or prior to the Closing Date the
status of such Receivable, including payments and recoveries made and payments
owing (and the nature of each) and (ii) reconciliation between payments or
recoveries on (or with respect to) each Receivable and the Principal Balance as
of the Closing Date.  Seller shall maintain its computer systems so that, from
and after the time of sale under this Agreement of the Receivables to Purchaser,
and the conveyance of the Receivables by Purchaser to the Issuer, Seller's
master computer records (including archives) that shall refer to a Receivable
indicate clearly that such Receivable has been sold to Purchaser and has been
conveyed by Purchaser to the Issuer.  Indication of the Issuer's ownership of a
Receivable shall be deleted from or modified on Seller's computer systems when,
and only when, the Receivable shall become a Purchased Receivable or shall have
been paid in full.

           (e) If at any time Seller shall propose to sell, grant a security
interest in, or otherwise transfer any interest in any motor vehicle receivables
to any prospective purchaser, lender or other transferee, Seller shall give to
such prospective purchaser, lender, or other transferee computer tapes, records,
or print-outs (including any restored from archives) that, if they shall refer
in any manner whatsoever to any Receivable (other than a Purchased Receivable),
shall indicate clearly that such Receivable has been sold to Purchaser, sold by
Purchaser to Issuer, and is owned by the Issuer.

           SECTION 4.2  Other Liens or Interests. (a) Except for the conveyances
                        ------------------------
hereunder, Seller will not sell, pledge, assign or transfer to any other Person,
or grant, create, incur, assume or suffer to exist any Lien on the Receivables
or the Other Conveyed Property or any interest therein, and Seller shall defend
the right, title, and interest of Purchaser and the Issuer in and to the
Receivables and the Other Conveyed Property against all claims of third parties
claiming through or under Seller. Seller shall notify Purchaser, the Trustee and
the Insurer promptly after becoming aware of any Lien or any Receivable.

           (b) Seller will perform the transactions contemplated by this
Agreement in a manner that is consistent with Purchaser's ownership interest in
the Receivables and  Seller will respond to all third party inquiries confirming
the transfer of the Receivables and the Other Conveyed Property to Purchaser.

           (c) Seller will not make any material amendments to its Charge-Off
Policy without obtaining the prior written consent of the Controlling Party and
giving prior written notice of such amendment to the Rating Agency.

           SECTION 4.3 Costs and Expenses. Seller shall pay all reasonable costs
                       ------------------
and disbursements in connection with the performance of its obligations
hereunder and under its Related Documents.

           SECTION 4.4 Indemnification.
                       ---------------

                                       13
<PAGE>

          (a)  Seller shall defend, indemnify and hold harmless Purchaser, the
Issuer, the Trust Collateral Agent, the Indenture Trustee, the Insurer, the
Owner Trustee, the Noteholders and the Certificateholders from and against any
and all costs, expenses, losses, damages, claims, and liabilities, arising out
of or resulting from any breach of any of Seller's representations and
warranties contained herein.

          (b)  Seller shall defend, indemnify and hold harmless Purchaser, the
Insurer, the Issuer, the Trust Collateral Agent, the Indenture Trustee, the
Owner Trustee, the Noteholders and the Certificateholders 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 Seller or any affiliate
thereof of a Financed Vehicle.

          (c)  Seller shall defend, indemnify and hold harmless Purchaser, the
Insurer, the Issuer, the Trust Collateral Agent, the Indenture Trustee, the
Owner Trustee, the Noteholders and the Certificateholders against any and all
costs, expenses, losses, damages, claims and liabilities arising out of or
resulting from any action taken, or failed to be taken, by it in respect of any
portion of the Receivables other than in accordance with this Agreement or the
Sale and Servicing Agreement.

          (d)  Seller agrees to pay, and shall defend, indemnify and hold
harmless Purchaser, the Issuer, the Trust Collateral Agent, the Insurer, the
Indenture Trustee, the Owner Trustee, the Noteholders and the Certificateholders
from and against any taxes that may at any time be asserted against Purchaser,
the Issuer, the Trust Collateral Agent, the Indenture Trustee, the Owner
Trustee, the Noteholders and the Certificateholders with respect to the
transactions contemplated in this Agreement, including, without limitation, any
sales, gross receipts, general corporation, tangible or intangible personal
property, privilege, or license taxes (but not including any taxes asserted with
respect to, and as of the date of, the sale, transfer and assignment of the
Receivables and the Other Conveyed Property to Purchaser and by Purchaser to the
Issuer or the issuance and original sale of the Notes or the Certificates, or
asserted with respect to ownership of the Receivables and Other Conveyed
Property which shall be indemnified by Seller pursuant to clause (e) below, or
federal, state or other income taxes, arising out of distributions on the Notes
or the Certificates or transfer taxes arising in connection with the transfer of
the Notes or the Certificates) and costs and expenses in defending against the
same, arising by reason of the acts to be performed by Seller under this
Agreement or imposed against such Persons.

          (e)  Seller agrees to pay, and to indemnify, defend and hold harmless
Purchaser, the Issuer, the Trust Collateral Agent, the Indenture Trustee, the
Insurer, the Owner Trustee, the Noteholders and the Certificateholders from, any
taxes which may at any time be asserted against such Persons with respect to,
and as of the date of, the conveyance or ownership of the Receivables or the
Other Conveyed Property hereunder and the conveyance or ownership of the
Receivables and the Other Conveyed Property under the Sale and Servicing
Agreement or the issuance and original sale of the Notes or the Certificates,
including, without limitation, any sales, gross receipts, personal property,
tangible or intangible personal property, privilege or license taxes (but not
including any federal or other income taxes, including franchise taxes, arising
out of the issuance and ownership of the Notes or the transactions contemplated
hereby or transfer taxes arising

                                       14
<PAGE>

in connection with the transfer of the Notes or the Certificates) and costs and
expenses in defending against the same, arising by reason of the acts to be
performed by Seller under this Agreement or imposed against such Persons.

          (f)  Seller shall defend, indemnify, and hold harmless Purchaser, the
Insurer, the Issuer, the Trust Collateral Agent, the Indenture Trustee, the
Owner Trustee, the Noteholders and the Certificateholders 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 of such Persons through the negligence, willful misfeasance, or
bad faith of Seller in the performance of its duties under this Agreement or by
reason of reckless disregard of Seller's obligations and duties under this
Agreement.

          (g)  Seller shall indemnify, defend and hold harmless Purchaser, the
Insurer, the Issuer, the Trust Collateral Agent, the Indenture Trustee, the
Owner Trustee, the Noteholders and the Certificateholders from and against any
and all costs, claims, damages and any loss, liability or expense incurred by
reason of the violation by Seller of federal or state securities laws in
connection with the registration or the sale of the Notes or the Certificates.

          (h)  Seller shall indemnify, defend and hold harmless Purchaser, the
Insurer, the Issuer, the Trust Collateral Agent, the Indenture Trustee, the
Owner Trustee, the Noteholders and the Certificateholders from and against any
loss, liability or expense imposed upon, or incurred by, any of such Persons as
result of the failure of any Receivable, or the sale of the related Financed
Vehicle, to comply with all requirements of applicable law.

          (i)  Seller shall defend, indemnify, and hold harmless Purchaser from
and against all costs, expenses, losses, claims, damages, and liabilities
arising out of or incurred in connection with the acceptance or performance of
Seller's trusts and duties as Servicer under the Sale and Servicing Agreement,
except to the extent that such cost, expense, loss, claim, damage, or liability
shall be due to the willful misfeasance, bad faith, or negligence (except for
errors in judgment) of Purchaser.

Indemnification under this Section 4.4 shall include reasonable fees and
expenses of counsel and expenses of litigation incurred by the Noteholders,
Trust Collateral Agent, Insurer or the Trustee in connection with enforcement of
this Agreement and shall survive termination of the Notes and the Certificates.
The indemnity obligations hereunder shall be in addition to any obligation that
Seller may otherwise have.

                                   ARTICLE V

                                  REPURCHASES
                                  -----------

               SECTION 5.1 Repurchase of Receivables Upon Breach of Warranty.
                           -------------------------------------------------
Upon the occurrence of a Repurchase Event, Seller shall, unless the breach
which is the subject of such Repurchase Event shall have been cured in all
material respects,

                                       15
<PAGE>

repurchase the Receivable relating thereto from the Issuer as promptly as
possible but in no event later than by the last day of the first full calendar
month following the discovery by Seller or receipt by Seller of notice of such
breach and, simultaneously with the repurchase of the Receivable, Seller shall
deposit the Purchase Amount in full, without deduction or offset, to the
Collection Account, pursuant to Section 3.2 of the Sale and Servicing Agreement.
It is understood and agreed that, except as set forth in Section 6.1 hereof, the
obligation of Seller to repurchase any Receivable, as to which a breach occurred
and is continuing, shall, if such obligation is fulfilled, constitute the sole
remedy against Seller for such breach available pursuant to this Agreement
(subject to the next paragraph of this Section 5.1) to Purchaser, the Issuer,
the Insurer, the Noteholders, the Certificateholders, the Trust Collateral Agent
on behalf of the Noteholders or the Owner Trustee on behalf of
Certificateholders. The provisions of this Section 5.1 are intended to grant the
Issuer and the Trust Collateral Agent a direct right against Seller to demand
performance hereunder, and in connection therewith, Seller waives any
requirement of prior demand against Purchaser with respect to such repurchase
obligation. Any such repurchase shall take place in the manner specified in
Section 3.2 of the Sale and Servicing Agreement. Notwithstanding any other
provision of this Agreement or the Sale and Servicing Agreement to the contrary,
the obligation of Seller under this Section shall not terminate upon a
termination of Seller as Servicer under the Sale and Servicing Agreement and
shall be performed in accordance with the terms hereof notwithstanding the
failure of the Servicer or Purchaser to perform any of their respective
obligations with respect to such Receivable under the Sale and Servicing
Agreement.


          In addition to the foregoing and notwithstanding whether the related
Receivable shall have been purchased by Seller, Seller shall indemnify the
Issuer, the Trust Collateral Agent, the Indenture Trustee, the Owner Trustee,
the Insurer, the Noteholders and the Certificateholders 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 Repurchase Events.

              SECTION 5.2 Reassignment of Purchased Receivables. Upon deposit in
                          -------------------------------------
the Collection Account of the Purchase Amount of any Receivable repurchased by
Seller under Section 5.1 hereof, Purchaser and the Issuer shall take such steps
as may be reasonably requested by Seller in order to sell, assign, convey and
otherwise transfer to Seller all right, title and interest of each of Purchaser
and the Issuer in and to such Receivable and all security and documents and all
Other Conveyed Property conveyed to Purchaser or the Issuer directly relating
thereto, without recourse, representation or warranty, except as to the absence
of liens, charges or encumbrances created by or arising as a result of actions
of Purchaser or the Issuer. Such assignment shall be a sale and assignment
outright, and not for security. If, following the reassignment of a Purchased
Receivable, in any enforcement suit or legal proceeding, it is held that Seller
may not enforce any such Receivable on the ground that it shall not be a real
party in interest or a holder entitled to enforce the Receivable, Purchaser and
the Issuer shall, at the expense of Seller, take such steps as Seller deems
reasonably necessary to enforce the Receivable, including bringing suit in
Purchaser's or in the Issuer's name.

                                       16
<PAGE>

              SECTION 5.3 Waivers. No failure or delay on the part of Purchaser,
                          -------
or the Issuer as assignee of Purchaser, in exercising any power, right or remedy
under this Agreement shall operate as a waiver thereof, nor shall any single or
partial exercise of any such power, right or remedy preclude any other or future
exercise thereof or the exercise of any other power, right or remedy.


                                  ARTICLE VI


                                 MISCELLANEOUS
                                 -------------

              SECTION 6.1 Liability of Seller. Seller shall be liable in
                          -------------------
accordance herewith only to the extent of the obligations in this Agreement
specifically undertaken by Seller and the representations and warranties of
Seller.

              SECTION 6.2 Merger or Consolidation of Seller or Purchaser. Any
                          ----------------------------------------------
corporation other entity (i) into which Seller or Purchaser may be merged or
consolidated, (ii) resulting from any merger or consolidation to which Seller or
Purchaser is a party or (iii) succeeding to the business of Seller or Purchaser,
in the case of Purchaser, which corporation has a certificate of incorporation
containing provisions relating to limitations on business and other matters
substantively identical to those contained in Purchaser's certificate of
incorporation, provided that in any of the foregoing cases such corporation
shall execute an agreement of assumption to perform every obligation of Seller
or Purchaser, as the case may be, under this Agreement and, whether or not such
assumption agreement is executed, shall be the successor to Seller or Purchaser,
as the case may be, hereunder (without relieving Seller or Purchaser of its
responsibilities hereunder, if it survives such merger or consolidation) without
the execution or filing of any document or any further action by any of the
parties to this Agreement. Notwithstanding the foregoing, so long as an Insurer
Default shall not have occurred and be continuing and (a) there are Notes
outstanding, (b) any amounts due to the Insurer remain unpaid or (c) the Note
Policy has not expired in accordance with its terms, Purchaser shall not merge
or consolidate with any other Person or permit any other Person to become the
successor to Purchaser's business without the prior written consent of the
Controlling Party. Seller or Purchaser shall promptly inform the other party,
the Issuer, the Trust Collateral Agent, the Owner Trustee and, so long as an
Insurer Default shall not have occurred and be continuing and (a) there are
Notes outstanding, (b) any amounts due to the Insurer remain unpaid or (c) the
Note Policy has not expired in accordance with its terms, the Controlling Party
of such merger, consolidation or purchase and assumption. Notwithstanding the
foregoing, as a condition to the consummation of the transactions referred to in
clauses (i), (ii) and (iii) above, (x) immediately after giving effect to such
transaction, no representation or warranty made pursuant to Sections 3.1 and 3.2
of this Agreement shall have been breached (for purposes hereof, such
representations and warranties shall speak as of the date of the consummation of
such transaction) and no event that, after notice or lapse of time, or both,
would become an event of default under the Insurance Agreement, shall have
occurred and be continuing, (y) Seller or Purchaser, as applicable, shall have
delivered written notice of such consolidation, merger or purchase and
assumption to the Rating

                                       17
<PAGE>

Agency prior to the consummation of such transaction and shall have delivered to
the Issuer, the Controlling Party and the Trust Collateral Agent an Officer's
Certificate and an Opinion of Counsel each stating that such consolidation,
merger or succession and such agreement of assumption comply with this Section
6.2 and that all conditions precedent, if any, provided for in this Agreement
relating to such transaction have been complied with, and (z) Seller or
Purchaser, as applicable, shall have delivered to the Issuer, the Insurer and
the Trust Collateral Agent an Opinion of Counsel, stating, in the opinion of
such counsel, either (A) all financing statements and continuation statements
and amendments thereto have been executed and filed that are necessary to
preserve and protect the interest of the Issuer and the Trust Collateral Agent
in the Receivables and reciting the details of the filings or (B) no such action
shall be necessary to preserve and protect such interest.

               SECTION 6.3 Limitation on Liability of Seller and Others. Seller
                           --------------------------------------------
and any director, officer, employee or agent may rely in good faith on the
advice of counsel or on any document of any kind prima facie properly executed
and submitted by any Person respecting any matters arising under this Agreement.
Seller shall not be under any obligation to appear in, prosecute or defend any
legal action that is not incidental to its obligations under this Agreement or
its Related Documents and that in its opinion may involve it in any expense or
liability.

               SECTION 6.4 Seller May Own Notes or Certificates. Subject to the
                           ------------------------------------
provisions of the Sale and Servicing Agreement, the Trust Agreement, the
Indenture and the Insurance Agreement, Seller and any Affiliate of Seller may in
its individual or any other capacity become the owner or pledgee of Notes or
Certificates with the same rights as it would have if it were not Seller or an
Affiliate thereof.


               SECTION 6.5 Amendment.
                           ---------

               (a) This Agreement may be amended by Seller and Purchaser with
the prior written consent of the Insurer (so long as an Insurer Default shall
not have occurred and be continuing and (a) there are Notes outstanding, (b) any
amounts due to the Insurer remain unpaid or (c) the Note Policy has not expired
in accordance with its terms) and with prior written notice to the Rating Agency
but without the consent of the Trust Collateral Agent, the Owner Trustee or any
of the Certificateholders or Noteholders (i) to cure any ambiguity or (ii) to
correct any provisions in this Agreement; provided, however, that such action
shall not adversely affect in any material respect the interests of any
Certificateholder or Noteholder.

               (b) This Agreement may also be amended from time to time by
Seller and Purchaser, with the prior written consent of the Insurer (so long as
an Insurer Default shall not have occurred and be continuing and (a) there are
Notes outstanding, (b) any amounts due to the Insurer remain unpaid or (c) the
Note Policy has not expired in accordance with its terms), with prior written
notice to the Rating Agency and with the consent of the Trust Collateral Agent
and, if required, a Security Majority in accordance with the Sale and Servicing
Agreement, for the purpose of adding any provisions to or changing in any manner
or eliminating any of the provisions of this Agreement, or of

                                       18
<PAGE>

modifying in any manner the rights of the Certificateholders or Noteholders;
provided, however, Seller provides the Trust Collateral Agent with an Opinion of
Counsel, (which may be provided by Seller's internal counsel) that no such
amendment shall increase or reduce in any manner the amount of, or accelerate or
delay the timing of, collections of payments on Receivables or distributions
that shall be required to be made on any Note or Certificate.

               (c) It shall not be necessary for the consent of
Certificateholders or Noteholders pursuant to this Section 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 of the execution thereof by
Certificateholders or Noteholders shall be subject to such reasonable
requirements as the Trust Collateral Agent may prescribe, including the
establishment of record dates. The consent of a Holder of a Certificate or a
Note given pursuant to this Section or pursuant to any other provision of this
Agreement shall be conclusive and binding on such Holder and on all future
Holders of such Certificate or Note and of any Certificate or Note issued upon
the transfer thereof or in exchange thereof or in lieu thereof whether or not
notation of such consent is made upon the Certificate or Note.

               Prior to the execution of any amendment to this Agreement, the
Indenture Trustee or the Trust Collateral Agent, if requested, 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 and that all
conditions precedent to the execution and delivery of such amendment have been
satisfied.

               SECTION 6.6 Notices. All demands, notices and communications to
                           -------
Seller or Purchaser hereunder shall be in writing, personally delivered, or sent
by telecopier (subsequently confirmed in writing), reputable overnight courier
or mailed by certified mail, return receipt requested, and shall be deemed to
have been given upon receipt (a) in the case of Seller, to The Finance Company,
Attention: Chief Financial Officer, 5425 Robin Hood Road, Suite 101A, Norfolk,
Virginia 23513, (b) in the case of Purchaser, to TFC Receivables Corporation 2,
Attention: Chief Financial Officer, 5425 Robin Hood Road, Suite 101B, Norfolk,
Virginia 23513 or (c) in the case of the Insurer, to Asset Guaranty Insurance
Company, Attention: Manager Asset-Backed Surveillance, 335 Madison Avenue, New
York, New York 10017-4605, or such other address as shall be designated by a
party in a written notice delivered to the other party or to the Issuer, Owner
Trustee or the Trust Collateral Agent, as applicable.

               SECTION 6.7 Merger and Integration. Except as specifically stated
                           ----------------------
otherwise herein, this Agreement and Related Documents set forth the entire
understanding of the parties relating to the subject matter hereof, and all
prior understandings, written or oral, are superseded by this Agreement and the
Related Documents. This Agreement may not be modified, amended, waived or
supplemented except as provided herein.

                                       19
<PAGE>

              SECTION 6.8 Severability of Provisions. If any one or more of the
                          --------------------------
covenants, provisions or terms of this Agreement shall be for any reason
whatsoever held invalid, then such covenants, provisions or terms shall be
deemed severable from the remaining covenants, provisions or terms of this
Agreement and shall in no way affect the validity or enforceability of the other
provisions of this Agreement.


               SECTION 6.9 Intention of the Parties. The execution and delivery
                           ------------------------
of this Agreement shall constitute an acknowledgment by Seller and Purchaser
that they intend that the assignment and transfer herein contemplated constitute
a sale and assignment outright, and not for security, of the Receivables and the
Other Conveyed Property, conveying good title thereto free and clear of any
Liens, from Seller to Purchaser, and that the Receivables and the Other Conveyed
Property shall not be a part of Seller's estate in the event of the bankruptcy,
reorganization, arrangement, insolvency or liquidation proceeding, or other
proceeding under any federal or state bankruptcy or similar law, or the
occurrence of another similar event, of or with respect to Seller. In the event
that such conveyance is determined to be made as security for a loan made by
Purchaser, the Issuer, the Noteholders or the Certificateholders to Seller, the
parties intend that Seller shall have granted to Purchaser a first priority,
perfected security interest in all of Seller's right, title and interest in and
to the Receivables and the Other Conveyed Property conveyed pursuant to Section
2.1 hereof, and that this Agreement shall constitute a security agreement under
applicable law and shall have granted such security interest.

               SECTION 6.10 Governing Law. This Agreement shall be construed in
                            -------------
accordance with the laws of the State of New York without regard to the
principles of conflicts of laws thereof and the obligations, rights and remedies
of the parties under this Agreement shall be determined in accordance with such
laws.


               SECTION 6.11 Counterparts. For the purpose of facilitating the
                            ------------
execution of this Agreement and for other purposes, this Agreement may be
executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and all of which counterparts
shall constitute but one and the same instrument.


               SECTION 6.12 Conveyance of the Receivables and the Other
                            -------------------------------------------
Conveyed Property to the Issuer.  Seller acknowledges that Purchaser intends,
-------------------------------
pursuant to the Sale and Servicing Agreement, to convey the Receivables and the
Other Conveyed Property, together with its rights under this Agreement, to the
Issuer on the date hereof. Seller acknowledges and consents to such conveyance
and pledge and waives any further notice thereof and covenants and agrees that
the representations and warranties of Seller contained in this Agreement and the
rights of Purchaser hereunder are intended to benefit the Insurer, the Issuer,
the Owner Trustee, the Trust Collateral Agent, the Noteholders and the
Certificateholders. In furtherance of the foregoing, Seller covenants and agrees
to perform its duties and obligations hereunder, in accordance with the terms
hereof for the benefit of the Insurer, the Issuer, the Owner

                                       20
<PAGE>

Trustee, the Trust Collateral Agent, the Noteholders and the Certificateholders
and that, notwithstanding anything to the contrary in this Agreement, Seller
shall be directly liable to the Issuer, the Insurer, the Owner Trustee, the
Trust Collateral Agent, the Noteholders and the Certificateholders
(notwithstanding any failure by the Servicer, or Purchaser to perform their
respective duties and obligations hereunder or under Related Documents) and that
the Trust Collateral Agent may enforce the duties and obligations of Seller
under this Agreement against Seller for the benefit of the Insurer, the Owner
Trustee, the Trust Collateral Agent, the Noteholders and the Certificateholders.


               SECTION 6.13 Nonpetition Covenant. Neither Purchaser nor Seller
                            --------------------
shall petition or otherwise invoke the process of any court or government
authority for the purpose of commencing or sustaining a case against Purchaser
or 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 Purchaser or the Issuer or any substantial part of
their respective property, or ordering the winding up or liquidation of the
affairs of Purchaser or the Issuer.

               SECTION 6.14 Third Party Beneficiary. Asset Guaranty Insurance
                            -----------------------
Company and the Indenture Trustee shall be third party beneficiaries of this
Agreement. The Indenture Trustee and the Insurer, and each of its respective
successors and assigns, shall be a third party beneficiary to the provisions of
this Agreement, and the Insurer shall be entitled to rely upon and directly
enforce such provisions of this Agreement so long as no Insurer Default shall
have occurred and be continuing and (a) there are Notes outstanding, (b) any
amounts due to the Insurer remain unpaid or (c) the Note Policy has not expired
in accordance with its terms. Except as expressly stated otherwise herein, any
right of the Insurer to direct, appoint, consent to, approve of, or take any
action under this Agreement, shall be a right exercised by the Insurer in its
reasonable discretion. The Insurer may disclaim any of its rights and powers
under this Agreement (but not its duties and obligations under the Note Policy)
upon delivery of a written notice to the Trust Collateral Agent. Nothing in this
Agreement, whether express or implied, shall be construed to give to any other
Person any legal or equitable right, remedy or claim in the Trust Property or
under or in respect of this Agreement or any covenants, conditions or provisions
contained herein.

                            [Signature Page Follows]

                                       21
<PAGE>

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

                         THE FINANCE COMPANY,
                            as Seller


                         By ________________________________________
                            Name:
                            Title:

                         TFC RECEIVABLES CORPORATION 2,
                            as Purchaser


                         By ________________________________________
                            Name:
                            Title:



Acknowledged and Accepted:

NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,
As Indenture Trustee and Trust Collateral Agent


By ________________________________________
   Name:
   Title:


                    [Signature Page for Purchase Agreement]

                                       22
<PAGE>

                                  SCHEDULE A

                            SCHEDULE OF RECEIVABLES


                           [Distributed at Closing]

                                       23
<PAGE>

                                  SCHEDULE B

                   REPRESENTATIONS AND WARRANTIES OF SELLER

1.   Characteristics of Receivables.  Each Receivable (A) was originated by a
     ------------------------------
     Dealer for the retail sale of a Financed Vehicle in the ordinary course of
     such Dealer's business in accordance with either (i) TFC's credit policies
     or (ii) credit policies which were reviewed by TFC prior to a purchase of a
     Receivable by TFC and such Dealer had all necessary licenses and permits to
     originate Receivables in the state where such Dealer was located, was fully
     and properly executed by the parties thereto was purchased by TFC from such
     Dealer under an existing Dealer Agreement or pursuant to a Dealer
     Assignment, was validly assigned by such Dealer to the Seller pursuant to
     the Dealer Agreement or the Dealer Assignment, was validly assigned by TFC
     to the Seller, and was validly assigned by the Seller to the Trust and
     pledged by the Trust to the Trust Collateral Agent, (B) contains customary
     and enforceable provisions such as to render the rights and remedies of the
     holder thereof adequate for realization against the collateral security,
     (C) is a Receivable which provides for level scheduled payments (provided
     that the payment in the first Monthly Period and the payment in the final
     Monthly Period of the Receivable may be minimally different from the normal
     period and level payment) which, if made when due, shall fully amortize the
     Amount Financed over the original term, (D) provides for, in the event that
     the related Contract is prepaid, a prepayment that fully pays the principal
     balance of such related Contract and includes accrued but unpaid interest
     through the date of prepayment in an amount at least equal to the annual
     percentage rate, (E) has not been amended or rewritten, or collections with
     respect to which deferred or waived, other than as evidenced in the
     Receivable File relating thereto, (F) has an original term of eleven (11)
     to forty-eight (48) months and a remaining term of not less than six (6)
     months, (G) that has been acquired by TFC and, if a monthly pay contract
     which is not more than thirty (30) days delinquent, the related Obligor
     does not have other Receivables owing to TFC that are more than thirty (30)
     days delinquent or defaulted, (H) that has been acquired by TFC and, if a
     non-monthly-pay contract, is not more than thirty (30) days delinquent nor
     is it defaulted based on the Company's methodology in effect for converting
     non-monthly pay Receivables to a daily delinquency equivalent as such
     methodology is described in Schedule 1 of the Insurance Agreement nor does
     the Obligor have other Receivables owing to TFC that are delinquent, (I)
     has a final scheduled payment due no less than eight (8) months before the
     Final Scheduled Payment Date, (J) has not been extended beyond its original
     term, except in keeping with the TFC's stated policies and procedures which
     allow for up to two, one-month deferments in any twelve month period not to
     exceed up to four, one-month deferments over the life of a monthly-pay
     contract, (K) satisfies in all material respects, including but not limited
     to, down-payment provisions, the requirements under TFC's Credit Guidelines
     as in effect on August 31, 1999, (L) was originated through an approved
     Dealer of TFC, (M) is due from a U.S. citizen in the case of military
     Receivables and a U.S. resident in the case of civilian Receivables and is
     denominated in U.S. dollars, (N) is secured by a Financed Vehicle and a
     valid
<PAGE>

     first priority perfected security interest is in effect with respect to
     such Financed Vehicle, (O) is owned solely by TFC free and clear of any
     lien, claim, or other encumbrance, excluding liens that will be released no
     later than the Closing Date, (P) with respect to the related security
     interest in the related Financed Vehicle is perfected and with clear legal
     right of repossession, (Q) that if a Point-of-Sale Receivable, was secured
     by a vehicle covered by a comprehensive insurance policy covering theft,
     fire, collision, and naming TFC as loss payee on the date the loan advance
     was made, (R) meets, in all material respects, all applicable requirements
     of federal, state, and local laws and regulations, (S) has an annual
     percentage rate of not less than 14.9%, (T) has a remaining principal
     balance of net less than fifteen thousand dollars, (U) is not subject to
     any right of setoff by the Obligor and (V) will be clearly marked in the
     books and records of TFC as being sold to Seller, and from Seller to Issuer
     and liened to the Trust Collateral Agent.

2.   No Fraud or Misrepresentation.  Each Receivable (A) was originated by a
     -----------------------------
     Dealer, (B) was sold by the Dealer to TFC and (C) was sold by TFC to the
     Seller and by the Seller to the Trust without any fraud or
     misrepresentation in any case.

3.   Compliance with Law. All requirements of applicable federal, state and
     -------------------
     local laws, and regulations thereunder (including usury laws, the Federal
     Truth-in-Lending Act, the Equal Credit Opportunity Act, the Fair Credit
     Billing Act, the Fair Credit Reporting Act, the Fair Debt Collection
     Practices Act, the Federal Trade Commission Act, the Moss-Magnuson Warranty
     Act, the Federal Reserve Board's Regulations "B" and "Z", the Soldiers' and
                                                   -       -
     Sailors' Civil Relief Act of 1940, as amended, each applicable state Motor
     Vehicle Retail Installment Sales Act, and state adaptations of the National
     Consumer Act and of the Uniform Consumer Credit Code and other consumer
     credit laws and equal credit opportunity and disclosure laws) in respect of
     the Receivables, the Financed Vehicles and the sale of any physical damage,
     credit life and credit accident and health insurance and any extended
     service contracts, have been complied with in all material respects by TFC
     and the Seller, as applicable, and each Receivable, the sale of the
     Financed Vehicle evidenced by each Receivable and the sale of any physical
     damage, credit life and credit accident and health insurance and any
     extended service contracts complied at the time it was originated or made
     in all material respects and now complies in all material respects with all
     applicable legal and regulatory requirements.

4.   Origination.  Each point-of-sale Receivable was originated in the United
     -----------
     States and materially conforms to all requirements of the "Dealer
                                                                ------
     Underwriting Guide" applicable to such Receivable at the time assigned to
     ------------------
     TFC, at the time of such assignment.

5.   Binding Obligation.  Each Receivable represents the genuine, legal, valid
     ------------------
     and binding payment obligation of the Obligor thereon, enforceable by the
     holder thereof in accordance with its terms, except (A) as enforceability
     may be limited by bankruptcy, insolvency, reorganization or similar laws
     affecting the
<PAGE>

     enforcement of creditors' rights generally and by equitable limitations on
     the availability of specific remedies, regardless of whether such
     enforceability is considered in a proceeding in equity or at law and (B) as
     such Receivable may be modified by the application after the Cut-Off Date
     of the Soldiers' and Sailors' Civil Relief Act of 1940, as amended; and all
     parties to each Receivable had full legal capacity to execute and deliver
     such Receivable and all other documents related thereto and to grant the
     security interest purported to be granted thereby.

6.   No Government Obligor.  No Obligor is the United States of America or any
     ---------------------
     State or any agency, department, subdivision or instrumentality thereof.

7.   Obligor Bankruptcy.  At the Cut-Off Date, no Obligor had been the subject
     ------------------
     of a current bankruptcy proceeding.

8.   Schedule of Receivables.  The information set forth in the Schedule of
     -----------------------
     Receivables has been produced from the Electronic Ledger and was true and
     correct in all material respects as of the close of business on the Cut-Off
     Date as delivered on the Closing Date.

9.   Marking Records.  By the Closing Date, the Seller will have caused the
     ---------------
     portions of the Electronic Ledger relating to the Receivables to be clearly
     and unambiguously identified to show that the Receivables have been sold to
     the Seller by TFC and resold by the Seller to the Trust in accordance with
     the terms of the Sale and Servicing Agreement.

10.  Computer Tape.  The Computer Tape made available by the Seller to the Trust
     -------------
     Collateral Agent on the Closing Date was complete and accurate as of the
     Cut-Off Date and includes a description of the same Receivables that are
     described in the Schedule of Receivables.

11.  Adverse Selection.  No selection procedures adverse to the Noteholders or
     -----------------
     the Insurer were utilized in selecting the Receivables from those
     receivables owned by TFC which met the selection criteria contained in the
     Sale and Servicing Agreement.

12.  Chattel Paper. The Receivables constitute chattel paper within the meaning
     -------------
     of the UCC as in effect in the State of New York, Delaware, Virginia and
     Minnesota.

13.  One Original.  There is only one original executed copy of each Receivable.
     ------------

14.  Receivable Files Complete. There exists a Receivable File pertaining to
     -------------------------
     each Receivable and such Receivable File contains, without limitation,
     subject to any exceptions which may appear on any exception report
     delivered by the Trust Collateral Agent, (a) a fully executed original of
     the Receivable, (b) the original Lien Certificate or application therefor
     together with an assignment of the Lien Certificate executed by the
     Unaffiliated Originator and TFC by TFC to the Seller, and, an assignment of
     the Lien Certificate executed by the Seller to the Trustee, (c) an original
     credit application or copy thereof and (d) documents evidencing or
<PAGE>

     relating to any Insurance Policy to the extent such documents are
     maintained on behalf of the Seller or TFC. Each of such documents which is
     required to be signed by the Obligor has been signed by the Obligor in the
     appropriate spaces. All blanks on any form described in clauses (a), (b)
     and (c) above have been properly filled in and each form has otherwise been
     correctly prepared. Notwithstanding the above, a copy of the complete
     Receivable File for each Receivable, which fulfills the documentation
     requirements of the Dealer Underwriting Guide as in effect at the time of
     purchase is in the possession of the Servicer or its bailee.

15.  Receivables in Force.  No Receivable has been satisfied, subordinated or
     --------------------
     rescinded, and the Financed Vehicle securing each such Receivable has not
     been released from the lien of the related Receivable in whole or in part.
     No terms of any Receivable have been waived, altered or modified in any
     respect since its origination, except by instruments or documents
     identified in the Receivable File.  No Receivable has been modified as a
     result of application of the Soldiers' and Sailors' Civil Relief Act of
     1940, as amended.

16.  Lawful Assignment. No Receivable was originated in, or is subject to the
     -----------------
     laws of, any jurisdiction the laws of which would make unlawful, void or
     voidable the sale, transfer and assignment of such Receivable under this
     Agreement or pursuant to transfers of the Securities.  The Seller has not
     entered into any agreement with any account debtor that prohibits,
     restricts or conditions the assignment of any portion of the Receivables.

17.  Good Title.  No Receivable has been sold, transferred, assigned or pledged
     ----------
     by the Seller to any Person other than the Issuer; immediately prior to the
     conveyance of the Receivables to the Trust pursuant to this Agreement, the
     Seller was the sole owner thereof and had good and indefeasible title
     thereto, free (except with respect to GE Capital, which lien of GE Capital
     has been released (as of the Closing Date)) of any Lien and, upon execution
     and delivery of this Agreement by the Seller, the Trust shall have good and
     indefeasible title to and will be the sole owner of such Receivables, free
     of any Lien other than the Lien of the Trust Collateral Agent.  No Dealer
     has a participation in, or other right to receive, proceeds of any
     Receivable.  The Seller has not taken any action to convey any right to any
     Person that would result in such Person having a right to payments received
     under the related Insurance Policies or the related Dealer Agreements or
     Dealer Assignments or to payments due under such Receivables.

18.  Security Interest in Financed Vehicle.  Each Receivable created or will
     -------------------------------------
     create a valid, binding and enforceable first priority security interest in
     favor of TFC or the Trust Collateral Agent in the Financed Vehicle. The
     Lien Certificate and original certificate of title for each Financed
     Vehicle show, or if a new or replacement Lien Certificate is being applied
     for with respect to such Financed Vehicle the Lien Certificate will be
     received within 180 days of the Closing Date, and will show TFC or the
     Trust Collateral Agent named as the original secured party under each
     Receivable as the holder of a first priority security interest in
<PAGE>

     such Financed Vehicle. With respect to each Receivable for which the Lien
     Certificate has not yet been returned from the Registrar of Titles, TFC has
     received written evidence from the related Dealer that such Lien
     Certificate showing TFC or the Trust Collateral Agent as first lienholder
     has been applied for and (i) TFC's security interest has been validly
     assigned to the Seller pursuant to the Purchase Agreement and (ii) the
     Seller's security interest has been validly assigned by the Seller to the
     Trust pursuant to this Agreement and (iii) the Trust's security interest
     has been validly pledged to the Trust Collateral Agent pursuant to the
     Indenture. Immediately after the sale, transfer and assignment thereof by
     the Seller to the Trust, each Receivable will be secured by an enforceable
     and perfected first priority security interest in the Financed Vehicle in
     favor of the Trustee as secured party, which security interest 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 taxes, labor or materials affecting a Financed Vehicle arising
     subsequent to the Cut-Off Date). As of the Cut-Off Date there were no Liens
     or claims for taxes, work, labor or materials affecting a Financed Vehicle
     which are or may be Liens prior or equal to the Liens of the related
     Receivable.

19.  All Filings Made.  All filings (including UCC filings) required to be made
     ----------------
     by any Person and actions required to be taken or performed by any Person
     in any jurisdiction to give the Trust Collateral Agent a first priority
     perfected lien on the Receivables and the proceeds thereof and the Other
     Conveyed Property have been made, taken or performed.

20.  No Impairment.  Neither TFC nor the Seller has done anything to convey any
     -------------
     right to any Person that would result in such Person having a right to
     payments due under the Receivable or otherwise to impair the rights of the
     Trust, the Insurer, the Trustee, the Trust Collateral Agent and the
     Noteholders in any Receivable or the proceeds thereof.

21.  Receivable Not Assumable.  No Receivable is assumable by another Person
     ------------------------
     in a manner which would release the Obligor thereof from such Obligor's
     obligations to the Seller with respect to such Receivable.

22.  No Default.  As of the Cut-Off Date, no Receivable was in default and no
     ----------
     condition existed or event occurred that constituted a default, breach,
     violation or event permitting acceleration under the terms of any
     Receivable, and there has been no waiver of any of the foregoing.  As of
     the Cut-Off Date no Financed Vehicle had been repossessed.

23.  Insurance.  At the time of origination of each point of sale Receivable,
     ---------
     the related Financed Vehicle was covered by a comprehensive and collision
     insurance policy (i) in an amount at least equal to the lesser of,
     excluding any deductible, (a) its maximum insurable value or (b) the
     principal amount due from the Obligor under the related Receivable, (ii)
     naming TFC and its successors and assigns as loss payee and (iii) insuring
     against loss and damage due to fire, theft, transportation,
<PAGE>

     collision and other risks generally covered by comprehensive and collision
     coverage. No Financed Vehicle is insured under a policy of Force-Placed
     Insurance on the Cut-Off Date.

24.  Certain Characteristics of Receivables.  (i) No Receivable was more than
     --------------------------------------
     29 days past due as of the Cut-Off Date; (ii) no funds have been advanced
     by the Seller, the Servicer, any Dealer, or anyone acting on behalf of any
     of them in order to cause any Receivable to qualify under subclause (i) of
     this clause 24; (iii) the Principal Balance of each Receivable set forth in
     the Schedule of Receivables is true and accurate as of the Cut-Off Date.

25.  Direct Payment.  All Receivable are secured by Financed Vehicles on which
     --------------
     at least one payment has been made directly to TFC subsequent to the date
     TFC has purchased such Receivable.

26.  Military Assistance Corporation.  As of the Closing Date, Fort Knox
     -------------------------------
     National Bank ("FKNB") has been directed by TFC, and evidence of FKNB's
                     -----
     acknowledgment has been received to directly transfer to the Collection
     Account all amounts received by it pursuant to the Military Assistance
     Corporation ("MAC") program.
                   ----

27.  Pool Characteristics. The weighted average interest rate for the pool was
     --------------------
     no less than 21.2% and the weighted average remaining maturity for the pool
     is no greater than 29 months.
<PAGE>

                                  SCHEDULE C

                     THE FINANCE COMPANY CHARGE-OFF POLICY
<PAGE>

                                                                       EXHIBIT D
                                                                       ---------

                                  ASSIGNMENT

                                      A-