<PAGE>

                                                                    Exhibit 10.4

                                                                 EXECUTION COPY





                        INSURANCE AND INDEMNITY AGREEMENT

                                      among

                          RADIAN ASSET ASSURANCE INC.,

                    TFC AUTOMOBILE RECEIVABLES TRUST 2002-1,

                         TFC RECEIVABLES CORPORATION V,

                              THE FINANCE COMPANY,

                       WELLS FARGO FINANCIAL AMERICA, INC.

                                       and

                WELLS FARGO BANK MINNESOTA, NATIONAL ASSOCIATION


                           Dated as of March 19, 2002

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<S>                                                                                                        <C>
ARTICLE I  DEFINITIONS..................................................................................    2

     Section 1.01.  General Definitions.................................................................    2
     Section 1.02.  Generic Terms.......................................................................   11
     Section 1.03.  Computation of Time Periods.........................................................   11

ARTICLE II  THE POLICY AND REIMBURSEMENT................................................................   11

     Section 2.01.  Policy..............................................................................   11
     Section 2.02.  Conditions Precedent................................................................   11
     Section 2.03.  Premium Letter......................................................................   15
     Section 2.04.  Reimbursement Obligations...........................................................   15
     Section 2.05.  Assignment and Other Rights upon Payments under the Policy..........................   16
     Section 2.06.  Subrogation; Further Assurances.....................................................   16
     Section 2.07.  Indemnification by TFC; Conduct of Actions or Proceedings; Contribution.............   17
     Section 2.08.  Indemnification by TFCRC V; Conduct of Actions or Proceedings; Contribution.........   19
     Section 2.09.  Other Payment Obligations...........................................................   21
     Section 2.10.  Payments, Generally.................................................................   22

ARTICLE III  REPRESENTATIONS AND WARRANTIES.............................................................   22

     Section 3.01.  Representations and Warranties with respect to TFC and TFCRC V......................   23
     Section 3.02.  Representations and Warranties of the Issuer........................................   29

ARTICLE IV  COVENANTS...................................................................................   32

     Section 4.01.  Covenants of TFCRC V and TFC........................................................   32
     Section 4.02.  Negative Covenants with Respect to TFCRC V and TFC..................................   43
     Section 4.03.  Affirmative Covenants of the Issuer.................................................   46
     Section 4.04.  Negative Covenants on Behalf of the Issuer..........................................   51

ARTICLE V  FURTHER AGREEMENTS...........................................................................   53

     Section 5.01.  Effective Date; Term of Insurance Agreement.........................................   53
     Section 5.02.  Obligations Absolute................................................................   53
     Section 5.03.  Assignments; Reinsurance; Third-Party Rights........................................   55
     Section 5.04.  Liability of Radian.................................................................   55

ARTICLE VI  EVENTS OF DEFAULT; REMEDIES.................................................................   56

     Section 6.01.  Insurance Agreement Events of Default...............................................   56
     Section 6.02.  Remedies; Waivers...................................................................   59

ARTICLE VII  MISCELLANEOUS PROVISIONS...................................................................   60

     Section 7.01.  Amendments, Etc.....................................................................   60
     Section 7.02.  Notices.............................................................................   60
</TABLE>

                                        i

<PAGE>

<TABLE>
<S>                                                                                   <C>
     Section 7.03.  No Waiver; Remedies and Severability...........................   63
     Section 7.04.  Payments.......................................................   63
     Section 7.05.  Governing Law..................................................   63
     Section 7.06.  Counterparts...................................................   63
     Section 7.07.  Paragraph Headings, Etc........................................   64
     Section 7.08.  No Petition....................................................   64
     Section 7.09.  Consent to Jurisdiction........................................   64
     Section 7.10.  Consent of Radian..............................................   65
     Section 7.11.  Jury Trial Waiver..............................................   65
     Section 7.12.  Limitation of Liability........................................   65
     Section 7.13.  Third Party Beneficiary........................................   66
     Section 7.14.  Entire Agreement...............................................   66
</TABLE>

                                       ii

<PAGE>

                        INSURANCE AND INDEMNITY AGREEMENT

     THIS INSURANCE AND INDEMNITY AGREEMENT (this "Insurance Agreement") is made
                                                   -------------------
as of March 19, 2002 among Radian Asset Assurance Inc., a financial guaranty
insurance company incorporated in the State of New York, as note insurer
("Radian"), TFC Automobile Receivables Trust 2002-1, a Delaware business trust
  ------
(individually, the "Trust"), as issuer (the "Issuer"), TFC Receivables
                    -----                    ------
Corporation V, a Delaware corporation ("TFCRC V"), The Finance Company, a
                                        -------
Virginia corporation (individually, "TFC") and as servicer (together with its
                                     ---
successors and assigns in such capacity, including without limitation the Backup
Servicer (as defined below) and any successor servicer appointed pursuant to the
Sale and Servicing Agreement (as defined below), the "Servicer"), Wells Fargo
                                                      --------
Bank Minnesota, National Association, a national banking association
(individually "Wells Fargo"), as trustee (together with its successors and
               -----------
assigns, in such capacity, the "Trustee"), as trust collateral agent (together
                                -------
with its successors and assigns, in such capacity, the "Trust Collateral
                                                         ---------------
Agent"), as backup servicer (together with its successors and assigns, in such
-----
capacity, the "Backup Servicer") and as post office box owner (together with its
               ---------------
successors and assigns, in such capacity, the "P.O. Box Owner"), and Wells Fargo
                                               --------------
Financial America, Inc. (individually, "Wells Fargo Financial"), as "Successor
                                        ---------------------        ---------
Servicer" under the Sale and Servicing Agreement (together with its successors
--------
and assigns, in such capacity, the "Successor Servicer").
                                    ------------------

                             PRELIMINARY STATEMENTS

     The Issuer will issue (a) the TFC 4.23% Asset Backed Notes, Series 2002-1
(the "Notes") pursuant to the Indenture, dated as of March 19, 2002, among the
      -----
Insurer, the Issuer and Wells Fargo as Trustee and Trust Collateral Agent (as
the same may be amended, restated, supplemented or otherwise modified from time
to time in accordance with its terms and the terms hereof the "Indenture") and
                                                               ---------
(b) a certificate (the "Certificate") pursuant to the Trust Agreement, dated as
                        -----------
of March 19, 2002, between Wilmington Trust Company as owner trustee (together
with its successors and assigns, in such capacity, the "Owner Trustee") and
                                                        -------------
TFCRC V as depositor (as the same may be amended, restated, supplemented or
otherwise modified from time to time in accordance with its terms and the terms
hereof, the "Trust Agreement").
             ---------------

     Pursuant to the Indenture, the Issuer will grant to the Trust Collateral
Agent for the benefit of the Trustee on behalf of the Noteholders and Radian, to
secure repayment of the Notes (and other related amounts), a security interest
in collateral consisting of all of the Issuer's right, title and interest in, to
and under a pool of receivables, including, among other types of receivables,
receivables of retail installment sale contracts secured by the financed
vehicles and certain other assets and rights, all as more fully set forth in the
Indenture (the "Collateral"). Such receivables and related assets constituting a
                ----------
part of the Collateral are being sold to the Issuer pursuant to the Sale and
Servicing Agreement, dated as of March 19, 2002, among the Issuer, TFCRC V as
seller (the "Seller"), the Servicer, Radian, the Trust Collateral Agent, the
             ------
Backup Servicer and the Successor Servicer (as the same may be amended,
restated, supplemented or otherwise modified from time to time in accordance
with its terms and the terms hereof, the "Sale and Servicing Agreement"); and
                                          ----------------------------

<PAGE>

     Radian is authorized to transact a financial guaranty insurance business in
the State of New York and has agreed, subject to the terms and conditions of
this Insurance Agreement, to issue to the Trustee, for the benefit of the
Noteholders, a financial guaranty insurance policy substantially in the form of
Exhibit A hereto (the "Policy"); and
---------              ------

     The parties hereto, among other things, desire to specify the conditions
precedent to the issuance by Radian of the Policy, the obligations of the
Issuer, the Servicer, the Backup Servicer, the P.O. Box Owner, the Successor
Servicer, TFC and TFCRC V, as applicable, to make payments in respect of
premiums, reimbursement obligations and other amounts relating to the Policy,
and to perform certain other obligations in respect of the issuance of the
Policy, and to provide for certain other matters related thereto.

     NOW, THEREFORE, in consideration of the premises and of the agreements
herein contained, Radian, the Issuer, the Servicer, TFCRC V, the Trustee, the
Trust Collateral Agent, the Backup Servicer, the P.O. Box Owner and the
Successor Servicer agree as follows:

                                   ARTICLE I

                                   DEFINITIONS

     Section 1.01. General Definitions. The terms defined in this Article I
                   -------------------
shall have the meanings provided herein for all purposes of this Insurance
Agreement, unless the context clearly requires otherwise, in both singular and
plural form, as appropriate. Capitalized terms used and not otherwise defined
herein shall have the meanings assigned to such terms in the Indenture or the
Sale and Servicing Agreement (as applicable).

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

     "Backup Servicer" has the meaning assigned to such term in the preamble
      ---------------
above.

     "Certificate" has the meaning assigned to such term in the Preliminary
      -----------
Statements above.

     "Closing Date" means March 19, 2002.
      ------------

     "Collateral" has the meaning assigned to such term in the Indenture.
      ----------

     "Commonly Controlled Entity" means TFC and each entity, whether or not
      --------------------------
incorporated, which is affiliated with TFC pursuant to Section 414(b), (c), (m)
or (o) of the Code.

     "Cumulative Net Loss Rate" means with respect to any Determination Date,
      ------------------------
the fraction, expressed as a percentage, the numerator of which is equal to the
aggregate amount of Net Losses through the end of the related Monthly Period for
such Determination Date and the denominator of which is equal to the Original
Pool Balance.

2

<PAGE>

     "Cumulative Net Loss Test Failure" means with respect to any Determination
      --------------------------------
Date described below, the Cumulative Net Loss Rate shall be greater than the
percentage set forth below opposite the description of such Determination Date:

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------
                          Period                                    Maximum Percentage
                          ------                                    ------------------

---------------------------------------------------------------------------------------------
<S>                                                                 <C>
For the January, February and March 2002 Determination                    1.36%
Dates
---------------------------------------------------------------------------------------------
For the April, May and June 2002  Determination Dates                     4.73%
---------------------------------------------------------------------------------------------
For the July, August and September 2002 Determination Dates               11.23%
---------------------------------------------------------------------------------------------
For the October, November and December 2003 Determination                 17.23%
Dates
---------------------------------------------------------------------------------------------
For the January, February and March 2003 Determination                    17.53%
Dates
---------------------------------------------------------------------------------------------
For the April, May and June 2003 Determination Dates                      18.22%
---------------------------------------------------------------------------------------------
For the July, August and September 2003 Determination Dates               19.10%
---------------------------------------------------------------------------------------------
For the October, November and December 2003 Determination                 19.97%
Dates
---------------------------------------------------------------------------------------------
For the January, February and March 2004 Determination                    20.85%
Dates
---------------------------------------------------------------------------------------------
For the April, May and June 2004 Determination Dates                      21.72%
---------------------------------------------------------------------------------------------
For the July 2004 Determination Date and thereafter                       22.66%
---------------------------------------------------------------------------------------------
</TABLE>

     "Date of Issuance" has the meaning assigned to such term in the Policy.
      ----------------

     "Deemed Cured" means, as of a Determination Date, (a) with respect to a
      ------------
Trigger Event that has occurred solely as a result of the occurrence of a
Delinquency Test Failure, that no Trigger Event or any Insurance Agreement Event
of Default shall have occurred as of such Determination Date or as of any of the
three (3) immediately preceding Determination Dates; or (b) with respect to a
Trigger Event that has occurred as a result of a Cumulative Net Loss

3

<PAGE>

Failure, that no Trigger Event or any Insurance Agreement Event of Default shall
have occurred as of such Determination Date or as of any of the six (6)
immediately preceding Determination Dates.

     "Default" means any event which results, or which with the giving of notice
      -------
or the lapse of time or both would result, in an Insurance Agreement Event of
Default.

     "Delinquency Category" means (a) for Receivables having monthly Scheduled
      --------------------
Receivable Payments ("Monthly-Pay Contracts" as defined in Schedule 1) in
respect of which the relevant Obligor shall have failed to make a Scheduled
Receivable Payment or a portion thereof on the due date therefor, the applicable
Delinquency Category into which such Receivable falls based on the number of
months delinquent, as described in Schedule 1 hereto and (b) for Receivables not
having monthly Scheduled Receivable Payments ("Non-Monthly-Pay Contracts," as
defined in Schedule 1) in respect of which the relevant Obligor shall have
failed to make a Scheduled Receivables Payment or a portion thereof on the due
date therefor, the applicable Delinquency Category into which such Receivable
falls based on the number of weeks delinquent, as described in Schedule 1
hereto.

     "Delinquency Ratio" means, with respect to any Determination Date, the
      -----------------
fraction, expressed as a percentage, (a) the numerator of which is equal to the
sum of the Principal Balances (as of the related Accounting Date) of all
Receivables that are Delinquent Receivables as of the related Accounting Date,
or that became Purchased Receivables as of the related Accounting Date and were
Delinquent Receivables as of such Accounting Date and (b) the denominator of
which is equal to the sum of the Aggregate Principal Balance as of such
Accounting Date plus the Principal Balances (as of the related Accounting Date)
of all Receivables that became Purchased Receivables as of such Accounting Date
and were Delinquent Receivables as of such Accounting Date.

     "Delinquency Test Failure" means, (i) with respect to the April 2002
      ------------------------
Determination Date, the Delinquency Ratio shall be greater than 18.25%; (ii)
with respect to the May 2002 Determination Date, the arithmetic average of the
Delinquency Ratios for such Determination Date and the preceding Determination
Date shall be greater than 18.25% and (iii) for each subsequent Determination
Date described below, the arithmetic average of the Delinquency Ratios for such
Determination Date and the two immediately preceding Determination Dates shall
be greater than the percentage set forth below opposite the period during which
such Determination Date occurs:

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------
                             Period                                        Maximum Percentage
                             ------                                        ------------------
-----------------------------------------------------------------------------------------------------
<S>                                                                        <C>
For each Determination Date prior to the January 2003                            18.25%
Determination Date
-----------------------------------------------------------------------------------------------------
For the January 2003 Determination Date through the June 2003                    21.46%
Determination Date
-----------------------------------------------------------------------------------------------------
For each Determination Date occurring after the June 2003                        26.96%
Determination Date
-----------------------------------------------------------------------------------------------------
</TABLE>

4

<PAGE>

--------------------------------------------------------------------------------
June 2003 Determination Date
--------------------------------------------------------------------------------

     "Delinquent Receivable" means a Receivable which (a) falls into any
      ---------------------
Delinquency Category other than the "Current" category (as described in Schedule
1 hereto) and (b) is not a Liquidated Receivable.

     "ERISA" means the Employee Retirement Income Security Act of 1974,
      -----
including, unless the context otherwise requires, the rules and regulations
thereunder, as amended from time to time.

     "Event of Default" has the meaning assigned to such term in the Indenture.
      ----------------

     "Financial Statements" means with respect to each of TFC and the Parent,
      --------------------
the audited consolidated balance sheets as of December 31, 2000 and the
statements of income, shareholder's equity and cash flows for the 12-month
period then ended and the notes thereto, and the unaudited consolidated balance
sheets as of September 30, 2001 and the consolidated statements of income and
cash flows for the fiscal quarter then ended.

     "Fort Knox ACH Letter" means the letter agreement by TFC, dated as of March
      --------------------
19, 2002, acknowledged and agreed to by Fort Knox National Company, Fort Knox
National Bank and the Trust Collateral Agent (with respect to TFC's ACH Obligor
payment program).

     "Fort Knox Allotment Letter" means the letter agreement by TFC, dated as of
      --------------------------
March 19, 2002, acknowledged and agreed to by Fort Knox National Company and
Fort Knox National Bank (with respect to TFC's military allotment Obligor
payment program).

     "Fort Knox Letters" means each of the Fort Knox TrueCheck Letter, the Fort
      -----------------
Knox ACH Letter and the Fort Knox Allotment Letter.

     "Fort Knox TrueCheck Letter" means the letter agreement by TFC, dated as of
      --------------------------
March 19, 2002, acknowledged and agreed to by Fort Knox National Company, Fort
Knox National Bank and the Trust Collateral Agent (with respect to TFC's
TrueCheck Obligor payment program).

     "GAAP" means generally accepted accounting principles in effect from time
      ----
to time in the United States of America.

     "GE Capital" means General Electric Capital Corporation, a New York
      ----------
corporation.

     "GE Capital Agreement" means the Amended and Restated Motor Vehicle
      --------------------
Installment Contract Loan and Security Agreement, dated as of March 31, 2001,
between GE Capital as lender and TFC as borrower.

     "Governmental Authority" means any nation or government, any state or other
      ----------------------
political subdivision thereof and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government
as in effect on the date hereof.

5

<PAGE>

     "Indemnification Agreement" means the Indemnification Agreement, dated as
      -------------------------
of March 19, 2002, among Radian, the Issuer, TFC and TFCRC V.

     "Indemnified Party" has the meaning specified in Section 2.07(a).
      -----------------                               ---------------

     "Indenture" has the meaning assigned to such term in the Preliminary
      ---------
Statements above.

     "Independent Accountants" has the meaning specified in Section 4.01(q).
      -----------------------                               ---------------

     "Independent Director" means a natural person who (i) is not a stockholder
      --------------------
(whether direct, indirect or beneficial), customer, advisor or supplier of TFCRC
V, the Parent or any of their respective Affiliates (other than by means of
indirect stock ownership of TFCRC V or the Parent or of any of their respective
Affiliates by any Person through a mutual fund or similar diversified investment
pool); (ii) is not a director, officer, employee or Affiliate of TFCRC V or the
Parent or any of their respective Affiliates; (iii) is not a Person related to
any Person referred to in clauses (i) and (ii); (iv) is not a trustee,
conservator or receiver for any of TFCRC V or the Parent or any of their
respective Affiliates; and (v) has (A) prior experience as an independent
director or independent manager for a corporation or limited liability company
whose charter documents require the unanimous written consent of all independent
directors or independent managers thereof before such corporation or limited
liability company could consent to the institution of bankruptcy or insolvency
proceedings against it or could file a petition seeking relief under any
applicable federal or state law relating to bankruptcy, and (B) at least three
years of employment experience with one or more entities that provide, in the
ordinary course of their respective businesses, advisory, management or
placement services to issuers of securitization or structured finance
instruments, agreements or securities.

     "Initial Cutoff Date" means December 31, 2001.
      -------------------

     "Initial Purchaser" means West LB in its capacity as "Initial Purchaser"
      -----------------
under the Note Purchase Agreement.

     "Initial Purchaser Information" means the information relating to the
      -----------------------------
Initial Purchaser in the Private Placement Memorandum.

     "Initial Spread Account Deposit Amount" means 4.00% of the Original Pool
      -------------------------------------
Balance.

     "Insurance Agreement" has the meaning assigned to such term in the preamble
      -------------------
above.

     "Insurance Agreement Event of Default" has the meaning specified in Section
      ------------------------------------
6.01.

     "Insurance Agreement Indenture Cross Default" means any Insurance Agreement
      -------------------------------------------
Event of Default specified in clauses (a), (c), (d), (e), (f), (k) and (l) of
Section 6.01.

     "Investment Company Act" means the Investment Company Act of 1940,
      ----------------------
including, unless the context otherwise requires, the rules and regulations
thereunder, as amended from time to time.

     "IRS" means the Internal Revenue Service.
      ---

6

<PAGE>

     "Issuer" has the meaning assigned to such term in the preamble above.
      ------

     "Lien" means, as applied to the property or assets (or the income or
      ----
profits therefrom) of any Person, in each case whether the same is consensual or
nonconsensual or arises by contract, operation of law, legal process or
otherwise: (a) any mortgage, lien, pledge, attachment, charge, lease,
conditional sale or other title retention agreement, or other security interest
or encumbrance of any kind or (b) any arrangement, express or implied, under
which such property or assets are transferred, sequestered or otherwise
identified for the purpose of subjecting or making available the same for the
payment of debt or performance of any other obligation in priority to the
payment of the general, unsecured creditors of such Person.

     "Material Adverse Change" means, (a) in respect of any Person, a material
      -----------------------
adverse change in (i) the business, financial condition, results of operations
or properties of such Person or any of its Subsidiaries or (ii) the ability of
such Person to perform its obligations under any of the Basic Documents to which
it is a party and (b) in respect of the Receivables, a material adverse change
in (i) the value or marketability of the Receivables, taken as a whole, or (ii)
the probability that amounts now or hereafter due in respect of a material
portion of the Receivables will be collected on a timely basis.

     "Multiemployer Plan" means a multiemployer plan (within the meaning of
      ------------------
Section 400 1(a)(3) of ERISA) in respect of which a Commonly Controlled Entity
makes contributions or has liability.

     "Net Losses" means, with respect to any Determination Date and the most
      ----------
recently concluded Monthly Period, the positive difference of (a) the sum of (i)
the aggregate amount of the Principal Balances as of the related Accounting Date
(plus accrued and unpaid interest through and including such Accounting Date, at
the applicable annual percentage rate) of all Receivables that became Liquidated
Receivables since the Initial Cutoff Date, plus (ii) the aggregate Cram Down
Losses as of the related Accounting Date that occurred since the Initial Cutoff
Date, over (b) the aggregate, cumulative Net Liquidation Proceeds received by
the Issuer as of the related Accounting Date since the Initial Cutoff Date.

     "Note Purchase Agreement" means the Note Purchase Agreement dated as of
      -----------------------
March 19, 2002, among TFC, TFCRC V, WestLB Panmure Securities Inc. and the
Initial Purchaser.

     "Notes" has the meaning assigned to such term in the Preliminary Statements
      -----
above.

     "Notice for Payment" has the meaning assigned to such term in the Policy.
      ------------------

     "Offering Document" means the Private Placement Memorandum and any
      -----------------
amendment or supplement thereto and any other offering document in respect of
the Notes that makes reference to the Policy.

     "Owner Trustee" has the meaning assigned to such term in the Preliminary
      -------------
Statements above.

     "Parent" means TFC Enterprises, Inc., a Delaware corporation.
      ------

7

<PAGE>

     "Parent Support Agreement" means the agreement among TFCRC V, TFC, Radian,
      ------------------------
the Trust Collateral Agent, and the Parent, dated as of March 19, 2002.

     "PBGC" means the Pension Benefit Guaranty Corporation or any successor
      ----
agency, corporation or instrumentality of the United States to which the duties
and powers of the Pension Benefit Guaranty Corporation are transferred.

     "Person" means an individual, a partnership, a corporation, a limited
      ------
liability company, a business trust, a joint stock company, a trust, an
unincorporated association, a joint venture, a Governmental Authority or other
entity of whatever nature.

     "Plan" means any pension plan (other than a Multiemployer Plan) covered by
      ----
Title IV of ERISA, which is maintained by a Commonly Controlled Entity or in
respect of which a Commonly Controlled Entity has liability.

     "P.O. Box Owner" has the meaning assigned to such term in the preamble
      --------------
above.

     "Policy" has the meaning assigned to such term in the Preliminary
      ------
Statements above.

     "Premium" means the premium payable by the Issuer pursuant to the Premium
      -------
Letter (including, without limitation, the Premium Supplement payable
thereunder).

     "Premium Letter" means the letter agreement among Radian, TFC and the
      --------------
Issuer, dated as of the Closing Date, setting forth the payment arrangement for
the premiums payable by the Issuer in respect of the Policy, and certain other
fees, related expenses and other related matters.

     "Premium Rate" has the meaning assigned to such term in the Premium Letter.
      ------------

     "Premium Supplement" has the meaning assigned to such term in the Premium
      ------------------
Letter.

     "Prime Rate" means the fluctuating rate of interest as published from time
      ----------
to time in the New York, New York edition of The Wall Street Journal, under the
                                             -----------------------
caption "Money Rates" as the "prime rate", the "Prime Rate" to change when and
as such published prime rate changes.

     "Private Placement Memorandum" means the Preliminary Private Placement
      ----------------------------
Memorandum dated February 28, 2002, relating to the offering of the Notes.

     "Provided Documents" means the Basic Documents and any documents,
      ------------------
agreements, instruments, schedules, certificates, statements, cash flow
schedules, number runs or other writings or data furnished to Radian (or any of
its reinsurers or potential reinsurers identified to TFC, including, without
limitation, Radian Reinsurance Inc.) by or on behalf of TFC, the Parent or TFCRC
V with respect to itself, its respective Subsidiaries, the Receivables or the
Transaction.

     "Purchaser" means TFCRC V, in its capacity as the "Purchaser" under the
      ---------
Purchase Agreement.

8

<PAGE>

     "Purchase Agreement" means the Purchase Agreement between TFC, as seller,
      ------------------
and TFCRC V, as purchaser, dated as of March 19, 2002.

     "Radian" has the meaning assigned to such term in the preamble above.
      ------

     "Radian Information" has the meaning given to such term under the
      ------------------
Indemnification Agreement.

     "Rating Agency" means S&P. If S&P fails to maintain a rating on the Notes,
      -------------
the Rating Agency shall be a nationally recognized statistical rating
organization or other comparable Person designated by the Seller and acceptable
to Radian.

     "Receivable" has the meaning provided in the Sale and Servicing Agreement.
      ----------

     "Reportable Event" means any of the events set forth in Section 4043(b) of
      ----------------
ERISA or the regulations thereunder.

     "Requisite Amount" means (a) on the Closing Date, the Initial Spread
      ----------------
Account Deposit Amount and (b) with respect to any Determination Date
thereafter, (i) if no Trigger Event or Insurance Agreement Event of Default
shall have occurred, the lesser of (A) the Initial Spread Account Deposit Amount
and (B) an amount equal to the Note Principal Balance, (ii) after the occurrence
of a Trigger Event, the lesser of (A) an amount equal to 6.0% of the Original
Pool Balance and (B) an amount equal to the Note Principal Balance; provided,
                                                                    --------
however, that, in the event such Trigger Event has been Deemed Cured, an amount
-------
equal to the amount calculated for such Determination Date pursuant to clause
(i) above, and (iii) notwithstanding anything in clauses (i) and (ii) above to
the contrary, after the occurrence of an Insurance Agreement Event of Default,
an amount equal to the Note Principal Balance.

     "Restrictions on Transferability" means, as applied to the property or
      -------------------------------
assets (or the income or profits therefrom) of any Person, in each case whether
the same is consensual or non-consensual or arises by contract, operation of
law, legal process or otherwise, any material condition to, or restriction on,
the ability of such Person or any transferee therefrom to sell, assign, transfer
or otherwise liquidate such property or assets in a commercially reasonable time
and manner or which would otherwise materially deprive such Person or any
transferee therefrom of the benefits of ownership of such property or assets.

     "Sale and Servicing Agreement" has the meaning assigned to such term in the
      ----------------------------
Preliminary Statements above.

     "Schedule of Receivables" means the schedule of receivables delivered to
      -----------------------
the Trust Collateral Agent by the Issuer in connection with the Sale and
Servicing Agreement.

     "Securities Act" means the Securities Act of 1933, including, unless the
      --------------
context otherwise requires, the rules and regulations thereunder, as amended
from time to time.

     "Securities Exchange Act" means the Securities Exchange Act of 1934,
      -----------------------
including, unless the context otherwise requires, the rules and regulations
thereunder, as amended from time to time.

9

<PAGE>

     "S&P" means Standard & Poor's Ratings Services, or its successor.
      ---

     "Servicer" has the meaning assigned to such term in the preamble above.
      --------

     "Standby Remittance and Processing Agreement" means the Amended and
      -------------------------------------------
Restated Standby Remittance and Processing Agreement among Radian, Financial
Security Assurance Inc., a financial guaranty insurance company incorporated in
the State of New York, TFC Receivables Corporation 2, a Delaware corporation,
TFC Receivables Corporation III, a Delaware corporation, Asset Guaranty
Insurance Company, TFCRC IV, TFCRC V, TFC, GE Capital, Wells Fargo, as Trust
Collateral Agent, P.O. Box Owner and trust collateral agent for certain other
trusts, dated as of March 19, 2002, as the same may be amended, restated,
supplemented or otherwise modified from time to time in accordance with its
terms and the terms hereof.

     "Stock Pledge Agreement" means the Stock Pledge and Collateral Agency
      ----------------------
Agreement made by TFC in favor of Wells Fargo Bank Minnesota, National
Association, as "Collateral Agent" on behalf of Radian, dated as of March 19,
2002, as the same may be amended, restated, supplemented or otherwise modified
from time to time in accordance with its terms and the terms hereof.

     "Subordinated Debt" means a debt obligation of TFC which is subordinated to
      -----------------
obligations owed to GE Capital as lender under the GE Capital Agreement,
pursuant to a subordination agreement which is in the form of Exhibit 16 to the
GE Capital Agreement or pursuant to some other agreement approved by GE Capital
and the Insurer.

     "Subsidiary" means, with respect to any Person, any corporation of which a
      ----------
majority of the outstanding shares of capital stock having ordinary voting power
for the election of directors is at the time owned by such Person directly or
through one or more Subsidiaries.

     "Successor Servicer" has the meaning assigned to such term in the preamble
      ------------------
above.

     "Tangible Net Worth" means, with respect to TFC, the excess of (a) the
      ------------------
tangible assets of TFC and all of its consolidated subsidiaries calculated in
accordance with GAAP, as reduced by adequate reserves in each case where
reserves are proper, over (b) all Indebtedness (excluding Subordinated Debt) of
TFC and all of its consolidated subsidiaries; provided, however, that (i) in no
                                              --------  -------
event shall there be included in the above calculation any intangible assets
such as patents, trademarks, trade names, copyrights, licenses, goodwill,
organizational costs, advances or loans to, or receivables from, directors,
shareholders, officers, employees or subsidiaries, amounts relating to covenants
not to compete, pension assets or treasury stock or any securities of TFC or of
any Affiliate of TFC, or any other securities unless the same are readily
marketable in the United States of America or entitled to be used as a credit
against federal income tax liabilities, (ii) securities included as such
intangible assets shall be taken into account at their current market price or
cost, whichever is lower, and (iii) any write-up in the book value of any assets
shall not be taken into account.

     "TFC" has the meaning assigned to such term in the preamble above.
      ---

10

<PAGE>

     "Transaction" means the transactions contemplated by the Transaction
      -----------
Documents, including the transactions described in the Offering Document.

     "Transaction Documents" has the meaning assigned to such term in Section
      ---------------------
2.02(a).

     "Trigger Event" means the occurrence of either of the following events, the
      -------------
occurrence of which shall not have been waived in writing by Radian: (a) a
Delinquency Test Failure or (b) a Cumulative Net Loss Test Failure.

     "Trust Agreement" has the meaning assigned to such term in the Preliminary
      ---------------
Statements above.

     "Trust Collateral Agent" has the meaning assigned to such term in the
      ----------------------
preamble above.

     "Trustee" has the meaning assigned to such term in the preamble above.
      -------

     "Trust Property" has the meaning assigned to such term in the Preliminary
      --------------
Statements above.

     "West LB" means Westdeutsche Landesbank Gironzentrale, London Branch.
      -------

     Section 1.02. Generic Terms. All words used herein shall be construed to be
                   -------------
of such gender or number as the circumstances require. The words "herein,"
"hereby," "hereof," "hereto," "hereinbefore" and "hereinafter," and words of
similar import, refer to this Insurance Agreement in its entirety and not to any
particular paragraph, clause or other subdivision, unless otherwise specified.

     Section 1.03. Computation of Time Periods. In this Insurance Agreement, the
                   ---------------------------
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
means "to and including". Periods of days referred to in this Insurance
Agreement shall be counted in calendar days unless Business Days are expressly
prescribed and periods of months and years shall be counted in calendar months
and calendar years unless otherwise specified.

                                   ARTICLE II

                          THE POLICY AND REIMBURSEMENT

     Section 2.01. Policy. Radian agrees, subject to the satisfaction or waiver
                   ------
of the conditions hereinafter set forth on or prior to the Closing Date, to
issue the Policy on the Closing Date.

     Section 2.02. Conditions Precedent. The obligation of Radian to issue the
                   --------------------
Policy is subject to the satisfaction of the following conditions on or prior to
the Closing Date:

          (a) The following documents shall have been duly authorized, executed
     and delivered by each of the parties thereto (other than Radian) and shall
     be in full force and effect and in form and substance satisfactory to
     Radian, in the exercise of Radian's sole

11

<PAGE>

     discretion, and an executed counterpart of each thereof shall have been
     delivered to Radian:

          (i)    this Insurance Agreement;

          (ii)   the Indenture;

          (iii)  the Sale and Servicing Agreement, including the Schedule of
                 Receivables;

          (iv)   the Purchase Agreement, including the Schedule of Receivables;

          (v)    the Note Purchase Agreement;

          (vi)   the Indemnification Agreement;

          (vii)  the Standby Remittance and Processing Agreement;

          (viii) the Trust Agreement;

          (ix)   the Parent Support Agreement;

          (x)    the Securities Account Control Agreement;

          (xi)   the Premium Letter;

          (xii)  the Stock Pledge Agreement; and

          (xiii) the Fort Knox Letters.

(items (i) through (xiii) being, collectively, the "Transaction Documents").
                                                    ---------------------

          (b)    Radian shall have received:

          (i)    copies certified by the Secretary or an Assistant Secretary of
                 each of the Parent, the Issuer, TFC and TFCRC V, dated the
                 Closing Date, of its certificate of incorporation and by-laws
                 and the resolutions of its Board of Directors, as the case may
                 be, or a duly authorized committee thereof authorizing its
                 execution and delivery of the Basic Documents and of all
                 documents evidencing other corporate or company action and
                 governmental approvals, if any, that are necessary for the
                 consummation of the transactions contemplated in such
                 documents;

          (ii)   a certificate, dated the Closing Date, of the Secretary or an
                 Assistant Secretary of each of the Parent, the Issuer, TFCRC V,
                 the Trustee, the Owner Trustee, the Backup Servicer and TFC
                 certifying the names and true signatures of its officers
                 authorized to sign such Basic Documents to which it is a party;

12

<PAGE>

          (iii)  a certificate, dated the Closing Date, of a Chief Financial
                 Officer, a Treasurer, an Assistant Treasurer or Vice President
                 of each of the Issuer, TFCRC V and TFC certifying to the effect
                 of the representation and warranty set forth in Section 3.01(e)
                                                                 ---------------
                 hereof;

          (iv)   each of the opinions, letters and certificates described in the
                 closing checklist attached hereto as Exhibit B (other than any
                                                      ---------
                 such opinion, letter or certificate required to be issued or
                 delivered by Radian or an agent or employee thereof), in each
                 case (1) dated the Closing Date, (2) in full force and effect
                 at the time of delivery thereof, (3) in form and substance
                 satisfactory to Radian in the exercise of its sole discretion,
                 and (4) covering such matters as Radian shall require in the
                 exercise of its sole discretion;

          (v)    evidence that one or more UCC financing statements covering the
                 security interest of the Trust Collateral Agent created by or
                 pursuant to the Indenture in the Collateral and the other
                 property and rights which the Trust Collateral Agent is granted
                 in the Indenture and the proceeds thereof has been (A) executed
                 by the Issuer in favor of the Trust Collateral Agent and (B)
                 duly filed in such place or places which, in the opinion of
                 counsel for the Issuer, TFC and Radian, are necessary or
                 desirable to perfect such interest;

          (vi)   evidence that one or more UCC financing statements covering the
                 interest of TFCRC V in the Receivables and the Other Conveyed
                 Property (as defined in the Purchase Agreement) and other
                 property and rights which TFCRC V is granted in the Purchase
                 Agreement has been (A) executed by TFC in favor of TFCRC V and
                 assigned to the Trust Collateral Agent and (B) duly filed in
                 such place or places which, in the opinion of counsel for the
                 Issuer, TFC and Radian, are necessary or desirable to perfect
                 such interest;

          (vii)  evidence that one or more UCC financing statements covering the
                 interest of the Issuer in the Trust Property and other property
                 and rights which the Issuer is granted in the Sale and
                 Servicing Agreement has been (A) executed by TFCRC V in favor
                 of the Issuer and assigned to the Trust Collateral Agent and
                 (B) duly filed in such place or places which, in the opinion of
                 counsel for the Issuer, TFC and Radian, are necessary or
                 desirable to perfect such interest;

          (viii) evidence that each of the Collection Account, the Spread
                 Account, and the Note Payment Account have been established in
                 accordance with the terms and conditions of the Indenture and
                 the Sale and Servicing Agreement;

13

<PAGE>

          (ix)   certified copies of documents, certificates, instruments,
                 approvals or executed copies thereof that relate to the
                 transactions as contemplated by the Basic Documents as Radian
                 may reasonably request;

          (x)    a specimen Note;

          (xi)   evidence that one or more UCC financing statements covering the
                 security interest of Radian created by or pursuant to the Stock
                 Pledge Agreement and the other property and rights which Radian
                 is granted in the Stock Pledge Agreement and the proceeds
                 thereof has been (A) executed by TFC in favor of Radian and (B)
                 duly filed in such place or places which, in the opinion of
                 counsel for TFC and Radian, are necessary or desirable to
                 perfect such interest; and

          (xii)  a statement, in form and substance satisfactory to Radian,
                 reviewing the results of the Independent Accountants'
                 performance of certain agreed upon procedures with respect to
                 TFC, its reporting and recordkeeping, and the characteristics
                 of the Receivables as of the Cut-Off Date, by way of
                 independent verification of (x) information provided by TFC for
                 inclusion in the Offering Document and (y) certain cash flow
                 models supplied to Radian by the Initial Purchaser in advance
                 of the Closing Date (the full costs of which statement shall
                 have been paid on or before the Closing Date by or on behalf of
                 TFC).

          (c)    (i) No statute, rule, regulation or order shall have been
     enacted, entered or deemed applicable by any Governmental Authority or
     other governmental or administrative agency or court which would make the
     transactions contemplated by the Transaction Documents illegal or otherwise
     prevent the consummation thereof, (ii) no material omission or change of
     fact shall have occurred or come to the attention of any of TFC, TFCRC V,
     the Issuer, the Parent, the Trustee, the Initial Purchaser or Radian that
     would cause information or documents heretofore supplied to Radian to be
     untrue or misleading, (iii) no other material change or omission shall have
     occurred or come to the attention of any of TFC, TFCRC V, the Issuer, the
     Parent, the Trustee, the Initial Purchaser or Radian that would entitle the
     Initial Purchaser to decline to purchase the Notes, and (iv) no Material
     Adverse Change shall have occurred in the security for the Notes since the
     date of the Purchase Agreement.

          (d)    No suit, action or other proceeding, investigation, or
     injunction or final judgment relating thereto, shall be threatened or
     pending before any court or governmental agency in which it is sought to
     restrain or prohibit or obtain damages or other relief in connection with
     the consummation of the Transactions, and no investigation that might
     result in any such suit, action or proceeding shall be pending or
     threatened.

          (e)    Radian shall have received an executed copy of all legal
     opinions, certificates, accountant's reports and other documents required
     to be furnished by the Issuer, the Servicer, the Backup Servicer, the
     Trustee, TFCRC V, the Parent and TFC

14

<PAGE>

     pursuant to any of the Transaction Documents or pursuant to the
     requirements of the Rating Agency (if any). Such documents shall be in form
     and substance satisfactory to Radian in the exercise of its sole discretion
     and each such legal opinion or certificate shall be addressed to Radian, or
     accompanied by appropriate reliance letters to Radian.

          (f)  There shall be on deposit in the Spread Account a sum of not less
     than $2,582,087.92 in immediately available funds.

          (g)  Simultaneously with the issuance of the Policy, the Notes shall
     have been duly executed and authenticated and delivered to the relevant
     Noteholders pursuant to the Indenture.

          (h)  All fees and expenses payable hereunder and pursuant to the
     Premium Letter to Radian on or prior to the Closing Date shall have been
     paid in full by TFC or the Issuer.

          (i)  Radian shall have received confirmation that the risk insured by
     the Policy constitutes at least "BBB-" by S&P, and that the Notes, when
     issued, will be rated "AA" by S&P.

          (j)  No Trigger Event, Event of Default, Servicer Termination Event,
     Default or Insurance Agreement Event of Default shall have occurred or be
     in effect.

     Section 2.03. Premium Letter. Radian shall be entitled to receive the
                   --------------
Premium payable under the Premium Letter on each Payment Date, and the timely
payment or other performance of all other obligations set forth in the Premium
Letter, in each case in accordance with the terms and conditions of the Premium
Letter on any Payment Date and in accordance with the provisions of Section 5.7
                                                                    -----------
of the Sale and Servicing Agreement. The Premium shall be nonrefundable without
regard to whether Radian makes any payment under the Policy or to any other
circumstances relating to the Notes, or any provision being made for payment of
the Notes prior to maturity.

     Section 2.04. Reimbursement Obligations.
                   -------------------------

          (a)  In consideration of the issuance of the Policy by Radian, Radian
     shall be entitled to reimbursement by the Issuer from the Collateral,
     pursuant to the terms hereof, the Indenture and the Sale and Servicing
     Agreement, for any payment made under the Policy, which reimbursement shall
     be due and payable to Radian on the date that any amount is to be paid
     pursuant to a Notice for Payment. Such reimbursement shall be made in
     accordance with the terms hereof and of the Sale and Servicing Agreement
     and the Indenture, in an amount equal to the sum of all amounts paid or
     previously paid that remain unpaid under the Policy, together with interest
     on any and all amounts remaining unpaid (to the extent permitted by law, if
     in respect of any unpaid amounts representing interest) from the date such
     amounts became due until paid in full (after as well as before judgment),
     at a rate of interest equal to the Prime Rate from time to time in effect
     plus 2.0%.

15

<PAGE>

          (b)  Anything in Section 2.04(a) to the contrary notwithstanding,
                           ---------------
     Radian shall be entitled to reimbursement (to the extent such reimbursement
     and related interest has not previously been paid by payment to Radian from
     the Collateral) from (i) the Issuer, for payments made under the Policy
     arising as a result of the Issuer's failure to make any payment or deposit
     with respect to a Receivable required to be made pursuant to Section 3.2 of
                                                                  -----------
     the Sale and Servicing Agreement, together with interest on any and all
     such amounts remaining unpaid (to the extent permitted by law, if in
     respect of any unpaid amounts representing interest) from the date such
     amounts became due until paid in full (after as well as before judgment),
     at a rate of interest equal to the Prime Rate from time to time in effect
     plus 2.0%, and (ii) the Servicer, for payments made under the Policy
     arising as a result of the Servicer's failure to make any deposit,
     including without limitation, a deposit required to be made pursuant to
     Section 4.7 of the Sale and Servicing Agreement, together with interest on
     -----------
     any and all such amounts remaining unpaid (to the extent permitted by law,
     if in respect of any unpaid amounts representing interest) from the date
     such amounts became due until paid in full (after as well as before
     judgment), at a rate of interest equal to the Prime Rate from time to time
     in effect plus 2.0% (provided, however, that a successor to the Servicer
                          --------  -------
     shall under no circumstances be liable to Radian for the failure of its
     predecessor Servicer to so make a deposit).

     Section 2.05. Assignment and Other Rights upon Payments under the Policy.
                   ----------------------------------------------------------

          (a)  In consideration of the issuance of the Policy by Radian, in the
     case of any payment made by or on behalf of Radian under the Policy, in
     addition to and not by way of limitation of, any of the rights and remedies
     of Radian hereunder, under the Policy, the Sale and Servicing Agreement or
     the Indenture with respect to such payment, each of the Issuer, TFCRC V and
     TFC hereby acknowledges and consents to the assignment by the Trustee, on
     behalf of the Noteholders, to Radian in accordance with the terms of the
     relevant Notice for Payment:

          (i)  the rights of the Noteholders with respect to the Notes and the
               Collateral, to the extent of any such payment under the Policy;
               and

          (ii) the rights of the Trustee and each Noteholder in the conduct of
               any Insolvency Proceeding relating to any Preference Event (as
               such terms are defined in the Policy), including, without
               limitation, all rights of any party to an adversary proceeding or
               action with respect to any court order issued in connection with
               any such Insolvency Proceeding.

          (b)  The rights and remedies of Radian described in clause (a) above
                                                              ----------
     are in addition to, and not in limitation of, rights of subrogation and
     other rights and remedies otherwise available to Radian in respect of
     payments under the Policy. The Trustee shall take such action and deliver
     such instruments as may be reasonably requested or required by Radian to
     effectuate the purpose or provisions of this Section 2.05.
                                                  ------------

     Section 2.06. Subrogation;  Further Assurances.
                   --------------------------------

16

<PAGE>

     (a) The interests, rights and remedies of Radian described in this Article
                                                                        -------
         II are in addition to, and not in lieu of, Radian's equitable rights of
         --
         subrogation, and Radian reserves all of such rights. Each of the
         Issuer, TFCRC V and TFC agrees to take, or cause to be taken, all
         actions deemed desirable by Radian to preserve, enforce, perfect or
         maintain the perfection in Radian's favor of such interests, rights and
         remedies and such equitable rights of subrogation.

     (b) For the avoidance of doubt, the parties hereto acknowledge and agree
         that the receipt of any payment under the Policy shall not constitute
         (x) a reduction of any unpaid amounts of principal or interest of Notes
         outstanding under the Indenture or (y) otherwise discharge any other
         obligations whatsoever of the Issuer under the Indenture.

     (c) Each of the Issuer, TFCRC V and TFC agrees to promptly and duly take,
         execute, acknowledge and deliver such further acts, documents,
         instruments and assurances as Radian may from time to time reasonably
         request to more effectively evidence any rights to assignment or
         subrogation under this Article II, and to protect and perfect all of
                                ----------
         Radian's other rights as against the Issuer, TFCRC V and TFC, as the
         case may be.

     Section 2.07. Indemnification by TFC; Conduct of Actions or Proceedings;
                   ----------------------------------------------------------
                   Contribution.
                   ------------

          (a)  In addition to any and all rights of reimbursement,
     indemnification, subrogation and any other rights pursuant hereto or under
     law or in equity, TFC agrees to pay, protect, indemnify and save harmless,
     Radian and its officers, directors, shareholders, employees, agents,
     assignees, participants, reinsurers and each Person, if any, who controls
     Radian within the meaning of either Section 15 of the Securities Act or
     Section 20 of the Securities Exchange Act (individually, an "Indemnified
                                                                  -----------
     Party" and, collectively, the "Indemnified Parties"), from and against any
     -----                          -------------------
     and all claims, losses, liabilities (including penalties), actions, suits,
     judgments, demands, damages, costs or expenses (including, without
     limitation, reasonable fees and expenses of attorneys, consultants and
     auditors and reasonable costs of investigations) of any nature arising out
     of or relating to the transactions contemplated by the Transaction
     Documents by reason of:

          (i)  the negligence, bad faith, willful misconduct, misfeasance,
               malfeasance or theft committed by any director, officer, employee
               or agent of the Issuer, TFC, the Servicer, the Parent, TFCRC V,
               the Seller, as the case may be;

          (ii) the breach by the Issuer, TFC, the Servicer, the Parent, TFCRC V,
               or the Seller of any representation, warranty or covenant under
               any of the Transaction Documents, or the occurrence, in respect
               of the Issuer, TFC, the Servicer, the Parent, TFCRC V, or the
               Seller, under any of the Transaction Documents of any "default,"
               "event of default" or similar event (howsoever designated), or
               any event which, with the giving of notice or the lapse of time
               or both, would constitute any "event of default" or similar event
               (howsoever designated); provided, however, it is
                                       --------  -------

17

<PAGE>

                understood and agreed that the sole remedy with respect to a
                breach of representations and warranties pursuant to Section 3.1
                                                                     -----------
                of the Sale and Servicing Agreement shall be the repurchase of
                Receivables pursuant to Section 3.2 of the Sale and Servicing
                                        -----------
                Agreement, subject to the conditions contained therein, or to
                enforce the obligation of TFC to TFCRC V to repurchase such
                Receivables pursuant to the Purchase Agreement; provided,
                                                                --------
                further, it is understood and agreed that the sole remedy with
                -------
                respect to the breach of any of the covenants set forth in
                Sections 4.5(a) or 4.6(a) of the Sale and Servicing Agreement
                ---------------    ------
                shall be the repurchase of Receivables pursuant to Section 4.7
                                                                   -----------
                of the Sale and Servicing Agreement, subject to the conditions
                contained therein; provided further, however, that TFC shall
                                   -------- -------  -------
                indemnify the Indemnified Parties against all costs, expenses,
                losses, damages, claims and liabilities, including reasonable
                fees and expenses of counsel, which may be asserted against or
                incurred by it as a result of third party claims arising out of
                the events or facts giving rise to any such breach of such
                covenant; or

          (iii) any untrue statement or alleged untrue statement of a material
                fact contained in the Private Placement Memorandum, or in any
                amendment or supplement to the Private Placement Memorandum, or
                the omission or alleged omission to state therein a material
                fact required to be stated therein or necessary to make the
                statements therein not misleading; provided, however, that TFC
                                                   --------  -------
                will not be liable as a result of this clause (iii) to the
                                                       ------ -----
                extent that any such loss, claim, damage or liability arises out
                of or is based upon an untrue statement or alleged untrue
                statement in or omission or alleged omission from any of such
                documents in reliance upon the representation made by Radian
                with regard to the Radian Information.

          (b)   If any action or proceeding (including any governmental
     investigation) shall be brought or asserted against the Indemnified Parties
     in respect of which indemnity may be sought from TFC hereunder, Radian
     shall promptly notify TFC in writing, and TFC shall assume the defense
     thereof, including the employment of counsel satisfactory to Radian and the
     payment of all reasonable expenses. An Indemnified Party (including Radian)
     shall have the right to employ separate counsel in any such action and to
     participate in the defense thereof at the expense of the Indemnified Party;
     provided, however, that the fees and expenses of such separate counsel
     --------  -------
     shall be at the expense of TFC if (i) TFC has agreed to pay such fees and
     expenses, (ii) TFC shall have failed to assume the defense of such action
     or proceeding and employ counsel satisfactory to Radian in any such action
     or proceeding or (iii) the named parties to any such action or proceeding
     (including any impleaded parties) include both the Indemnified Party and
     TFC, and the Indemnified Party shall have been advised by counsel that (A)
     there may be one or more legal defenses available to it which are different
     from or additional to those available to TFC and (B) the representation of
     TFC and the Indemnified Party by the same counsel would be inappropriate or
     contrary to prudent practice (in which case, if the Indemnified Party
     notifies TFC in writing that it elects to employ separate counsel at the
     expense of TFC, TFC shall not have the right to assume the defense of such
     action or

18

<PAGE>

     proceeding on behalf of such Indemnified Party, it being understood,
     however, that TFC shall not, in connection with any one such action or
     proceeding or separate but substantially similar or related actions or
     proceedings in the same jurisdiction arising out of the same general
     allegations or circumstances, be liable for the reasonable fees and
     expenses of more than one separate firm of attorneys at any time for the
     Indemnified Parties, which firm shall be designated in writing by Radian).
     TFC shall not be liable for any settlement of any such action or proceeding
     effected without its written consent to the extent that any such settlement
     shall be prejudicial to TFC, but, if settled with its written consent, or
     if there be a final judgment for the plaintiff in any such action or
     proceeding with respect to which TFC shall have received notice in
     accordance with this subsection (b), TFC agrees to indemnify and hold the
                          ---------- ---
     Indemnified Parties harmless from and against any loss or liability by
     reason of such settlement or judgment.

          (c)  To provide for just and equitable contribution, if the
     indemnification provided by TFC is determined to be unavailable for any
     Indemnified Party (other than due to application of this Section 2.07), TFC
                                                              ------------
     shall contribute to the losses incurred by the Indemnified Party on the
     basis of the relative fault of TFC, on the one hand, and the Indemnified
     Party, on the other hand.

     Section 2.08. Indemnification by TFCRC V; Conduct of Actions or
                   -------------------------------------------------
Proceedings; Contribution.
-------------------------

          (a)  In addition to any and all rights of reimbursement,
     indemnification, subrogation and any other rights pursuant hereto or under
     law or in equity, TFCRC V agrees to pay, protect, indemnify and save
     harmless the Indemnified Parties, from and against any and all claims,
     losses, liabilities (including penalties), actions, suits, judgments,
     demands, damages, costs or expenses (including, without limitation,
     reasonable fees and expenses of attorneys, consultants and auditors and
     reasonable costs of investigations) of any nature arising out of or
     relating to the transactions contemplated by the Transaction Documents by
     reason of:

          (i)  the negligence, bad faith, willful misconduct, misfeasance,
               malfeasance or theft committed by any director, officer, employee
               or agent of TFCRC V;

          (ii) the breach by TFCRC V of any representation, warranty or covenant
               under any of the Transaction Documents, or the occurrence, in
               respect of TFCRC V, under any of the Transaction Documents of any
               "default," "event of default" or similar event (howsoever
               designated), or any event which, with the giving of notice or the
               lapse of time or both, would constitute any "event of default" or
               similar event (howsoever designated); provided, however, it is
                                                     --------  -------
               understood and agreed that the sole remedy with respect to a
               breach of representations and warranties pursuant to Section 3.1
                                                                    -----------
               of the Sale and Servicing Agreement shall be the repurchase of
               Receivables pursuant to Section 3.2 of the Sale and Servicing
                                       -----------
               Agreement, subject to the conditions contained therein, or to
               enforce the obligation of TFC to repurchase such Receivables
               pursuant to the Purchase Agreement; or

19

<PAGE>

          (iii) any untrue statement or alleged untrue statement of a material
                fact contained in the Private Placement Memorandum, or in any
                amendment or supplement to the Private Placement Memorandum, or
                the omission or alleged omission to state therein a material
                fact required to be stated therein or necessary to make the
                statements therein not misleading; provided, however, that TFCRC
                                                   --------  -------
                V will not be liable as a result of this clause (iii) to the
                extent that any such loss, claim, damage or liability arises out
                of or is based upon an untrue statement or alleged untrue
                statement in or omission or alleged omission from any of such
                documents in reliance upon the representation made by Radian
                with regard to the Radian Information.

          (b)   If any action or Proceeding (including any governmental
     investigation) shall be brought or asserted against the Indemnified Parties
     in respect of which indemnity may be sought from TFCRC V hereunder, Radian
     shall promptly notify TFCRC V in writing, and TFCRC V shall assume the
     defense thereof, including the employment of counsel satisfactory to Radian
     and the payment of all reasonable expenses. An Indemnified Party shall have
     the right to employ separate counsel in any such action and to participate
     in the defense thereof at the expense of the Indemnified Party; provided,
                                                                     --------
     however, that the fees and expenses of such separate counsel shall be at
     -------
     the expense of TFCRC V if (i) TFCRC V has agreed to pay such fees and
     expenses, (ii) TFCRC V shall have failed to assume the defense of such
     action or proceeding and employ counsel satisfactory to Radian in any such
     action or proceeding or (iii) the named parties to any such action or
     proceeding (including any impleaded parties) include both the Indemnified
     Party and TFCRC V, and the Indemnified Party shall have been advised by
     counsel that (A) there may be one or more legal defenses available to it
     which are different from or additional to those available to TFCRC V and
     (B) the representation of TFCRC V and the Indemnified Party by the same
     counsel would be inappropriate or contrary to prudent practice (in which
     case, if the Indemnified Party notifies TFCRC V in writing that it elects
     to employ separate counsel at the expense of TFCRC V, TFCRC V shall not
     have the right to assume the defense of such action or proceeding on behalf
     of such Indemnified Party, it being understood, however, that TFCRC V shall
     not, in connection with any one such action or proceeding or separate but
     substantially similar or related actions or proceedings in the same
     jurisdiction arising out of the same general allegations or circumstances,
     be liable for the reasonable fees and expenses of more than one separate
     firm of attorneys at any time for the Indemnified Parties, which firm shall
     be designated in writing by Radian). TFCRC V shall not be liable for any
     settlement of any such action or proceeding effected without its written
     consent to the extent that any such settlement shall be prejudicial to
     TFCRC V, but, if settled with its written consent, or if there be a final
     judgment for the plaintiff in any such action or proceeding with respect to
     which TFCRC V shall have received notice in accordance with this subsection
                                                                      ----------
     (b), TFCRC V agrees to indemnify and hold the Indemnified Parties harmless
     ---
     from and against any loss or liability by reason of such settlement or
     judgment.

          (c)   To provide for just and equitable contribution, if the
     indemnification provided by TFCRC V is determined to be unavailable for any
     Indemnified Party (other than due to application of this Section), TFCRC V
     shall contribute to the losses incurred

20

<PAGE>

     by the Indemnified Party on the basis of the relative fault of TFCRC V, on
     the one hand, and the Indemnified Party, on the other hand.

     Section 2.09. Other Payment Obligations.
                   -------------------------

     (a)  Legal Fees. On the Date of Issuance, TFC agrees to pay to Radian all
          ----------
          reasonable out-of-pocket legal fees and disbursements incurred by
          Radian in connection with the negotiation, preparation, execution and
          delivery of the Private Placement Memorandum, the Transaction
          Documents and all other documents, instruments and agreements
          delivered with respect thereto.

     (b)  Rating Agency Fees. The initial fees of S&P with respect to the Notes
          ------------------
          and the transactions contemplated hereby shall be paid by TFC in full
          on the Date of Issuance. Each of TFC and the Issuer agrees to pay all
          periodic and subsequent fees of S&P with respect to, and directly
          allocable to, the Notes and the transactions contemplated hereby and
          thereby. The fees for any other rating agency shall be paid by the
          party requesting such other agency's rating, unless such other agency
          is a substitute for S&P in the event that S&P is no longer rating the
          Notes, in which case the cost for such substitute agency shall be paid
          by each of TFC and the Issuer.

     (c)  Accountants' and Auditors' Fees. In the event that Radian's auditors
          -------------------------------
          are required to provide information or any consent in connection with
          the Offering Document prepared on or prior to the Date of Issuance,
          any reasonable fees therefor shall be paid by TFC. Each of TFC and the
          Issuer shall pay on demand any additional fees of Radian's auditors
          payable in respect of any Offering Document, the Notes or the
          transactions contemplated hereby and thereby that are incurred after
          the Date of Issuance.

     (d)  Enforcement and Modifications. Each of TFC and the Issuer agrees to
          -----------------------------
          pay to Radian any and all out-of-pocket charges, fees, costs and
          expenses (including, without limitation, reasonable fees and expenses
          of legal counsel and accountants) reasonably incurred by Radian in
          connection with (i) in the event of payments under the Policy, any
          accounts established to facilitate payments under the Policy, to the
          extent Radian has not been immediately reimbursed on the date that any
          amount is paid by Radian under the Policy, or other administrative
          expenses relating to such payments under the Policy, (ii) the
          enforcement, defense or preservation of any rights of Radian,
          including but not limited to defending, monitoring or participating in
          any litigation or proceeding (including any insolvency or bankruptcy
          proceeding commenced by or against the Issuer, the Servicer, the
          Parent, TFCRC V or TFC, as the case may be) relating to any of the
          Transaction Documents, any party to any of the Transaction Documents
          or to the Transaction, (iii) any amendment, modification, waiver or
          any similar action, with respect to, or related to, any Transaction
          Document or the Transaction, whether or not executed or completed
          and/or (iv) any review or investigation made by Radian in those
          circumstances where the approval or consent of Radian is sought under
          any of the Transaction Documents.

21

<PAGE>

     (e)  Third Party Advances. Each of TFC and the Issuer agrees to pay to
          --------------------
          Radian the amount of any and all payments made by Radian on behalf of,
          or advanced to, TFC, in its capacity as Servicer, or to the Trustee,
          including, without limitation, any amounts payable by TFC in its
          capacity as Servicer, or by the Trustee pursuant to the Notes or any
          other Transaction Documents, and any payments made by Radian as, or in
          lieu of, any servicing, management, trustee, custodial or
          administrative fees payable, in the sole discretion of Radian to third
          parties in connection with the Transaction.

     (f)  No Obligation to Seek Reimbursement. All amounts payable under this
          -----------------------------------
          Section 2.09 are to be immediately due and payable without demand, in
          full, without any requirement on the part of Radian or any other
          Person to seek reimbursement of such amounts from any other source of
          reimbursement or indemnity, or to allocate such amount to any other
          transaction that may have benefited from the expenditure of such
          amounts.

     Section 2.10. Payments, Generally.
                   -------------------

     (a)  Interest. Interest shall accrue and be payable in respect of any
          --------
          amounts not paid when due under this Insurance Agreement, from the
          date such amounts became due until paid in full (after as well as
          before judgment), at a rate of interest equal to the Prime Rate from
          time to time in effect plus 2.0%. All amounts in respect of interest
          payable under this Insurance Agreement shall be calculated on the
          basis of a 360-day year for the actual number of days elapsed, and
          with respect to all amounts payable pursuant to Sections 2.03 or
                                                          -------------
          2.04(a) hereof shall be payable in accordance with the Indenture and
          -------
          the Sale and Servicing Agreement, or to the extent payable pursuant to
          any other Section herein, payable on demand.

     (b)  Certain Obligations Not Recourse to TFC. Notwithstanding any provision
          ---------------------------------------
          of this Article II to the contrary, the payment obligations provided
          in Section 2.09(d)(ii) and 2.09(e) (but only to the extent of advances
             -------------------     -------
          to the Trustee in respect of payments on the Notes), in each case, to
          the extent that such payment obligations do not arise from any failure
          or default in performance by the Parent, TFC, or TFCRC V of any of its
          obligations under the Transaction Documents, and any interest on the
          foregoing in accordance with Section 2.10(a), shall not be recourse to
                                       ---------------
          TFC, but shall be payable in the manner and in accordance with
          priorities provided in the Sale and Servicing Agreement. For the
          avoidance of doubt, all obligations of TFC hereunder shall constitute
          amounts owing under this Insurance Agreement and shall be payable in
          the manner and in accordance with the priorities provided in the Sale
          and Servicing Agreement with respect to such amounts.

                                  ARTICLE III

                         REPRESENTATIONS AND WARRANTIES

22

<PAGE>

     Section 3.02. Representations and Warranties with respect to TFC and TFCRC
                   ------------------------------------------------------------
V. Each of TFC and TFCRC V represents and warrants, as of the Closing Date, with
-
respect to TFC and TFCRC V (and to the extent specifically set forth below, with
respect to the Issuer), that:

          (a)  Due Organization and Qualification. (i) TFC is a corporation,
               ----------------------------------
     duly organized, validly existing and in good standing under the laws of
     Virginia. TFC is not organized under the laws of any other jurisdiction.
     TFC is duly qualified to do business, is in good standing and has obtained
     all necessary licenses, permits, charters, registrations and approvals
     (together, "approvals") necessary for the conduct of its business as
                 ---------
     currently conducted and as described in the Offering Document and the
     performance of its obligations under the Transaction Documents, in each
     jurisdiction in which the failure to be so qualified or to obtain such
     approvals might result in a Material Adverse Change. (ii) TFCRC V is a
     corporation duly organized, validly existing and in good standing under the
     laws of Delaware. TFCRC V is not organized under the laws of any other
     jurisdiction. TFCRC V is duly qualified to do business, is in good standing
     and has obtained all necessary approvals necessary for the conduct of its
     business as currently conducted and as described in the Offering Document
     and the performance of its obligations under the Transaction Documents, in
     each jurisdiction in which the failure to be so qualified or to obtain such
     approvals might result in a Material Adverse Change.

          (b)  Power and Authority. Each of TFC and TFCRC V has all necessary
               -------------------
     corporate power and authority to conduct its business as currently
     conducted and as described in the Offering Document, to execute, deliver
     and perform its obligations under the Transaction Documents and has full
     power and authority to sell and assign the Receivables and related property
     as contemplated by the Transaction Documents and to consummate the
     Transaction.

          (c)  Due Authorization. The execution, delivery and performance of the
               -----------------
     Transaction Documents by each of TFC and TFCRC V has been duly authorized
     by all necessary corporate action and does not require any additional
     approvals or consents or other action by, or any notice to, or filing with,
     any Person, including, without limitation, any Governmental Authority or
     any of its stockholders.

          (d)  Noncontravention. None of the execution and delivery of the
               ----------------
     Transaction Documents by TFC or TFCRC V, the consummation of the
     transactions contemplated thereby nor the satisfaction of the terms and
     conditions of the Transaction Documents,

          (i)  conflicts with or results in any material breach or violation of
               any provision of the Articles of Incorporation of TFC or
               Certificate of Incorporation of TFCRC V, or the Bylaws of TFC or
               TFCRC V, as the case may be, or any law, rule, regulation, order,
               writ, judgment, injunction, decree, determination or award
               currently in effect having applicability to TFC or TFCRC V, as
               the case may be, or any of their respective properties, including
               regulations issued by an administrative agency or other
               Governmental Authority having supervisory powers over TFC or
               TFCRC V, as the case may be,

23

<PAGE>

          (ii)    constitutes or will constitute a default by TFC or TFCRC V, as
                  the case may be, under or a material breach of any provision
                  of any loan agreement, mortgage, indenture or other agreement
                  or instrument to which TFC or TFCRC V is a party or by which
                  it, or any of its or their properties is, or may be, bound or
                  affected, or

          (iii)   results in or requires the creation of any Lien upon or in
                  respect of any of the assets of TFC or TFCRC V except as
                  otherwise expressly contemplated by the Transaction Documents.

          (e)     Legal Proceedings. Other than as stated in the Private
                  -----------------
     Placement Memorandum, there is no action, proceeding or investigation
     pending, or to the best knowledge of TFC or TFCRC V after reasonable
     inquiry, threatened by or before any court, regulatory body, governmental
     or administrative agency or arbitrator against or affecting TFC or TFCRC V,
     or any properties or rights of TFC or TFCRC V, including without
     limitation, the Receivables, which might result in a Material Adverse
     Change with respect to TFC or TFCRC V.

          (f)     Valid and Binding Obligations. Each of the Transaction
                  -----------------------------
     Documents to which either TFC or TFCRC V is a party when executed and
     delivered by TFC or TFCRC V, as the case may be, will constitute the legal,
     valid and binding obligations of such Person, enforceable in accordance
     with their respective terms, except as such enforceability may be limited
     by bankruptcy, insolvency, reorganization, moratorium or other similar laws
     affecting creditors' rights generally and general equitable principles. The
     Certificate, when executed, authenticated and delivered in accordance with
     the Trust Agreement, will be validly issued and outstanding and entitled to
     the benefits of the Trust Agreement and will evidence the entire beneficial
     ownership interest in the Issuer. The Notes when executed, authenticated
     and delivered in accordance with the Indenture, will be entitled to the
     benefits of the Indenture and will constitute legal, valid and binding
     obligations of the Issuer, enforceable in accordance with their terms,
     except as limited by applicable bankruptcy, insolvency, reorganization,
     moratorium and similar laws affecting the enforcement of creditors' rights
     generally or general equitable principles (whether in a proceeding at law
     or in equity) and except to the extent that rights to indemnity and
     contribution may be limited by public policy.

          (g)     ERISA. Each of TFC and TFCRC V is in compliance with ERISA and
                  -----
     has not incurred and does not reasonably expect to incur, any liabilities
     to the PBGC under ERISA in connection with any Plan or Multiemployer Plan.

          (h)     Accuracy of Information. None of the Transaction Documents nor
                  -----------------------
     any of the Provided Documents contain any statement of a material fact with
     respect to TFC or TFCRC V or the Transaction that was untrue or misleading
     in any material respect when made. Since the furnishing of the Provided
     Documents, there has been no change, nor any development or event involving
     a prospective change known to TFC or TFCRC V, that would render any of the
     Provided Documents untrue or misleading in any material respect. There is
     no fact known to TFC or TFCRC V which has a material possibility of causing
     a Material Adverse Change with respect to either of TFC or TFCRC V, or
     which

24

<PAGE>

     has a material possibility of impairing the value or marketability of the
     Receivables, taken as a whole, or decreasing the possibility that amounts
     due in respect of the Receivables will be collected as due.

          (i)     Compliance With Securities Laws. The Notes have not been
                  -------------------------------
     offered or sold in any manner that would render the issuance and sale of
     the Notes a violation of the Securities Act or any state securities or
     "Blue Sky" laws or require registration pursuant thereto, nor has any
     Person been authorized to act in such manner. No registration under the
     Securities Act is required for the sale of the Notes as contemplated by the
     Transaction Documents, assuming the accuracy of the Purchaser's
     representations and warranties set forth in the Purchase Agreement, and
     satisfaction by the Initial Purchaser of its obligations set forth in the
     Note Purchase Agreement. Without limitation of the foregoing, the Offering
     Document does not contain any untrue statement of a material fact and does
     not omit to state a material fact required to be stated therein or
     necessary to make the statements made therein, in light of the
     circumstances under which they were made, not misleading.

          (j)     Transaction Documents. Each of the representations and
                  ---------------------
     warranties of TFC or TFCRC V contained in the Transaction Documents is true
     and correct in all material respects and each of TFC or TFCRC V hereby
     makes each such representation and warranty made by it to, and for the
     benefit of, Radian as if the same were set forth in full herein.

          (k)     No Consents. No consent, license, approval or authorization
                  -----------
     from, or registration, filing or declaration with, any regulatory body,
     administrative agency, or other governmental instrumentality, nor any
     consent, approval, waiver or notification of any creditor, lessor or other
     nongovernmental person, is required in connection with the execution,
     delivery and performance by TFC or TFCRC V of this Insurance Agreement or
     of any other Transaction Document to which such Person is a party, except
     (in each case) as have been obtained and are in full force and effect.

          (l)     Compliance With Law. Etc. No practice, procedure or policy
                  -------------------
     employed or proposed to be employed by TFC or TFCRC V in the conduct of
     their respective businesses violates any law, regulation, judgment,
     agreement, order or decree applicable to it which, if enforced, would
     result in a Material Adverse Change with respect to such Person.

          (m)     Special Purpose Entity.
                  ----------------------

          (i)     The capital of TFCRC V is adequate for the business and
                  undertakings of TFCRC V.

          (ii)    Other than with respect to the purchase by TFC of the stock of
                  TFCRC V, and as provided in this Insurance Agreement and the
                  Transaction Documents, TFCRC V is not engaged in any business
                  transactions with TFC.

25

<PAGE>

          (iii)   At least two directors of TFCRC V shall be persons who are
                  not, and will not be, a director, officer, employee or holder
                  of any equity securities of TFC or any of its Affiliates or
                  Subsidiaries.

          (iv)    The funds and assets of TFCRC V are not, and will not be,
                  commingled with the funds of any other Person.

          (v)     The Bylaws of TFCRC V require it to maintain (A) correct and
                  complete minute books and records of account, and (B) minutes
                  of the meetings and other proceedings of its shareholders and
                  board of directors.

          (n)     Solvency; Fraudulent Conveyance. Each of TFC and TFCRC V is
                  -------------------------------
     solvent, is able to pay its debts as they become due and will not be
     rendered insolvent by the Transaction and, after giving effect to such
     Transaction, neither TFC nor TFCRC V will be left with an unreasonably
     small amount of capital with which to engage in its business. Neither TFC
     nor TFCRC V intends to incur, or believes that it has incurred, debts
     beyond its ability to pay such debts as they mature. Neither TFC nor TFCRC
     V contemplates the commencement of insolvency, bankruptcy, liquidation or
     consolidation proceedings or the appointment of a receiver, liquidator,
     conservator, trustee or similar official in respect of TFC or TFCRC V, as
     the case may be, or any of their respective assets. The amount of
     consideration being received by TFCRC V upon the sale of the Receivables to
     the Issuer constitutes reasonably equivalent value and fair consideration
     for the Receivables. TFCRC V is not selling the Receivables to the Issuer,
     as provided in the Transaction Documents, with any intent to hinder, deal
     or defraud any of TFC's creditors.

          (o)     Good Title; Valid Transfer; Absence of Liens; Security
                  ------------------------------------------------------
     Interest.
     --------

          (i)     Immediately prior to the pledge of the Collateral to the Trust
                  Collateral Agent pursuant to the Indenture, the Issuer was the
                  owner of, and had good and marketable title to, such property
                  free and clear of all Liens and Restrictions on
                  Transferability, and had or will have had full right, power
                  and lawful authority to assign, transfer and pledge such
                  Receivables. The Indenture constitutes a valid pledge of the
                  Collateral to the Trust Collateral Agent and the Trust
                  Collateral Agent shall have a valid and perfected first
                  priority security interest in the Collateral, free and clear
                  of all Liens and Restrictions on Transferability.

          (ii)    Immediately prior to the transfer of any Trust Property to the
                  Issuer pursuant to the Sale and Servicing Agreement, TFCRC V
                  was or will have been the owner of, and had good and
                  marketable title to, such property free and clear of all Liens
                  and Restrictions on Transferability, and had or will have had
                  full right, corporate power and lawful authority to assign,
                  transfer and pledge such Receivables. In the event that a
                  transfer of the Receivables by TFCRC V to the Issuer is
                  characterized as other than a sale, such transfer shall be
                  characterized as a secured financing, and the Issuer shall
                  have a valid and perfected first priority security interest in

26

<PAGE>

                  such Receivables free and clear of all Liens and Restrictions
                  on Transferability.

          (iii)   Immediately prior to the sale of the Receivables and Other
                  Conveyed Property to TFCRC V pursuant to the Purchase
                  Agreement, TFC was or will have been the owner of, and had
                  good and marketable title to, the Receivables being
                  transferred by such party free and clear of all Liens and
                  Restrictions on Transferability, and had or will have had full
                  right, corporate power and lawful authority to assign,
                  transfer and pledge such Receivables. In the event that a
                  transfer of the Receivables by TFC to TFCRC V is characterized
                  as other than a sale, such transfer shall be characterized as
                  a secured financing, and TFCRC V shall have a valid and
                  perfected first priority security interest in such Receivables
                  free and clear of all Liens and Restrictions on
                  Transferability.

          (p)     Taxes. Each of TFC and TFCRC V has (i) filed all tax returns
                  -----
     which are required to be filed in any jurisdiction and (ii) paid all taxes,
     assessments, fees and other governmental charges against TFC or TFCRC V or
     any of the properties, income or franchises of TFC or TFCRC V, to the
     extent that such taxes have become due, other than any taxes or
     assessments, the validity of which are being contested in good faith by
     appropriate proceedings and with respect to which it has set aside adequate
     reserves on its books in accordance with GAAP and which proceedings have
     not given rise to any Lien. To the best of the knowledge of TFC and TFCRC
     V, all such tax returns were true and correct in all material respects and
     neither of TFC nor TFCRC V knows of any proposed material additional tax
     assessment against it nor any basis therefor. Any taxes, assessments, fees
     and other governmental charges payable by TFC or TFCRC V in connection with
     the Transaction, the execution and delivery of the Transaction Documents
     and the issuance of the Notes have been paid or shall have been paid at or
     prior to Closing Date.

          (q)     Private Placement Memorandum. As of the Closing Date, neither
                  ----------------------------
     the Private Placement Memorandum nor any amendment thereof or supplement
     thereto (other than the Radian Information and the Initial Purchaser
     Information) contain any untrue statement of a material fact or omit to
     state a material fact necessary in order to make the statements therein, in
     light of the circumstances under which they were made, not misleading.

          (r)     Pledge of Shares. The shares of stock of TFCRC V which have
                  ----------------
     been pledged pursuant to the Stock Pledge Agreement constitute all of the
     issued and outstanding shares of stock of TFCRC V.

          (s)     Investment Company. Neither TFC nor TFCRC V is an "investment
                  ------------------
     company" or a company "controlled" by an "investment company" within the
     meaning of the Investment Company Act, and none of the execution, delivery
     or performance of obligations under the Agreement or any of the Transaction
     Documents or the consummation of any of the transactions contemplated
     thereby will violate any provision

27

<PAGE>

     of the Investment Company Act, or any rule, regulation or order issued by
     the Securities and Exchange Commission thereunder.

          (t)     No Restrictions on TFCRC V Affecting Its Business. TFCRC V is
                  -------------------------------------------------
     not a party to any contract or agreement, or subject to any charter or
     other corporate restriction which materially and adversely affects its
     business.

          (u)     Perfection of Security Interest. All filings and recordings as
                  -------------------------------
     may be necessary to perfect the interest of the Issuer in the Receivables
     have been accomplished and are in full force and effect. TFCRC V will from
     time to time, at its own expense, execute and file such additional
     financing statements (including continuation statements) as may be
     necessary to ensure that at any time, the interest of the Issuer (and the
     priority of such interest) in all of the Receivables is fully protected.

          (v)     Ownership of TFCRC V. 100% of the issued and outstanding
                  --------------------
     shares of capital stock of TFCRC V are directly owned (both beneficially
     and of record) by TFC. Such shares are validly issued, fully paid and
     nonassessable and no one other than TFC has any options, warrants or other
     rights to acquire shares of capital stock of and from TFCRC V.

          (w)     No Broker, Finder or Financial Adviser Other Than West LB.
                  ---------------------------------------------------------
     Neither TFCRC V nor any of its officers, directors, employees or agents has
     employed any broker, finder or financial adviser other than West LB or
     incurred any liability for fees or commissions to any person other than
     West LB in connection with the offering, issuance or sale of the Notes.

          (x)     Rating Agency. The information supplied by TFC or TFCRC V to
                  -------------
     the Rating Agency in connection with obtaining a rating for the Notes did
     not contain any untrue statement of a material fact or omit to state any
     material fact required to be stated in order to make such information not
     misleading.

          (y)     No Violation of Exchange Act or Regulations T, U or X. None of
                  -----------------------------------------------------
     the transactions contemplated in the Transaction Documents (including the
     use of the proceeds from the sale of the Notes and the pledge of the shares
     of TFCRC V under the Stock Pledge Agreement) will result in a violation of
     Section 7 of the Securities and Exchange Act, or any regulations issued
     pursuant thereto, or in a violation of any of Regulations T, U and X of the
     Board of Governors of the Federal Reserve System.

          (Z)     Financial Statements. The Financial Statements of TFC, copies
                  --------------------
     of which have been furnished to Radian, (i) are, as of the dates and for
     the periods referred to therein, complete and correct in all material
     respects. (ii) present fairly the financial condition and results of
     operations of TFC as of the dates and for the periods indicated, and (iii)
     have been prepared in accordance with GAAP consistently applied, except as
     noted therein (subject as to interim statements to normal year-end
     adjustments). Since the date of the most recent Financial Statements, there
     has been no Material Adverse Change. Except as disclosed in the Financial
     Statements, TFC is not subject to any

28

<PAGE>

     contingent liabilities or commitments that, individually or in the
     aggregate, have a material possibility of causing a Material Adverse Change
     with respect to TFC.

          (aa)    Available Financing. TFC is not dependent on the renewal of
                  -------------------
     the financing arrangements provided by GE Capital under the GE Capital
     Agreement for the maintenance of its operations and businesses.

     Section 3.03. Representations and Warranties of the Issuer.  The Issuer
                   --------------------------------------------
represents and warrants, as of the Closing Date, as follows:

          (a)     Due Organization and Qualification. The Issuer is duly formed
                  ----------------------------------
     and validly existing as a Delaware statutory business trust and is in good
     standing under the laws of the State of Delaware. The Issuer is not
     organized under the laws of any other jurisdiction. The Issuer is duly
     qualified to do business, is in good standing and has obtained all
     necessary licenses, permits, charters, registrations and approvals
     (together, "approvals") necessary for the conduct of its business as
     currently conducted and as described in the Offering Document and the
     performance of its obligations under the Transaction Documents, in each
     jurisdiction in which the failure to be so qualified or to obtain such
     approvals would render any Receivable or Transaction Document unenforceable
     in any material respect or would otherwise cause a Material Adverse Change
     to occur with respect to the Transaction.

          (b)     Power and Authority. The Issuer has all necessary trust power
                  -------------------
     and authority to conduct its business as currently conducted and as
     described in the Offering Document, to execute, deliver and perform its
     obligations under the Transaction Documents and has full power and
     authority to sell and assign the Receivables as contemplated by the
     Transaction Documents and to consummate the Transaction.

          (c)     Due Authorization. The execution, delivery and performance of
                  -----------------
     the Transaction Documents by the Issuer have been duly authorized by all
     necessary trust action and do not require any additional approvals or
     consents or other action by, or any notice to or filing with, any Person,
     including, without limitation, any Governmental Authority.

          (d)     Noncontravention. None of the execution and delivery of the
                  ----------------
     Transaction Documents by the Issuer, the consummation of the transactions
     contemplated thereby nor the satisfaction of the terms and conditions of
     the Transaction Documents,

          (i)     conflicts with, or results in any material breach or violation
                  of, any provision of the Certificate or the Trust Agreement,
                  or any law, rule, regulation, order, writ, judgment,
                  injunction, decree, determination or award currently in effect
                  having applicability to the Issuer or its property, including
                  regulations issued by an administrative agency or other
                  Governmental Authority having supervisory powers over the
                  Issuer,

          (ii)    constitutes, or will constitute, a material default by the
                  Issuer under, or a material breach of, any provision of any
                  loan agreement, mortgage,

29

<PAGE>

                  indenture or other agreement or instrument to which the Issuer
                  is a party or by which it or any of its property is or may be
                  bound or affected, or

          (iii)   results in or requires the creation of any Lien upon or in
                  respect of any of the assets of the Issuer, except as
                  otherwise expressly contemplated by the Transaction Documents.

          (e)     Legal Proceedings. There is no action, proceeding, suit or
                  -----------------
     investigation by or before any court, governmental or administrative agency
     or arbitrator against or affecting the Issuer, or any properties or rights
     of the Issuer, pending or, to the knowledge of the Issuer, threatened,
     which, in any case, if decided adversely, would result in a Material
     Adverse Change with respect to the Issuer, the Certificate or the Notes.

          (f)     Valid and Binding Obligations. Each of the Transaction
                  -----------------------------
     Documents to which the Issuer is a party when executed by the Owner Trustee
     on behalf of the Issuer, will constitute the legal, valid and binding
     obligations of the Issuer enforceable against the Issuer in accordance with
     their respective terms, except as limited by applicable bankruptcy,
     insolvency, reorganization, moratorium and similar laws affecting the
     enforcement of creditors' rights generally or general equitable principles
     (whether in a proceeding at law or in equity) and except to the extent that
     rights to indemnity and contribution may be limited by public policy. The
     Certificate, when executed, authenticated and delivered in accordance with
     the Trust Agreement, will be validly issued and outstanding and entitled to
     the benefits of the Trust Agreement and will evidence the entire beneficial
     ownership interest in the Issuer. The Notes when executed, authenticated
     and delivered in accordance with the Indenture, will be entitled to the
     benefits of the Indenture and will constitute legal, valid and binding
     obligations of the Issuer, enforceable in accordance with their terms,
     except as limited by applicable bankruptcy, insolvency, reorganization,
     moratorium and similar laws affecting the enforcement of creditors' rights
     generally or general equitable principles (whether in a proceeding at law
     or in equity) and except to the extent that rights to indemnity and
     contribution may be limited by public policy.

          (g)     Accuracy of Information. None of the Transaction Documents,
                  -----------------------
     nor any of the Provided Documents, contain any statement of a material fact
     with respect to the Issuer or the Transaction that was untrue or misleading
     in any material respect when made. Since the furnishing of the Provided
     Documents, there has been no change, that would render any of the Provided
     Documents untrue or misleading in any material respect. There is no fact
     known to the Issuer which has a material possibility of causing a Material
     Adverse Change with respect to the Issuer or which has a material
     possibility of impairing the value or marketability of the Receivables,
     taken as a whole, or decreasing the possibility that amounts due in respect
     of the Receivables will be collected as due.

          (h)     Compliance With Securities Laws; Offering Document. The Notes
                  --------------------------------------------------
     have not been offered or sold in any manner that would render the issuance
     and sale of the Notes a violation of the Securities Act or any state
     securities or "Blue Sky" laws or require registration pursuant thereto, nor
     has any Person been authorized to act in such manner. No registration under
     the Securities Act is required for the sale of the Notes as

30

<PAGE>

     contemplated by the Transaction Documents, assuming the accuracy of the
     Purchaser's representations and warranties set forth in the Purchase
     Agreement, and satisfaction by the Initial Purchaser of its obligations set
     forth in the Note Purchase Agreement. Without limitation of the foregoing,
     the Offering Document did not, as of its date, and does not, as of the date
     hereof, contain any untrue statement of a material fact or omit to state a
     material fact required to be stated therein or necessary to make the
     statements made therein, in light of the circumstances under which they
     were made, not misleading.

          (i)     Transaction Documents. Each of the representations and
                  ---------------------
     warranties of the Issuer contained in the Transaction Documents is true and
     correct in all material respects and the Issuer hereby makes each such
     representation and warranty made by it to, and for the benefit of, Radian
     as if the same were set forth in full herein.

          (j)     No Consents. No consent, license, authorization or approval
                  -----------
     from, or registration or other action by, and no notice to or filing or
     declaration with, any governmental entity or regulatory body, is required
     for the due execution, delivery and performance by the Issuer of the
     Transaction Documents or any other material document or instrument to be
     delivered thereunder, except (in each case) as have been obtained or the
     failure of which to be obtained would not be reasonably likely to cause a
     Material Adverse Change with respect to the Transaction.

          (k)     Compliance With Law. Etc. No practice, procedure or policy
                  -------------------
     employed or proposed to be employed by the Issuer in the conduct of its
     business violates any law, regulation, judgment, agreement, order or decree
     applicable to it which, if enforced, would result in a Material Adverse
     Change with respect to the financial condition of such Person.

          (l)     Special Purpose Entity.
                  ----------------------

          (i)     The capital of the Issuer is adequate for the business and
                  undertakings of the Issuer.

          (ii)    Except as contemplated by the Transaction Documents, the
                  Issuer is not engaged in any business transactions with TFC,
                  the Parent, TFCRC V or any Affiliate of any of them.

          (iii)   The Issuer's funds and assets are not, and will not be,
                  commingled with the funds of any other Person.

          (m)     Solvency; Fraudulent Conveyance. The Issuer is solvent and
                  -------------------------------
     will not be rendered insolvent by the Transaction and, after giving effect
     to such Transaction, the Issuer will not be left with an unreasonably small
     amount of capital with which to engage in its business. The Issuer does not
     intend to incur, or believe that it has incurred, debts beyond its ability
     to pay such debts as they mature. The Issuer does not contemplate the
     commencement of insolvency, bankruptcy, liquidation or consolidation
     proceedings or the appointment of a receiver, liquidator, conservator,
     trustee or similar official in respect of the Issuer or any of its assets.

31

<PAGE>

               (n) Perfection of Liens and Security Interest. On the Closing
                   -----------------------------------------
         Date, the Lien and security interest in favor of the Trust Collateral
         Agent with respect to the Collateral will be perfected by the filing of
         financing statements on Form UCC-1 in each jurisdiction where such
         recording or filing is necessary for the perfection thereof, the
         delivery of the Receivables Files to the Trust Collateral Agent, and
         the establishment of the Collection Account, the Spread Account and the
         Note Payment Account in accordance with the provisions of the
         Transaction Documents, and no other filings in any jurisdiction or any
         other actions (except as expressly provided herein) are necessary to
         perfect the Trust Collateral Agent's Lien on and security interest in
         the Collateral as against any third parties.

               (o) Investment Company. The Issuer is not an "investment company"
                   ------------------
         or a company "controlled" by an "investment company" within the meaning
         of the Investment Company Act, and none of the execution, delivery or
         performance of obligations under the Agreement or any of the
         Transaction Documents or the consummation of any of the transactions
         contemplated thereby by the Issuer or the acquisition by the Issuer of
         the Receivables will violate any provision of the Investment Company
         Act, or any rule, regulation or order issued by the Securities and
         Exchange Commission thereunder.

               (p) Collateral. On the Closing Date, the Issuer will have good
                   ----------
         and marketable title to each item of Trust Property conveyed on such
         date and will own each such item free and clear of any Lien (other than
         Liens contemplated under the Indenture) or any equity or participation
         interest of any other Person.

               (q) Security Interest in Funds and Investments. Assuming the
                   ------------------------------------------
         retention of funds in the Trust Accounts and/or the Spread Account,
         such funds will be subject to a valid and perfected, first priority
         security interest in favor of the Trust Collateral Agent on behalf of
         the Trustee (for the benefit of the Noteholders and Radian).

               (r) No Violation of Exchange Act or Regulations T, U or X. None
                   -----------------------------------------------------
         of the transactions contemplated in the Transaction Documents will
         result in a violation of Section 7 of the Securities Exchange Act, or
         any regulations issues pursuant thereto, or any of Regulations T, U and
         X of the Board of Governors of the Federal Reserve System. The Issuer
         does not own nor does it intend to carry or purchase any "Margin
         Security" within the meaning of said Regulation U, including margin
         securities originally issued by it or any "margin stock" within the
         meaning of said Regulation U.

                                   ARTICLE IV

                                    COVENANTS

         Section 4.01. Covenants of TFCRC V and TFC. Each of TFCRC V and TFC
                       ----------------------------
hereby covenants and agrees that during the term of this Insurance Agreement,
unless Radian shall otherwise expressly consent in writing (in the absence of an
Insurer Default which shall have occurred and be continuing):

32

<PAGE>

               (a) Compliance With Agreements and Applicable Laws. Each of TFCRC
                   ----------------------------------------------
         V and TFC shall perform each of its respective obligations under the
         Transaction Documents and shall comply with all material requirements
         of any law, rule or regulation applicable to it, or that are required
         in connection with its performance under any of the Transaction
         Documents. Neither TFCRC V nor TFC will cause or permit to become
         effective any amendment to or modification of any of the Transaction
         Documents to which it is a party, unless Radian shall have previously
         approved in writing the form of such amendment or modification and
         shall have received all fees and expenses payable under the Premium
         Letter in connection therewith (provided that such prior written
                                         --------
         approval of Radian shall not be required in the event that (x) an
         Insurer Default shall have occurred and be continuing or (y) the
         proposed amendment or modification shall not have any adverse effect on
         Radian). Neither TFCRC V nor TFC shall take any action or fail to take
         any action that would interfere with the enforcement of any rights of
         Radian or the Trust Collateral Agent under the Transaction Documents.

               (b) Reports; Other Information. Each of TFCRC V and TFC shall
                   --------------------------
         keep or cause to be kept in reasonable detail, books and records of
         account of their respective assets and business, and in the case of
         TFC, which shall clearly reflect the transfer of the Receivables to
         TFCRC V, and, in the case of TFCRC V, which shall clearly reflect the
         transfer of the Receivables to the Issuer, and subsequently to the
         Trust Collateral Agent. Each of TFCRC V and TFC shall furnish or caused
         to be furnished to Radian:

               (i) Promptly upon receipt thereof, copies of all reports,
                   statements, certifications, schedules, or other similar items
                   delivered to or by TFCRC V and TFC pursuant to the terms of
                   the Transaction Documents and, promptly upon request, such
                   other data as Radian may reasonably request; provided,
                                                                --------
                   however, that neither TFCRC V nor TFC shall be required to
                   -------
                   deliver any such items if provision by some other party to
                   Radian is required under the Transaction Documents unless
                   such other party wrongfully fails to deliver such item. TFCRC
                   V and TFC shall, upon the reasonable request of Radian,
                   permit Radian or its authorized agents (including, without
                   limitation, any reinsurers of Radian appointed by Radian as
                   an agent for such purposes) (A) to inspect its books and
                   records as they may relate to the Notes, the Receivables, the
                   obligations of TFCRC V and TFC under the Transaction
                   Documents, the Transaction and the business of TFC or TFCRC
                   V; (B) to discuss the affairs, finances and accounts of TFCRC
                   V and TFC with an officer of each such Person upon Radian's
                   reasonable request; and (C) to discuss the affairs, finances
                   and accounts of TFCRC V and TFC with its independent
                   accountants, provided that an officer of such Person shall
                   have the right to be present during such discussions. Such
                   inspections and discussions shall be conducted during normal
                   business hours and shall not unreasonably disrupt the
                   business of such Person. The reasonable fees and expenses of
                   Radian or any such authorized agents shall be for the account
                   of TFC.


33

<PAGE>

               (ii)  TFC shall provide or cause to be provided to Radian an
                     executed original copy of each document executed in
                     connection with the transaction within 30 days after the
                     Closing Date.

               (iii) At least 30 days prior to the implementation thereof,
                     notice of any material change to the software, hardware or
                     other systems employed by the Parent or TFC in connection
                     with billing, collecting or otherwise servicing the
                     Receivables.

               (c)   Notice of Material Events. TFCRC V and TFC shall promptly
                     -------------------------
          inform Radian in writing of the occurrence of any of the following:

               (i)   the submission of any claim or the initiation of any legal
                     process, litigation or administrative or judicial
                     investigation (A) against TFCRC V or TFC pertaining to the
                     Receivables in general, (B) with respect to a material
                     portion of the Receivables or (C) in which a request has
                     been made for certification as a class action (or
                     equivalent relief) that would involve a material portion of
                     the Receivables;

               (ii)  any change in the location of the principal office of
                     either of TFCRC V or TFC or any change in the location of
                     the books and records of TFCRC V or TFC;

               (iii) the occurrence of any Trigger Event, Event of Default,
                     Servicer Termination Event, Default or Insurance Agreement
                     Event of Default; or

               (iv)  any other event, circumstance or condition that has
                     resulted, or which TFCRC V or TFC, as the case may be,
                     reasonably believes might result, in a Material Adverse
                     Change with respect to TFCRC V or TFC.

               (d)   Further Assurances. Each of TFCRC V and TFC will file all
                     ------------------
          necessary financing statements, assignments or other instruments, and
          any amendments or continuation statements relating thereto, necessary
          to be kept and filed in such manner and in such places as may be
          required by law to preserve and protect fully the Lien on and security
          interest in, and all rights of the Trust Collateral Agent, for the
          benefit of the Trustee (on behalf of the Noteholders) and Radian with
          respect to the Receivables, the Collection Account, the Note Payment
          Account, the Spread Account, the stock of TFCRC V subject to the Stock
          Pledge Agreement and all of the other Collateral. In addition, each of
          TFCRC V and TFC shall, upon the request of Radian, from time to time,
          execute, acknowledge and deliver, or cause to be executed,
          acknowledged and delivered, within thirty (30) days of such request,
          such amendments hereto and such further instruments and take such
          further action as may be reasonably necessary to effectuate the
          intention, performance and provisions of the Transaction Documents or
          to protect the interest of the Issuer, the Owner Trustee, the Trustee
          (for the benefit of the Noteholders) and Radian, in the Receivables,
          the Collection Account, the Note Payment Account, the Spread Account,
          the stock of TFCRC V subject to the Stock Pledge Agreement and all of
          the other Collateral, free and clear of all Liens and Restrictions on

34

<PAGE>

          Transferability except as contemplated by the Transaction Documents.
          In addition, each of TFCRC V and TFC agrees to cooperate with the
          Rating Agency in connection with any review of the Transaction which
          may be undertaken by such Rating Agency and after the date hereof.

               (e) TFCRC V's Corporate Existence. TFCRC V shall maintain its
                   -----------------------------
          corporate existence and shall at all times continue to be duly
          organized under the laws of Delaware, and duly qualified and duly
          authorized (as described in Sections 3.01 (a), (b) and (c) hereof,
                                      -----------------  ---     ---
          including, but not limited to, in the Commonwealth of Virginia) and
          shall conduct its business in accordance with the terms of its
          Certificate of Incorporation and Bylaws.

               (f) TFC's Corporate Existence. TFC shall maintain its corporate
                   -------------------------
          existence and shall at all times continue to be duly organized under
          the laws of Virginia, and duly qualified and duly authorized (as
          described in Sections 3.01 (a), (b) and (c) hereof) and shall conduct
                       -----------------  ---     ---
          its business in accordance with the terms of its Articles of
          Incorporation and Bylaws.

               (g) Disclosure Document. Each Offering Document delivered with
                   -------------------
          respect to the Notes shall clearly disclose that the Policy is not
          covered by the property/casualty insurance security fund specified in
          Article 76 of the New York Insurance Law. In addition, each Offering
          Document delivered with respect to the Notes which includes financial
          statements of Radian prepared in accordance with GAAP shall include
          the following statement immediately preceding such financial
          statements:

                   The New York State Insurance Department recognizes only
                   statutory accounting practices for determining and reporting
                   the financial condition and results of operations of an
                   insurance company, for determining its solvency under the New
                   York Insurance Law, and for determining where its financial
                   condition warrants the payment of a dividend to its
                   stockholders. No consideration is given by the New York State
                   Insurance Department to financial statements prepared in
                   accordance with generally accepted accounting principles in
                   making such determinations.

               (h) Special Purpose Entity.
                   ----------------------

               (i) TFCRC V shall conduct its business solely in its own name
                   through its duly authorized officers or agents so as not to
                   mislead others as to the identity of the entity with which
                   those others are concerned; in particular, TFCRC V shall (A)
                   require that its employees, if any, identify themselves as
                   employees of TFCRC V when conducting business of TFCRC V, (B)
                   use its best efforts to avoid the appearance that it is
                   conducting business on behalf of any Affiliate thereof or
                   that its assets are available to pay the creditors of TFC or
                   the Parent or any Affiliate thereof, (C) maintain at all

35

<PAGE>

          times stationary separate from that of any Affiliate, and (D) conduct
          all oral and written communications, including, without limitation,
          letters, invoices, purchase orders, contracts, statements and loan
          applications, solely in the name of TFCRC V.

   (ii)   Each of TFC and TFCRC V shall respond to any inquiries made directly
          to it with respect to ownership of a Receivable by stating that TFCRC
          V acquired such Receivable from TFC, that TFCRC V contributed such
          Receivable to the Issuer and that the Trust Collateral Agent has been
          granted a security interest in such Receivable.

   (iii)  TFCRC V shall compensate all employees, consultants and agents
          directly or indirectly through reimbursement of TFC, from TFCRC V's
          bank accounts, for services provided to TFCRC V by such employees,
          consultants and agents and, to the extent any employee, consultant or
          agent of TFCRC V is also an employee, consultant or agent of TFC,
          allocate the compensation of such employee, consultant or agent
          between TFCRC V and TFC on a basis which reflects the respective
          services rendered to TFCRC V and TFC.

   (iv)   TFCRC V shall keep its assets and liabilities wholly separate from
          those of all other entities, including, but not limited to TFC and the
          Parent and the Affiliates thereof. TFCRC V shall not commingle its
          funds or other assets with those of any of its Affiliates (other than
          in respect of items of payment or funds which may be commingled until
          deposit into the Collection Account in accordance with the Sale and
          Servicing Agreement), and not hold its assets in any manner that would
          create an appearance that such assets belong to any such Affiliate,
          not maintain bank accounts or other depository accounts to which any
          such Affiliate is an account party, into which such Affiliate makes
          deposits or from which any such Affiliate has the power to make
          withdrawals, and not act as an agent or representative of any of its
          Affiliates in any capacity.

   (v)    TFCRC V shall not guarantee any obligation of any of its Affiliates
          nor have any of its obligations guaranteed by any such Affiliate
          (either directly or by seeking credit based on the assets of such
          Affiliate), or otherwise hold itself out as responsible for the debts
          of any Affiliate;

   (vi)   TFCRC V shall maintain corporate records and books of account separate
          from those of TFC or the Parent, and the Affiliates thereof.

   (vii)  TFCRC V shall obtain proper authorization from its Board of Directors
          of all corporate action requiring such authorization. Meetings of the
          Board of Directors of TFCRC V shall be held not less frequently than
          one time per annum, and copies of the minutes of each such board
          meeting shall be delivered to Radian within 30 days of such meeting.

36

<PAGE>

       (viii) TFCRC V shall obtain proper authorization from its shareholders of
              all corporate action requiring shareholder approval. Meetings of
              the shareholders of TFCRC V shall be held not less frequently than
              one time per annum, and copies of each such authorization and the
              minutes of each such shareholder meeting shall be delivered to
              Radian within 30 days of such authorization or meeting, as the
              case may be.

       (ix)   TFCRC V shall (A) pay its own incidental administrative costs and
              expenses from its own funds, (B) allocate all other shared
              overhead expenses (including, without limitation, telephone and
              other utility charges, the services of shared employees,
              consultants and agent, and reasonable legal auditing expenses),
              and other items of cost and expense shared between TFCRC V and any
              Affiliate thereof, on the basis of actual use to the extent
              practicable, and to the extent such allocation is not practicable,
              on a basis reasonably related to actual use or the value of
              services rendered. TFCRC V shall not permit any of its Affiliates
              to pay its operation expenses.

       (x)    The annual financial statements of each of the Parent, TFC and
              TFCRC V shall disclose the effects of the Transactions in
              accordance with GAAP and shall disclose that neither the assets of
              TFCRC V nor the assets of the Issuer are available to pay
              creditors of the Parent or TFC, or any of their other Affiliates.
              Without limiting the foregoing, each of the Parent and TFC shall
              ensure that any of its consolidated financial statements have
              notes to the effect that TFCRC V and the Issuer are separate
              entities whose creditors have a claim on their respective assets
              prior to those assets becoming available to its equity holders and
              to any of their respective creditors.

       (xi)   The resolutions, agreements and other instruments of TFCRC V
              underlying the transactions described in this Insurance Agreement
              and in the other Transaction Documents shall be continuously
              maintained by TFCRC V as official records of TFCRC V, separately
              identified and held apart from the records of TFC and the Parent
              and each affiliate thereof.

       (xii)  TFCRC V shall at all times have at least two independent directors
              who satisfy the definition of Independent Director provided in its
              certificate of incorporation, and have at least one officer
              responsible for managing its day-to-day business and manage such
              business by or under the direction of its board of directors.

       (xiii) TFCRC V shall take such actions as are necessary on its part to
              ensure that the facts and assumptions set forth in the
              non-consolidation opinion delivered by its counsel remain true and
              correct at all times.

       (i)    Maintenance of Licenses. Each of TFCRC V and TFC shall maintain
              -----------------------
all licenses, permits, charters and registrations which are material to the
performance by it of

37

<PAGE>

         its obligations under this Insurance Agreement and each other
         Transaction Document to which it is a party or by which it is bound.

                (j)   Transaction Documents. Each of TFCRC V and TFC shall
                      ---------------------
         comply with each of the covenants, as applicable, made by it in each of
         the Transaction Documents.

                (k)   Ownership of TFCRC V. TFC shall at all times own 100% of
                      --------------------
         the issued and outstanding shares of capital stock of TFCRC V free and
         clear of any Liens.

                (l)   Civilian Portfolio. TFC shall cause, with respect to each
                      ------------------
         calendar quarter ending before January 1, 2003, the fraction (stated as
         a percentage) (A) the numerator of which is the aggregate outstanding
         principal balance of Contracts serviced by TFC (including, without
         limitation, those Contracts pledged to secure loans to TFC or
         transferred by TFC in connection with securitization transactions) as
         determined as of the close of business of the last day of the most
         recently concluded calendar quarter, and in respect of which the
         Obligors are not military personnel and (B) the denominator of which is
         the aggregate outstanding principal balance of all such Contracts
         serviced by TFC as determined as of the close of business of the last
         day of such calendar quarter, not to exceed for such calendar quarter,
         the percentage set forth opposite such Monthly Period on Schedule 2
                                                                  ----------
         attached hereto and under the heading "Civilian Percentage Limit".

                (m)   Access to Records; Discussions with Officers. TFC shall,
         upon the reasonable request of Radian, permit Radian or its authorized
         agent (including, without limitation, any reinsurers of Radian
         appointed by Radian as an agent for such purposes) access to:

                (i)   the documentation regarding the Receivables, the other
                      Collateral, the obligations of TFC under the Transaction
                      Documents, the business of TFC and the transactions
                      consummated in connection therewith including, but not
                      limited to, the accounts, records and computer systems
                      maintained by TFC with respect thereto; and

                (ii)  any of the properties of TFC, to examine all of its books
                      of account, records, reports and other papers, to make
                      copies and extracts therefrom and to discuss its affairs,
                      finances and accounts with its officers, employees, and
                      independent public accounts (and by this provision TFC
                      authorizes said accountants to discuss the finances and
                      affairs of TFC) (in each such case, it being understood
                      that an officer of TFC shall be entitled to be present
                      during any such examination and/or discussion).

                  Such inspections and discussions shall be conducted at such
         reasonable times and as often as may be reasonably requested. In each
         case, such access shall be afforded without charge but only upon
         reasonable request and during normal business hours.

                (n)   Benefit Plan. Each of TFC and TFCRC V shall comply in all
                      ------------
         material respects with the provisions of ERISA, the Code, and all other
         applicable laws, and the regulations and interpretations thereunder to
         the extent applicable, with respect to each

38

<PAGE>

         Benefit Plan.  Each  of TFC and TFCRC V will not, and will cause any
         ERISA Affiliate not to:

               (i)    engage in any non-exempt prohibited transaction (within
                      the meaning of Code Section 4975 or ERISA Section 406)
                      with respect to any Benefit Plan which would result in a
                      material liability to either of TFC or TFCRC V;

               (ii)   permit to exist any accumulated funding deficiency as
                      defined in Section 301(a) of ERISA and Section 412(a) of
                      the Code, with respect to any Benefit Plan which is
                      subject to Section 302(q) of ERISA or 412 of the Code;

               (iii)  terminate any Benefit Plan of either of TFC or TFCRC V or
                      any ERISA Affiliate if such termination would result in
                      any material liability to either of TFC or TFCRC V or an
                      ERISA Affiliate; or

               (iv)   create any defined benefit plan (as defined in ERISA).

               (o) Reporting and Accounting Treatment. For reporting and
                   ----------------------------------
         accounting purposes, and in its books of account and records, TFCRC V
         will treat each transfer of Receivables pursuant to the Sale and
         Servicing Agreement as an absolute sale and assignment of TFCRC V's
         full right, title and ownership interest in such Receivable and TFCRC V
         will not account for or treat the Transactions in any other manner.

               (p) Financial Statements; Accountants' Reports; Other
                   -------------------------------------------------
         Information. TFC shall keep, or cause to be kept, in reasonable detail
         -----------
         books and records of account of its assets and business, and shall
         clearly reflect therein the transfer of the Receivables from TFC to
         TFCRC V, and from TFCRC V to the Issuer, and the sale of the Notes to
         the Noteholders, as a sale of TFCRC V's respective interests in the
         Receivables evidenced by the Notes. TFC shall furnish or cause to be
         furnished to Radian:

               (i)    Annual Financial Statements. As soon as available, and in
                      ---------------------------
                      any event within 120 days after the close of each fiscal
                      year of the Parent, the audited consolidated balance
                      sheets of TFC and the Parent, and the unaudited balance
                      sheets of TFCRC V, in each case as of the end of such
                      fiscal year, and the audited consolidated statements of
                      income, shareholders' equity and cash flows of TFC and the
                      Parent, and the unaudited consolidated statements of
                      income, shareholders' equity and cash flows of TFCRC V, as
                      applicable, for such fiscal year, all in reasonable detail
                      and stating in comparative form the respective figures for
                      the corresponding date and period in the preceding fiscal
                      year, in each case prepared in accordance with GAAP,
                      consistently applied, and in the case of TFC and the
                      Parent, accompanied by the certificate of independent
                      accountants (which shall be a nationally recognized firm
                      or otherwise acceptable to Radian) and certified by an
                      authorized officer of the relevant entity as being
                      complete and correct in all material respects, and in the

39

<PAGE>

                           case of TFCRC V, certified by an authorized officer
                           of TFCRC V as being complete and correct in all
                           material respects, and in each case presenting the
                           financial condition and results of operations of the
                           Parent, TFC or TFCRC V, as applicable, as of the
                           dates and for the periods indicated, in accordance
                           with GAAP consistently applied.

                    (ii)   Quarterly Financial Statements. As soon as available,
                           ------------------------------
                           and in any event within 45 days after the close of
                           the first three quarters of each fiscal year of TFC
                           and the Parent, the unaudited consolidated balance
                           sheets of TFC, the Parent and TFCRC V, in each case
                           as of the end of each such quarter and the unaudited
                           consolidated statements of income and cash flows of
                           TFC and the Parent for the portion of the fiscal year
                           then ended, all in reasonable detail and stating in
                           comparative form the respective figures for the
                           corresponding date and period in the preceding fiscal
                           year, prepared in accordance with GAAP, consistently
                           applied (subject to normal year-end adjustments), and
                           certified by an authorized officer of TFC as being
                           complete and correct in all material respects and
                           presenting the financial condition and results of
                           operations of TFC or the Parent, as applicable, as of
                           the dates and for the periods indicated, in
                           accordance with GAAP consistently applied (subject as
                           to interim statements to normal year-end
                           adjustments).

                    (iii)  Other Information. Promptly upon receipt thereof,
                           -----------------
                           copies of all reports, statements, certifications,
                           schedules, or other similar items delivered to or by
                           TFC pursuant to the terms of the Transaction
                           Documents and, promptly upon request, such other data
                           as Radian may reasonably request; provided, however,
                                                             --------  -------
                           that TFC shall not be required to deliver any such
                           items if provision by some other party to Radian is
                           required under the Transaction Documents unless such
                           other party wrongfully fails to deliver such item.
                           The reasonable fees and expenses of Radian or any
                           such authorized agents shall be for the account of
                           TFC. In addition, TFC shall promptly (but in no case
                           more than 30 days following issuance or receipt by a
                           Commonly Controlled Entity) provide to Radian a copy
                           of all correspondence between a Commonly Controlled
                           Entity and the PBGC, IRS, Department of Labor or the
                           administrators of a Multiemployer Plan relating to
                           any Reportable Event or the under-funded status,
                           termination or possible termination of a Plan or a
                           Multiemployer Plan. The books and records of TFC will
                           be maintained at the address for it designated herein
                           for receipt of notices, unless it shall otherwise
                           advise the parties hereto in writing.

                    (iv)   Closing Documents. TFC shall provide, or cause to be
                           -----------------
                           provided, to Radian an executed original copy of each
                           document executed in connection with the Transaction
                           within 30 days after the Closing Date.

                    (q)    Agreed Upon Procedures; Reports. (1) TFC shall cause
                           -------------------------------
        a firm of nationally recognized independent certified public accountants
        (the Independent Accountants"), who may also render other services to
             -----------------------
        TFC and/or to TFCRC V, to

40

<PAGE>

         deliver to the Board of Directors of the Servicer, to the Trustee, the
         Owner Trustee, the Trust Collateral Agent and Radian (with a copy
         delivered to the Rating Agency):

                    (i)    As soon as practical, but in no event later than 45
                           days after the delivery by the Servicer of the third
                           Servicer's Certificate required to be delivered by
                           the Servicer after the Closing Date pursuant to
                           Section 4.8 of the Sale and Servicing Agreement, a
                           -----------
                           statement (the "Initial Accountant's Statement"), in
                                           ------------------------------
                           form and substance satisfactory to Radian, reviewing
                           the results of the Independent Accountants'
                           performance of certain agreed upon procedures with
                           respect to the Servicer, its reporting and record
                           keeping and the degree of its compliance with
                           provisions of the Basic Documents requiring the
                           deposit or remittance of funds by the Servicer to the
                           Collection Account, substantially to the effect that:
                           (1) the Independent Accountants have examined the
                           accounts and records of the Servicer relating to the
                           Receivables (which records shall be described in one
                           or more schedules to such statement), (2) such firm
                           has compared the information contained in the third
                           Servicer's Certificate delivered by the Servicer
                           pursuant to Section 4.8 of the Sale and Servicing
                                       -----------
                           Agreement with information contained in such accounts
                           and records for such periods, (3) such firm has
                           traced deposits and remittances made to the
                           Collection Account by the Servicer for such periods,
                           and (4) on the basis of the agreed upon procedures so
                           performed, whether and to what extent (x) the
                           information contained in such Servicer's Certificates
                           reconciles with the information contained in such
                           accounts and records, (y) such accounts and records
                           of the Servicer related to the Receivables agree to
                           the respective source documents, and (z) the Servicer
                           has complied with the obligations set forth in the
                           Basic Documents with respect to the deposits and
                           remittances made to the Collection Account by the
                           Servicer for such periods, except for such exceptions
                           as TFC and Radian believe to be immaterial and such
                           other exceptions as shall be set forth in such
                           statement;

                    (ii)   In the event that the Initial Accountant's Statement
                           indicates a degree of accuracy with respect to the
                           third Servicer's Certificate deemed by Radian to be
                           unsatisfactory in the exercise of its sole
                           discretion, as soon as practical after written demand
                           therefor by Radian to TFC and the Independent
                           Accountants (which demand may be made as frequently
                           as deemed necessary in the sole discretion of
                           Radian), but in no event later than 30 days after the
                           delivery to Radian by the Servicer of any subsequent
                           Servicer's Certificate constituting the subject of
                           such demand, a statement (each, an "Additional
                                                               ----------
                           Accountant's Statement"), in form and substance
                           ----------------------
                           satisfactory to Radian, reviewing the results of the
                           Independent Accountants' performance of certain
                           agreed upon procedures with respect to then most
                           recently completed and delivered Servicer's
                           Certificate, and otherwise covering the same
                           subjects, and having the same scope, as the Initial
                           Accountant's Statement; provided, however, that
                                                   --------  -------
                           Radian shall not demand Additional Accountant's
                           Statements if and to the extent that no

41

<PAGE>

                           fewer than three consecutive Additional Accountant's
                           Statements are deemed by Radian, in the exercise of
                           its sole discretion, to indicate a high degree of
                           accuracy with respect to the related Servicer's
                           Certificate;

                    (iii)  As soon as practical, but in no event later than 90
                           days after the end of each calendar year during the
                           term hereof (commencing with the calendar year 2003),
                           a statement (each, an "Annual Accountant's
                                                  -------------------
                           Statement"), in form and substance satisfactory to
                           ---------
                           Radian, reviewing the results of the Independent
                           Accountants' performance of certain agreed upon
                           procedures with respect to a sample of (A) no more
                           than, and in the Insurer's discretion, less than six
                           of the preceding twelve Servicer's Certificates and
                           (B) no more than, and in the Insurer's discretion,
                           less than three of the preceding twelve months'
                           reporting and record keeping practices with respect
                           to the Servicer's compliance with provisions of the
                           Basic Documents requiring the deposit or remittance
                           of funds to the Collection Account (in each case,
                           randomly selected by such Independent Accountants),
                           and otherwise covering the same subjects, and having
                           the same scope, as the Initial Accountant's
                           Statement; provided that each of the three months
                                      --------
                           described in clause (B) shall constitute a Monthly
                           Period to which one of the six Servicer's
                           Certificates referred to in clause (A) shall relate;
                           and

                    (iv)   The agreed upon procedures referred to in each of
                           clauses (i), (ii) and (iii) above will be
                           -----------  ----     -----
                           substantially the same procedures agreed upon by
                           Radian and TFC with respect to the securitization
                           transaction pursuant to which the TFC Asset Backed
                           Notes Series 2001-1 were issued.

                    (1)    On or before April 30 (or 120 days after the end of
the Servicer's fiscal year, if other than December 31) of each year, beginning
on April 30, 2002, with respect to the twelve months ended on the immediately
preceding December 31 (or other applicable date) the financial statements of TFC
containing a report of the Independent Accountants to the effect that such firm
has examined the books and records of TFC and that, on the basis of such
examination conducted in compliance with generally accepted audit standards,
such financial statements accurately reflect the financial condition of TFC, in
each case certified by a Responsible Officer of TFC to be true, accurate and
complete copies of such financial statements. The statements referenced above
shall also indicate that the Independent Accountants are independent of TFC and
TFCRC V within the meaning of the Code of Professional Ethics of the American
Institute of Certified Public Accountants.

                    (2)    In the event the above-referenced Independent
Accountants require the Trust Collateral Agent to agree to the procedures to be
performed by such firm in any of the reports required to be prepared pursuant to
this Section 4.01(q), TFC, in its capacity as Servicer only, shall direct the
     ---------------
Trust Collateral Agent in writing to so agree; it being understood and agreed
that the Trust Collateral Agent will deliver such letter of agreement in
conclusive reliance upon the direction of the Servicer, and the Trust Collateral
Agent has not made any independent inquiry or investigation as to, and shall
have no obligation or liability in respect of, the sufficiency, validity or
correctness of such procedures.

42

<PAGE>

                    (3)    All fees, costs and expenses incurred by Radian and
the Trust Collateral Agent in connection with obtaining any of the foregoing
described statements shall be for the sole cost and expense of TFC.

                    (r)    UCC Matters. Within ten days of the Closing Date, TFC
                           -----------
          and TFCRC V shall cause to be filed an assignment to the Trust
          Collateral Agent of all of the rights, title and interest of the
          Issuer in, to and under the UCC-1 financing statements filed with (a)
          the Secretary of State of the Commonwealth of Virginia and (b) the
          Secretary of State of Delaware to the extent that the Trust Collateral
          Agent is not otherwise the secured party of record on such financing
          statements.

                    (s)    Maintenance of Licenses. Each of TFC and TFCRC V
                           -----------------------
          shall maintain all licenses, permits, charges and registrations which
          are material to the performance of its obligations under this
          Insurance Agreement and each of the Transaction Documents to which it
          is a party or by which it is bound.

          Section 4.02. Negative Covenants with Respect to TFCRC V and TFC. Each
                        --------------------------------------------------
of TFCRC V and TFC hereby covenants and agrees that during the term of this
Insurance Agreement, unless Radian shall otherwise expressly consent in writing
(in the absence of an Insurer Default which shall have occurred and be
continuing), which consent shall not be unreasonably withheld:

                    (a)    Restrictions on Liens. Neither TFCRC V nor TFC shall,
                           ---------------------
          except as contemplated by the Transaction Documents, (i) create, incur
          or suffer to exist, or agree to create, incur or suffer to exist, or
          consent to cause or permit in the fixture (upon the happening of a
          contingency or otherwise) the creation, incurrence or existence of any
          Lien or Restriction on Transferability of the Collateral, or (ii) sign
          or file under the Uniform Commercial Code of any jurisdiction any
          financing statement which names TFCRC V or TFC as a debtor, or sign
          any security agreement authorizing any secured party thereunder to
          file such financing statement, with respect to the Collateral.

                    (b)    Impairment of Rights. Neither TFCRC V nor TFC shall
                           --------------------
          take any action, or fail to take any action, if such action or failure
          to take action may reasonably be expected to (i) interfere with the
          enforcement of any rights under the Transaction Documents that are
          material to the rights, benefits or obligations of the Trustee, the
          Trust Collateral Agent, the Noteholders or Radian, (ii) result in a
          Material Adverse Change with respect to the Collateral, or (iii)
          impair the ability of TFCRC V or TFC to perform their respective
          obligations under the Transaction Documents.

                    (c)    Waiver, Amendments, Etc. Neither TFCRC V nor TFC
                           -----------------------
          shall waive, modify or amend, or consent to any waiver, modification
          or amendment of, any of the provisions of any of the Transaction
          Documents.

                    (d)    Successors. Neither TFCRC V nor TFC shall terminate
                           ----------
          or designate, or consent to the termination or designation of, the
          Servicer, the Trustee, the Backup Servicer, the Trust Collateral
          Agent, the P.O. Box Owner, the Successor Servicer, the Owner Trustee
          or any successor thereto.

43

<PAGE>

                    (e)    Creation of Indebtedness; Guarantees. TFCRC V shall
                           ------------------------------------
          not create, incur, assume or suffer to exist any Indebtedness. TFCRC V
          shall not assume, guarantee, endorse or otherwise be or become
          directly or contingently liable for the obligations of any Person by,
          among other things, agreeing to purchase any obligation of another
          Person, agreeing to advance funds to such Person or causing or
          assisting such Person to maintain any amount of capital.

                    (f)    Subsidiaries. TFCRC V shall not form, or cause to be
                           ------------
          formed, any Subsidiaries.


                    (g)    Issuance of Stock. TFCRC V shall not issue any shares
                           -----------------
          of capital stock or rights, warrants or options in respect of capital
          stock or securities convertible into or exchangeable for capital
          stock.

                    (h)    No Mergers. TFCRC V shall not consolidate with or
                           ----------
          merge into any Person or transfer all or any material amount of their
          respective assets to any Person or liquidate or dissolve.

                    (i)    No Related Transactions.
                           -----------------------

                    (i)    TFCRC V shall not conduct transactions with the
                           Parent, TFC or any other Affiliate of the Parent, TFC
                           or TFCRC V or with any shareholder, director,
                           officer, or employee of TFCRC V, other than in the
                           ordinary course of business and on an arm's length
                           basis upon fair and reasonable terms materially no
                           less favorable to TFCRC V than would be obtained in a
                           comparable arm's-length transaction with a Person not
                           an Affiliate of the Parent or TFCRC V or a
                           shareholder, director, officer, or employee of TFCRC
                           V, as the case may be; and

                    (ii)   TFC shall not conduct transactions with the Parent,
                           TFCRC V or any other Affiliate of the Parent or TFC
                           or with any shareholder, director, officer, or
                           employee of TFC which would cause a Material Adverse
                           Change with respect to the financial condition or
                           operations of TFC, other than in the ordinary course
                           of business and on an arm's-length basis upon fair
                           and reasonable terms materially no less favorable to
                           TFC than would be obtained in a comparable
                           arm's-length transaction with a Person not an
                           Affiliate of the Parent or TFC or a shareholder,
                           director, officer, or employee of TFC, as the case
                           may be.

                    (j)    No Sale of Assets. TFCRC V shall not sell, transfer,
                           -----------------
          exchange or otherwise dispose of any of its assets except pursuant to
          the Transaction as expressly permitted under the Transaction
          Documents.

                    (k)    Other Activities. TFCRC V shall not engage in any
                           ----------------
          business or activity other than in connection with the Transaction
          Documents, except (i) as otherwise specifically approved in writing by
          Radian, or (ii) as otherwise permitted by its certificate of
          incorporation.

44

<PAGE>

               (l) Insolvency. Neither TFCRC V nor TFC shall commence with
                   ----------
          respect to TFCRC V or the Issuer any case, proceeding or other action
          (A) under any existing or future law of any jurisdiction, domestic or
          foreign, relating to the bankruptcy, insolvency, reorganization or
          relief of debtors, seeking to have an order for relief entered with
          respect to it, or seeking reorganization, arrangement, adjustment,
          winding-up, liquidation, dissolution, corporation or other relief with
          respect to it or (B) seeking appointment of a receiver, trustee,
          custodian or other similar official for it or for all or any
          substantial part of its assets, or make a general assignment for the
          benefit of its creditors. Neither of TFCRC V nor TFC shall take any
          action in furtherance of, or indicating the consent to, approval of,
          or acquiescence in any of the acts set forth above. TFCRC V shall not
          admit in writing its inability to pay its debts.

               (m) Tangible Net Worth of TFC. TFC shall not permit its Tangible
                   -------------------------
          Net Worth, at any time, calculated as of the close of TFC's then most
          recently concluded fiscal quarter and commencing with the quarter
          ended March 31, 2002, to be less than the sum of (i) $40,000,000 plus
          (ii) 50% of the net earnings (after taxes) of TFC for the period
          commencing on March 31, 2002 and ending at the end of TFC's then most
          recently concluded fiscal quarter (treated for this purpose as a
          single accounting period). For purposes of this clause, if net
          earnings of TFC for any period shall be less than zero, the amount
          calculated pursuant to clause (ii) above for such period shall be
          zero.

               (n) No Change in Name, Etc. TFCRC V shall not make any change to
                   ----------------------
          its corporate name, use any trade names, fictitious names, assumed
          names or "doing business as" names or change its jurisdiction of
          organization. TFC shall not change its name (including using any trade
          names, fictitious names, assumed names or "doing business as" names),
          identity, organizational structure in any manner that would, could or
          might make any financing statement or continuation statement filed in
          connection with the closing of the Transactions, or otherwise in
          accordance with Section 4.01(d) above, seriously misleading within the
                          ---------------
          meaning of Section 9-506 of the UCC, and shall not change its
          jurisdiction of organization unless, in any such case, it shall have
          given Radian at least 60 days' prior written notice thereof and shall
          have filed before the date of such change appropriate new financing
          statements or amendments to all such previously filed financing
          statements or continuation statements.

               (o) No Merger or Consolidation of, or Assumption of the
                   ---------------------------------------------------
          Obligations of, TFC. (x) TFC shall not merge or consolidate with any
          -------------------
          other Person, convey, transfer or lease substantially all its assets
          as an entirety to another Person, or permit any other Person to become
          the successor to TFC's business unless, after the merger,
          consolidation, conveyance, transfer, lease or succession, the
          successor or surviving entity, there shall be no Material Adverse
          Change with respect to the ability of the surviving entity to fulfill
          its duties contained in this Insurance Agreement or in any other
          Transaction Document to which it is a party. Any corporation (i) into
          which TFC may be merged or consolidated, (ii) resulting from any
          merger or consolidation to which TFC shall be a party, (iii) which
          acquires by conveyance, transfer, or lease substantially all of the
          assets of TFC, or (iv) succeeding to the business of TFC, in any of
          the foregoing cases shall execute an agreement of assumption to
          perform every obligation of TFC under this Insurance Agreement and,
          whether or not such assumption agreement is executed, shall be the

45

<PAGE>

          successor to TFC under this Insurance Agreement without the execution
          or filing of any paper or any further act on the part of any of the
          parties to this Insurance Agreement, anything in this Insurance
          Agreement to the contrary notwithstanding; provided, however, that
                                                     --------  -------
          nothing contained herein shall be deemed to release TFC from any
          obligation. TFC shall provide notice of any merger, consolidation or
          succession pursuant to this Section 4.02(o) to the Issuer, the Trust
                                      ---------------
          Collateral Agent, the Noteholders, Radian and the Rating Agency.
          Notwithstanding the foregoing, TFC shall not merge or consolidate with
          any other Person or permit any other Person to become a successor to
          TFC's business, unless (x) immediately after giving effect to such
          transaction, no representation or warranty made by TFC with respect to
          the business, operations or condition (financial or otherwise of TFC)
          pursuant to this Insurance Agreement (by way of avoidance of doubt,
          the representations and warranties referred to in this clause (x)
          shall exclude the representations and warranties made under Schedule B
          of the Purchase 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 Insurance Agreement
          Event of Default shall have occurred and be continuing, (y) TFC shall
          have delivered to the Issuer, the Trust Collateral Agent, the Rating
          Agency and Radian 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 4.02(o) and that all
                                                   ---------------
          conditions precedent, if any, provided for in this Insurance Agreement
          relating to such transaction have been complied with, and (z) TFC
          shall have delivered to the Issuer, the Trust Collateral Agent, the
          Rating Agency and Radian 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 Trust
          Collateral Agent in the Receivables and the Other Conveyed Property
          and reciting the details of the filings or (B) no such action shall be
          necessary to preserve and protect such interest.

               (p) Incorporation of Covenants. Each of TFC and TFCRC V shall
                   --------------------------
          comply with each of their respective covenants set forth in the
          Transaction Documents and hereby incorporates such covenants by
          reference as if each were set forth herein.

               (q) Modification of Receivables. Neither TFC nor TFCRC V shall
                   ---------------------------
          agree to the deferral or extension of a Receivable of the type
          contemplated by the Servicer's charge-off and allowable delinquency
          policies, to the extent that (i) the number of Receivables deferred or
          extended during any Monthly Period exceeds 0.75% of the number of
          Receivables as of the Determination Date related to the immediately
          preceding Monthly Period, or (ii) the aggregate number of Receivables
          deferred or extended since the Closing Date exceeds 1,510.

          Section 4.03. Affirmative Covenants of the Issuer. The Issuer hereby
                        -----------------------------------
covenants and agrees that during the term of this Insurance Agreement, unless
Radian shall otherwise expressly consent in writing:

               (a) Compliance With Agreements and Applicable Laws. The Issuer
                   ----------------------------------------------
          shall perform each of its obligations under the Transaction Documents
          and shall comply with

46

<PAGE>

     all material requirements of, and the Notes shall be offered and sold in
     accordance with, any law, rule, regulation or order applicable to it or
     thereto, or that are required in connection with its performance under any
     of the Transaction Documents. The Issuer will not cause or permit to become
     effective any amendment to or modification of any of the Transaction
     Documents to which it is a party unless Radian shall have previously
     approved in writing the substance of such amendment or modification. The
     Issuer shall not take any action or fail to take any action that would
     interfere with the enforcement of any rights under the Transaction
     Documents.

          (b)  Certain Information. The Issuer shall keep, or cause to be kept,
               -------------------
     in reasonable detail books and records of account of its assets and
     business, which shall be furnished to Radian upon request. The Issuer shall
     furnish to Radian, simultaneously with the delivery of such documents to
     the Trustee, the Noteholders or the Certificateholder, as the case may be,
     copies of all reports, certificates, statements, financial statements or
     notices furnished to the Trustee, the Noteholders or the Certificateholder,
     as the case may be, pursuant to the Transaction Documents. In addition, the
     Issuer shall furnish to Radian the following:

          (i)  Certain Information. Not less than two weeks prior to the date of
               -------------------
               filing with the IRS of any tax return or amendment thereto,
               copies of the proposed form of such return or amendment and,
               promptly after the filing or sending thereof, (A) copies of each
               tax return and amendment thereto that the Issuer files with the
               IRS and (B) copies of all financial statements, reports, and
               registration statements which the Issuer files with, or delivers
               to, any federal government agency, authority or body which
               supervises the issuance of securities by the Issuer.

          (ii) Other Information. Promptly upon the request of Radian, copies of
               -----------------
               all schedules, financial statements or other similar reports
               delivered to or by the Issuer pursuant to the terms of this
               Insurance Agreement and the other Transaction Documents and such
               other data as Radian may reasonably request.

          (c)  Access to Records; Discussions with Officers. The Issuer shall,
               --------------------------------------------
     upon the reasonable request of Radian, permit Radian or its authorized
     agent:

          (i)  to inspect such books and records of the Issuer as may relate to
               the Notes, the Certificate, the Receivables and the other Trust
               Property, the obligations of the Issuer under the Transaction
               Documents, the business of the Issuer and the transactions
               consummated in connection therewith; and

          (ii) to discuss the affairs, finances and accounts of the Issuer with
               an appropriate officer of the Issuer.

          Such inspections and discussions shall be conducted at such reasonable
     times and as often as may be reasonably requested. In each case, such
     access shall be afforded without charge but only upon reasonable request
     and during normal business hours.

47

<PAGE>

          (d)   Notice of Material Events. The Issuer shall promptly inform
                -------------------------
     Radian in writing of the occurrence of any of the following:

          (i)   the submission of any claim or the initiation of any legal
                process, litigation or administrative or judicial investigation
                against the Issuer in any federal, state or local court or
                before any arbitration board, or any such proceeding threatened
                by any governmental agency, which, if adversely determined,
                would cause a Material Adverse Change to occur with respect to
                the Receivables as a whole, or which, if adversely determined,
                would cause a Material Adverse Change to occur with respect to
                the ability of the Issuer to perform its obligations under any
                Transaction Document;

          (ii)  any change in the location of the Issuer's principal office or
                any change in the location of the books and records of the
                Issuer;

          (iii) the occurrence of any Trigger Event, Event of Default, Servicer
                Termination Event, Default or Insurance Agreement Event of
                Default; or

          (iv)  any other event, circumstance or condition that has resulted, or
                which is reasonably likely to result, in a Material Adverse
                Change with respect to the Issuer.

          (e)   Further Assurances. The Issuer will file all necessary financing
                ------------------
     statements, assignments or other instruments, and any amendments or
     continuation statements relating thereto, necessary to be kept and filed in
     such manner and in such places as may be required by law to preserve and
     protect fully the Lien on and security interest in, and all rights of the
     Trust Collateral Agent with respect to the Collateral under the Indenture.
     In addition, the Issuer shall, upon the request of Radian, from time to
     time, execute, acknowledge and deliver, or cause to be executed,
     acknowledged and delivered, within thirty (30) days of such request, such
     amendments hereto and such further instruments and take such further action
     as may be reasonably necessary to effectuate the intention, performance and
     provisions of the Transaction Documents or to protect the interest of the
     Trust Collateral Agent in the Collateral under the Indenture. In addition,
     the Issuer agrees to cooperate with the Rating Agency in connection with
     any review of the Transaction which may be undertaken by the Rating Agency
     after the date hereof.

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

          (g)   Preservation of Existence. The Issuer shall observe in all
                ------------------
     material respects all procedures required by its Certificate and Trust
     Agreement and preserve and maintain its existence as a trust and its
     rights, franchises and privileges in the jurisdiction of its organization,
     and shall qualify and remain qualified in good standing in each
     jurisdiction where the nature of its business requires it to do so except
     where the failure to be so qualified, in good standing and to maintain its
     rights, franchises and privileges would not cause a Material Adverse Change
     to occur with respect to the financial condition of the

48

<PAGE>

     Issuer, or its ability to perform its obligations under this Insurance
     Agreement or under any other Transaction Document to which it is party.

          (h)   Disclosure Document. Each Offering Document with respect to the
                -------------------
     Notes shall include only information concerning Radian that is supplied or
     consented to in writing by Radian expressly for inclusion therein. Each
     Offering Document delivered with respect to the Notes shall clearly
     disclose that the Policy is not covered by the property/casualty insurance
     security fund specified in Article 76 of the New York Insurance Law. In
     addition, each Offering Document delivered with respect to the Notes which
     includes financial statements of Radian prepared in accordance with GAAP
     (but excluding any Offering Document in which such financial statements are
     incorporated by reference) shall include the following statement
     immediately preceding such financial statements:

                The New York State Insurance Department recognizes only
                statutory accounting practices for determining and reporting the
                financial condition and results of operations of an insurance
                company, for determining its solvency under the New York
                Insurance Law, and for determining where its financial condition
                warrants the payment of a dividend to its stockholders. No
                consideration is given by the New York State Insurance
                Department to financial statements prepared in accordance with
                generally accepted accounting principles in making such
                determinations.

          (i)   Special Purpose Entity.
                ----------------------

          (i)   The Issuer shall conduct its business solely in its own name
                through its duly authorized officers or agents so as not to
                mislead others as to the identity of the entity with which those
                others are concerned, and particularly will use its best efforts
                to avoid the appearance of conducting business on behalf of the
                Parent, TFC, TFCRC V or any other Affiliates thereof or that the
                assets of the Issuer are available to pay the creditors of the
                Parent, TFC, TFCRC V or any other Affiliates thereof. Without
                limiting the generality of the foregoing, all oral and written
                communications, including, without limitation, letters,
                invoices, purchase orders, contracts, statements and loan
                applications, will be made solely in the name of the Issuer.

          (ii)  The Issuer shall maintain trust records and books of account
                separate from those of the Parent, TFC, TFCRC V and each of the
                Affiliates of any of them.

          (iii) The Issuer shall obtain proper authorization from its equity
                owners of all trust action requiring such authorization, and
                copies of each such

49

<PAGE>

                 authorization and the minutes or other written summary of each
                 such meeting shall be delivered to Radian within 30 days of
                 such authorization or meeting as the case may be.

          (iv)   Although the organizational expenses of the Issuer have been
                 paid by TFC, operating expenses and liabilities of the Issuer
                 shall be paid from its own funds.

          (v)    The annual financial statements of the Issuer shall disclose
                 the effects of the Issuer's transactions in accordance with
                 GAAP and shall disclose that the assets of the Issuer are not
                 available to pay creditors of the Parent, TFC, TFCRC V or any
                 Affiliate of any of them.

          (vi)   The resolutions, agreements and other instruments of the Issuer
                 underlying the transactions described in this Insurance
                 Agreement and in the other Transaction Documents shall be
                 continuously maintained by the Issuer as official records of
                 the Issuer separately identified and held apart from the
                 records of the Parent, TFC, TFCRC V and each Affiliate of any
                 of them.

          (vii)  The Issuer shall maintain an arm's-length relationship with the
                 Parent, TFC, TFCRC V and each Affiliate of any of them and will
                 not hold itself out as being liable for the debts of any such
                 Person.

          (viii) The Issuer shall keep its assets and its liabilities wholly
                 separate from those of all other entities, including, but not
                 limited to the Parent, TFC, TFCRC V and each Affiliate of any
                 of them except, in each case, as contemplated by the
                 Transaction Documents.

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

          (k)    Securities Laws. The Issuer shall comply in all material
                 ---------------
     respects with all applicable provisions of state and federal securities
     laws, including blue sky laws and the Securities Act, the Securities
     Exchange Act and the Investment Company Act and all rules and regulations
     promulgated thereunder for which non-compliance would result in a Material
     Adverse Change with respect to the Issuer.

          (l)    Incorporation of Covenants. The Issuer shall comply with each
                 --------------------------
     of the Issuer's covenants set forth in the Transaction Documents and hereby
     incorporates such covenants by reference as if each were set forth herein.

          (m)    Reports. The Issuer shall furnish to Radian:
                 -------

50

<PAGE>

          (i)      Annual Financial Statements. As soon as available, and in any
                   ---------------------------
                   event within 120 days after the close of each fiscal year,
                   its unaudited balance sheet as of the end of such fiscal year
                   and the unaudited statements of income, shareholders' equity
                   and cash flows for such fiscal year, all in reasonable detail
                   and stating in comparative form the respective figures for
                   the corresponding date and period in the preceding fiscal
                   year, prepared in accordance with GAAP, consistently applied,
                   and certified by an authorized officer of the Issuer as being
                   complete and correct in all material respects and presenting
                   the financial condition and results of operations of the
                   Issuer as of the dates and for the periods indicated, in
                   accordance with GAAP consistently applied.

          (ii)     Quarterly Financial Statements. As soon as available, and in
                   ------------------------------
                   any event within 45 days after the close of the first three
                   quarters of each fiscal year of the Issuer, the unaudited
                   balance sheets of the Issuer as of the end of each such
                   quarter and the unaudited statements of income and cash flows
                   of the Issuer for the portion of the fiscal year then ended,
                   all in reasonable detail and stating in comparative form the
                   respective figures for the corresponding date and period in
                   the preceding fiscal year, prepared in accordance with GAAP,
                   consistently applied (subject to normal year-end
                   adjustments), and certified by an authorized officer of the
                   Issuer as being complete and correct in all material respects
                   and presenting the financial condition and results of
                   operations of the Issuer as of the dates and for the periods
                   indicated, in accordance with GAAP consistently applied
                   (subject as to interim statements to normal year-end
                   adjustments).

          (iii)    Other Information. Promptly upon receipt thereof, copies of
                   -----------------
                   all reports, statements, certifications, schedules, or other
                   similar items delivered to or by the Issuer pursuant to the
                   terms of the Transaction Documents and, promptly upon
                   request, such other data as Radian may reasonably request.
                   The fees and expenses of Radian or any such authorized
                   agents shall be for the account of the Issuer. The books and
                   records of the Issuer will be maintained at the address for
                   it designated herein for receipt of notices or at the
                   Servicer, unless it shall otherwise advise the parties
                   hereto in writing.

     Section 4.04. Negative Covenants on Behalf of the Issuer. TFCRC V as
                   ------------------------------------------
"Depositor" under the Trust Agreement, on behalf of the Issuer, hereby covenants
and agrees, that during the term of this Insurance Agreement, unless Radian
shall otherwise expressly consent in writing (in the absence of an Insurer
Default which shall have occurred and be continuing):

          (a)      Restrictions on Liens. The Issuer shall not, except as
                   ---------------------
     contemplated by the Transaction Documents, (i) create, incur or suffer to
     exist, or agree to create, incur or suffer to exist, or consent to cause or
     permit in the future (upon the happening of a contingency or otherwise) the
     creation, incurrence or existence of any Lien or Restriction on
     Transferability of the Receivables, or (ii) sign or file under the Uniform
     Commercial Code of any jurisdiction any financing statement which names the
     Issuer as a debtor, or

51

<PAGE>

sign any security agreement authorizing any secured party thereunder to file
such financing statement, with respect to the Receivables.

     (b)  Impairment of Rights. The Issuer shall not take any action, or fail to
          --------------------
take any action, if such action or failure to take action would be reasonably
likely to (i) interfere with the enforcement of any rights under the Transaction
Documents that are material to the rights, benefits or obligations of the
Trustee, the Certificateholder, the Noteholders or Radian, (ii) result in a
Material Adverse Change with respect to the Receivables, or (iii) impair the
ability of the Issuer to perform its obligations under the Transaction
Documents.

     (c)  Waiver, Amendments, Etc. Absent the prior written approval of Radian,
          -----------------------
the Issuer shall not waive, modify or amend, or consent to any waiver,
modification or amendment of, any of the provisions of any of the Transaction
Documents (provided that such prior written approval of Radian shall not be
required in the event that (x) an Insurer Default shall have occurred and be
continuing, and (y) the proposed amendment or modification shall not have an
adverse effect on Radian).

     (d)  Successors. The Issuer shall not terminate or designate, or consent to
          ----------
the termination or designation of, the Servicer, the Backup Servicer, the P.O.
Box Owner, the Successor Servicer, the Trustee, the Trust Collateral Agent, the
Owner Trustee or any successor thereto.

     (e)  Creation of Indebtedness; Guarantees. Other than the Transaction
          ------------------------------------
Documents, the Issuer shall not create, incur, assume or suffer to exist any
Indebtedness other than Indebtedness guaranteed or approved in writing by
Radian. The Trustee shall not assume, guarantee, endorse or otherwise be or
become directly or contingently liable for the obligations of any Person by,
among other things, agreeing to purchase any obligation of another Person,
agreeing to advance funds to such Person or causing or assisting such Person to
maintain any amount of capital.

     (f)  Subsidiaries. The Issuer shall not form, or cause to be formed, any
          ------------
Subsidiaries.


     (g)  No Mergers. The Issuer shall not consolidate with or merge into any
          ----------
Person or transfer all or any material amount of its assets to any Person,
liquidate or dissolve except as permitted by the Trust Agreement and as
contemplated by the Transaction Documents.

     (h)  Other Activities. The Issuer shall not:
          ----------------

     (i)  sell, pledge, transfer, exchange or otherwise dispose of any of its
          assets except as permitted under the Transaction Documents; or

     (ii) engage in any business or activity except as contemplated by the
          Transaction Documents and as permitted by the Trust Agreement.

52

<PAGE>

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

                                   ARTICLE V

                               FURTHER AGREEMENTS

     Section 5.01. Effective Date; Term of Insurance Agreement. This Insurance
                   -------------------------------------------
Agreement shall take effect upon issuance of the Policy on the Closing Date and
shall remain in effect until the later of (a) such time as Radian is no longer
subject to a claim under the Policy and the Policy shall have been surrendered
to Radian for cancellation and (b) all amounts payable to Radian and the
Noteholders under the Transaction Documents and under the Notes have been paid
in full; provided, however, that the provisions of Sections 2.04, 2.05, 2.06,
         --------  -------                         -------------  ----  ----
2.07, 2.08, 2.09 and 2.10 hereof shall survive any termination of this
----  ----  ----     ----
Agreement.

     Section 5.02. Obligations Absolute.
                   --------------------

            (a)    The obligations of the Issuer, TFCRC V and TFC pursuant to
     this Insurance Agreement are absolute and unconditional and will be paid or
     performed strictly in accordance with the respective terms hereof,
     irrespective of:

            (i)    any lack of validity or enforceability of, or any amendment
                   or other modifications of, or waiver with respect to, the
                   Indenture, the Sale and Servicing Agreement, the Policy or
                   the Indemnification Agreement;

            (ii)   any amendment or waiver of, or consent to departure from the
                   Indenture, the Sale and Servicing Agreement, the Policy or
                   the Indemnification Agreement;

            (iii)  the existence of any claim, set off, defense or other rights
                   it may have at any time against the Trustee, the Trust
                   Collateral Agent, any beneficiary or any transferee of the
                   Policy (or any persons or entities for whom the Trustee, the
                   Trust Collateral Agent, any such beneficiary or any such
                   transferee may be acting), Radian or any other person or
                   entity whether in connection with the Policy, the Transaction
                   Documents or any unrelated transactions;

            (iv)   any statement or any other document presented under the
                   Policy (including any Notice for Payment) proving to be
                   forged, fraudulent,

53

<PAGE>

            invalid or insufficient in any respect or any statement therein
            being untrue or inaccurate in any respect whatsoever;

     (v)    the inaccuracy or alleged inaccuracy of any Servicer's Certificate
            or Notice for Payment upon which any drawing under the Policy is
            based;

     (vi)   payment by Radian under the Policy against presentation of a draft
            or certificate which does not comply with the terms of the Policy;

     (vii)  the bankruptcy or insolvency of Radian, the Issuer, any other party
            hereto or the Trust Property;

     (viii) any default or alleged default of Radian under the Policy (other
            than any payment default by Radian under the Policy);

     (ix)   any defense based upon the failure of the Issuer or the Trust
            Property to receive all or part of the proceeds of the sale of the
            Notes or of the Servicer to receive any or all of the Base Servicing
            Fee (as defined in the Indenture) or other compensation required
            under the Indenture or otherwise, or any nonapplication or
            misapplication of the proceeds of any drawing upon the Policy; and

     (x)    any other circumstance or happening whatsoever which would otherwise
            constitute a defense to the obligations of the Issuer, TFCRC V or
            TFC hereunder.

     (b)    Each of TFC, TFCRC V and the Issuer, and any and all other Persons
who are now or may become liable for all or part of the obligations of TFC,
TFCRC V or the Issuer in connection with the Transaction under the Transaction
Documents (or any of them) agrees to be bound by this Agreement and (i) to the
extent permitted by law, waives and renounces any and all redemption and
exemption rights and the benefit of all valuation and appraisement privileges
against the indebtedness, if any, and obligations evidenced by any Transaction
Document or by any extension or renewal thereof, (ii) waives presentment and
demand for payment, notices of nonpayment and of dishonor, protest of dishonor
and notice of protest; (iii) waives all notices in connection with the delivery
and acceptance hereof and all other notices in connection with the performance,
default or enforcement of any payment hereunder except as required by the
Transaction Documents; (iv) waives all rights of abatement, diminution,
postponement or deduction, or to any defense other than payment, or to any right
of setoff or recoupment arising out of any breach under any of the Transaction
Documents, by any party thereto or any beneficiary thereof, or out of any
obligation at any time owing to TFC, TFCRC V or the Issuer; (v) agrees that any
consent, waiver or forbearance hereunder with respect to an event shall operate
only for such event and not for any subsequent event; (vi) consents to any and
all extensions of time that may be granted by Radian with respect to any payment
hereunder or other provisions hereof and to the release of any security at any
time given for any payment hereunder, or any part thereof, with or without
substitution, and to the release of any Person or entity liable for any such
payment; and (vii) consents to the

54

<PAGE>

     addition of any and all other makers, endorsers, guarantors and other
     obligors for any payment hereunder, and to the acceptance of any and all
     other security for any payment hereunder, and agrees that the addition of
     any such obligors or security shall not affect the liability of the parties
     hereto for any payment hereunder.

            (c)    Nothing herein shall be construed as prohibiting TFC, TFCRC
     V or the Issuer from pursuing any rights or remedies it may have against
     any Person other than Radian in a separate legal proceeding.

     Section 5.03. Assignments; Reinsurance; Third-Party Rights.
                   --------------------------------------------

            (a)    This Insurance Agreement shall be a continuing obligation of
     the parties hereto and shall be binding upon and inure to the benefit of
     the parties hereto and their respective successors and permitted assigns.
     None of the Issuer, TFC, TFCRC V, the Servicer, the Backup Servicer or the
     Successor Servicer may assign its rights under this Agreement, or delegate
     any of its duties hereunder, without the prior written consent of Radian.
     Any assignment made in violation of this Agreement shall be null and void.

            (b)    Radian shall have the right to grant participations in its
     rights under this Agreement and to enter into contracts of reinsurance with
     respect to the Policy upon such terms and conditions as Radian may in its
     discretion determine; provided, however, that no such participation or
     reinsurance agreement or arrangement shall relieve Radian of any of its
     obligations hereunder or under the Policy.

            (c)    In addition, Radian shall be entitled to assign or pledge to
     any bank or other investor providing liquidity or credit with respect to
     the Transaction or the obligations of Radian in connection therewith any
     rights of Radian under the Transaction Documents or with respect to any
     real or personal property or other interests pledged to Radian, or in which
     Radian has a security interest, in connection with the Transaction.

            (d)    Except as provided herein with respect to participants and
     reinsurers, nothing in this Agreement shall confer any right, remedy or
     claim, express or implied, upon any Person, including, particularly, any
     Noteholder or the Certificateholder, other than Radian, against the Issuer,
     TFC, TFCRC V, the Servicer, the Backup Servicer or the Successor Servicer,
     and all the terms, covenants, conditions, promises and agreements contained
     herein shall be for the sole and exclusive benefit of the parties hereto
     and their successors and permitted assigns. None of the Trustee, the Owner
     Trustee, or the Trust Collateral Agent, nor any Noteholder or the
     Certificateholder shall have any right to payment from any premiums paid or
     payable hereunder or from any other amounts paid by TFC or any other Person
     pursuant to Article II hereof.
                 ----------

     Section 5.04. Liability of Radian. Each of the Issuer, the Servicer, TFCRC
                   -------------------
V, the Parent, TFC, the Backup Servicer and the Successor Servicer agree that
neither Radian, nor any of its officers, directors or employees shall be liable
or responsible for (except to the extent of its own gross negligence or willful
misconduct): (a) the use which may be made of the Policy by or for any acts or
omissions of another Person in connection therewith or (b) the validity,
sufficiency, accuracy or genuineness of any documents delivered to Radian, or of
any

55




<PAGE>

endorsement(s) thereon, even if such documents should in fact
prove to be in any or all respects invalid, insufficient, fraudulent or forged.
In furtherance and not in limitation of the foregoing, Radian may accept
documents that appear on their face to be in order, without responsibility for
further investigation.

                                   ARTICLE VI

                           EVENTS OF DEFAULT; REMEDIES

     Section 6.01. Insurance Agreement Events of Default. The occurrence of any
                   -------------------------------------
of the following events shall constitute an "Insurance Agreement Event of
                                             ----------------------------
Default" hereunder:
-------

            (a)    any demand for payment shall be made under the Policy;

            (b)    (i) any representation or warranty made by any of the Issuer,
                   the Parent, TFC, the Servicer, or TFCRC V under any of the
                   Basic Documents, or in any certificate or report furnished
                   pursuant to any of the Basic Documents, shall prove to have
                   been untrue or incorrect in any material respect when made;
                   provided, however, if such default has not been committed
                   --------  -------
                   voluntarily and is capable of being cured, it shall be deemed
                   a default hereunder only if it shall continue or fail to be
                   cured, or the circumstance or condition in respect of which
                   such misrepresentation or warranty was incorrect shall not
                   have been eliminated or otherwise cured, for a period of 30
                   days after such Person shall have been given a written notice
                   by Radian, the Trustee or the Trust Collateral Agent
                   specifying such default or incorrect representation or
                   warranty and requiring it to be remedied;

            (ii)   any covenant made by any of the Issuer, the Parent, TFC, the
                   Servicer, or TFCRC V under any of the Basic Documents (other
                   than any covenant described in clause (iii) below), shall be
                                                  -----------
                   breached in any material respect; provided, however, if such
                                                     --------  -------
                   breach in the observance or performance of such covenant has
                   not been committed voluntarily and is capable of being cured,
                   it shall be deemed a default hereunder only if it shall
                   continue or fail to be cured, or the circumstance or
                   condition in respect of which such covenant was breached
                   shall not have been eliminated or otherwise cured, for a
                   period of 30 days after such Person shall have been given a
                   written notice by Radian, the Trustee or the Trust Collateral
                   Agent specifying such breach and requiring it to be remedied;
                   or

            (iii)  any of the Issuer, TFC or TFCRC V shall fail to pay when due
                   any amount payable under any of the Transaction Documents
                   unless such amounts are paid in full within any applicable
                   cure period explicitly provided for under the relevant
                   Transaction Document;

            (c)    with respect to any Determination Date described below, the
Cumulative Net Loss Rate shall be greater than the percentage set forth below
opposite the description of such Determination Date:

56

<PAGE>

-------------------------------------------------------------------------------
                Period                                 Maximum Percentage
                ------                                 ------------------

-------------------------------------------------------------------------------
For the January, February and March 2002                     1.53%
Determination Dates

-------------------------------------------------------------------------------
For the April, May and June 2002                             5.33%
Determination Dates
-------------------------------------------------------------------------------
For the July, August and September 2002                     12.65%
Determination Dates

-------------------------------------------------------------------------------
For the October, November and December 2002                 19.41%
Determination Dates

-------------------------------------------------------------------------------
For the January, February and March 2003                    19.75%
Determination Dates

-------------------------------------------------------------------------------
For the April, May and June 2003                            20.53%
Determination Dates

-------------------------------------------------------------------------------
For the July, August and September 2003                     21.51%
Determination Dates

-------------------------------------------------------------------------------
For the October, November and December 2003                 22.50%
Determination Dates

-------------------------------------------------------------------------------
For the January, February and March 2004                    23.48%
Determination Dates

-------------------------------------------------------------------------------
For the April, May and June 2004                            24.47%
Determination Dates

-------------------------------------------------------------------------------
For the July, August and September 2004                     26.40%
Determination Dates

-------------------------------------------------------------------------------
For the October 2004 Determination Date and                 26.43%
thereafter

-------------------------------------------------------------------------------


               (d)  (i) the Issuer, TFC or TFCRC V shall have asserted that any
         of the Transaction Documents to which it is a party is not valid and
         binding on the parties thereto; or (ii) any court, governmental
         authority or agency having jurisdiction over any of the parties to any
         of the Transaction Documents or any property thereof shall find or rule
         that any material provision of any of the Transaction Documents is not
         valid and binding on the parties thereto;

57

<PAGE>

         (e) (i) any of the Issuer, TFC or TFCRC V shall fail to pay its debts
     generally as they come due, or shall admit in writing its inability to pay
     its debts generally, or shall make a general assignment for the benefit of
     creditors, or shall institute any proceeding seeking to adjudicate it
     insolvent or seeking a liquidation, or shall take advantage of any
     insolvency act, or shall commence a case or other proceeding naming it as
     debtor under the United States Bankruptcy Code or similar law, domestic or
     foreign; (ii) or a case or other proceeding shall be commenced against any
     of the Issuer, TFC or TFCRC V under the United States Bankruptcy Code or
     similar law, domestic or foreign, or any proceeding shall be instituted
     against any of the Issuer, TFC or TFCRC V seeking liquidation of their
     respective assets, and such Person shall fail to take appropriate action
     resulting in the withdrawal or dismissal of such proceeding within 60 days;
     (iii) or there shall be appointed, or any of the Issuer, TFC or TFCRC V
     shall consent to, or acquiesce in, the appointment of a receiver,
     liquidator, conservator, trustee or similar official in respect of such
     Person or the whole or any substantial part of its respective properties or
     assets; or (iv) such Person shall take any corporate action in furtherance
     of any of the foregoing;

         (f) on any Payment Date, after taking into account the application in
     accordance with Section 5.7(a) of the Sale and Servicing Agreement on the
                     --------------
     related Payment Date of the sum of Available Funds with respect to such
     related Payment Date and the amounts available in the Spread Account (prior
     to withdrawals therefrom in accordance with the terms of the Spread Account
     under the Sale and Servicing Agreement) any amounts payable on such related
     Payment Date pursuant to clauses (i), (ii), (iii) or (v) of Section 5.7(a)
                                                                 --------------
     of the Sale and Servicing Agreement have not been paid in full;

         (g) with respect to (i) the April 2002 Determination Date, the
     Delinquency Ratio shall be greater than 21.46%; (ii) the May 2002
     Determination Date, the arithmetic average of the Delinquency Ratios for
     such Determination Date and the preceding Determination Date shall be
     greater than 21.46% and (iii) each subsequent Determination Date described
     below, any Determination Date described below, the arithmetic average of
     the Delinquency Ratios for such Determination Date and the two immediately
     preceding Determination Dates shall be greater than the percentage set
     forth below opposite the period during which such Determination Date
     occurs:

--------------------------------------------------------------------------------
                   Period                                  Maximum Percentage
                   ------                                  ------------------

--------------------------------------------------------------------------------
For each Determination Date occurring prior to the              21.46%
June 2002 Determination Date

--------------------------------------------------------------------------------
For the June 2002 Determination Date through the                24.68%
December 2002 Determination Date

--------------------------------------------------------------------------------
For each Determination Date occurring after the                 30.07%
December 2002 Determination Date

--------------------------------------------------------------------------------

58

<PAGE>

         (h)    the occurrence of a Servicer Termination Event;

         (i)    TFC shall fail to pay any principal, premium or interest on any
Indebtedness having an aggregate principal amount of $1,000,000 or greater, when
the same becomes due and payable (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise) and such failure shall continue
uncured and unwaived after the applicable grace period, if any, specified in the
agreement or instrument relating to such Indebtedness; or any other default
under any agreement or instrument relating to any such Indebtedness of either of
TFC or any other similar event, shall occur and shall continue uncured and
unwaived after the applicable grace period, if any, specified in such agreement
or instrument if the effect of such failure to pay, other default or other event
is to accelerate, or permit the acceleration of, the maturity of such
Indebtedness; or any such Indebtedness shall be declared to be due and payable
or required to be prepaid (other than by a regulatory scheduled required
prepayment) prior to the stated maturity thereof;

         (j)    the occurrence of any Event of Default under the Indenture,
which event is not cured within the applicable grace period, if any;

         (k)    the Trust Collateral Agent shall fail to have a perfected, first
priority security interest in the Trust Property; or

         (l)    the Issuer becomes taxable as an association (or publicly traded
partnership) taxable as a corporation for federal or state income tax purposes.

Section 6.02.   Remedies; Waivers.
                -----------------

         (a)    Upon the occurrence of an Insurance Agreement Event of Default,
Radian may exercise any one or more of the rights and remedies set forth below:

         (i)    declare all or a portion of the Premium Supplement that has
                accrued or will accrue payable, and the same shall thereupon (A)
                be immediately due and payable to the extent then accrued and
                (B) become immediately due and payable upon accrual to the
                extent accruing thereafter, whether or not Radian shall have
                declared an "Insurance Agreement Event of Default" or shall have
                exercised, or be entitled to exercise, any other rights or
                remedies hereunder;

         (ii)   exercise any rights and remedies available under the Basic
                Documents in its own capacity or in its capacity as the Person
                entitled to exercise the rights of the Controlling Party under
                the Basic Documents, including, without limitation, its right to
                accelerate the Notes, to sell the Receivables, or to terminate
                TFC as Servicer and to appoint a substitute Servicer, as
                applicable; or

         (iii)  take whatever action at law or in equity may appear necessary or
                desirable in its judgment to enforce performance of any
                obligation of the Issuer, the Parent, TFC or TFCRC V under the
                Basic Documents.

59

<PAGE>

          (b) Unless otherwise expressly provided, no remedy herein conferred
upon or reserved is intended to be exclusive of any other available remedy, but
each remedy shall be cumulative and shall be in addition to other remedies given
under the Basic Documents or existing at law or in equity. No delay or failure
to exercise any right or power accruing under any Transaction Document upon the
occurrence of any Event of Default or otherwise shall impair any such right or
power or shall be construed to be a waiver thereof, but any such right or power
may be exercised from time to time and as often as may be deemed expedient. In
order to entitle Radian to exercise any remedy reserved to Radian in this
Article VI, it shall not be necessary to give any notice, other than such notice
----------
as may be expressly required in this Article VI.
                                     ----------

          (c) If any proceeding has been commenced to enforce any right or
remedy under this Insurance Agreement and such proceeding has been discontinued
or abandoned for any reason, or has been determined adversely to Radian, then
and in every such case the parties hereto shall, subject to any determination in
such proceeding, be restored to their respective former positions hereunder,
and, thereafter, all rights and remedies of Radian shall continue as though no
such proceeding had been instituted.

          (d) Radian shall have the right, to be exercised in its complete
discretion, to waive compliance with any covenant, or waive any Default or
Insurance Agreement Event of Default or collection of Premium Supplement by a
writing setting forth the terms, conditions and extent of such waiver signed by
Radian and delivered to the Issuer, the Parent, TFC or TFCRC V, as the case may
be. Any such waiver may only be effected in writing duly executed by Radian, and
no other course of conduct shall constitute a waiver of any provision hereof.
Unless such writing expressly provides to the contrary, any waiver so granted
shall extend only to the specific event or occurrence so waived and not to any
other similar event or occurrence.

                                  ARTICLE VII

                            MISCELLANEOUS PROVISIONS

          Section 7.01. Amendments, Etc. No amendment or waiver of any provision
                        ---------------
of this Insurance Agreement, nor consent to any departure therefrom, shall in
any event be effective unless in writing and signed by all of the parties
hereto, with written notice thereof to the Rating Agency in the case of any
material amendment or waiver; provided that any waiver so granted shall extend
                              --------
only to the specific event of occurrence so waived and not to any other similar
event or occurrence which occurs subsequent to the date of such waiver. No act
or course of dealing shall be deemed to constitute an amendment, modification or
termination hereof.

          Section 7.02. Notices. Except to the extent otherwise expressly
                        -------
provided herein, all notices, requests and demands to or upon the respective
parties hereto to be effective shall be in writing (and if sent by mail,
certified or registered, return receipt requested) or facsimile transmission
and, unless otherwise expressly provided herein, shall be deemed to have been
duly given or made when delivered by hand, or three (3) Business Days after
being deposited in the mail, postage prepaid, or, in the case of facsimile
transmission, when sent, addressed as follows

60

<PAGE>

or to such other address or facsimile number as set forth in a written notice
delivered by a party to each other party hereto:

         If to TFC, the Parent or the Servicer:
         -------------------------------------

         The Finance Company
         TFC Enterprises, Inc.
         5425 Robin Hood Road, Suite 101B
         Norfolk, Virginia  23513
         Attention:  Ronald G. Tray, President
         Telephone:  (757) 858-1400
         Facsimile:   (757) 858-4093

         With a copy to:

         John M. Paris, Jr.
         Williams, Mullen, Clark, Dobbins P.C.
         900 One Columbus Center,
         Virginia Beach, Virginia  23462
         Telephone:  (757) 473-5308
         Facsimile:    (757) 473-0395


         If to TFCRC V:
         -------------

         5425 Robin Hood Road, Suite 101B
         Norfolk, Virginia  23513
         Attention:  Ronald G. Tray, President
         Telephone: (757) 858-1400
         Facsimile:   (757) 858-4093

         With a copy to:

         John M. Paris, Jr.
         Williams, Mullen, Clark, Dobbins P.C.
         900 One Columbus Center,
         Virginia Beach, Virginia  23462
         Telephone:  (757) 473-5308
         Facsimile:    (757) 473-0395


         If to the Issuer:
         ----------------

         TFC Automobile Receivables Trust 2002-1
         c/o Wilmington Trust Company
         Rodney Square North
         1100 North Market Street
         Wilmington, Delaware  19890-0001

61

<PAGE>

Attention: Corporate Trust Administration
Telephone: (302) 636-6170
Facsimile: (302) 636-4140

If to Radian:
------------

Radian Asset Assurance Inc.
335 Madison Avenue
New York, NY 10017-4605
Attention: Chief Risk Officer
Telephone: (212) 983-3100
Facsimile: (212) 682-5377

(in each case in which notice or other communication to Radian refers to an
Insurance Agreement Event of Default, a claim on the Policy or with respect to
which failure on the part of Radian to respond shall be deemed to constitute
consent or acceptance, then a copy of such notice or other communication should
also be sent to the attention of each of the General Counsel and the
Head-Financial Guaranty Group and shall be marked to indicate "URGENT MATERIAL
ENCLOSED.")

If to the Trustee, Trust Collateral Agent, Backup Servicer and P.O. Box Owner:
-----------------------------------------------------------------------------

Wells Fargo Bank Minnesota, National Association
Sixth Street and Marquette Avenue, MAC N9311-161
Minneapolis, Minnesota 55479
Attention: Corporate Trust Services/Asset-Backed Administration
Telephone: (612) 667-8058
Facsimile: (612) 667-3464

If to the Successor Servicer:
----------------------------

Wells Fargo Financial America, Inc.
59 Skyline Drive, Suite 1700
Lake Mary, Florida  32746
Attention: Rick Potter
Telephone: (407) 829-7878
Facsimile: (407) 804-7877

with a copy to:

Wells Fargo Financial, Inc.
206 Eighth Street
Des Moines, Iowa  50309
Attention: General Counsel
Telephone: (515) 557-7251
Facsimile: (515) 557-7602

62

<PAGE>

     Section 7.03. No Waiver; Remedies and Severability. No failure on the part
                   ------------------------------------
of Radian to exercise, and no delay in exercising, any right hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of any
such right preclude any other or further exercise thereof or the exercise of any
other right. The remedies herein provided are cumulative and not exclusive of
any remedies provided by law. The parties further agree that the holding by any
court of competent jurisdiction that any remedy pursued by Radian hereunder is
unavailable or unenforceable shall not affect in any way the ability of Radian
to pursue any other remedy available to it. In the event any provision of this
Insurance Agreement shall be held invalid or unenforceable by any court of
competent jurisdiction, the parties hereto agree that such holding shall not
invalidate or render unenforceable any other provision hereof.

     Section 7.04. Payments.
                   --------

          (a)      All payments to Radian hereunder shall be made in lawful
     currency of the United States and in immediately available funds, shall be
     made prior to 1:00 p.m. (New York City time) on the date such payment is
     due by wire transfer pursuant to the wire transfer instructions and bank
     account information set forth in the Premium Letter, or to such other
     office or account as Radian may direct. Payments received by Radian after
     1:00 p.m. (New York City time) shall be deemed to have been received on the
     next succeeding Business Day, and such extension of time shall be included
     in computing interest, commissions or fees, if any, in connection with such
     payment.

          (b)      Whenever any payment under this Insurance Agreement shall be
     stated to be due on a day which is not a Business Day, such payment shall
     be made on the next succeeding Business Day, and such extension of time
     shall in such cases be included in computing interest, commissions or fees,
     if any, in connection with such payment.

          (c)      Unless otherwise specified herein, Radian shall be entitled
     to interest on all amounts owed to Radian under this Insurance Agreement,
     together with interest on any and all amounts remaining unpaid (to the
     extent permitted by law, if in respect of any unpaid amounts representing
     interest) from the date such amounts become due until paid in full (after
     as well as before judgment), at a rate of interest equal to the Prime Rate
     from time to time in effect plus 2.0%.

          (d)      In the event of any payment by Radian for which it is
     entitled to be reimbursed or indemnified as provided above, each of the
     Issuer, TFC and TFCRC V agrees to accept the voucher or other evidence of
     payment as prima facie evidence of the propriety thereof and the liability
     therefor to Radian.

     SECTION 7.05. GOVERNING LAW. THIS INSURANCE AGREEMENT SHALL BE CONSTRUED,
                   -------------
AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BEs
DETERMINED, IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

     Section 7.06. Counterparts. This Insurance Agreement may be executed in
                   ------------
counterparts by the parties hereto, and each such counterpart shall be
considered an original and all such counterparts shall constitute one and the
same instrument.

63

<PAGE>

     Section 7.07. Paragraph Headings, Etc. The headings of paragraphs contained
                   -----------------------
in this Insurance Agreement are provided for convenience only. They form in no
part of this Insurance Agreement and shall not affect its construction or
interpretation.

     Section 7.08. No Petition. Each of the parties hereto agrees that it will
                   -----------
not institute against, or join any other Person in instituting against, the
Issuer or the Trust Property any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceeding, or other proceeding under any federal or
state bankruptcy or similar law, for one year and one day after satisfaction of
all of the Issuer's payment obligations under the Notes, the Premium Letter and
this Insurance Agreement. The provisions of this Section 7.08 shall survive the
                                                 ------------
termination of this Insurance Agreement.

     Section 7.09. Consent to Jurisdiction. (a) THE PARTIES HERETO HEREBY
                   -----------------------
IRREVOCABLY SUBMIT TO THE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR
THE SOUTHERN DISTRICT OF NEW YORK AND ANY COURT IN THE STATE OF NEW YORK LOCATED
IN THE CITY AND COUNTY OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, IN
ANY ACTION, SUIT OR PROCEEDING BROUGHT AGAINST IT AND TO OR IN CONNECTION WITH
ANY OF THE TRANSACTION DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREUNDER OR
FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND THE PARTIES HERETO HEREBY
IRREVOCABLY AND UNCONDITIONALLY AGREE THAT ALL CLAIMS IN RESPECT OF ANY SUCH
ACTION OR PROCEEDING MAY BE HEARD OR DETERMINED IN SUCH NEW YORK STATE COURT OR,
TO THE EXTENT PERMITTED BY LAW, IN SUCH FEDERAL COURT. THE PARTIES HERETO AGREE
THAT A FINAL JUDGMENT IN ANY SUCH ACTION, SUIT OR PROCEEDING SHALL BE CONCLUSIVE
AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY
OTHER MANNER PROVIDED BY LAW. TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE
PARTIES HERETO HEREBY WAIVE AND AGREE NOT TO ASSERT BY WAY OF MOTION, AS A
DEFENSE OR OTHERWISE IN ANY SUCH SUIT, ACTION OR PROCEEDING, ANY CLAIM THAT IT
IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF SUCH COURTS, THAT THE SUIT,
ACTION OR PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM, THAT THE VENUE OF THE
SUIT, ACTION OR PROCEEDING IS IMPROPER OR THAT THE TRANSACTION DOCUMENTS OR THE
SUBJECT MATTER THEREOF MAY NOT BE LITIGATED IN OR BY SUCH COURTS.

          (b)      To the extent permitted by applicable law, the parties hereto
     shall not seek and hereby waive the right to any review of the judgment of
     any such court by any court of any other nation or jurisdiction which may
     be called upon to grant an enforcement of such judgment.

          (c)      Each of TFC and TFCRC V hereby irrevocably appoints and
     designates The Prentice-Hall Corporation System, Inc., whose address is 15
     Columbus Circle, New York, New York 10023-7773, as its true and lawful
     attorney and duly authorized agent for acceptance of service of legal
     process. Each of TFC and TFCRC V agrees that service of such process upon
     such Person shall constitute personal service of such process upon it.

64

<PAGE>

          (d)      Nothing contained in the Agreement shall limit or affect
     Radian's right to serve process in any other manner permitted by law or to
     start legal proceedings relating to any of the Transaction Documents
     against TFC or TFCRC V or their respective property in the courts of any
     jurisdiction.

     Section 7.10. Consent of Radian. In the event that Radian's consent is
                   -----------------
required under any of the Transaction Documents, the determination whether to
grant or withhold such consent shall be made by Radian in its sole discretion
without any implied duty towards any other Person, except as otherwise expressly
provided therein.

     Section 7.11. Jury Trial Waiver. EACH PARTY HERETO HEREBY WAIVES, TO THE
                   -----------------
FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION ARISING DIRECTLY OR INDIRECTLY OUT OF, UNDER OR IN CONNECTION WITH
ANY OF THE TRANSACTION DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED
THEREUNDER. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT IT
WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND
(B) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THE TRANSACTION
DOCUMENTS TO WHICH IT IS A PARTY BY, AMONG OTHER THINGS, THIS WAIVER.

     Section 7.12. Limitation of Liability.
                   -----------------------

          (a)      No recourse under any Transaction Document shall be had
     against, and no personal liability shall attach to, any officer, employee,
     director, affiliate or shareholder of any party hereto, as such, by the
     enforcement of any assessment or by any legal or equitable proceeding, by
     virtue of any statute or otherwise in respect of any of the Transaction
     Documents, the Notes or the Policy, it being expressly agreed and
     understood that each Transaction Document is solely a corporate obligation
     of each party hereto, and that any and all personal liability, either at
     common law or in equity, or by statute or constitution, of every such
     officer, employee, director, affiliate or shareholder for breaches by any
     party hereto of any obligations under any Transaction Document is hereby
     expressly waived as a condition of and in consideration for the execution
     and delivery of this Agreement.

          (b)      It is expressly understood and agreed by the parties hereto
     that (i) this Insurance Agreement is executed and delivered by Wilmington
     Trust Company, not individually or personally but solely as Owner Trustee
     of the Issuer under the Trust Agreement, in the exercise of the powers and
     authority conferred and vested in it, (ii) each of the representations,
     undertakings and agreements herein made on the part of the Issuer is made
     and intended not as personal representations, undertakings and agreements
     by Wilmington Trust Company but is made and intended for the purpose for
     binding only the Issuer, (iii) nothing herein contained shall be construed
     as creating any liability on Wilmington Trust Company individually or
     personally, to perform any covenant either expressed or implied contained
     herein, all such liability, if any, being expressly waived by the parties
     to this Insurance Agreement and by any person claiming by, through or

65

<PAGE>

     under them and (iv) under no circumstances shall Wilmington Trust Company
     be personally liable for the payment of any indebtedness or expenses of the
     Issuer or be liable for the breach or failure of any obligation,
     representation, warranty or covenant made or undertaking by the Issuer
     under this Insurance Agreement or any related documents.

     Section 7.13. Third Party Beneficiary. Each of TFC, the Servicer, TFCRC V,
                   -----------------------
the Issuer, the Trustee, the Trust Collateral Agent, the P.O. Box Owner, the
Backup Servicer and the Successor Servicer hereby agrees that Radian shall have
all of the rights of a third-party beneficiary in, to, under and in respect of
the Sale and Servicing Agreement and the Indenture, and hereby incorporates and
restates each of its respective, representations, warranties, undertakings,
covenants and understandings, all as set forth therein, for the benefit of
Radian.

     Section 7.14. Entire Agreement. This Insurance Agreement, the Premium
                   ----------------
Letter and the Policy set forth the entire agreement between the parties with
respect to the subject matter hereof and thereof, and this Insurance Agreement
supersedes and replaces any agreement or understanding that may have existed
between the parties prior to the date hereof in respect of any such subject
matter.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

66

<PAGE>

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

                                            RADIAN ASSET ASSURANCE INC.


                                            By: ________________________________
                                                Name:
                                                Title:

                                            TFC RECEIVABLES CORPORATION V


                                            By: ________________________________
                                                Name:
                                                Title:

                                            THE FINANCE COMPANY,
                                            individually and as Servicer


                                            By: ________________________________
                                                Name:
                                                Title:

                                            WELLS FARGO BANK MINNESOTA,
                                            NATIONAL ASSOCIATION, not in its
                                            individual capacity, but solely as
                                            Trust Collateral Agent, Trustee,
                                            P.O. Box Owner and as Backup
                                            Servicer

                                            By: ________________________________
                                                Name:
                                                Title:

                                            WELLS FARGO FINANCIAL AMERICA, INC.,
                                            as Successor Servicer

                                            By: ________________________________
                                                Name:
                                                Title:

<PAGE>

                                            TFC AUTOMOBILE RECEIVABLES TRUST
                                            2002-1

                                            By:      WILMINGTON TRUST COMPANY,
                                            not in its individual capacity but
                                            solely as Owner Trustee


                                            By: ________________________________
                                                Name:
                                                Title:

<PAGE>

                                   SCHEDULE 1

          The following table is based, in part, on The Finance Company's memo
entitled "Aged Trial Balance Report Modifications for Non-Monthly Accounts MIS
Project #2367", dated March 5, 1998, and for Monthly Accounts, Section 6.1 of
the November 1991 Collection Manual for Monthly Accounts.

          1.   Pursuant to (i) the Sale and Servicing Agreement dated as of
March 19, 2002 (the "Sale and Servicing Agreement") among TFC Automobile
                     ----------------------------
Receivables Trust 2002-1 as issuer (the "Issuer"), The Finance Company ("TFC")
                                         ------                          ---
as servicer (the "Servicer"), Radian Asset Assurance Inc., ("Radian") TFC
                  --------
Receivables Corporation V as seller ("TFCRC V"), Wells Fargo Bank Minnesota,
                                      -------
National Association (individually "Wells Fargo") as trust collateral agent,
                                    -----------
backup servicer and P.O. box owner, and Wells Fargo Financial America, Inc.
(individually, "Wells Fargo Financial"), as successor servicer; (ii) the
                ---------------------
Insurance and Indemnity Agreement dated as of March 19, 2002 (the "Insurance
                                                                   ---------
Agreement") among Radian, the Issuer, TFCRC V, the Servicer, Wells Fargo as
---------
trustee, trust collateral agent, Backup servicer and P.O. box owner and Wells
Fargo Financial, as successor servicer; (iii) the other Basic Documents (as
defined under the Sale and Servicing Agreement); and (iv) the transactions
contemplated by the agreements listed in clauses (i) through (iii) above, the
following table shall be used to define delinquency categories for contracts
with monthly Scheduled Receivable Payments ("Monthly-Pay Contracts") and
                                             ---------------------
contracts with more frequent Scheduled Receivable Payments ("Non-monthly-Pay
                                                             ---------------
Contracts"):
---------

<TABLE>
<CAPTION>
Monthly-Pay Contracts*           Non-Monthly-Pay Contracts**                 Delinquency
(# Months Delinquent)              (# Weeks Delinquent)                        Category
---------------------------------------------------------------------------------------------------
<S>                              <C>                                         <C>
         0                                  0-5                                 Current
         1                                  6-9                                    30
         2                                  10-13                                  60
         3                                  14-17                                  90
         4                                  18-21                                  120
         5                                  22-25                                  150
         6                                  26+                                    180+
</TABLE>

          2.   In accordance with TFC's customary policy, in assigning a
delinquency category to any contract, a single partial payment of at least 51%
of a Scheduled Receivable Payment (a "One-Time Partial Payment") shall prevent
                                      ------------------------
either the characterization of such contract as being in the 30 Delinquency
Category or, in the case of a contract which is in a more advanced Delinquency
Category at the time of the receipt of such One-Time Partial Payment,
progression of the contract to the next higher Delinquency Category.

______________
    *Monthly-Pay contracts (e.g., "Monthly Accounts").

    **Non-monthly-Pay contracts (e.g., "Weekly Accounts," "Bi-Weekly Accounts,"
and "Semi-Monthly Accounts").

<PAGE>

                                   SCHEDULE 2

                        CIVILIAN PORTFOLIO CONCENTRATION
                        --------------------------------

<TABLE>
<CAPTION>
------------------------------------------------------

Calendar Quarter       Civilian Percentage Limit
     (ending)
<S>                    <C>
    March 2002                   49.00%
    June 2002                    49.00%
  September 2002                 49.00%
  December 2002                  49.00%
------------------------------------------------------
</TABLE>

<PAGE>

                                    EXHIBIT A

                   FORM OF FINANCIAL GUARANTY INSURANCE POLICY

                                   [Attached]

<PAGE>

                                    EXHIBIT B

                                CLOSING CHECKLIST

                                   [Attached]