Document:

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                                                                    Exhibit 10.3

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                                    INDENTURE

                          RADIAN ASSET ASSURANCE INC.,
                                     Insurer

                                       and

                    TFC AUTOMOBILE RECEIVABLES TRUST 2002-1,
                                     Issuer

                                       and

                WELLS FARGO BANK MINNESOTA, NATIONAL ASSOCIATION
                       Trustee and Trust Collateral Agent

                           Dated as of March 19, 2002

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                                TABLE OF CONTENTS

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Article I.     Definitions and Incorporation by Reference .............................    2

    Section 1.1.   Definitions ........................................................    2

    Section 1.2.   [Reserved]. ........................................................    9

    Section 1.3.   Rules of Construction ..............................................    9

    Section 1.4.   Action by or Consent of Noteholders and Certificateholders .........   10

    Section 1.5.   Material Adverse Effect ............................................   10

Article II.    The Notes ..............................................................   10

    Section 2.1.   Form. ..............................................................   10

    Section 2.2.   Execution, Authentication and Delivery .............................   11

    Section 2.3.   Temporary Notes. ...................................................   11

    Section 2.4.   Registration; Registration of Transfer and Exchange ................   12

    Section 2.5.   Restrictions on Transfer and Exchange. .............................   12

    Section 2.6.   Mutilated, Destroyed, Lost or Stolen Notes. ........................   15

    Section 2.7.   Persons Deemed Owner ...............................................   16

    Section 2.8.   Payment of Principal and Interest; Defaulted Interest ..............   16

    Section 2.9.   Cancellation .......................................................   17

    Section 2.10.  Release of Collateral ..............................................   18

    Section 2.11.  Notices to Noteholders .............................................   18

    Section 2.12.  Book-Entry Notes. ..................................................   18

    Section 2.13.  Definitive Notes. ..................................................   19

Article III.   Covenants ..............................................................   19

    Section 3.1.   Payment of Principal and Interest ..................................   19

    Section 3.2.   Maintenance of Office or Agency ....................................   20

    Section 3.3.   Money for Payments to be Held in Trust .............................   20

    Section 3.4.   Existence ..........................................................   21

    Section 3.5.   Protection of Trust Property .......................................   21

    Section 3.6.   Opinions as to Trust Property ......................................   22

    Section 3.7.   Performance of Obligations; Servicing of Receivables ...............   23

    Section 3.8.   Negative Covenants. ................................................   24
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                                TABLE OF CONTENTS
                                   (continued)

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         Section 3.9.   Annual Statement as to Compliance .............................   24

         Section 3.10.  Issuer May Consolidate, Etc. Only on Certain Terms ............   25

         Section 3.11.  Successor or Transferee. ......................................   27

         Section 3.12.  No Other Business .............................................   27

         Section 3.13.  No Borrowing ..................................................   27

         Section 3.14.  Servicer's Obligations ........................................   27

         Section 3.15.  Guarantees, Loans, Advances and Other Liabilities .............   27

         Section 3.16.  Capital Expenditures ..........................................   28

         Section 3.17.  Compliance with Laws ..........................................   28

         Section 3.18.  Restricted Payments ...........................................   28

         Section 3.19.  Notice of Events of Default ...................................   28

         Section 3.20.  Further Instruments and Acts ..................................   28

         Section 3.21.  Amendments of Sale and Servicing Agreement and
                        Trust Agreement ...............................................   28

         Section 3.22.  Income Tax Characterization ...................................   28

Article IV.    Satisfaction and Discharge .............................................   29

         Section 4.1.   Satisfaction and Discharge of Indenture .......................   29

         Section 4.2.   Application of Trust Money ....................................   30

         Section 4.3.   Repayment of Monies Held by Note Paying Agent .................   30

Article V.     Remedies ...............................................................   30

         Section 5.1.   Events of Default .............................................   30

         Section 5.2.   Rights Upon Event of Default. .................................   32

         Section 5.3.   Collection of Indebtedness and Suits for Enforcement
                        by Trustee ....................................................   33

         Section 5.4.   Remedies ......................................................   35

         Section 5.5.   Optional Preservation of the Receivables ......................   36

         Section 5.6.   Priorities ....................................................   37

         Section 5.7.   Limitation of Suits ...........................................   37

         Section 5.8.   Unconditional Rights of Noteholders To Receive Principal
                        and Interest ..................................................   38

         Section 5.9.   Restoration of Rights and Remedies ............................   38
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                                TABLE OF CONTENTS
                                   (continued)

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         Section 5.10.  Rights and Remedies Cumulative ................................   39

         Section 5.11.  Delay or Omission Not a Waiver ................................   39

         Section 5.12.  Control by Noteholders ........................................   39

         Section 5.13.  Waiver of Past Defaults .......................................   39

         Section 5.14.  Undertaking for Costs .........................................   40

         Section 5.15.  Waiver of Stay or Extension Laws ..............................   40

         Section 5.16.  Action on Notes ...............................................   40

         Section 5.17.  Performance and Enforcement of Certain Obligations ............   40

         Section 5.18.  Subrogation ...................................................   41

         Section 5.19.  Preference Claims .............................................   41

Article VI.    The Trustee and the Trust Collateral Agent .............................   42

         Section 6.1.   Duties of Trustee .............................................   42

         Section 6.2.   Rights of Trustee and the Trust Collateral Agent ..............   44

         Section 6.3.   Individual Rights of Trustee ..................................   45

         Section 6.4.   Trustee's Disclaimer ..........................................   46

         Section 6.5.   Notice of Defaults ............................................   46

         Section 6.6.   Reports by Note Paying Agent to Holders .......................   46

         Section 6.7.   Compensation and Indemnity ....................................   46

         Section 6.8.   Replacement of Trustee ........................................   47

         Section 6.9.   Successor Trustee by Merger ...................................   48

         Section 6.10.  Appointment of Co-Trustee or Separate Trustee .................   49

         Section 6.11.  Eligibility: Disqualification .................................   50

         Section 6.12.  [Reserved] ....................................................   50

         Section 6.13.  Appointment and Powers ........................................   50

         Section 6.14.  Performance of Duties .........................................   51

         Section 6.15.  Limitation on Liability .......................................   51

         Section 6.16.  Reliance Upon Documents .......................................   52

         Section 6.17.  Successor Trust Collateral Agent ..............................   52

         Section 6.18.  Compensation ..................................................   53
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                                TABLE OF CONTENTS
                                   (continued)

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         Section 6.19.  Representations and Warranties of the Trustee and the
                        Trust Collateral Agent ........................................   53

         Section 6.20.  Waiver of Setoffs .............................................   54

         Section 6.21.  Control by the Controlling Party ..............................   54

Article VII.   Noteholders' Lists and Reports .........................................   55

         Section 7.1.   Issuer To Furnish To Trustee Names and Addresses of
                        Noteholders ...................................................   55

         Section 7.2.   Preservation of Information; Communications to
                        Noteholders ...................................................   55

         Section 7.3.   Reports by Issuer .............................................   55

Article VIII.  Accounts, Disbursements and Releases ...................................   56

         Section 8.1.   Collection of Money ...........................................   56

         Section 8.2.   Release of Trust Property .....................................   56

         Section 8.3.   Opinion of Counsel ............................................   56

Article IX.    Supplemental Indentures ................................................   57

         Section 9.1.   Supplemental Indentures Without Consent of Noteholders ........   57

         Section 9.2.   Supplemental Indentures with Consent of Noteholders ...........   58

         Section 9.3.   Execution of Supplemental Indentures ..........................   59

         Section 9.4.   Effect of Supplemental Indenture ..............................   60

         Section 9.5.   [Reserved]. ...................................................   60

         Section 9.6.   Reference in Notes to Supplemental Indentures .................   60

Article X.     Redemption of Notes ....................................................   60

         Section 10.1.  Redemption ....................................................   60

         Section 10.2.  Form of Redemption Notice .....................................   61

         Section 10.3.  Notes Payable on Redemption Date ..............................   61

Article XI.    Miscellaneous ..........................................................   61

         Section 11.1.  Compliance Certificates and Opinions, etc. ....................   61

         Section 11.2.  Form of Documents Delivered to Trustee ........................   63

         Section 11.3.  Acts of Noteholders ...........................................   64

         Section 11.4.  Notices, etc. to Trustee, Issuer and Rating Agency ............   64
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                                TABLE OF CONTENTS
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    Section 11.5.   Notices to Noteholders; Waiver ......................................  65

    Section 11.6.   Alternate Payment and Notice Provisions .............................  66

    Section 11.7.   [Reserved] ..........................................................  66

    Section 11.8.   Effect of Headings and Table of Contents ............................  66

    Section 11.9.   Successors and Assigns ..............................................  66

    Section 11.10.  Separability ........................................................  66

    Section 11.11.  Benefits of Indenture ...............................................  66

    Section 11.12.  Legal Holidays ......................................................  66

    Section 11.13.  Governing Law .......................................................  67

    Section 11.14.  Counterparts ........................................................  67

    Section 11.15.  Recording of Indenture ..............................................  67

    Section 11.16.  Trust Obligation ....................................................  67

    Section 11.17.  No Petition .........................................................  67

    Section 11.18.  Inspection ..........................................................  68

    Section 11.19.  Limitation of Liability .............................................  68
</TABLE>

EXHIBITS
Exhibit A -- Form of Note

                                        v

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                  INDENTURE dated as of March 19, 2002, among TFC AUTOMOBILE
RECEIVABLES TRUST 2002-1 (the "Issuer"), WELLS FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION, a national banking association, as trustee (in such capacity, the
"Trustee") and trust collateral agent (in such capacity, the "Trust Collateral
Agent") and RADIAN ASSET ASSURANCE INC., a stock insurance company incorporated
in the State of New York (the "Insurer").

                  Each party agrees as follows for the benefit of each other
party and for the equal and ratable benefit of the Holders of the Issuer's 4.23%
Asset Backed Notes (the "Notes"):

                  As security for the payment and performance by the Issuer of
its obligations under this Indenture and the Notes, the Issuer has agreed to
assign the Collateral (as defined below) to the Trust Collateral Agent for the
benefit of the Trustee on behalf of the Noteholders and for the benefit of the
Insurer.

                  The Insurer has issued and delivered a financial guaranty
insurance policy, dated the Closing Date (with endorsements, the "Note Policy"),
pursuant to which the Insurer guarantees Scheduled Payments with respect to the
Notes, as defined in the Note Policy.

                  As an inducement to the Insurer to issue and deliver the Note
Policy, the Issuer and the Insurer have executed and delivered the Insurance and
Indemnity Agreement, dated as of March 19, 2002, (as amended from time to time,
the "Insurance Agreement"), among the Insurer, the Issuer, The Finance Company,
TFC Receivables Corporation V (the "Seller"), the Trustee and Wells Fargo
Financial America, Inc.

                  As an additional inducement to the Insurer to issue the Note
Policy, and as security for the performance by the Issuer of the Insurer Issuer
Secured Obligations and as security for the performance by the Issuer of the
Trustee Issuer Secured Obligations, the Issuer has agreed to assign the
Collateral (as defined below) to the Trust Collateral Agent for the benefit of
the Issuer Secured Parties, as their respective interests may appear.

                                 GRANTING CLAUSE

                  The Issuer hereby Grants to the Trust Collateral Agent as of
the Closing Date, for the benefit of the Issuer Secured Parties all of the
Issuer's right, title and interest (but none of its obligations) in and to the
following (collectively, the "Collateral"): (a) the Receivables and all monies
paid or payable thereon or in respect thereof after the Cut-Off Date (including
amounts due on or before the Cut-Off Date but received by TFC, the Seller or the
Issuer on or after the Cut-Off Date); (b) the security interests in the Financed
Vehicles granted by Obligors pursuant to the Receivables and any other interest
of the Issuer in the Financed Vehicles; (c) all rights of the Seller against
Dealers pursuant to Dealer Agreements or Dealer Assignments; (d) all rights
under any Service Contracts on the related Financed Vehicles; (e) any proceeds
and the right to receive proceeds with respect to the Receivables from claims on
any Insurance Policies covering Financed Vehicles or Obligors, including rebates
of insurance premiums relating to the Receivables and any proceeds from the
liquidation of Receivables; (f) all funds on deposit from time to time in the
Trust Accounts and the Spread Account (including all Eligible Investments and
proceeds thereof), and all rights of the Issuer therein; (g) the Issuer's rights
and benefits, but none of its obligations or

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burdens, under the Purchase Agreement and the Sale and Servicing Agreement,
including the delivery requirements, representations and warranties and the cure
and repurchase obligations of TFC under the Purchase Agreement and of the Seller
under the Sale and Servicing Agreement; (h) property (including the right to
receive future Net Liquidation Proceeds) that secures a Receivable and that has
been acquired pursuant to liquidation of such Receivable; (i) all items
contained in the Receivable Files and any and all other documents that TFC or
any other servicer keeps on file relating to the Receivables, the Obligors or
the Financed Vehicles, (j) all rights under the Standby Processing Agreement;
and (k) all present and future claims, demands, causes and choses in action in
respect of any or all of the foregoing and all payments on or under and all
proceeds of every kind and nature whatsoever in respect of any or all of the
foregoing, including all proceeds of the conversion, voluntary or involuntary,
into cash or other liquid property, all cash proceeds, accounts, accounts
receivable, notes, drafts, acceptances, chattel paper, checks, deposit accounts,
insurance proceeds, condemnation awards, rights to payment of any and every kind
and other forms of obligations and receivables, instruments and other property
which at any time constitute all or part of or are included in the proceeds of
any of the foregoing.

                  The foregoing Grant is made in trust to the Trust Collateral
Agent, for the benefit of the Trustee on behalf of the Holders of the Notes, and
for the benefit of the Insurer. The Trust Collateral Agent hereby acknowledges
such Grant, accepts the trusts under this Indenture in accordance with the
provisions of this Indenture and agrees to perform its duties required in this
Indenture to the end that the interests of such parties, recognizing the
priorities of their respective interests, may be adequately and effectively
protected.

                  It is the intention of the Issuer and the Trustee that this
Grant constitutes a grant or assignment of a valid, first priority perfected
security interest in the Issuer's rights in the Collateral, free and clear of
all Liens (other than the security interest Granted herein) to the Trust
Collateral Agent. This Agreement shall be deemed to create a security interest
and be a security agreement with respect to the Collateral within the meaning of
Article 1, Article 8 and Article 9 of the Uniform Commercial Code as in effect
in the States of New York and Minnesota and under the law of all jurisdictions
governing the creation and perfection of security interests in the Collateral.

                                   Article I.

                   Definitions and Incorporation by Reference

                  Section 1.1. Definitions. Except as otherwise specified
                               -----------
herein, the following terms have the respective meanings set forth below for all
purposes of this Indenture.

                  "Act" has the meaning specified in Section 11.3(a).

                  "Affiliate" means, with respect 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" and
"controlled" have meanings correlative to the foregoing. A Person shall

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not be deemed to be an Affiliate of any person solely because such other Person
has the contractual right or obligation to manage such Person unless such other
Person controls such Person through equity ownership or otherwise.

                  "Agents" means Westdeutsche Landesbank Girozentrale, London
Branch and WestLB Panmure Securities Inc.

                  "Authorized Officer" means, with respect to the Issuer and the
Servicer, any officer or agent acting pursuant to a power of attorney of the
Owner Trustee or the Servicer, as applicable, who is authorized to act for the
Owner Trustee or the Servicer, as applicable, in matters relating to the Issuer
and who is identified on the list of Authorized Officers delivered by the
Servicer to the Trustee and the Insurer on the Closing Date (as such list may be
modified or supplemented from time to time thereafter).

                  "Basic Documents" means this Agreement, the Certificate of
Trust, the Trust Agreement, the Sale and Servicing Agreement, the Insurance
Agreement, the Premium Letter, the Stock Pledge Agreement, the Purchase
Agreement, the Note Purchase Agreement, the Standby Processing Agreement, the
Securities Account Control Agreement, the Fort Knox Letters and other documents
and certificates delivered in connection therewith.

                  "Benefit Plan" has the meaning specified in Section 2.5(f).

                  "Book Entry Notes" means a beneficial interest in the Notes,
ownership and transfers of which shall be made through book entries by a
Clearing Agency as described in Section 2.11.

                  "Business Day" means any day other than a Saturday, Sunday,
legal holiday or other day on which commercial banking institutions located in
any of the states of Delaware, Minnesota, New York, and Virginia are authorized
or obligated by law, executive order or governmental decree to be closed.

                  "Certificate of Trust" means the certificate of trust of the
Issuer substantially in the form of Exhibit B to the Trust Agreement.

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

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

                  "Closing Date" means March 19, 2002.

                  "Code" means the Internal Revenue Code of 1986, as amended
from time to time, and Treasury Regulations promulgated thereunder.

                  "Collateral" has the meaning specified in the Granting Clause
of this Indenture.

                  "Commission" means the Securities and Exchange Commission.

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                  "Controlling Party" means (a) the Insurer, so long as no
Insurer Default shall have occurred and be continuing, and (i) there are Notes
outstanding, (ii) any amounts due to the Insurer remain unpaid or (iii) the Note
Policy has not expired according to its terms and (b) in all other cases, the
Security Majority.

                  "Corporate Trust Office" means the principal office of the
Trustee at which at any particular time its corporate trust business shall be
administered which office at the date of execution of this Agreement is located
at Sixth Street and Marquette Avenue, MAC N9311-161, Minneapolis, Minnesota,
55479, Attention: Corporate Trust Services-Asset Backed Administration or at
such other address as the Trustee may designate from time to time by notice to
the Noteholders, the Insurer, the Servicer and the Issuer, or the principal
corporate trust office of any successor Trustee (the address of which the
successor Trustee will notify the Noteholders and the Issuer).

                  "Cut-Off Date" means the close of business on December 31,
2001.

                  "Default" means any occurrence that is, or with notice or the
lapse of time or both would become, an Event of Default.

                  "ERISA" means the Employee Retirement Income Security Act of
1974, as amended.

                  "Event of Default" has the meaning specified in Section 5.1.

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

                  "Executive Officer" means, with respect to any corporation,
the Chief Executive Officer, Chief Operating Officer, Chief Financial Officer,
President, Executive Vice President, any Vice President, the Secretary or the
Treasurer of such corporation.

                  "Grant" means mortgage, pledge, bargain, warrant, alienate,
remise, release, convey, assign, transfer, create, grant a lien upon or a
security interest in and right of set-off against, deposit, set over and confirm
pursuant to this Indenture. A Grant of the Collateral or of any other agreement
or instrument shall include all rights, powers and options (but none of the
obligations) of the Granting party thereunder, including the immediate and
continuing right to claim for, collect, receive and give receipt for principal
and interest payments in respect of the Collateral and all other monies payable
thereunder, to give and receive notices and other communications, to make
waivers or other agreements, to exercise all rights and options, to bring
proceedings in the name of the Granting party or otherwise and generally to do
and receive anything that the Granting party is or may be entitled to do or
receive thereunder or with respect thereto.

                  "Holder" or "Noteholder" means the Person in whose name a Note
is registered on the Note Register.

                  "Indebtedness" means, with respect to any Person at any time,
(a) indebtedness or liability of such Person for borrowed money whether or not
evidenced by bonds, debentures, notes or other instruments, or for the deferred
purchase price of property or services (including trade obligations); (b)
obligations of such Person as lessee under leases

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which should have been or should be, in accordance with generally accepted
accounting principles, recorded as capital leases; (c) current liabilities of
such Person in respect of unfunded vested benefits under plans covered by Title
IV of ERISA other than accrued contributions which are not past due; (d)
obligations issued for or liabilities incurred on the account of such Person;
(e) obligations or liabilities of such Person arising under acceptance
facilities; (f) obligations of such Person under any guarantees, endorsements
(other than for collection or deposit in the ordinary course of business) and
other contingent obligations to purchase, to provide funds for payment, to
supply funds to invest in any Person or otherwise to assure a creditor against
loss; (g) obligations of such Person secured by any lien on property or assets
of such Person, whether or not the obligations have been assumed by such Person;
or (h) obligations of such Person under any interest rate or currency exchange
agreement.

                  "Indenture" means this Indenture as amended and supplemented
from time to time.

                  "Independent" means, when used with respect to any specified
Person, that the person (a) is in fact independent of the Issuer, any other
obligor upon the Notes, the Seller and any Affiliate of any of the foregoing
persons, (b) does not have any direct financial interest or any material
indirect financial interest in the Issuer, any such other obligor, the Seller or
any Affiliate of any of the foregoing Persons and (c) is not connected with the
Issuer, any such other obligor, the Seller or any Affiliate of any of the
foregoing Persons as an officer, employee, promoter, underwriter, trustee,
partner, director or Person performing similar functions.

                  "Independent Certificate" means a certificate or opinion to be
delivered to the Trust Collateral Agent, and the Insurer and the Trustee under
the circumstances described in, and otherwise complying with, the applicable
requirements of Section 11.1, prepared by an Independent appraiser or other
expert appointed pursuant to an Issuer Order and approved by the Trust
Collateral Agent in the exercise of reasonable care, and such opinion or
certificate shall state that the signer has read the definition of "Independent"
in this Indenture and that the signer is Independent within the meaning thereof.

                  "Institutional Investor" means any "qualified institutional
buyer (as defined in Rule 144A under the Securities Act) or any bank, trust
company, savings and loan association or other financial institution, any
pension plan, any investment company, any insurance company, any broker or
dealer, or any other similar financial institution or entity, regardless of
legal form.

                  "Insurance Agreement Indenture Cross Default" has the meaning
specified therefor in the Insurance Agreement.

                  "Insurer Issuer Secured Obligations" means all amounts and
obligations which the Issuer, TFC or the Seller may at any time owe to or on
behalf of the Insurer under this Indenture, the Insurance Agreement or any other
Basic Document.

                  "Interest Rate" means, 4.23% per annum (computed on the basis
of a 360-day year consisting of twelve 30-day months).

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<PAGE>

                  "Issuer" means the party named as such in this Indenture until
a successor replaces it in accordance with the terms of the Basic Documents,
and, thereafter, means the successor.

                  "Issuer Order" and "Issuer Request" means a written order or
request signed in the name of the Issuer by any one of its Authorized Officers
and delivered to the Trustee.

                  "Issuer Secured Obligations" means the Insurer Issuer Secured
Obligations and the Trustee Issuer Secured Obligations.

                  "Issuer Secured Parties" means each of the Trustee in respect
of the Trustee Issuer Secured Obligations on behalf of the Noteholders and the
Insurer in respect of the Insurer Issuer Secured Obligations.

                  "Note Owner" means, with respect to a Book-Entry Note, the
person who is the owner of such Book-Entry Note, as reflected on the books of
the Clearing Agency, or on the books of a Person maintaining an account with
such Clearing Agency (directly as a Clearing Agency Participant or as an
indirect participant, in each case in accordance with the rules of such Clearing
Agency).

                  "Note Paying Agent" means the Trustee or any other Person that
meets the eligibility standards for the Trustee specified in Section 6.11 and is
authorized by the Issuer to make payments to and distributions from the
Collection Account and the Note Payment Account, including payment of principal
of or interest on the Notes on behalf of the Issuer.

                  "Note Policy" means the insurance policy issued by the Insurer
with respect to the Notes, including any endorsements thereto.

                  "Note Policy Claim Amount" has the meaning specified in the
Sale and Serving Agreement.

                  "Note Purchase Agreement" means the Note Purchase Agreement
among the Seller, TFC, Westdeutsche Landesbank Girozentrale, London Branch, as
the initial purchaser and WestLB Panmure Securities Inc., as selling agent for
the initial purchaser.

                  "Note Register" and "Note Registrar" have the respective
meanings specified in Section 2.4.

                  "Notes" means the 4.23% Asset Backed Notes, substantially in
the form of Exhibit A.

                  "Officer's Certificate" means a certificate signed by the
chairman of the board, the president, any executive vice president, any vice
president or any treasurer, secretary or authorized signatory of the Seller, the
Issuer or the Servicer, as appropriate.

                  "Opinion of Counsel" means an opinion of counsel reasonably
acceptable to the Controlling Party and the Trustee, in form and substance
reasonably acceptable to the Controlling Party and the Trustee.

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<PAGE>

                  "Outstanding" means, as of the date of determination, all
Notes theretofore authenticated and delivered under this Indenture except:

                  (i)   Notes theretofore canceled by the Note Registrar or
          delivered to the Note Registrar for cancellation;

                  (ii)  Notes or portions thereof the payment for which money in
          the necessary amount has been theretofore deposited with the Trustee
          or the Note Paying Agent in trust for the Holders of such Notes
          (provided, however, that if such Notes are to be redeemed, notice of
           --------  -------
          such redemption has been duly given pursuant to this Indenture or
          provision therefor, satisfactory to the Trustee, has been made); and

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

provided, however, that Notes which have been paid with proceeds of the Note
--------  -------
Policy shall continue to remain Outstanding for purposes of this Indenture until
the Insurer has been paid as subrogee hereunder or reimbursed pursuant to the
Insurance Agreement as evidenced by a written notice from the Insurer delivered
to the Trustee, and the Insurer shall be deemed to be the Holder thereof to the
extent of any payments thereon made by the Insurer; provided, further, that in
determining whether the Holders of the requisite Outstanding Amount of the Notes
have given any request, demand, authorization, direction, notice, consent or
waiver hereunder or under any Basic Document, Notes owned by the Issuer, any
other obligor upon the Notes, the Seller or any Affiliate of any of the
foregoing Persons shall be disregarded and deemed not to be Outstanding, except
that, in determining whether the Trustee shall be protected in relying upon any
such request, demand, authorization, direction, notice, consent or waiver, only
Notes that a Responsible Officer of the Trustee either actually knows to be so
owned or has received written notice thereof shall be so disregarded. Notes so
owned that have been pledged in good faith may be regarded as Outstanding if the
pledgee establishes to the satisfaction of the Trustee the pledgee's right so to
act with respect to such Notes and that the pledgee is not the Issuer, any other
obligor upon the Notes, the Seller or any Affiliate of any of the foregoing
Persons.

                  "Outstanding Amount" means the aggregate principal amount of
all Notes, outstanding at the date of determination.

                  "Preference Claim" has the meaning specified in the Sale and
Servicing Agreement.

                  "Proceeding" means any suit in equity, action at law or other
judicial or administrative proceeding.

                  "Rating Agency" means Standard & Poor's. If no such
organization or successor maintains a rating on the Notes, "Rating Agency" shall
be a nationally recognized statistical rating organization or other comparable
Person designated by the Seller and acceptable to the Controlling Party.

                                       7

<PAGE>

                  "Rating Agency Condition" means, with respect to any action,
that the Rating Agency shall have been given 10 days' (or such shorter period as
shall be acceptable to the Rating Agency) prior notice thereof and that the
Rating Agency shall have notified the Seller, the Servicer, the Insurer, the
Trustee, the Owner Trustee and the Issuer in writing that such action will not
result in a reduction or withdrawal of the then current rating of the Notes,
without giving effect to the existence of the Note Policy.

                  "Record Date" means, with respect to a Payment Date or
Redemption Date, the close of business on the Business Day immediately preceding
such Payment Date or Redemption Date.

                  "Redemption Date" means in the case of a redemption of the
Notes pursuant to Section 10.1(a) or a payment to Noteholders pursuant to
Section 10.1(b), the Payment Date specified by the Servicer or the Issuer
pursuant to Section 10.1(a) or (b) as applicable.

                  "Redemption Price" means (a) in the case of a redemption of
the Notes pursuant to Section 10.1(a), an amount equal to the unpaid principal
amount of the then outstanding principal amount of Notes being redeemed plus
accrued and unpaid interest thereon to but excluding the Redemption Date, or (b)
in the case of a payment made to Noteholders pursuant to Section 10.1(b), the
amount on deposit in the Note Payment Account, but not in excess of the amount
specified in clause (a) above.

                  "Responsible Officer" means, (i) in the case of the Trust
Collateral Agent, the chairman or vice-chairman of the board of directors, the
chairman or vice-chairman of the executive committee of the board of directors,
the president, any vice president, assistant vice-president or managing
director, the secretary, any assistant secretary or any other officer of the
Trust Collateral Agent customarily performing functions similar to those
performed by any of the above designated officers and also means, with respect
to a particular corporate trust matter, any other officer to whom such matter is
referred because of such officer's knowledge of and familiarity with the
particular subject, and (ii) in the case of the Owner Trustee, any officer in
the corporate trust office of the Owner Trustee or any officer of the Owner
Trustee with direct responsibility for the administration of this Agreement or
any of the Basic Documents on behalf of the Owner Trustee.

                  "Sale and Servicing Agreement" means the Sale and Servicing
Agreement dated as of March 19, 2002, among the Insurer, the Issuer, the Seller,
the Servicer, the Trust Collateral Agent, the Backup Servicer and Wells Fargo
Financial America, Inc., as successor servicer, as the same may be amended or
supplemented from time to time.

                  "Securities Account Control Agreement" means the Securities
Account Control Agreement dated as of March 19, 2002, among the Issuer, the
Trustee and Wells Fargo Bank Minnesota, National Association, as securities
intermediary, as the same may be amended or supplemented from time to time.

                  "Security Majority" has the meaning specified in the Sale and
Servicing Agreement.

                  "Scheduled Payments" has the meaning specified in the Note
Policy.

                                       8

<PAGE>

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

          "State" means any one of the 50 states of the United States of America
or the District of Columbia.

          "Termination Date" means the latest of (i) the expiration of the Note
Policy and the return of the Note Policy to the Insurer for cancellation, (ii)
the date on which the Insurer shall have received payment and performance of all
Insurer Issuer Secured Obligations and (iii) the date on which the Trustee shall
have received payment and performance of all Trustee Issuer Secured Obligations.

          "Trust Accounts" has the meaning specified in the Sale and Servicing
Agreement.

          "Trust Collateral Agent" means, initially, Wells Fargo Bank Minnesota,
National Association, in its capacity as trust collateral agent on behalf of the
Issuer Secured Parties, including its successors in interest, until and unless a
successor Person shall have become the Trust Collateral Agent pursuant to
Section 6.17 hereof, and thereafter "Trust Collateral Agent" shall mean such
successor Person.

          "Trust Property" means (i) all money, instruments, rights and other
property that are subject or intended to be subject to the lien and security
interest of this Indenture for the benefit of the Noteholders and the Insurer
(including all property and interests Granted to the Trust Collateral Agent),
including all proceeds thereof, (ii) the Spread Account and (iii) the right to
receive payments pursuant to the Note Policy.

          "Trustee" means Wells Fargo Bank Minnesota, National Association, a
national banking association, not in its individual capacity but as trustee
under this Indenture, or any successor trustee under this Indenture.

          "Trustee Fee" means the fees and expenses due to the Trustee, the
Backup Servicer and the Trust Collateral Agent payable to such Persons pursuant
to Section 5.7(a)(ii) under the Sale and Servicing Agreement.

          "Trustee Issuer Secured Obligations" means all amounts and obligations
which the Issuer may at any time owe to or on behalf of the Trustee for the
benefit of the Noteholders under this Indenture or the Notes.

          "UCC" means, unless the context otherwise requires, the Uniform
Commercial Code, as in effect in the relevant jurisdiction, as amended from time
to time.

          Capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to them in the Sale and Servicing Agreement or the
Trust Agreement.

          Section 1.2. [Reserved].
                        --------

          Section 1.3. Rules of Construction.  Unless the context otherwise
                       ---------------------

 requires:

          (i)  a term has the meaning assigned to it;

                                       9

<PAGE>

          (ii)  an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting principles as in
effect from time to time;

          (iii) "or" is not exclusive;

          (iv)  any form of the word "include" shall be deemed to be followed by
the words "without limitation"; and

          (v)   words in the singular include the plural and words in the plural
include the singular.

          Section 1.4. Action by or Consent of Noteholders and
                       ---------------------------------------
Certificateholders. Whenever any provision of this Agreement refers to action to
------------------
be taken, or consented to, by Noteholders or Certificateholders, such provision
shall be deemed to refer to the Certificateholder or Noteholder, as the case may
be, of record as of the Record Date immediately preceding the date on which such
action is to be taken, or consent given, by Noteholders or Certificateholders.
Solely for the purposes of any action to be taken, or consented to, by
Noteholders or Certificateholders, any Note or Certificate registered in the
name of TFC, the Seller or any Affiliate thereof shall be deemed not to be
Outstanding; provided, however, that, solely for the purpose of determining
whether the Trustee or the Trust Collateral Agent is entitled to rely upon any
such action or consent, only Notes or Certificates which the Owner Trustee, the
Trustee or the Trust Collateral Agent, respectively, knows to be so owned shall
be so disregarded.

          Section 1.5. Material Adverse Effect. Whenever used in the Basic
                       -----------------------
Documents, "Material Adverse Effect" or "material adverse effect" means (i) when
used with respect to any action, event, fact or other matter or thing, means
that such action, event, fact or other matter or thing will, individually or in
the aggregate, have a material adverse effect on (a) the Trust, the Trust
Property or Collateral, (b) the existence, perfection or priority of the
security interests of the Trust Collateral Agent in the Collateral, (c) the
ability of the Trust Collateral Agent on behalf of the Noteholders and the
Insurer to collect on, liquidate, or foreclose against, the Collateral in
accordance with the Indenture, (d) the validity, enforceability, or the
performance of any Person's obligations under, or with respect to, the Basic
Documents, or the validity, enforceability, or performance of any Person's
obligations under or with respect to, or the payment of, the Notes, (e) the
transactions contemplated by the Basic Documents, (f) the business, operations,
condition (financial or otherwise) or prospects of the Servicer, the Seller or
the Issuer or (g) the interests, rights and/or remedies hereunder, or otherwise
with respect to the Trust Property, of the Trust Collateral Agent, the Trustee,
the Insurer or any of the Noteholders (which determination shall be made, in
each case, without giving effect to the existence of the Note Policy), and (ii)
when used in relation to or in connection with any Person also means that such
action, event, fact or other matter or thing shall not, individually or in the
aggregate, have a material adverse effect on the business, operations, condition
(financial or otherwise) or prospects of such Person.

                                       10

<PAGE>

                                   Article II.

                                    The Notes
                                    ---------

          Section 2.1. Form.
                       ----

          (a)  The Notes, together with the Trustee's certificate of
authentication, shall be in substantially the form set forth in Exhibit A for
the Rule 144A Global Note, with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture and may have such letters, numbers or other marks of identification
and such legends or endorsements placed thereon as may, consistently herewith,
be determined by the officers executing such Notes, as evidenced by their
execution of the Notes. Any portion of the text of any Note may be set forth on
the reverse thereof, with an appropriate reference thereto on the face of the
Note.

          (b)  Each Note shall be dated the date of its authentication. The
terms of the Notes set forth in Exhibit A are part of the terms of this
Indenture.

          Section 2.2. Execution, Authentication and Delivery.
                       --------------------------------------

          (a)  The Notes shall be executed on behalf of the Issuer by any of its
Authorized Officers. The signature of any such Authorized Officer on the Notes
may be original or facsimile.

          (b)  Notes bearing the original or facsimile signature of individuals
who were at any time Authorized Officers of the Issuer shall bind the Issuer,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Notes or did not hold
such offices at the date of such Notes.

          (c)  The Trustee shall upon receipt of the Note Policy and Issuer
Order for authentication and delivery, authenticate and deliver Notes for
original issue in an aggregate principal amount of $64,552,198.

          (d)  Each Note shall be dated the date of its authentication. The Rule
144A Note shall be issuable as registered Note in the minimum denomination of
$100,000 and in integral multiples of $1.00 in excess thereof. Definitive Notes
issued in exchange for interests in the Rule 144A Global Note in accordance with
the provisions of this Indenture shall be issuable as registered notes in the
minimum denomination of $100,000 and in integral multiples of $1,000 (except,
with respect to each Noteholder, for one Note which may be issued in a
denomination other than an integral multiple of $100,000).

          (e)  No Note shall be entitled to any benefit under this Indenture or
be valid or obligatory for any purpose, unless there appears attached to such
Note a certificate of authentication substantially in the form provided for
herein executed by the Trustee by the manual signature of one of its authorized
signatories, and such certificate attached to any Note shall be conclusive
evidence, and the only evidence, that such Note has been duly authenticated and
delivered hereunder.

                                       11

<PAGE>

          (f)  It is expected that the delivery of the Notes will be made on or
about March 19, 2002.

          Section 2.3. Temporary Notes. Pending the preparation of Definitive
                       ---------------
Notes, the Issuer may execute, and upon receipt of an Issuer Order the Trustee
shall authenticate and deliver, temporary Notes which are printed, lithographed,
typewritten, mimeographed or otherwise produced, of the tenor of the Definitive
Notes in lieu of which they are issued and with such variations not inconsistent
with the terms of this Indenture as the officers executing such Notes may
determine, as evidenced by their execution of such Notes. If temporary Notes are
issued, the Issuer will cause Definitive Notes to be prepared without
unreasonable delay. After the preparation of Definitive Notes, the temporary
Notes shall be exchangeable for Definitive Notes upon surrender of the temporary
Notes at the office or agency of the Issuer to be maintained as provided in
Section 3.2, without charge to the Holder. Upon surrender for cancellation of
any one or more temporary Notes, the Issuer shall execute and the Trustee shall
authenticate and deliver in exchange therefor a like principal amount of
Definitive Notes of authorized denominations. Until so exchanged, the temporary
Notes shall in all respects be entitled to the same benefits under this
Indenture as Definitive Notes.

          Section 2.4. Registration; Registration of Transfer and Exchange.
                       ---------------------------------------------------

          (a)  The Issuer shall cause to be kept a register (the "Note
Register") in which, subject to such reasonable regulations as it may prescribe,
the Issuer shall provide for the registration of the Notes and, subject to the
provisions of Section 2.5, the registration of transfers of the Notes. The
Trustee shall be "Note Registrar" for the purpose of registering the Notes and
transfers of the Notes as herein provided. Upon any resignation of any Note
Registrar, the Issuer shall promptly appoint a successor or, if it elects not to
make such an appointment, assume the duties of Note Registrar.

          (b)  If a Person other than the Trustee is appointed by the Issuer as
Note Registrar, the Issuer will give the Trustee and the Insurer prompt written
notice of the appointment of such Note Registrar and of the location, and any
change in the location, of the Note Register, and the Trustee and the Insurer
shall have the right to inspect the Note Register at all reasonable times and to
obtain copies thereof. The Trustee shall have the right to rely upon a
certificate executed on behalf of the Note Registrar by an Authorized Officer
thereof as to the names and addresses of the Holders of the Notes and the
principal amounts and number of such Notes.

          (c)  All the Notes effected by the registration of transfer or
exchange of the Notes shall be the valid obligations of the Issuer, evidencing
the same debt, and entitled to the same benefits under this Indenture, as the
Notes surrendered upon such registration of transfer or exchange. This Section
2.4(c) shall be the sole method of a transfer or exchange of the Notes.

          (d)  Notwithstanding the preceding provisions of this section, the
Issuer shall not be required to make, and the Note Registrar shall not register,
transfers or exchanges of the Notes selected for redemption for a period of 15
days preceding the Payment Date.

                                       12

<PAGE>

          Section 2.5.  Restrictions on Transfer and Exchange.
                        -------------------------------------

          (a) No transfer of a Note shall be made unless such transfer is (i) to
the Issuer, (ii) to any person the transferor reasonably believes is a qualified
institutional buyer (as defined in Rule 144A under the Securities Act) in a
transaction meeting the requirements of Rule 144A under the Securities Act or
(iii) in a transaction complying with or exempt from the registration
requirements of the Securities Act and in accordance with any applicable
securities laws of any state of the United States or any other jurisdiction.
Each prospective transferee by its acquisition of any Note, acknowledges that
each Note will contain a legend substantially to the following effect (unless
the Issuer determines otherwise in accordance with applicable law):

                  THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
          OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES
          LAWS OR "BLUE SKY" LAWS. THE HOLDER HEREOF, BY PURCHASING ANY NOTE,
          AGREES FOR THE BENEFIT OF THE ISSUER THAT SUCH NOTE IS BEING ACQUIRED
          FOR ITS OWN ACCOUNT AND NOT WITH A VIEW TO DISTRIBUTION AND MAY BE
          RESOLD, PLEDGED OR TRANSFERRED ONLY TO (1) THE ISSUER (UPON REDEMPTION
          THEREOF OR OTHERWISE), (2) TO A PERSON THE TRANSFEROR REASONABLY
          BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A
          UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF
          RULE 144A OR (3) IN A TRANSACTION OTHERWISE EXEMPT FROM THE
          REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, APPLICABLE SECURITIES
          LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER JURISDICTION, IN
          EACH SUCH CASE, IN COMPLIANCE WITH THE INDENTURE AND ALL APPLICABLE
          SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
          JURISDICTION.

          (b) Each transferee of Notes represented by an interest in the Rule
144A Global Note will be deemed to have represented and agreed as follows (terms
used in this paragraph that are defined in Rule 144A under the Securities Act
are used herein as defined therein):

                  (1) The transferee (A) is a qualified institutional buyer, (B)
          is aware that the sale of the Notes to it is being made in reliance on
          the exemption from registration provided by Rule 144A under the
          Securities Act and (C) is acquiring the Notes for its own account or
          for one or more accounts, each of which is a qualified institutional
          buyer, and as to each of which the transferee exercises sole
          investment discretion, for the transferee and for each such account.
          The transferee has such knowledge and experience in financial and
          business matters as to be capable of evaluating the merits and risks
          of its investment in the Notes, and the transferee and any accounts
          for which it is acting are each able to bear the economic risk of the
          transferee's or its investment.

                                       13

<PAGE>

                  (2) The transferee understands that the Notes are being
          offered only in a transaction not involving any public offering in the
          United States within the meaning of the Securities Act, the Notes have
          not been and will not be registered under the Securities Act, and, if
          in the future the transferee decides to offer, resell, pledge or
          otherwise transfer the Notes, such Notes may be offered, resold,
          pledged or otherwise transferred only in accordance with the legend on
          such Notes described above. The transferee acknowledges that no
          representation is made by the Issuer as to the availability of any
          exemption under the Securities Act or any state securities laws for
          resale of the Notes.

                  (3) The transferee has carefully read and understands the
          Private Placement Memorandum, including, without limitation, the "Risk
          Factors" section therein, and has based its decision to purchase the
          Notes upon the information contained therein and not upon any
          information, if any, provided to it by any of the Issuer, the Seller,
          the Agents or any other Person. The transferee is not purchasing the
          Notes with a view to the resale, distribution or other disposition
          thereof in violation of the Securities Act. The transferee understands
          that an investment in the Notes involves certain risks, including the
          risk of loss of a substantial part of its investment under certain
          circumstances. The transferee has had access to such financial and
          other information concerning the Issuer and the Notes as it deemed
          necessary or appropriate in order to make an informed investment
          decision with respect to its purchase of the Notes, including an
          opportunity to ask questions of and request information from the
          Agents, the Issuer and the Seller.

                  (4) In connection with the transfer of the Notes: (i) none of
          the Issuer, the Seller or the Agents is acting as a fiduciary or
          financial or investment adviser for the transferee; (ii) the
          transferee is not relying (for purposes of making any investment
          decision or otherwise) upon any advice, counsel or representations
          (whether written or oral) of the Issuer, Seller or the Agents other
          than any in a current private placement memorandum for such Notes and
          any representations expressly set forth in a written agreement with
          such party; (iii) none of the Issuer, Seller or the Agents has given
          to the transferee (directly or indirectly through any other person)
          any assurance, guarantee, or representation whatsoever as to the
          expected or projected success, profitability, return, performance,
          result, effect, consequence, or benefit (including legal, regulatory,
          tax, financial, accounting, or otherwise) of the Indenture or
          documentation for the Notes; (iv) the transferee has consulted with
          its own legal, regulatory, tax, business, investment, financial, and
          accounting advisers to the extent it has deemed necessary, and it has
          made its own investment decisions (including decisions regarding the
          suitability of any transaction pursuant to the Indenture) based upon
          its own judgment and upon any advice from such advisers as it has
          deemed necessary and not upon any view expressed by the Issuer; (v)
          the transferee has determined that the rates, prices or amounts and
          other terms of the purchase and sale of the Notes reflect those in the
          relevant market for similar transactions; (vi) the transferee is
          acquiring the Notes with a full understanding of all of the terms,
          conditions and risks thereof (economic and

                                       14

<PAGE>

          otherwise), and it is capable of assuming and willing to assume
          (financially and otherwise) those risks; and (vii) the transferee is a
          sophisticated investor.

                  (5) The transferee understands that the Notes will be
          represented by the Rule 144A Global Note and will bear the legend set
          forth above. The Notes may not at any time be held by or on behalf of
          U.S. persons that are not qualified institutional buyers.

                  (6) The transferee will not, at any time, offer to buy or
          offer to sell the Notes by any form of general solicitation or
          advertising, including, but not limited to, any advertisement,
          article, notice or other communication published in any newspaper,
          magazine or similar medium or broadcast over television or radio or
          seminar or meeting whose attendees have been invited by general
          solicitations or advertisings.

                  (7) The transferee represents that either (A) it is not a
          Benefit Plan and is not acting on behalf of or investing the assets of
          a Benefit Plan or (B) the transferee's purchase and holding of such
          Notes will not be, or result in, a prohibited transaction which is not
          exempted by application of a statute, regulation, or an administrative
          exemption, such as a U.S. Department of Labor Prohibited Transaction
          Class Exemption.

                  (8) The transferee acknowledges that the Issuer, the Seller,
          the Agents and others will rely upon the truth and accuracy of the
          foregoing acknowledgments, representations and agreements and agrees
          that, if any of the acknowledgments, representations or warranties
          deemed to have been made by it by or in connection with its purchase
          of Notes is no longer accurate, it shall promptly notify the Issuer,
          the Seller and the Agents. If the transferee is acquiring any Notes as
          a fiduciary or agent for one or more investor accounts, it shall be
          deemed to have represented that it has sole investment discretion with
          respect to each such account and that it has full power to make the
          foregoing acknowledgments, representations and agreements on behalf of
          each such account.

                  (9) In connection with a transfer of the Notes, the Issuer
          shall furnish upon request of a Noteholder to such Noteholder and any
          prospective purchaser designated by such Noteholder the information
          required to be delivered under paragraph (d)(4) of Rule 144A of the
          Securities Act.

          (c) Any information the purchaser desires concerning the Issuer, the
Notes or any other matter relevant to its decision to purchase the notes is or
has been made available to it.

          (d) Either (i) no part of the assets used by it to acquire the Notes
constitutes assets of any Benefit Plan, or (ii) its purchase and holding of the
Notes will not, throughout the term of holding, constitute, or result in, a
non-exempt "prohibited transaction" under Section 406 of ERISA or Section 4975
of the Code by reason of the application of one or more statutory, regulatory or
administrative exemptions from such prohibited transaction rules.

                                       15

<PAGE>

          Section 2.6. Mutilated, Destroyed, Lost or Stolen Notes. If (i) any
                       ------------------------------------------
mutilated Note is surrendered to the Trustee, or the Trustee receives evidence
to its satisfaction of the destruction, loss or theft of any Note, and (ii)
there is delivered to the Trustee and the Insurer (unless an Insurer Default
shall have occurred and be continuing) such security or indemnity as may be
required by it to hold the Issuer, the Trustee and the Insurer harmless
(provided, however, that if the holder of such Note is, or is a nominee for, an
Institutional Investor with a net worth of at least $50,000,000, such
Institutional Investor's own unsecured agreement of indemnity shall be deemed to
be satisfactory) then, in the absence of notice to the Issuer, the Note
Registrar, the Insurer or the Trustee that such Note has been acquired by a bona
fide purchaser, and provided that the requirements of Section 8-405 of the UCC
are met, the Issuer, upon the request of the Trustee shall execute and, upon its
request, the Trustee shall authenticate and deliver, in exchange for or in lieu
of any such mutilated, destroyed, lost or stolen Note, a replacement Note;
provided, however, that if any such destroyed, lost or stolen Note, but not a
--------  -------
mutilated Note, shall have become or within seven days shall be due and payable,
or shall have been called for redemption, instead of issuing a replacement Note,
the Issuer may direct the Trustee, in writing, to pay such destroyed, lost or
stolen Note when so due or payable or upon the Redemption Date without surrender
thereof. If, after the delivery of such replacement Note or payment of a
destroyed, lost or stolen Note pursuant to the proviso to the preceding
sentence, a bona fide purchaser of the original Note in lieu of which such
replacement Note was issued presents for payment such original Note, the Issuer,
the Trustee and the Insurer shall be entitled to recover such replacement Note
(or such payment) from the Person to whom it was delivered or any assignee of
such Person, except a bona fide purchaser, and shall be entitled to recover upon
the security or indemnity provided therefor to the extent of any loss, damage,
cost or expense incurred by the Issuer or the Trustee in connection therewith.

          Upon the issuance of any replacement Note under this Section, the
Issuer may require the payment by the Holder of such Note of a sum sufficient to
cover any expense, tax or other governmental charge that may be imposed in
relation thereto and any other reasonable expenses (including the fees and
expenses of the Trustee) connected therewith.

          Every replacement Note issued pursuant to this Section in replacement
of any mutilated, destroyed, lost or stolen Note shall constitute an original,
additional contractual obligation of the Issuer, whether or not the mutilated,
destroyed, lost or stolen Note shall be at any time enforceable by anyone, and
shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Notes duly issued hereunder.

          The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Notes.

          Section 2.7. Persons Deemed Owner. Prior to due presentment for
                       --------------------
registration of transfer of any Note, the Issuer, the Trustee and any agent of
the Issuer, the Trustee and the Insurer may treat the Person in whose name any
Note is registered (as of the Record Date) as the owner of such Note for the
purpose of receiving payments of principal of and interest, if any on such Note
and for all other purposes whatsoever, whether or not such Note be overdue, and
none of the Issuer, the Insurer, the Trustee nor any agent of the Issuer or the
Trustee shall be affected by notice to the contrary.

                                       16

<PAGE>

          Section 2.8. Payment of Principal and Interest; Defaulted Interest.
                       -----------------------------------------------------

          (a) The Notes shall bear interest as provided in the forms of the Note
set forth in Exhibit A, and such interest shall be due and payable on each
Payment Date as specified therein. Any installment of interest or principal, if
any, payable on any Note which is punctually paid or duly provided for by the
Issuer on the Payment Date shall be paid to the Person in whose name such Note
is registered on the Record Date, by wire transfer in immediately available
funds to such Person's account as it appears on the Note Register on such Record
Date, except that, unless Definitive Notes have been issued pursuant to Section
2.13, with respect to Notes registered on the Record Date in the name of the
nominee of the Clearing Agency (initially, such nominee to be Cede & Co.),
payment will be made by wire transfer in immediately available funds to the
account designated by such nominee and except for the final installment of
principal payable with respect to such Note on a Payment Date or on the Final
Scheduled Payment Date (and except for the Redemption Price for any Note called
for redemption pursuant to Section 10.1(a)) which shall be payable as provided
below.

          (b) The principal of each Note shall be payable in installments on
each Payment Date as provided in the forms of the Note set forth in Exhibit A.
Notwithstanding the foregoing, the entire unpaid principal amount of the Notes
shall be due and payable, if not previously paid, on the date on which an Event
of Default shall have occurred and be continuing, upon the direction of the
Controlling Party pursuant to Section 5.2. Upon written notice from the Issuer,
the Trustee shall notify the Person in whose name a Note is registered at the
close of business on the Record Date preceding the Payment Date on which the
Issuer expects that the final installment of principal of and interest on such
Note will be paid. Such notice shall be mailed or transmitted by facsimile prior
to such final Payment Date and shall specify that such final installment will be
payable only upon presentation and surrender of such Note and shall specify the
place where such Note may be presented and surrendered for payment of such
installment. Notices in connection with redemptions of Notes shall be mailed to
Noteholders as provided in Section 10.2.

          (c) If the Issuer defaults in a payment of interest on the Notes, and
such default is not waived by the Controlling Party, the Issuer shall pay
defaulted interest (plus interest on such defaulted interest to the extent
lawful) at the applicable Interest Rate to the extent lawful. The Issuer may pay
such defaulted interest to the Persons who are Noteholders on a subsequent
special record date, which date shall be at least five Business Days prior to
the payment date. The Issuer shall fix or cause to be fixed any such special
record date and payment date, and, at least 15 days before any such special
record date, the Issuer shall mail to each Noteholder and the Trustee a notice
that states the special record date, the payment date and the amount of
defaulted interest to be paid.

          (d) Promptly following the date on which all principal of and interest
on the Notes has been paid in full and the Notes have been surrendered to the
Trustee, the Trustee shall, upon written notice from the Servicer of the
amounts, if any, that the Insurer has paid in respect of the Notes under the
Note Policy or otherwise which has not been reimbursed to it, deliver such
surrendered Notes to the Insurer to the extent not previously cancelled or
destroyed.

                                       17

<PAGE>

          Section 2.9.  Cancellation. Subject to Section 2.8(d), all Notes
                        ------------
surrendered for payment, registration of transfer, exchange or redemption shall,
if surrendered to any Person other than the Trustee, be delivered to the Trustee
and shall be promptly canceled by the Trustee in accordance with its customary
procedures. Subject to Section 2.8(d), the Issuer may at any time deliver to the
Trustee for cancellation any Notes previously authenticated and delivered
hereunder which the Issuer may have acquired in any manner whatsoever, and all
Notes so delivered shall be promptly canceled by the Trustee in accordance with
its customary procedures. No Notes shall be authenticated in lieu of or in
exchange for any Notes canceled as provided in this Section, except as expressly
permitted by this Indenture. Subject to Section 2.8(d), all canceled Notes may
be held or disposed of by the Trustee in accordance with its standard retention
or disposal policy as in effect at the time.

          Section 2.10. Release of Collateral. The Trust Collateral Agent shall,
                        ---------------------
on or after the Termination Date, release any remaining portion of the Trust
Property from the lien created by this Indenture and deposit in the Collection
Account any funds then on deposit in any other Trust Account and the Spread
Account. The Trust Collateral Agent shall release property from the lien created
by this Indenture pursuant to this Section 2.10 only upon receipt of an Issuer
Request, an Officer's Certificate, and an Opinion of Counsel meeting the
applicable requirements of Section 11.1.

          Section 2.11. Notices to Noteholders. Whenever a notice or other
                        ----------------------
communication to the Noteholders is required under this Indenture, the Trustee
shall give all such notices and communications specified herein to Holders of
the Notes.

          Section 2.12. Book-Entry Notes. The Notes will be represented by a
                        ----------------
permanent global note in fully registered form without coupons (the "Rule 144A
Global Note") deposited with a custodian for, and registered in the name of a
nominee of, DTC. Beneficial interests in the Rule 144A Global Note will be shown
on, and transfers thereof will be effected only through, records maintained by
DTC and its direct and indirect participants. It is expected that the delivery
of the Notes will be made on March 19, 2002. Unless and until Definitive Notes
have been issued to Note Owners pursuant to Section 2.13(b):

          (i)   the provisions of this Section shall be in full force and
     effect;

          (ii)  the Note Registrar and the Trustee shall be entitled to deal
     with the Clearing Agency for all purposes of this Indenture (including the
     payment of principal of and interest on the Notes and the giving of
     instructions or directions hereunder) as the sole Holder of the Notes, and
     shall have no obligation to the Note Owners;

          (iii) to the extent that the provisions of this Section conflict with
     any other provisions of this Indenture, the provisions of this Section
     shall control;

          (iv)  the rights of Note Owners shall be exercised only through the
     Clearing Agency and shall be limited to those established by law and
     agreements between such Note Owners and the Clearing Agency and/or the
     Clearing Agency Participants. Unless and until Definitive Notes are issued
     pursuant to Section

                                       18

<PAGE>

     2.13(b), the initial Clearing Agency will make book-entry transfers among
     the Clearing Agency Participants and receive and transmit payments of
     principal of and interest on the Notes to such Clearing Agency
     Participants;

          (v)  whenever this Indenture requires or permits actions to be taken
     based upon instructions or directions of Holders of Notes evidencing a
     specified percentage of the Outstanding Amount of the Notes, the Clearing
     Agency shall be deemed to represent such percentage only to the extent that
     it has received instructions to such effect from Note Owners and/or
     Clearing Agency Participants owning or representing, respectively, such
     required percentage of the beneficial interest in the Notes and has
     delivered such instructions to the Trustee; and

          (vi) Note Owners may receive copies of any reports sent to Noteholders
     pursuant to this Indenture, upon written request, together with a
     certification that they are Note Owners and payment of reproduction and
     postage expenses associated with the distribution of such reports, from the
     Trustee at the Corporate Trust Office.

          Section 2.13. Definitive Notes. (a) If (i) the Issuer notifies the
                        ----------------
Trustee in writing that the Clearing Agency is no longer willing or able to
properly discharge its responsibilities with respect to the Notes or ceases to
be a "clearing agency" registered under the Exchange Act, and the Issuer is
unable to locate a qualified successor within 90 days or (ii) the Controlling
Party, at its sole option, advises the Trustee through the Clearing Agency in
writing that the continuation of a book entry system through the Clearing Agency
is no longer in the best interests of the Note Owners, then the Clearing Agency
shall notify all Note Owners and the Trustee of the occurrence of any such event
and of the availability of Definitive Notes to Note Owners requesting the same.
Upon surrender to the Trustee of the Rule 144A Global Note by the Clearing
Agency, accompanied by registration instructions, the Issuer shall execute and
the Trustee shall authenticate and deliver the Definitive Notes in accordance
with the instructions of the Clearing Agency. None of the Issuer, the Note
Registrar or the Trustee shall be liable for any delay in delivery of such
instructions and may conclusively rely on, and shall be fully protected in
relying on, such instructions. Upon the issuance of Definitive Notes, the
Trustee shall recognize the Holders of the Definitive Notes as Noteholders.

          (b) In the case of Definitive Notes issued in exchange for the Rule
144A Global Note, such Definitive Notes will bear, and be subject to, the legend
referred to under Section 2.5. The holder of a Definitive Note may transfer such
Definitive Notes by surrendering it at the office or agency maintained by the
Trustee for such purpose in the Borough of Manhattan, The City of New York or
Minneapolis, Minnesota, which initially will be the Minneapolis office of the
Trustee. Upon the transfer, exchange or replacement of Definitive Notes bearing
such legend, or upon specific written request for removal of the legend on a
Definitive Note, the Trustee will deliver only Definitive Notes that bear such
legend, or will refuse to remove such legend, as the case may be, unless there
is delivered to the Trustee such satisfactory evidence, which may include an
opinion of counsel, as may reasonably be required by the Trustee that neither
such legend nor the restrictions on transfer set forth therein are required to
ensure compliance with the provisions of the Securities Act. Definitive Notes
will not be eligible for clearing or settlement through DTC.

                                       19

<PAGE>

                                  Article III.

                                    Covenants
                                    ---------

          Section 3.1. Payment of Principal and Interest. The Issuer will duly
                       ---------------------------------
and punctually pay the principal of and interest on the Notes in accordance with
the terms of the Notes and this Indenture. Without limiting the foregoing, the
Issuer will cause to be distributed all amounts on deposit in the Note Payment
Account on a Payment Date pursuant to the Sale and Servicing Agreement for the
benefit of the Noteholders. Amounts properly withheld under the Code or any
applicable state tax law by any Person from a payment to any Noteholder of
interest and/or principal shall be considered as having been paid by the Issuer
to such Noteholder for all purposes of this Indenture.

          Section 3.2. Maintenance of Office or Agency. The Trustee will
                       -------------------------------
maintain in the Borough of Manhattan, The City of New York or Minneapolis,
Minnesota, an office or agency where Notes may be surrendered for registration,
transfer or exchange of the Notes, and where notices and demands to or upon the
Issuer in respect of the Notes and this Indenture may be served. The Issuer
hereby initially appoints the Trustee to serve as its agent for the foregoing
purposes. The Issuer will give prompt written notice to the Trustee of the
location, and of any change in the location, of any such office or agency. If at
any time the Issuer shall fail to maintain any such office or agency or shall
fail to furnish the Trustee with the address thereof, such surrenders, notices
and demands may be made or served at the Corporate Trust Office, and the Issuer
hereby appoints the Trustee as its agent to receive all such surrenders, notices
and demands.

          Section 3.3. Money for Payments to be Held in Trust. On or before each
                       --------------------------------------
Payment Date and Redemption Date, the Issuer shall deposit or cause to be
deposited in the Note Payment Account from the Collection Account an aggregate
sum sufficient to pay the amounts then becoming due under the Notes, such sum to
be held in trust for the benefit of the Persons entitled thereto and (unless the
Note Paying Agent is the Trustee) shall promptly notify the Trustee of its
action or failure so to act.

          The Issuer will cause the Note Paying Agent other than the Trustee to
execute and deliver to the Trustee and the Insurer an instrument in which the
Note Paying Agent shall agree with the Trustee (and if the Trustee acts as Note
Paying Agent, it hereby so agrees), subject to the provisions of this Section,
that the Note Paying Agent will:

          (i)   hold all sums held by it for the payment of amounts due with
     respect to the Notes in trust for the benefit of the Persons entitled
     thereto until such sums shall be paid to such Persons or otherwise disposed
     of as herein provided and pay such sums to such Persons as herein provided;

          (ii)  give the Trustee written notice of any default by the Issuer of
     which it has actual knowledge (or any other obligor upon the Notes) in the
     making of any payment required to be made with respect to the Notes;

          (iii) at any time during the continuance of any such default, upon the
     written request of the Trustee, forthwith pay to the Trustee all sums so
     held in trust by the Note Paying Agent;

                                       20

<PAGE>

          (iv) immediately resign as the Note Paying Agent and forthwith pay to
     the Trustee all sums held by it in trust for the payment of Notes if at any
     time it ceases to meet the standards required to be met by the Note Paying
     Agent at the time of its appointment; and

          (v)  subject to the provisions of the Sale and Servicing Agreement,
     comply with all requirements of the Code with respect to the withholding
     from any payments made by it on any Notes of any applicable withholding
     taxes imposed thereon and with respect to any applicable reporting
     requirements in connection therewith.

          The Issuer, may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, by Issuer
Order direct the Note Paying Agent to pay to the Trustee all sums held in trust
by the Note Paying Agent, such sums to be held by the Trustee upon the same
trusts as those upon which the sums were held by the Note Paying Agent; and upon
such a payment by the Note Paying Agent to the Trustee, the Note Paying Agent
shall be released from all further liability with respect to such money.

          Subject to applicable laws with respect to the escheat of funds, any
money held by the Trustee or the Note Paying Agent in trust for the payment of
any amount due with respect to any Note and remaining unclaimed for two years
after such amount has become due and payable shall be discharged from such trust
and be paid to the Issuer on Issuer Request, with the prior written consent of
the Controlling Party, and the Holder of such Note shall thereafter, as an
unsecured general creditor, look only to the Issuer for payment thereof (but
only to the extent of the amounts so paid to the Issuer), and all liability of
the Trustee or the Note Paying Agent with respect to such trust money shall
thereupon cease; provided, however, that if such money or any portion thereof
had been previously deposited by the Insurer or the Trust Collateral Agent with
the Trustee for the payment of principal or interest on the Notes, to the extent
any amounts are owing to the Insurer, such amounts shall be paid promptly to the
Insurer upon receipt of a written request from the Insurer to such effect; and
provided, further, that the Trustee or the Note Paying Agent, before being
required to make any such repayment, shall at the expense of the Issuer cause to
be published once, in a newspaper published in the English language, customarily
published on each Business Day and of general circulation in The City of New
York, notice that such money remains unclaimed and that, after a date specified
therein, which shall not be less than 30 days from the date of such publication,
any unclaimed balance of such money then remaining will be repaid to the Issuer.
The Trustee shall also adopt and employ, at the expense of the Issuer, any other
reasonable means of notification of such repayment (including, but not limited
to, mailing notice of such repayment to Holders whose Notes have been called but
have not been surrendered for redemption or whose right to or interest in monies
due and payable but not claimed is determinable from the records of the Trustee
or of the Note Paying Agent, at the last address of record for each such
Holder).

          Section 3.4. Existence. Except as otherwise permitted by the
                       ---------
provisions of Section 3.10, the Issuer will keep in full effect its existence,
rights and franchises as a business trust under the laws of the State of
Delaware (unless it becomes, or any successor Issuer hereunder is or becomes,
organized under the laws of any other state or of the United States of America,
in which case the Issuer will keep in full effect its existence, rights and
franchises under the laws of such other jurisdiction) and will obtain and
preserve its

                                       21

<PAGE>

qualification to do business in each jurisdiction in which such qualification is
or shall be necessary to protect the validity and enforceability of this
Indenture, the Notes, the Collateral and each other instrument or agreement
included in the Trust Property.

          Section 3.5. Protection of Trust Property. The Issuer intends the
                       ----------------------------
security interest Granted pursuant to this Indenture in favor of the Issuer
Secured Parties to be prior to all other liens in respect of the Trust Property,
and the Issuer shall take all actions necessary to obtain and maintain, in favor
of the Trust Collateral Agent, for the benefit of the Issuer Secured Parties, a
first lien on and a first priority, perfected security interest in the Trust
Property. The Issuer will from time to time prepare (or shall cause to be
prepared), execute and deliver all such supplements and amendments hereto and
all such financing statements, continuation statements, instruments of further
assurance and other instruments, and will take such other action necessary or
advisable to:

          (i)   Grant more effectively all or any portion of the Trust Property;

          (ii)  maintain or preserve the lien and security interest (and the
     priority thereof) in favor of the Trust Collateral Agent for the benefit of
     the Issuer Secured Parties created by this Indenture or carry out more
     effectively the purposes hereof;

          (iii) perfect, publish notice of or protect the validity of any Grant
     made or to be made by this Indenture;

          (iv)  enforce any of the Collateral;

          (v)   preserve and defend title to the Trust Property and the rights
     of the Trust Collateral Agent in such Trust Property against the claims of
     all persons and parties; and

          (vi)  pay all taxes or assessments levied or assessed upon the Trust
     Property when due.

          The Issuer hereby designates the Trust Collateral Agent its agent and
attorney-in-fact to execute any financing statement, continuation statement or
other instrument required by the Trust Collateral Agent pursuant to this
Section; provided that, such designation shall not be deemed to create a duty in
the Trustee or the Trust Collateral Agent to monitor the compliance of the
Issuer with respect to its duties under this Section 3.5 or the adequacy of any
financing statement, continuation statement or other instrument prepared by the
Issuer.

          Section 3.6. Opinions as to Trust Property.

          (a) On the Closing Date, the Issuer shall furnish to the Trustee, the
Noteholders, the Trust Collateral Agent and the Insurer an Opinion of Counsel
either stating that, in the opinion of such counsel, such action has been taken
with respect to the recording and filing of this Indenture, any indentures
supplemental hereto, and any other requisite documents, and with respect to the
execution and filing of any financing statements and continuation statements, as
are necessary to perfect and make effective the first priority lien and security
interest in favor of the Trust Collateral Agent, for the benefit of the Issuer

                                       22

<PAGE>

Secured Parties, created by this Indenture and reciting the details of such
action, or stating that, in the opinion of such counsel, no such action is
necessary to make such lien and security interest effective.

          (b) Within 90 days after the beginning of each calendar year,
beginning with the first calendar year beginning more than six months after the
Closing Date, the Issuer shall furnish to the Trustee, Trust Collateral Agent
and the Insurer, an Opinion of Counsel either stating that, in the opinion of
such counsel, such action has been taken with respect to the recording, filing,
re-recording and refiling of this Indenture, any indentures supplemental hereto
and any other requisite documents and with respect to the execution and filing
of any financing statements and continuation statements as are necessary to
maintain the lien and security interest created by this Indenture and reciting
the details of such action or stating that in the opinion of such counsel no
such action is necessary to maintain such lien and security interest. Such
Opinion of Counsel shall also describe the recording, filing, re-recording and
refiling of this Indenture, any indentures supplemental hereto and any other
requisite documents and the execution and filing of any financing statements and
continuation statements that will, in the opinion of such counsel, be required
to maintain the lien and security interest of this Indenture.

          Section 3.7. Performance of Obligations; Servicing of Receivables.

          (a) The Issuer will not take any action and will use its best efforts
not to permit any action to be taken by others that would release any Person
from any of such Person's covenants or obligations under any instrument or
agreement included in the Trust Property or that would result in the amendment,
hypothecation, subordination, termination or discharge of, or impair the
validity or effectiveness of, any such instrument or agreement, except as
ordered by any bankruptcy or other court or as expressly provided in this
Indenture, the Basic Documents or such other instrument or agreement.

          (b) The Issuer may contract with other Persons acceptable to the
Controlling Party to assist it in performing its duties under this Indenture,
and any performance of such duties by a Person identified to the Trustee, the
Insurer and the Noteholders in an Officer's Certificate of the Issuer shall be
deemed to be action taken by the Issuer. Initially, the Issuer has contracted
with the Servicer to assist the Issuer in performing its duties under this
Indenture.

          (c) The Issuer will punctually perform and observe all of its
obligations and agreements contained in this Indenture, the Basic Documents and
in the instruments and agreements included in the Trust Property, including, but
not limited to, preparing (or causing to be prepared) and filing (or causing to
be filed) all UCC financing statements and continuation statements required to
be filed by the terms of this Indenture and the Sale and Servicing Agreement in
accordance with and within the time periods provided for herein and therein.
Except as otherwise expressly provided therein, the Issuer shall not waive,
amend, modify, supplement or terminate any Basic Document or any provision
thereof without the prior written consent of the Controlling Party (subject to
Sections 9.1 and 9.2).

          (d) If a Responsible Officer of the Owner Trustee shall have actual
knowledge of the occurrence of a Servicer Termination Event under the Sale and
Servicing Agreement, the Owner Trustee shall promptly notify the Trustee, the
Noteholders, the Trust

                                       23

<PAGE>

Collateral Agent, the Insurer and the Rating Agency thereof in accordance with
Section 11.4, and shall specify in such notice the action, if any, the Issuer is
taking in respect of such default. If a Servicer Termination Event shall arise
from the failure of the Servicer to perform any of its duties or obligations
under the Sale and Servicing Agreement with respect to the Receivables, the
Issuer shall take all reasonable steps available to it to remedy such failure.

          (e) The Issuer agrees that it will not waive timely performance or
observance by the Servicer or the Seller of their respective duties under the
Basic Documents (x) without the prior written consent of the Controlling Party
or (y) if the effect thereof would adversely affect the Holders of the Notes.

          Section 3.8. Negative Covenants. So long as any Notes are Outstanding,
the Issuer shall not:

          (i)   except as expressly permitted by this Indenture or the Basic
     Documents, sell, transfer, exchange or otherwise dispose of any of the
     properties or assets of the Issuer, including those included in the Trust
     Property, unless directed to do so by the Controlling Party;

          (ii)  claim any credit on, or make any deduction from the principal or
     interest payable in respect of, the Notes (other than amounts properly
     withheld from such payments under the Code) or assert any claim against any
     present or former Noteholder by reason of the payment of the taxes levied
     or assessed upon any part of the Trust Property; or

          (iii) (A) permit the validity or effectiveness of this Indenture to be
     impaired, or permit the lien in favor of the Trust Collateral Agent created
     by this Indenture to be amended, hypothecated, subordinated, terminated or
     discharged, or permit any Person to be released from any covenants or
     obligations with respect to the Notes under this Indenture except as may be
     expressly permitted hereby, (B) permit any lien, charge, excise, claim,
     security interest, mortgage or other encumbrance (other than the lien of
     this Indenture) to be created on or extend to or otherwise arise upon or
     burden the Trust Property or any part thereof or any interest therein or
     the proceeds thereof (other than tax liens, mechanics' liens and other
     liens that arise by operation of law, in each case subsequent to the
     Cut-Off Date and on a Financed Vehicle and arising solely as a result of an
     action or omission of the related Obligor), (C) permit the lien of this
     Indenture not to constitute a valid first priority (other than with respect
     to any such tax, mechanics' or other lien arising subsequent to the Cut-Off
     Date) security interest in the Trust Property or (D) amend, modify or fail
     to comply with the provisions of the Basic Documents without the prior
     written consent of the Controlling Party (subject to Sections 9.1 and 9.2).

          Section 3.9. Annual Statement as to Compliance. The Issuer will
deliver to the Trustee and the Insurer, within 90 days after the end of each
fiscal year of the Issuer (commencing with the fiscal year ended December 31,
2002), an Officer's Certificate stating, as to the Authorized Officer signing
such Officer's Certificate, that

                                       24

<PAGE>

          (i)    a review of the activities of the Issuer during such year and
     of performance under this Indenture has been made under such Authorized
     Officer's supervision; and

          (ii)   to the best of such Authorized Officer's knowledge, based on
     such review, the Issuer has complied with all conditions and covenants
     under this Indenture throughout such year, or, if there has been a default
     in the compliance of any such condition or covenant, specifying each such
     default known to such Authorized Officer and the nature and status thereof.

          SECTION 3.10. Issuer May Consolidate, Etc. Only on Certain Terms.

          (a)  The Issuer shall not consolidate or merge with or into any other
Person, unless

          (i)    the Person (if other than the Issuer) formed by or surviving
     such consolidation or merger shall be a Person organized and existing under
     the laws of the United States of America or any State and shall expressly
     assume, by an indenture supplemental hereto, executed and delivered to the
     Trustee, in form satisfactory to the Trustee and the Controlling Party, the
     due and punctual payment of the principal of and interest on all Notes and
     the performance or observance of every agreement and covenant of this
     Indenture on the part of the Issuer to be performed or observed, all as
     provided herein;

          (ii)   immediately after giving effect to such transaction, no Default
     or Event of Default shall have occurred and be continuing;

          (iii)  the Rating Agency Condition shall have been satisfied with
     respect to such transaction;

          (iv)   the Issuer shall have received an Opinion of Counsel (and shall
     have delivered copies thereof to the Trustee, the Owner Trustee and the
     Insurer (so long as no Insurer Default shall have occurred and be
     continuing)) to the effect that such transaction will not have any material
     adverse tax consequence to the Trust, the Insurer, any Noteholder or any
     Certificateholder;

          (v)    any action as is necessary to maintain the lien and security
     interest created by this Indenture shall have been taken;

          (vi)   the Issuer shall have delivered to the Trustee and the Insurer
     an Officer's Certificate and an Opinion of Counsel each stating that such
     consolidation or merger and such supplemental indenture comply with this
     Article III and that all conditions precedent herein provided for relating
     to such transaction have been complied with (including any filing required
     by the Exchange Act); and

          (vii)  so long as no Insurer Default shall have occurred and be
     continuing and (a) any amounts due to the Insurer under the Insurance
     Agreement or the other Basic Documents remain unpaid or (b) the Note Policy
     has not expired in accordance with its terms, the Issuer shall have given
     the Insurer written notice of such

                                       25

<PAGE>

     consolidation or merger at least 20 Business Days prior to the consummation
     of such action and shall have received the prior written approval of the
     Insurer of such consolidation or merger and the Issuer or the Person (if
     other than the Issuer) formed by or surviving such consolidation or merger
     has a net worth, immediately after such consolidation or merger, that is
     (a) greater than zero and (b) not less than the net worth of the Issuer
     immediately prior to giving effect to such consolidation or merger.

          (b)  The Issuer shall not convey or transfer all or substantially all
of its properties or assets, including those included in the Trust Property, to
any Person, unless:

          (i)    the Person that acquires by conveyance or transfer the
     properties and assets of the Issuer the conveyance or transfer of which is
     hereby restricted shall (A) be a United States citizen or a Person
     organized and existing under the laws of the United States of America or
     any State, (B) expressly assume, by an indenture supplemental hereto,
     executed and delivered to the Trustee, in form satisfactory to the Trustee
     and the Controlling Party, the due and punctual payment of the principal of
     and interest on all Notes and the performance or observance of every
     agreement and covenant of this Indenture and each of the Basic Documents on
     the part of the Issuer to be performed or observed, all as provided herein,
     (C) expressly agree by means of such supplemental indenture that all right,
     title and interest so conveyed or transferred shall be subject and
     subordinate to the rights of Holders of the Notes, (D) unless otherwise
     provided in such supplemental indenture, expressly agree to indemnify,
     defend and hold harmless the Issuer against and from any loss, liability or
     expense arising under or related to this Indenture and the Notes and (E)
     expressly agree by means of such supplemental indenture that such Person
     (or if a group of persons, then one specified Person) shall prepare (or
     cause to be prepared) and make all filings with the Commission (and any
     other appropriate Person) required by the Exchange Act in connection with
     the Notes;

          (ii)   immediately after giving effect to such transaction, no Default
     or Event of Default shall have occurred and be continuing;

          (iii)  the Rating Agency Condition shall have been satisfied with
     respect to such transaction;

          (iv)   the Issuer shall have received an Opinion of Counsel (and shall
     have delivered copies thereof to the Trustee and the Insurer) to the effect
     that such transaction will not have any material adverse tax consequence to
     the Trust, the Insurer, any Noteholder or any Certificateholder;

          (v)    any action as is necessary to maintain the lien and security
     interest created by this Indenture shall have been taken; and

          (vi)   the Issuer shall have delivered to the Trustee an Officers'
     Certificate and an Opinion of Counsel each stating that such conveyance or
     transfer and such supplemental indenture comply with this Article III and
     that all conditions precedent herein provided for relating to such
     transaction have been complied with (including any filing required by the
     Exchange Act); and

                                       26

<PAGE>

          (vii)  so long as no Insurer Default shall have occurred and be
     continuing, and (a) any amounts due to the Insurer under the Insurance
     Agreement or the other Basic Documents remain unpaid or (b) the Note Policy
     has not expired in accordance with its terms, the Issuer shall have given
     the Insurer written notice of such conveyance or transfer at least 20
     Business Days prior to the consummation of such action and shall have
     received the prior written approval of the Insurer of such conveyance or
     transfer and the Issuer or the Person (if other than the Issuer) acquiring
     or surviving such conveyance or transfer has a net worth, immediately after
     such consolidation or merger, that is (a) greater than zero and (b) not
     less than the net worth of the Issuer immediately prior to giving effect to
     such consolidation or merger.

          SECTION 3.11. Successor or Transferee.
                        -----------------------

          (a)  Upon any consolidation or merger of the Issuer in accordance with
Section 3.10(a), the Person formed by or surviving such consolidation or merger
(if other than the Issuer) shall succeed to, and be substituted for, and may
exercise every right and power of, the Issuer under this Indenture with the same
effect as if such Person had been named as the Issuer herein.

          (b)  Upon a conveyance or transfer of all the assets and properties of
the Issuer pursuant to Section 3.10 (b), TFC Automobile Receivables Trust 2002-1
will be released from every covenant and agreement of this Indenture to be
observed or performed on the part of the Issuer with respect to the Notes
immediately upon the delivery of written notice to the Trustee stating that TFC
Automobile Receivables Trust 2002-1 is to be so released.

          SECTION 3.12. No Other Business. The Issuer shall not engage in any
                        -----------------
business other than financing, purchasing, owning, selling and managing the
Receivables in the manner contemplated by this Indenture and the Basic Documents
and activities incidental thereto.

          SECTION 3.13. No Borrowing. The Issuer shall not issue, incur, assume,
                        ------------
guarantee or otherwise become liable, directly or indirectly, for any
Indebtedness except for (i) the Notes, (ii) obligations owing from time to time
to the Insurer under the Insurance Agreement and (iii) any other Indebtedness
expressly permitted by or arising under the Basic Documents. The Notes and the
Certificates shall be issued to the Seller as payment for the Receivables under
the Sale and Servicing Agreement and the Seller shall use the proceeds from the
sale of the Notes exclusively to fund the Seller's purchase of the Receivables
and the other assets specified in the Purchase Agreement, to pay the Issuer's
organizational, transactional and start-up expenses and certain other expenses
in connection with the offering and sale of the Notes.

          SECTION 3.14. Servicer's Obligations. The Issuer shall cause the
                        ----------------------
Servicer to comply with Sections 4.9, 4.10, 4.11 and 5.11 of the Sale and
Servicing Agreement.

          SECTION 3.15. Guarantees, Loans, Advances and Other Liabilities.
                        -------------------------------------------------
Except as expressly permitted by the Sale and Servicing Agreement or this
Indenture, the Issuer shall not make any loan or advance or credit to, or
guarantee (directly or indirectly or by an

                                       27

<PAGE>

instrument having the effect of assuring another's payment or performance on any
obligation or capability of so doing or otherwise), endorse or otherwise become
contingently liable, directly or indirectly, in connection with the obligations,
stocks or dividends of, or own, purchase, repurchase or acquire (or agree
contingently to do so) any stock, obligations, assets or securities of, or any
other interest in, or make any capital contribution to, any other Person.

          SECTION 3.16. Capital Expenditures. The Issuer shall not make any
                        --------------------
expenditure (by long-term or operating lease or otherwise) for capital assets
(either realty or personalty).

          SECTION 3.17. Compliance with Laws. The Issuer shall comply with the
                        --------------------
requirements of all applicable laws, the non-compliance with which would,
individually or in the aggregate, materially and adversely affect the ability of
the Issuer to perform its obligations under the Notes, this Indenture or any
Basic Document.

          SECTION 3.18. Restricted Payments. The Issuer shall not, directly or
                        -------------------
indirectly, (i) pay any dividend or make any distribution (by reduction of
capital or otherwise), whether in cash, property, securities or a combination
thereof, to the Owner Trustee or any owner of a beneficial interest in the
Issuer or otherwise with respect to any ownership or equity interest or security
in or of the Issuer or to the Servicer, (ii) redeem, purchase, retire or
otherwise acquire for value any such ownership or equity interest or security or
(iii) set aside or otherwise segregate any amounts for any such purpose;
provided, however, that the Issuer may make, or cause to be made, distributions
to the Servicer, the Owner Trustee, the Insurer, the Trustee, the Trust
Collateral Agent and the Certificateholders as permitted by, and to the extent
funds are available for such purpose under, the Sale and Servicing Agreement or
Trust Agreement. The Issuer will not, directly or indirectly, make payments to
or distributions from the Collection Account, the Note Payment Account or the
Spread Account except in accordance with this Indenture and the Basic Documents.

          SECTION 3.19. Notice of Events of Default. Upon a Responsible Officer
                        ---------------------------
of the Owner Trustee having actual knowledge thereof, the Owner Trustee agrees
to give the Trustee, the Noteholders, the Insurer and the Rating Agency prompt
written notice of each Default or Event of Default hereunder and each default on
the part of the Servicer or the Seller of its obligations under the Sale and
Servicing Agreement.

          SECTION 3.20. Further Instruments and Acts. Upon request of the
                        ----------------------------
Trustee or the Insurer, the Issuer will execute and deliver such further
instruments and do such further acts as may be reasonably necessary or proper to
carry out more effectively the purpose of this Indenture.

          SECTION 3.21. Amendments of Sale and Servicing Agreement and Trust
                        ----------------------------------------------------
Agreement. The Issuer shall not agree to any amendment to Section 13.1 of the
---------
Sale and Servicing Agreement or Section 11.1 of the Trust Agreement to eliminate
the requirements thereunder that the Insurer, the Trustee or the Holders of the
Notes consent to amendments thereto as provided therein.

          SECTION 3.22. Income Tax Characterization. For purposes of federal
                        ---------------------------
income, state and local income and franchise and any other income taxes, the
Issuer will treat the Notes as indebtedness of the Issuer and hereby instructs
the Servicer to treat the Notes as

                                       28

<PAGE>

indebtedness of the Issuer for all such tax reporting purposes. Each Noteholder
and each Note Owner, by virtue of its possession of a Note or an interest
therein, agrees to treat the Notes as indebtedness for federal income, state and
local income and franchise tax purposes. In the event that the Internal Revenue
Service determines (as evidenced by an opinion of counsel is reasonably likely
to determine) that the Notes are equity interests in a partnership for federal
income tax purposes the Issuer will allocate such amounts of income, loss, etc.
so as to replicate as closely as possible the economic arrangements created
hereunder and under the Trust Agreement.

                                  ARTICLE IV.

                           Satisfaction and Discharge
                           --------------------------

      SECTION 4.1. Satisfaction and Discharge of Indenture. This Indenture shall
                   ---------------------------------------
cease to be of further effect with respect to the Notes except as to (i) rights
of registration of transfer and exchange, (ii) substitution of mutilated,
destroyed, lost or stolen Notes, (iii) rights of Noteholders to receive payments
of principal thereof and interest thereon, (iv) Sections 3.3, 3.4, 3.5, 3.8,
3.10, 3.11, 3.12, 3.13, 3.20, 3.21, 3.22 and 6.6, (v) the rights and immunities
of the Trustee hereunder (including the rights of the Trustee under Section 6.7
and the obligations of the Trustee under Section 4.2) and (vi) the rights of
Noteholders, the Insurer and the Trustee as beneficiaries hereof with respect to
the property so deposited with the Trustee or the Trust Collateral Agent and
payable to all or any of them, on demand of and at the expense of the Issuer,
shall execute proper instruments acknowledging satisfaction and discharge of
this Indenture with respect to the Notes, when

      (A) either

             (1)  all Notes theretofore authenticated and delivered (other than
      Notes for whose payment has theretofore been deposited in trust or
      segregated and held in trust by the Issuer and thereafter repaid to the
      Issuer or discharged from such trust, as provided in Section 3.3) have
      been delivered to the Trustee for cancellation and the Note Policy has
      expired and been returned to the Insurer for cancellation; or

             (2)  all Notes not theretofore delivered to the Trustee for
                  cancellation

                      (i)   have become due and payable,

                      (ii)  will become due and payable at their respective
             Final Scheduled Payment Dates within one year, or

                      (iii) are to be called for redemption within one year
             under arrangements satisfactory to the Trustee for the giving of
             notice of redemption by the Trustee in the name, and at the
             expense, of the Issuer,

      and the Issuer, in the case of (i), (ii) or (iii) above, has irrevocably
      deposited or caused to be irrevocably deposited with the Trust Collateral
      Agent cash or direct obligations of or obligations guaranteed by the
      United States of

                                       29

<PAGE>

               America (which will mature prior to the date such amounts are
               payable), in trust for such purpose, in an amount sufficient to
               pay and discharge the entire indebtedness on such Notes not
               theretofore delivered to the Trustee for cancellation when due on
               the Final Scheduled Payment Date or Redemption Date (if Notes
               shall have been called for redemption pursuant to Section
               10.1(a)), as the case may be, and the Note Policy, in the case of
               (i), (ii) and (iii) above shall have expired on its own terms;

               (B) the Issuer has paid or caused to be paid all Issuer Secured
      Obligations; and

               (C) the Issuer has delivered to the Trustee, the Trust Collateral
      Agent and the Insurer an Officer's Certificate and an Opinion of Counsel
      each stating that all conditions precedent herein provided for relating to
      the satisfaction and discharge of this Indenture have been complied with,
      and if required by the Controlling Party, an Independent Certificate from
      a firm of certified public accountants, each meeting the applicable
      requirements of Section 11.1(a) and each stating that all conditions
      precedent herein provided for relating to the satisfaction and discharge
      of this Indenture have been complied with. Upon such satisfaction and
      discharge, the Trustee shall give prompt written notice thereof to
      Standard & Poor's.

               SECTION 4.2. Application of Trust Money. All monies deposited
                            --------------------------
with the Trustee pursuant to Section 4.1 hereof shall be held in trust and
applied by it, in accordance with the provisions of the Notes and this
Indenture, to the payment, either directly or through the Note Paying Agent, as
the Trustee may determine, to the Holders of the particular Notes for the
payment or redemption of which such monies have been deposited with the Trustee,
of all sums due and to become due thereon for principal and interest; but such
monies need not be segregated from other funds except to the extent required
herein or in the Sale and Servicing Agreement or required by law.

               SECTION 4.3. Repayment of Monies Held by Note Paying Agent. In
                            ---------------------------------------------
connection with the satisfaction and discharge of this Indenture with respect to
the Notes, all monies then held by the Note Paying Agent other than the Trustee
under the provisions of this Indenture with respect to such Notes shall, upon
demand of the Issuer, be paid to the Trustee to be held and applied according to
Section 3.3 and thereupon the Note Paying Agent shall be released from all
further liability with respect to such monies.

                                   ARTICLE V.

                                    Remedies
                                    --------

               SECTION 5.1. Events of Default. "Event of Default," wherever used
                            -----------------
herein, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):

               (i)   default in the payment of any interest on any Note when the
      same becomes due and payable, and such default shall continue for a period
      of one

                                       30

<PAGE>

      Business Day (solely for purposes of this clause, a payment on the Notes
      funded by the Insurer or with proceeds from the Spread Account shall be
      deemed to be a payment made by the Issuer); or

               (ii)   default in the payment of the principal of or any
      installment of the principal of any Note when the same becomes due and
      payable; or

               (iii)  an Insurance Agreement Indenture Cross Default shall have
      occurred; provided, however, that the occurrence of an Insurance Agreement
      Indenture Cross Default may not form the basis of an Event of Default
      unless the Controlling Party shall, upon prior written notice to the
      Rating Agency, have delivered to the Issuer and the Trustee, and not
      rescinded, a written notice specifying that such Insurance Agreement
      Indenture Cross Default constitutes an Event of Default under the
      Indenture; or

               (iv)   so long as an Insurer Default shall have occurred and be
      continuing, default in the observance or performance of any covenant or
      agreement of the Issuer made in this Indenture (other than a covenant or
      agreement, a default in the observance or performance of which is
      elsewhere in this Section specifically dealt with), or any representation
      or warranty of the Issuer made in this Indenture or in any certificate in
      connection herewith proving to have been incorrect in any material respect
      as of the time when the same shall have been made, and such default shall
      continue or not 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 (or for such longer
      period, not in excess of 90 days, as may be reasonably necessary to remedy
      such default; provided that such default is capable of remedy within 90
      days or less and the Servicer, on behalf of the Owner Trustee, delivers an
      Officer's Certificate to the Trustee to the effect that the Issuer has
      commenced, or will promptly commence and diligently pursue, all reasonable
      efforts to remedy such default) after there shall have been given, by
      registered or certified mail, to the Issuer by the Trustee or to the
      Issuer and the Trustee by the Holders of at least 25% of the Outstanding
      Amount of the Notes, a written notice specifying such default or incorrect
      representation or warranty and requiring it to be remedied and stating
      that such notice is a "Notice of Default" hereunder; or

               (v)    so long as an Insurer Default shall have occurred and be
      continuing, the filing of a decree or order for relief by a court having
      jurisdiction in the premises in respect of the Issuer or any substantial
      part of the Trust Property in an involuntary case under any applicable
      Federal or state bankruptcy, insolvency or other similar law now or
      hereafter in effect, or appointing a receiver, liquidator, assignee,
      custodian, trustee, sequestrator or similar official of the Issuer or for
      any substantial part of the Trust Property, or ordering the winding-up or
      liquidation of the Issuer's affairs, and such decree or order shall remain
      unstayed and in effect for a period of 60 consecutive days; or

               (vi)   so long as an Insurer Default shall have occurred and be
      continuing, the commencement by the Issuer of a voluntary case under any
      applicable Federal or state bankruptcy, insolvency or other similar law
      now or hereafter in effect, or the

                                       31

<PAGE>

      consent by the Issuer to the entry of an order for relief in an
      involuntary case under any such law, or the consent by the Issuer to the
      appointment or taking possession by a receiver, liquidator, assignee,
      custodian, trustee, sequestrator or similar official of the Issuer or for
      any substantial part of the Trust Property, or the making by the Issuer of
      any general assignment for the benefit of creditors, or the failure by the
      Issuer generally to pay its debts as such debts become due, or the taking
      of action by the Issuer in furtherance of any of the foregoing.

               The Issuer shall as soon as possible deliver to the Trustee, the
Owner Trustee and the Insurer, and in all events within two Business Days after
the occurrence thereof, written notice in the form of an Officer's Certificate
of any event which with the giving of notice and the lapse of time would become
an Event of Default, its status and what action the Issuer is taking or proposes
to take with respect thereto.

               SECTION 5.2. Rights Upon Event of Default.
                            ----------------------------

               (a) If an Event of Default occurs and is continuing, then and in
every such case, the Controlling Party may declare the unpaid principal amount
of all the Notes to be immediately due and payable at par, together with accrued
interest thereon, and upon such declaration such principal amount shall become
immediately due and payable together with all accrued and unpaid interest
thereon, without presentment, demand, protest or other nature of any kind, all
of which are hereby waived by the Issuer. If an Event of Default shall have
occurred and be continuing, the Controlling Party may exercise any of the
remedies specified in Section 5.4(a). In the event of any acceleration of any
Notes by operation of this Section 5.2, the Trustee shall continue to be
entitled to make claims under the Note Policy pursuant to the Sale and Servicing
Agreement for Scheduled Payments on the Notes. Payments under the Note Policy
following acceleration of any Notes shall be applied by the Trustee:

               FIRST: to Noteholders for amounts due and unpaid on the Notes for
      interest, ratably, without preference or priority of any kind, according
      to the amounts due and payable on the Notes for interest; and

               SECOND: to Noteholders for amounts due and unpaid on the Notes
      for principal, ratably, without preference or priority of any kind,
      according to the amounts due and payable on the Notes for principal.

               (b) In the event any Notes are accelerated due to an Event of
Default, the Insurer shall have the right (in addition to its obligation to pay
Scheduled Payments on the Notes in accordance with the Note Policy), but not the
obligation, to make payments under the Note Policy or otherwise of interest and
principal due on such Notes, in whole or in part, on any date or dates following
such acceleration as the Insurer, in its sole discretion, shall elect.

               (c) At any time after such declaration of acceleration of
maturity has been made and before a judgment or decree for payment of the money
due has been obtained by the Trustee as hereinafter in this Article V provided
for, the Controlling Party may by written notice to the Issuer and the Trustee,
rescind and annul such declaration and its consequences if:

                                       32

<PAGE>

          (i)    the Issuer has paid or deposited with the Trustee a sum
     sufficient to pay

          (A) all payments of principal of and interest on all Notes and all

     other amounts that would then be due hereunder or upon such Notes if the
     Event of Default giving rise to such acceleration had not occurred; and

          (B) all sums paid or advanced by the Trustee hereunder and the
     reasonable compensation, expenses, disbursements and advances of the
     Trustee and its agents and counsel; and

          (ii)   all Events of Default, other than the nonpayment of the
     principal of the Notes that has become due solely by such acceleration,
     have been cured or waived as provided in Section 5.13.

          No such rescission shall affect any subsequent default or impair any
right consequent thereto.

          SECTION 5.3. Collection of Indebtedness and Suits for Enforcement by
                       -------------------------------------------------------
Trustee.
-------

          (a)  The Issuer covenants that if the Notes are accelerated following
the occurrence of an Event of Default, the Issuer will, upon demand of the
Trustee, pay to it, for the benefit of the Holders of the Notes, the whole
amount then due and payable on such Notes for principal and interest, with
interest upon the overdue principal, and, to the extent payment at such rate of
interest shall be legally enforceable, upon overdue installments of interest, at
the applicable Interest Rate and in addition thereto such further amount as
shall be sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee and
its agents and counsel.

          (b)  Each Issuer Secured Party hereby irrevocably and unconditionally
appoints the Controlling Party as the true and lawful attorney-in-fact of such
Issuer Secured Party for so long as such Issuer Secured Party is not the
Controlling Party, with full power of substitution, to execute, acknowledge and
deliver any notice, document, certificate, paper, pleading or instrument and to
do in the name of the Controlling Party as well as in the name, place and stead
of such Issuer Secured Party such acts, things and deeds for or on behalf of and
in the name of such Issuer Secured Party under this Indenture (including
specifically under Section 5.4) and under the Basic Documents which such Issuer
Secured Party could or might do or which may be necessary, desirable or
convenient in such Controlling Party's sole discretion to effect the purposes
contemplated hereunder and under the Basic Documents and, without limitation,
following the occurrence of an Event of Default, exercise full right, power and
authority to take, or defer from taking, any and all acts with respect to the
administration, maintenance or disposition of the Trust Property.

          (c)  If an Event of Default occurs and is continuing, the Trustee may
in its discretion but with the prior written consent of the Controlling Party
and shall, at the direction of the Controlling Party, proceed to protect and
enforce its rights and the rights of the Noteholders by such appropriate
Proceedings as the Trustee or the Controlling Party shall

                                       33

<PAGE>

deem most effective to protect and enforce any such rights, whether for the
specific enforcement of any covenant or agreement in this Indenture or in aid of
the exercise of any power granted herein, or to enforce any other proper remedy
or legal or equitable right vested in the Trustee by this Indenture or by law.

          (d)  [Reserved].

          (e)  In case there shall be pending, relative to the Issuer or any
other obligor upon the Notes or any Person having or claiming an ownership
interest in the Trust Property, proceedings under Title 11 of the United States
Code or any other applicable Federal or state bankruptcy, insolvency or other
similar law, or in case a receiver, assignee or trustee in bankruptcy or
reorganization, liquidator, sequestrator or similar official shall have been
appointed for or taken possession of the Issuer or its property or such other
obligor or Person, or in case of any other comparable judicial proceedings
relative to the Issuer or other obligor upon the Notes, or to the creditors or
property of the Issuer or such other obligor, the Trustee, irrespective of
whether the principal of any Notes shall then be due and payable as therein
expressed or by declaration or otherwise and irrespective of whether the Trustee
shall have made any demand pursuant to the provisions of this Section, shall be
entitled and empowered, by intervention in such proceedings or otherwise:

          (i)    to file and prove a claim or claims for the whole amount of

     principal and interest owing and unpaid in respect of the Notes and to file
     such other papers or documents as may be necessary or advisable in order to
     have the claims of the Trustee (including any claim for reasonable
     compensation to the Trustee and each predecessor Trustee, and their
     respective agents, attorneys and counsel, and for reimbursement of all
     expenses and liabilities incurred, and all advances made, by the Trustee
     and each predecessor Trustee, except as a result of negligence, bad faith
     or willful misconduct) and of the Noteholders allowed in such proceedings;

          (ii)   unless prohibited by applicable law and regulations, to vote on

     behalf of the Holders of Notes in any election of a trustee, a standby
     trustee or person performing similar functions in any such proceedings;

          (iii)  to collect and receive any monies or other property payable or

     deliverable on any such claims and to distribute all amounts received with
     respect to the claims of the Noteholders, the Insurer and of the Trustee on
     their behalf; and

          (iv)   to file such proofs of claim and other papers or documents as
     may be necessary or advisable in order to have the claims of the Trustee,
     the Insurer or the Holders of Notes allowed in any judicial proceedings
     relative to the Issuer, its creditors and its property;

          (v)    and any trustee, receiver, liquidator, custodian or other
     similar official in any such proceeding is hereby authorized by each of
     such Noteholders to make payments to the Trustee, and, in the event that
     the Trustee shall consent to the making of payments directly to such
     Noteholders, to pay to the Trustee such amounts as shall be sufficient to
     cover reasonable compensation to the Trustee, each predecessor Trustee and
     their respective agents, attorneys and counsel, and all other expenses and

                                       34

<PAGE>

     liabilities incurred, and all advances made, by the Trustee and each
     predecessor Trustee except as a result of negligence or bad faith.

          (f)  Nothing herein contained shall be deemed to authorize the Trustee
to authorize or consent to or vote for or accept or adopt on behalf of any
Noteholder any plan of reorganization, arrangement, adjustment or composition
affecting the Notes or the rights of any Holder thereof or to authorize the
Trustee to vote in respect of the claim of any Noteholder in any such proceeding
except, as aforesaid, to vote for the election of a trustee in bankruptcy or
similar person.

          (g)  All rights of action and of asserting claims under this Indenture
or under any of the Notes, may be enforced by the Trustee without the possession
of any of the Notes or the production thereof in any trial or other proceedings
relative thereto, and any such action or proceedings instituted by the Trustee
shall be brought in its own name as trustee of an express trust, and any
recovery of judgment, subject to the payment of the expenses, disbursements and
compensation of the Trustee, each predecessor Trustee and their respective
agents and attorneys, shall be for the ratable benefit of the Holders of the
Notes and the Insurer.

          (h)  In any proceedings brought by the Trustee (and also any
proceedings involving the interpretation of any provision of this Indenture),
the Trustee shall be held to represent all the Holders of the Notes, and it
shall not be necessary to make any Noteholder a party to any such proceedings.

          SECTION 5.4. Remedies.
                       --------

          (a)  If an Event of Default shall have occurred and be continuing, the
Controlling Party may do one or more of the following (subject to Section 5.5):

          (i)    institute Proceedings in its own name and as trustee of an
     express trust for the collection of all amounts then payable on the Notes
     or under this Indenture with respect thereto, whether by declaration or
     otherwise, enforce any judgment obtained, and collect from the Issuer and
     any other obligor upon such Notes monies adjudged due;

          (ii)   institute Proceedings from time to time for the complete or
     partial foreclosure of this Indenture with respect to the Trust Property;

          (iii)  exercise any remedies of a secured party under the UCC and take

     any other appropriate action to protect and enforce the rights and remedies
     of the Issuer Secured Parties; and

          (iv)   direct the Trust Collateral Agent in writing to sell the Trust
     Property or any portion thereof or rights or interest therein, at one or
     more public or private sales called and conducted in any manner permitted
     by law; provided, however, that

          (A) if the Insurer is the Controlling Party, the Insurer may not sell
or otherwise liquidate the Trust Property following an Insurance Agreement
Indenture Cross Default unless the proceeds of such sale or liquidation
distributable to the

                                       35

<PAGE>

     Noteholders are sufficient to discharge in full all amounts then due and
     unpaid upon such Notes for principal and interest;

          (B) if the Insurer is the Controlling Party, the Insurer must use due
     care to distribute proceeds in accordance with the requirements and
     priorities of Sections 2.8 and 5.6 of this Indenture, but only to the
     extent such proceeds are in fact received by the Controlling Party; and

          (C) if the Security Majority is the Controlling Party, the Trustee, if
     so directed by the Security Majority, may not sell or otherwise liquidate
     the Trust Property following an Event of Default unless

               (1)  such Event of Default is of the type described in Section
          5.1(i) or (ii), or

               (2)  either

                                (x)   the Holders of 100% of the Outstanding
                           Amount of the  Notes consent thereto,

                                (y)   the proceeds of such sale or liquidation
                           distributable to the Noteholders are sufficient to
                           discharge in full all amounts then due and unpaid
                           upon such Notes for principal and interest, or

                                (z)   the Trustee determines that the Trust
                           Property will not continue to provide sufficient
                           funds for the payment of principal of and interest on
                           the Notes as they would have become due if the Notes
                           had not been declared due and payable, and the
                           Trustee provides prior written notice to the Rating
                           Agency and obtains the consent of Holders of 66-2/3%
                           of the Outstanding Amount of the Notes.

          In determining such sufficiency or insufficiency with respect to
clause (y) and (z), the Trustee may, but need not, obtain and rely upon an
opinion of an Independent investment banking or accounting firm of national
reputation as to the feasibility of such proposed action and as to the
sufficiency of the Trust Property for such purpose.

          SECTION 5.5. Optional Preservation of the Receivables. If the Security
                       ----------------------------------------
Majority is the Controlling Party and if the Notes have been declared to be due
and payable under Section 5.2 following an Event of Default and such declaration
and its consequences have not been rescinded and annulled, the Trustee, if so
directed by the Security Majority, may direct the Trust Collateral Agent to
maintain possession of the Trust Property.

                                       36

<PAGE>

          SECTION 5.6. Priorities.
                       ----------

          (a)  Following (1) the acceleration of the Notes pursuant to Section
5.2 or (2) the receipt of Insolvency Proceeds pursuant to Section 11.1(b) of the
Sale and Servicing Agreement, the Amount Available, including any money or
property collected pursuant to Section 5.4 of this Indenture and any such
Insolvency Proceeds, shall be applied by the Trust Collateral Agent on the
related Payment Date in the following order of priority:

          FIRST: amounts due and owing and required to be distributed to the
     Servicer, the Backup Servicer, the Successor Servicer, the P.O. Box Owner,
     the Owner Trustee, the Trustee and the Trust Collateral Agent,
     respectively, pursuant to priorities (i) and (ii) of Section 5.7(a) of the
     Sale and Servicing Agreement and not previously distributed, in the order
     of such priorities and without preference or priority of any kind within
     such priorities;

          SECOND: to Noteholders for amounts due and unpaid on the Notes for
     interest, ratably, without preference or priority of any kind, according to
     the amounts due and payable on the Notes for interest;

          THIRD: to Noteholders for amounts due and unpaid on the Notes for
     principal, ratably, without preference or priority of any kind, according
     to the amounts due and payable on the Notes for principal;

          FOURTH: to the Insurer, to the extent of any amounts owing to the

     Insurer under the Insurance Agreement or any of the other Basic Documents
     and not paid; and

          FIFTH: to the Certificateholders in accordance with the Trust
     Agreement.

          (b)  The Trustee may fix a Record Date and Payment Date for any
payment to Noteholders pursuant to this Section. At least 15 days before such
Record Date the Issuer shall mail to each Noteholder and the Trustee a notice
that states the Record Date, the Payment Date and the amount to be paid.

          SECTION 5.7. Limitation of Suits. No Holder of any Note shall have any
                       -------------------
right to institute any proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless:

          (i)    such Holder has previously given written notice to the Trustee
     of a continuing Event of Default;

          (ii)   the Holders of not less than 25% of the Outstanding Amount of
     the Notes have made written request to the Trustee to institute such
     proceeding in respect of such Event of Default in its own name as Trustee
     hereunder;

                                       37

<PAGE>

          (iii)  such Holder or Holders have offered to the Trustee indemnity
     reasonably satisfactory to it against the costs, expenses and liabilities
     to be incurred in complying with such request;

          (iv)   the Trustee for 60 days after its receipt of such notice,
     request and offer of indemnity has failed to institute such proceedings;

          (v)    no direction inconsistent with such written request has been
     given to the Trustee during such 60-day period by the Holders of a majority
     of the Outstanding Amount of the Notes; and

          (vi)   an Insurer Default shall have occurred and be continuing;

it being understood and intended that no Holders of Notes shall have any right
in any manner whatsoever by virtue of, or by availing of, any provision of this
Indenture to affect, disturb or prejudice the rights of any other Holders of
Notes or to obtain or to seek to obtain priority or preference over any other
Holders or to enforce any right under this Indenture, except in the manner
herein provided.

          In the event the Trustee shall receive conflicting or inconsistent
requests and indemnity from two or more groups of Holders of Notes, each
representing less than a majority of the Outstanding Amount of the Notes, the
Trustee in its sole discretion may determine what action, if any, shall be
taken, notwithstanding any other provisions of this Indenture.

          Notwithstanding anything to the contrary contained in this Indenture
but subject to the rights of the Controlling Party hereunder, provided the
Trustee has sent out notices to Noteholders in accordance with this Indenture,
the Trustee may act as directed by a majority of the outstanding Noteholders
responding in writing to such request contained in such notice; provided,
                                                                --------
however, that Noteholders representing at least 66-2/3% of the outstanding
-------
principal balance of the Notes as of the time such notice is sent to Noteholders
must have responded in writing to such notice from the Trustee. In addition, the
Trustee shall not have any liability to any Noteholder or Note Owner with
respect to any action taken pursuant to such notice if the Noteholder or Note
Owner does not respond to such notice within the time period set forth in such
notice.

          SECTION 5.8. Unconditional Rights of Noteholders To Receive Principal
                       --------------------------------------------------------
and Interest. Notwithstanding any other provisions in this Indenture, the Holder
------------
of any Note shall have the right, which is absolute and unconditional, to
receive payment of the principal of and interest, if any, on such Note on or
after the respective due dates thereof expressed in such Note or in this
Indenture (or, in the case of redemption, on or after the Redemption Date) and
to institute suit for the enforcement of any such payment, and such right shall
not be impaired without the consent of such Holder.

          SECTION 5.9. Restoration of Rights and Remedies. If the Controlling
                       ----------------------------------
Party or any Noteholder has instituted any Proceeding to enforce any right or
remedy under this Indenture and such proceeding has been discontinued or
abandoned for any reason, then and in every such case the Issuer, the Trustee,
the Insurer and the Noteholders shall, subject to any determination in such
Proceeding, be restored severally and respectively to their former

                                       38

<PAGE>

positions hereunder, and thereafter all rights and remedies of the Trustee, the
Insurer and the Noteholders shall continue as though no such proceeding had been
instituted.

          SECTION 5.10. Rights and Remedies Cumulative. No right or remedy
                        ------------------------------
herein conferred upon or reserved to the Controlling Party or to the Noteholders
is intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.

          SECTION 5.11. Delay or Omission Not a Waiver. No delay or omission of
                        ------------------------------
the Controlling Party or any Holder of any Note to exercise any right or remedy
accruing upon any Default or Event of Default shall impair any such right or
remedy or constitute a waiver of any such Default or Event of Default or an
acquiescence therein. Every right and remedy given by this Article V or by law
to the Trustee, the Insurer or to the Noteholders may be exercised from time to
time, and as often as may be deemed expedient, by the Trustee, the Insurer or by
the Noteholders, as the case may be.

          SECTION 5.12. Control by Noteholders. If the Security Majority is the
                        ----------------------
Controlling Party, the Security Majority shall have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Trustee with respect to the Notes or exercising any trust or power conferred
on the Trustee; provided that

          (i)    such direction shall not be in conflict with any rule of law or

     with this Indenture;

          (ii)   subject to the express terms of Section 5.4, any direction to
     the Trustee to sell or liquidate the Trust Property shall be by the Holders
     of Notes representing not less than 100% of the Outstanding Amount of the
     Notes;

          (iii)  if the conditions set forth in Section 5.5 have been satisfied
     and the Trustee elects to retain the Trust Property pursuant to such
     Section, then any direction to the Trustee by Holders of Notes representing
     less than 100% of the Outstanding Amount of the Notes to sell or liquidate
     the Trust Property shall be of no force and effect; and

          (iv)   the Trustee may take any other action deemed proper by the
     Trustee that is not inconsistent with such direction; provided, however,
     that, subject to Section 6.1, the Trustee need not take any action that it
     determines might involve it in liability for which it has not received
     adequate indemnity or might materially adversely affect the rights of any
     Noteholders not consenting to such action.

          SECTION 5.13. Waiver of Past Defaults. Prior to the declaration of the
                        -----------------------
acceleration of the maturity of the Notes as provided in Section 5.4, if the
Security Majority is the Controlling Party, the Security Majority may waive any
past Default or Event of Default and its consequences except a Default (a) in
payment of principal of or interest on any of the Notes or (b) in respect of a
covenant or provision hereof which cannot be modified or amended without the
consent of the Holder of each Note. In the case of any such waiver,

                                       39

<PAGE>

the Issuer, the Trustee, the Insurer and the Holders of the Notes shall be
restored to their former positions and rights hereunder, respectively; but no
such waiver shall extend to any subsequent or other Default or impair any right
consequent thereto.

          Upon any such waiver, such Default shall cease to exist and be deemed
to have been cured and not to have occurred, and any Event of Default arising
therefrom shall be deemed to have been cured and not to have occurred, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other Default or Event of Default or impair any right consequent thereto.

          SECTION 5.14. Undertaking for Costs. All parties to this Indenture
                        ---------------------
agree, and each Holder of any Note by such Holder's acceptance thereof shall be
deemed to have agreed, that any court may in its discretion require, in any suit
for the enforcement of any right or remedy under this Indenture, or in any suit
against the Trustee for any action taken, suffered or omitted by it as Trustee,
the filing by any party litigant in such suit of an undertaking to pay the costs
of such suit, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees, against any party litigant in such suit,
having due regard to the merits and good faith of the claims or defenses made by
such party litigant; but the provisions of this Section shall not apply to (a)
any suit instituted by the Trustee, (b) any suit instituted by any Noteholder,
or group of Noteholders, in each case holding in the aggregate more than 10% of
the Outstanding Amount of the Notes or (c) any suit instituted by any Noteholder
for the enforcement of the payment of principal of or interest on any Note on or
after the respective due dates expressed in such Note and in this Indenture (or,
in the case of redemption, on or after the Redemption Date).

          SECTION 5.15. Waiver of Stay or Extension Laws. The Issuer covenants
                        --------------------------------
(to the extent that it may lawfully do so) that it will not at any time insist
upon, or plead or in any manner whatsoever, claim or take the benefit or
advantage of, any stay or extension law wherever enacted, now or at any time
hereafter in force, that may affect the covenants or the performance of this
Indenture; and the Issuer (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that it
will not hinder, delay or impede the execution of any power herein granted to
the Trustee, but will suffer and permit the execution of every such power as
though no such law had been enacted.

          SECTION 5.16. Action on Notes. The Trustee's right to seek and recover
                        ---------------
judgment on the Notes or under this Indenture shall not be affected by the
seeking, obtaining or application of any other relief under or with respect to
this Indenture. Neither the lien of this Indenture nor any rights or remedies of
the Trustee or the Noteholders shall be impaired by the recovery of any judgment
by the Trustee against the Issuer or by the levy of any execution under such
judgment upon any portion of the Trust Property or upon any of the assets of the
Issuer.

          SECTION 5.17. Performance and Enforcement of Certain Obligations.
                        --------------------------------------------------

          (a)  Promptly following a request from the Trust Collateral Agent to
do so and at the Servicer's expense, the Issuer agrees to take all such lawful
action as the Trust Collateral Agent may request to compel or secure the
performance and observance by the Seller and the Servicer, as applicable, of
each of their obligations to the Issuer under or in connection with the Sale and
Servicing Agreement in accordance with the terms thereof, and

                                       40

<PAGE>

to exercise any and all rights, remedies, powers and privileges lawfully
available to the Issuer under or in connection with the Sale and Servicing
Agreement to the extent and in the manner directed by the Trust Collateral
Agent, including the transmission of notices of default on the part of the
Seller or the Servicer thereunder and the institution of legal or administrative
actions or proceedings to compel or secure performance by the Seller or the
Servicer of each of their obligations under the Sale and Servicing Agreement.

          (b)  If the Security Majority is the Controlling Party and if an Event
of Default has occurred and is continuing, the Trustee shall, at the written
direction of the Security Majority, exercise all rights, remedies, powers,
privileges and claims of the Issuer against the Seller or the Servicer under or
in connection with the Sale and Servicing Agreement, including the right or
power to take any action to compel or secure performance or observance by the
Seller or the Servicer of each of their obligations to the Issuer thereunder and
to give any consent, request, notice, direction, approval, extension or waiver
under the Sale and Servicing Agreement, and any right of the Issuer to take such
action shall be suspended.

          (c)  The Trustee acknowledges and agrees to the actions to be taken by
the Trust Collateral Agent pursuant to Sections 6.1, 6.2 and 6.3 of the Sale and
Servicing Agreement.

          SECTION 5.18. Subrogation. Any and all Note Policy Claim Amounts
                        -----------
disbursed by the Trustee from claims made under the Note Policy shall not be
considered payment by the Trust with respect to such Notes, and shall not
discharge the obligations of the Trust with respect thereto. The Insurer shall,
to the extent it makes any payment with respect to the Notes, become subrogated
to the rights of the recipients of such payments to the extent of such payments.
Subject to and conditioned upon any payment with respect to the Notes by or on
behalf of the Insurer, each Noteholder shall be deemed, without further action,
to have directed the Trustee to assign to the Insurer all rights to the payment
of interest or principal with respect to the Notes which are then due for
payment to the extent of all payments made by the Insurer and the Insurer may
exercise any option, vote, right, power or the like with respect to the Notes to
the extent that it has made payment pursuant to the Note Policy. To evidence
such subrogation, the Note Registrar shall note the Insurer's rights as subrogee
upon the Note Register upon receipt from the Insurer of proof of payment by the
Insurer of any Noteholders' Interest Payment Amount or Noteholders' Principal
Payment Amount.

          SECTION 5.19. Preference Claims.
                        -----------------

          (a)  In the event that the Trustee has received a certified copy of a
final, non-appealable order of the appropriate court that any Scheduled Payment
paid on a Note has been avoided in whole or in part as a preference payment
under applicable bankruptcy law, the Trustee shall so notify the Insurer, shall
comply with the provisions of the Note Policy to obtain payment by the Insurer
of such avoided payment, and shall, at the time it provides notice to the
Insurer, comply with the provisions of the Note Policy to obtain payment by the
Insurer, notify Holders of the Notes by mail that, in the event that any
Noteholder's payment is so recoverable, such Noteholder will be entitled to
payment pursuant to the terms of the Note Policy. The Trustee shall furnish to
the Insurer at its written request, the requested records it holds in its
possession evidencing the payments of principal of and interest on

                                       41

<PAGE>

Notes, if any, which have been made by the Trustee and subsequently recovered
from Noteholders, and the dates on which such payments were made. Pursuant to
the terms of the Note Policy, the Insurer will make such payment on behalf of
the Noteholder to the receiver, conservator, debtor-in-possession or trustee in
bankruptcy named in the Order (as defined in the Note Policy) and not to the
Trustee or any Noteholder directly (unless a Noteholder has previously paid such
payment to the receiver, conservator, debtor-in-possession or trustee in
bankruptcy, in which case the Insurer will make such payment to the Trustee for
payment, in accordance with the instructions to be provided by the Insurer, to
such Noteholder upon proof of such payment reasonably satisfactory to the
Insurer).

          (b)  Each Notice of Claim shall provide that the Trustee, on its
behalf and on behalf of the Noteholders, thereby appoints the Insurer as agent
and attorney-in-fact for the Trustee and each Noteholder in any legal proceeding
with respect to the Notes. The Trustee shall promptly notify the Insurer of any
Proceeding or the institution of any action (of which a Responsible Officer of
the Trustee has actual knowledge) seeking the avoidance as a preferential
transfer under applicable bankruptcy, insolvency, receivership, rehabilitation
or similar law (a "Preference Claim") of any payment made with respect to the
Notes. Each Noteholder, by its purchase of Notes, and the Trustee hereby agree
that so long as an Insurer Default shall not have occurred and be continuing,
the Insurer may at any time during the continuation of any Proceeding relating
to a Preference Claim direct all matters relating to such Preference Claim
including, without limitation, (i) the direction of any appeal of any order
relating to any Preference Claim and (ii) the posting of any surety, supersedeas
or performance bond pending any such appeal at the expense of the Insurer, but
subject to reimbursement as provided in the Insurance Agreement. In addition,
and without limitation of the foregoing, as set forth in Section 5.18, the
Insurer shall be subrogated to, and each Noteholder and the Trustee hereby
delegate and assign, to the fullest extent permitted by law, the rights of the
Trustee and each Noteholder in the conduct of any Proceeding with respect to a
Preference Claim, including, without limitation, all rights of any party to an
adversary Proceeding action with respect to any court order issued in connection
with any such Preference Claim.

                                  ARTICLE VI.

                   The Trustee and the Trust Collateral Agent
                   ------------------------------------------

          SECTION 6.1. Duties of Trustee.
                       ------------------

          (a)  If an Event of Default has occurred and is continuing, the
Trustee and the Trust Collateral Agent shall exercise the rights and powers
vested in it by this Indenture and the Basic Documents and use the same degree
of care and skill in its exercise as a prudent person would exercise or use
under the circumstances in the conduct of such person's own affairs.

          (b)  Except during the continuance of an Event of Default:

          (i)    each of the Trustee and the Trust Collateral Agent undertakes
     to perform such duties and only such duties as are specifically set forth
     in this Indenture and no implied covenants or obligations shall be read
     into this Indenture against the Trustee and the Trust Collateral Agent,
     respectively; and

                                       42

<PAGE>

          (ii)   in the absence of bad faith or negligence on its part, each of
     the Trustee and the Trust Collateral Agent may conclusively rely, as to the
     truth of the statements and the correctness of the opinions expressed
     therein, upon certificates or opinions furnished to the Trustee or the
     Trust Collateral Agent, as the case may be and conforming to the
     requirements of this Indenture; however, the Trustee and the Trust
     Collateral Agent shall examine the certificates and opinions to determine
     whether or not they conform on their face to the requirements of this
     Indenture.

          (c)  Each of the Trustee and the Trust Collateral Agent may not be
relieved from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct, except that:

          (i)    this paragraph does not limit the effect of paragraph (b) of
     this Section;

          (ii)   each of the Trustee and the Trust Collateral Agent shall not be
     liable for any error of judgment made in good faith by a Responsible
     Officer unless it is proved that the Trustee or the Trust Collateral Agent
     was negligent in ascertaining the pertinent facts; and

          (iii)  each of the Trustee and the Trust Collateral Agent shall not be
     liable with respect to any action it takes or omits to take in good faith
     in accordance with a direction by the Controlling Party or received by it
     pursuant to Section 5.12.

          (d)  The Trustee and the Trust Collateral Agent shall not be liable
for interest on any money received by it except as the Trustee may agree in
writing with the Issuer.

          (e)  Money held in trust by the Trustee or the Trust Collateral Agent
need not be segregated from other funds except to the extent required by law or
the terms of this Indenture or the Sale and Servicing Agreement.

          (f)  No provision of this Indenture shall require the Trustee or the
Trust Collateral Agent to expend or risk its own funds or otherwise incur
financial liability in the performance of any of its duties hereunder or in the
exercise of any of its rights or powers, if it shall have reasonable grounds to
believe that repayment of such funds or indemnity reasonably satisfactory to it
against such risk or liability is not reasonably assured to it.

          (g)  Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Trustee or the Trust
Collateral Agent shall be subject to the provisions of this Section.

          (h)  The Trustee or the Trust Collateral Agent shall, upon reasonable
prior written notice to the Trustee or the Trust Collateral Agent, as the case
may be, permit any representative of the Insurer, and, if different, the
Controlling Party, during the Trustee's or the Trust Collateral Agent's, as the
case may be, normal business hours, at the expense of the Trust, to examine all
books of account, records, reports and other papers of the Trustee or the Trust
Collateral Agent, as the case may be, required to be maintained pursuant to this
Indenture and the Sale and Servicing Agreement, relating to the Notes or the
Collateral, to make copies and extracts therefrom and to discuss the Trustee's
or the Trust Collateral

                                       43

<PAGE>

Agent's affairs and actions, as such affairs and actions relate to the Trustee's
or the Trust Collateral Agent's duties with respect to the Notes or the
Collateral, with the Trustee's or the Trust Collateral Agent's officers and
employees responsible for carrying out the Trustee's or the Trust Collateral
Agent's duties with respect to the Notes.

          (i)  The Trust Collateral Agent shall, and hereby agrees that it will,
hold the Note Policy in trust, and will hold any proceeds of any claim on the
Note Policy in trust solely for the use and benefit of the Noteholders.

          (j)  The Trust Collateral Agent is hereby appointed Note Paying Agent
pursuant to and in accordance with this Indenture, whereby the Trust Collateral
Agent, as Note Paying Agent shall hold the Trust Property in trust for the
Trustee for the benefit of the Noteholders and the Insurer.

          (k)  Without limiting the generality of this Section 6.1, the Trustee,
solely in its role as Trustee, shall have no duty (i) to see to any recording,
filing or depositing of this Indenture or any agreement referred to herein or
any financing statement evidencing a security interest in the Receivables or the
Financed Vehicles, or to see to the maintenance of any such recording or filing
or depositing or to any re-recording, refiling or redepositing of any thereof,
(ii) to see to any insurance of the Financed Vehicles or Obligors or to effect
or maintain any such insurance, (iii) to see to the payment or discharge of any
tax, assessment or other governmental charge or any Lien or encumbrance of any
kind owing with respect to, assessed or levied against any part of the Trust,
(iv) to confirm or verify the contents of any reports or certificates delivered
to the Trustee pursuant to this Indenture or the Sale and Servicing Agreement
believed by the Trustee to be genuine and to have been signed or presented by
the proper party or parties, or (v) to inspect the Financed Vehicles at any time
or ascertain or inquire as to the performance of observance of any of the
Issuer's, the Seller's or the Servicer's representations, warranties or
covenants or the Servicer's duties and obligations as Servicer and as custodian
of the Receivable Files under the Sale and Servicing Agreement.

          (l)  In no event shall Wells Fargo Bank Minnesota, National
Association, in any of its capacities hereunder, be deemed to have assumed any
duties of the Owner Trustee under the Delaware Business Trust Statute, common
law, or the Trust Agreement.

          SECTION 6.2. Rights of Trustee and the Trust Collateral Agent.
                       ------------------------------------------------

          (a)  The Trustee and the Trust Collateral Agent may rely on any
document believed by it to be genuine and to have been signed or presented by
the proper Person. The Trustee and the Trust Collateral Agent need not
investigate any fact or matter stated in the document.

          (b)  Before the Trustee or the Trust Collateral Agent acts or refrains
from acting, it may require an Officer's Certificate or an Opinion of Counsel.
The Trustee shall not be liable for any action it takes or omits to take in good
faith in reliance on any such Officer's Certificate or Opinion of Counsel.

          (c)  The Trustee or the Trust Collateral Agent may execute any of the
trusts or powers hereunder or perform any duties hereunder either directly or by
or through agents or

                                       44

<PAGE>

attorneys or a custodian or nominee, and the Trustee or the Trust Collateral
Agent shall not be responsible for any misconduct or negligence on the part of,
or for the supervision of, TFC, or any agent, attorney, custodian or nominee
appointed with due care by it hereunder.

          (d)  The Trustee or the Trust Collateral Agent shall not be liable for
any action it takes or omits to take in good faith which it believes to be
authorized or within its rights or powers; provided, however, that the Trustee's
or the Trust Collateral Agent's conduct does not constitute willful misconduct,
negligence or bad faith.

          (e)  The Trustee and the Trust Collateral Agent may consult with
counsel, and the advice or opinion of counsel with respect to legal matters
relating to this Indenture, the Basic Documents and the Notes shall be full and
complete authorization and protection from liability in respect to any action
reasonably taken, omitted or suffered by it hereunder in good faith and in
accordance with the advice or opinion of such counsel.

          (f)  The Trustee and the Trust Collateral Agent shall be under no
obligation to institute, conduct or defend any litigation under this Indenture
or in relation to this Indenture, at the request, order or direction of any of
the Holders of Notes or the Controlling Party, pursuant to the provisions of
this Indenture, unless such Holders of Notes or the Controlling Party shall have
offered to the Trustee and the Trust Collateral Agent reasonable security or
indemnity against the costs, expenses and liabilities that may be incurred
therein or thereby; provided, however, that the Trustee and the Trust Collateral
Agent shall, upon the occurrence of an Event of Default (that has not been
cured), exercise the rights and powers vested in it by this Indenture with
reasonable care and skill customary for the care and skill exercised by trustees
under similar circumstances.

          (g)  The Trustee and the Trust Collateral Agent shall not be bound to
make any investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request, consent,
order, approval, bond or other paper or document, unless requested in writing to
do so by the Controlling Party; provided, however, that if the payment within a
reasonable time to the Trustee and the Trust Collateral Agent of the costs,
expenses or liabilities likely to be incurred by it in the making of such
investigation is, in the opinion of the Trustee or the Trust Collateral Agent,
not reasonably assured to the Trustee or the Trust Collateral Agent by the
security afforded to it by the terms of this Indenture or the Sale and Servicing
Agreement, the Trustee or the Trust Collateral Agent may require indemnity
reasonably satisfactory to it against such cost, expense or liability as a
condition to so proceeding; the reasonable expense of every such examination
shall be paid by the Person making such request, or, if paid by the Trustee or
the Trust Collateral Agent, shall be reimbursed by the Person making such
request upon demand.

          SECTION 6.3. Individual Rights of Trustee. The Trustee in its
                       ----------------------------
individual or any other capacity may become the owner or pledgee of Notes and
may otherwise deal with the Issuer or its Affiliates with the same rights it
would have if it were not Trustee. The Note Paying Agent, Note Registrar,
co-registrar or co-paying agent may do the same with like rights. However, the
Trustee must comply with Section 6.11.

          SECTION 6.4. Trustee's Disclaimer. Each of the Trustee and the Trust
                       --------------------
Collateral Agent shall not be responsible for and makes no representation as to
the validity or adequacy of this Indenture, the Trust Property or the Notes, it
shall not be accountable for the

                                       45

<PAGE>

Issuer's use of the proceeds from the Notes, and it shall not be responsible for
any statement of the Issuer in the Indenture or in any document issued in
connection with the sale of the Notes or in the Notes other than the Trustee's
certificate of authentication.

          SECTION 6.5. Notice of Defaults. If an Event of Default occurs and is
                       ------------------
continuing and if it is either known by, or written notice of the existence
thereof has been delivered to, a Responsible Officer of the Trustee, the Trustee
shall mail to each Noteholder notice of the Default within 5 days after such
knowledge or notice occurs. Except in the case of a Default in payment of
principal of or interest on any Note (including payments pursuant to the
mandatory redemption provisions of such Note), the Trustee may withhold the
notice if and so long as a committee of its Responsible Officers in good faith
determines that withholding the notice is in the interests of Noteholders.

          SECTION 6.6. Reports by Note Paying Agent to Holders. The Note Paying
                       ---------------------------------------
Agent shall on behalf of the Issuer deliver to each Noteholder such information
as is required under the Code (and shall comply with all information reporting
requirements of the Code, e.g. Form 1099) or which may be reasonably requested
to enable each Holder to prepare its income tax returns required by law.

          SECTION 6.7. Compensation and Indemnity.
                       --------------------------

          (a) Pursuant to Section 5.7(a) of the Sale and Servicing Agreement and
subject to Section 6.18 herein, the Issuer shall pay to the Trustee and the
Trust Collateral Agent from time to time the Trustee Fee as compensation for its
services. The Trustee's and the Trust Collateral Agent's compensation shall not
be limited by any law on compensation of a trustee of an express trust. The
Issuer shall reimburse the Trustee and the Trust Collateral Agent for all
reasonable out-of-pocket expenses incurred or made by it, including costs of
collection, in addition to the compensation for its services. Such expenses
shall include the reasonable compensation and expenses, disbursements and
advances of the Trustee's and the Trust Collateral Agent's agents, counsel,
accountants and experts. The Issuer shall or shall cause the Servicer to
indemnify the Trustee, the Trust Collateral Agent and their respective officers,
directors, employees and agents against any and all loss, liability or expense
(including attorneys' fees) incurred by each of them in connection with the
acceptance or the administration of this trust and the performance of its duties
hereunder, except that neither the Issuer nor the Servicer shall be liable for
or required to indemnify the Trustee from and against loss, liability or expense
arising or resulting from negligence, bad faith or willful misconduct on the
part of the Trustee; provided, however, any obligation of the Issuer under this
Section 6.7 shall not be payable from the Collateral or Trust Property. The
Trustee or the Trust Collateral Agent shall notify the Issuer and the Servicer
promptly in writing of any claim for which it may seek indemnity. Failure by the
Trustee or the Trust Collateral Agent to so notify the Issuer and the Servicer
shall not relieve the Issuer of its obligations hereunder or the Servicer of its
obligations under Article XII of the Sale and Servicing Agreement, except as
provided in the last sentence of this paragraph. The Issuer shall defend or
shall cause the Servicer to defend any claim indemnifiable under this Section
that may arise against the Trustee and the Trust Collateral Agent or the Trustee
or the Trust Collateral Agent may have separate counsel and the Issuer shall or
shall cause the Servicer to pay the fees and expenses of such counsel. Neither
the Issuer nor the Servicer need reimburse any expense or indemnify against any
loss, liability or expense incurred by the

                                       46

<PAGE>

Trustee or the Trust Collateral Agent through the Trustee's or the Trust
Collateral Agent's own willful misconduct, negligence or bad faith.

          (b)  The Issuer's payment obligations to the Trustee pursuant to this
Section shall survive the discharge of this Indenture. When the Trustee incurs
expenses after the occurrence of a Default specified in Section 5.1(v) or (vi)
with respect to the Issuer, the expenses are intended to constitute expenses of
administration under Title 11 of the United States Code or any other applicable
Federal or state bankruptcy, insolvency or similar law. Notwithstanding anything
else set forth in this Indenture or the Basic Documents, the Trustee agrees that
the obligations of the Issuer (but not the Servicer) to the Trustee hereunder
and under the Basic Documents shall be recourse to the Trust Property only and
specifically shall not be recourse to the assets of the Issuer or any
Securityholder. In addition, the Trustee agrees that its recourse to the Issuer,
the Trust Property and the Seller shall be limited to the right to receive the
distributions referred to in Section 5.7(a) of the Sale and Servicing Agreement.

          SECTION 6.8. Replacement of Trustee. The Trustee may resign at any
                       ----------------------
time upon 30 days prior written notice by so notifying the Issuer, the Insurer
and the Controlling Party. The Issuer may and, at the request of the Controlling
Party shall, remove the Trustee, if:

          (i)    the Trustee fails to comply with Section 6.11;

          (ii)   a court having jurisdiction in the premises in respect of the
     Trustee in an involuntary case or Proceeding under federal or state banking
     or bankruptcy laws, as now or hereafter constituted, or any other
     applicable federal or state bankruptcy, insolvency or other similar law,
     shall have entered a decree or order granting relief or appointing a
     receiver, liquidator, assignee, custodian, trustee, conservator,
     sequestrator (or similar official) for the Trustee or for any substantial
     part of the Trustee's property, or ordering the winding-up or liquidation
     of the Trustee's affairs, and such case is not dismissed within 30 days;

          (iii)  the Trustee commences a voluntary case under any federal or
     state banking or bankruptcy laws, as now or hereafter constituted, or any
     other applicable federal or state bankruptcy, insolvency or other similar
     law, or consents to the appointment of or taking possession by a receiver,
     liquidator, assignee, custodian, trustee, conservator, sequestrator (or
     other similar official) for the Trustee or for any substantial part of the
     Trustee's property, or makes any assignment for the benefit of creditors or
     fails generally to pay its debts as such debts become due or takes any
     corporate action in furtherance of any of the foregoing;

          (iv)   the Trustee otherwise becomes incapable of acting;

          (v)    the Trustee breaches any representation, warranty or covenant
     made by it under any Basic Document; or

          (vi)   the rating assigned to the long-term unsecured debt obligations
     of the Trustee by the Rating Agency shall be lowered below the rating of
     "BBB" or equivalent rating or be withdrawn by the Rating Agency.

                                       47

<PAGE>

          If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason (the Trustee in such event being referred to
herein as the retiring Trustee), the Issuer shall promptly deliver a notice of
such removal, resignation or vacancy to the Noteholders and the Insurer and
appoint a successor Trustee acceptable to the Controlling Party. If the Issuer
fails to appoint such a successor Trustee, the Controlling Party may appoint a
successor Trustee.

          A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee, the Insurer, the Noteholders and to the
Issuer. Thereupon the resignation or removal of the retiring Trustee shall
become effective, and the successor Trustee shall have all the rights, powers
and duties of the retiring Trustee under this Indenture subject to satisfaction
of the Rating Agency Condition. The successor Trustee shall mail a notice of its
succession to Noteholders. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee.

          If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Issuer or the
Controlling Party may petition any court of competent jurisdiction for the
appointment of a successor Trustee.

          If the Trustee fails to comply with Section 6.11, any Noteholder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.

          Any resignation or removal of the Trustee and appointment of a
successor Trustee pursuant to any of the provisions of this Section shall not
become effective until acceptance of appointment by the successor Trustee
pursuant to Section 6.8 and payment of all fees and expenses owed to the
outgoing Trustee. Notwithstanding the replacement of the Trustee pursuant to
this Section, the Issuer's and the Servicer's obligations under Section 6.7
shall continue for the benefit of the retiring Trustee.

          SECTION 6.9. Successor Trustee by Merger. If the Trustee consolidates
                       ---------------------------
with, merges or converts into, or transfers all or substantially all its
corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation without any
further act shall be the successor Trustee and shall at all times be required to
meet the terms of eligibility under Section 6.11. The Trustee shall provide the
Rating Agency and the Insurer with written notice of any such transaction as
soon as practical thereafter.

          In case at the time such successor or successors by merger, conversion
or consolidation to the Trustee shall succeed to the trusts created by this
Indenture any of the Notes shall have been authenticated but not delivered, any
such successor to the Trustee may adopt the certificate of authentication of any
predecessor trustee, and deliver such Notes so authenticated; and in case at
that time any of the Notes shall not have been authenticated, any successor to
the Trustee may authenticate such Notes either in the name of any predecessor
hereunder or in the name of the successor to the Trustee; and in all such cases
such certificates shall have the full force which it is anywhere in the Notes or
in this Indenture provided that the certificate of the Trustee shall have.

                                       48

<PAGE>

          SECTION 6.10.  Appointment of Co-Trustee or Separate Trustee.
                         ---------------------------------------------

          (a)  Notwithstanding any other provisions of this Indenture, at any
time, for the purpose of meeting any legal requirement of any jurisdiction in
which any part of the Trust may at the time be located, the Trustee with the
prior written consent of the Controlling Party shall have the power and may
execute and deliver all instruments to appoint one or more Persons to act as a
co-trustee or co-trustees, or separate trustee or separate trustees, of all or
any part of the Trust, and to vest in such Person or Persons, in such capacity
and for the benefit of the Noteholders, such title to the Collateral, or any
part thereof, and, subject to the other provisions of this Section, such powers,
duties, obligations, rights and trusts as the Trustee may consider necessary or
desirable. No co-trustee or separate trustee hereunder shall be required to meet
the terms of eligibility as a successor trustee under Section 6.11 and no notice
to Noteholders of the appointment of any co-trustee or separate trustee shall be
required under Section 6.8 hereof.

          (b)  Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:

          (i)    all rights, powers, duties and obligations conferred or imposed
     upon the Trustee shall be conferred or imposed upon and exercised or
     performed by the Trustee and such separate trustee or co-trustee jointly
     (it being understood that such separate trustee or co-trustee is not
     authorized to act separately without the Trustee joining in such act),
     except to the extent that under any law of any jurisdiction in which any
     particular act or acts are to be performed the Trustee shall be incompetent
     or unqualified to perform such act or acts, in which event such rights,
     powers, duties and obligations (including the holding of title to the Trust
     or any portion thereof in any such jurisdiction) shall be exercised and
     performed singly by such separate trustee or co-trustee, but solely at the
     direction of the Trustee;

          (ii)   no trustee hereunder shall be personally liable by reason of
     any act or omission of any other trustee hereunder, including acts or
     omissions of predecessor or successor trustees; and

          (iii)  the Trustee may at any time accept the resignation of or remove
     any separate trustee or co-trustee.

          (c)  Any notice, request or other writing given to the Trustee shall
be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article VI. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Trustee or separately, as may be provided therein, subject to all the provisions
of this Indenture, specifically including every provision of this Indenture
relating to the conduct of, affecting the liability of, or affording protection
to, the Trustee. Every such instrument shall be filed with the Trustee.

          (d)  Any separate trustee or co-trustee may at any time constitute the
Trustee, its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law,

                                       49

<PAGE>

to do any lawful act under or in respect of this Agreement on its behalf and in
its name. If any separate trustee or co-trustee shall die, dissolve, become
insolvent, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee. Notwithstanding anything to the contrary in this Indenture,
the appointment of any separate trustee or co-trustee shall not relieve the
Trustee of its obligations and duties under this Indenture.

          SECTION 6.11.  Eligibility: Disqualification. The Trustee shall at all
                         -----------------------------
times (i) have a combined capital and surplus of at least $500,000,000 as set
forth in its most recent published annual report of condition, (ii) have (or
have a parent which has) a long term debt rating of A or better by the Rating
Agency; and (iii) be acceptable to the Controlling Party. The Trustee shall
provide copies of such reports to the Insurer.

          SECTION 6.12.  [Reserved].
                          --------

          SECTION 6.13.  Appointment and Powers.
                         ----------------------

          (a)  Subject to the terms and conditions hereof, each of the Issuer
Secured Parties hereby appoint Wells Fargo Bank Minnesota, National Association,
as the Trust Collateral Agent with respect to the Collateral, and Wells Fargo
Bank Minnesota, National Association, hereby accepts such appointment and agrees
to act as Trust Collateral Agent with respect to the Collateral for the Issuer
Secured Parties, to maintain custody and possession of such Collateral (except
as otherwise provided hereunder) and to perform the other duties of the Trust
Collateral Agent in accordance with the provisions of this Indenture and the
other Basic Documents. Each Issuer Secured Party hereby authorizes the Trust
Collateral Agent to take such action on its behalf, and to exercise such rights,
remedies, powers and privileges hereunder, as the Controlling Party may direct
and as are specifically authorized to be exercised by the Trust Collateral Agent
by the terms hereof, together with such actions, rights, remedies, powers and
privileges as are reasonably incidental thereto. The Trust Collateral Agent
shall act upon and in compliance with the written instructions of the
Controlling Party delivered pursuant to this Indenture promptly following
receipt of such written instructions; provided that the Trust Collateral Agent
shall not act in accordance with any instructions (i) which are not authorized
by, or in violation of the provisions of, this Indenture or (ii) for which the
Trust Collateral Agent has not received reasonable indemnity. Receipt of such
instructions shall not be a condition to the exercise by the Trust Collateral
Agent of its express duties hereunder, except where this Indenture provides that
the Trust Collateral Agent is permitted to act only following and in accordance
with such instructions.

          (b)  Subject to the terms and conditions hereof, each of the Issuer
Secured Parties hereby appoint Wells Fargo Bank Minnesota, as the Note Paying
Agent with respect to the Trust Property, and Wells Fargo Bank Minnesota, hereby
accepts such appointment and agrees to act as Note Paying Agent with respect to
the Trust Property in trust for the benefit of the Noteholders and the Insurer
for the Issuer Secured Parties, to maintain custody and possession of such Trust
Property in trust for the benefit of the Noteholders and the Insurer (except as
otherwise provided hereunder) and to perform the other duties of the Note Paying
Agent in accordance with the provisions of this Indenture and the other Basic
Documents. Each Issuer Secured Party hereby authorizes the Note Paying Agent to
take such action on its behalf, and to exercise such rights, remedies, powers
and privileges hereunder,

                                       50

<PAGE>

as the Controlling Party may direct and as are specifically authorized to be
exercised by the Note Paying Agent by the terms hereof, together with such
actions, rights, remedies, powers and privileges as are reasonably incidental
thereto. The Note Paying Agent shall act upon and in compliance with the written
instructions of the Controlling Party delivered pursuant to this Indenture
promptly following receipt of such written instructions; provided that the Note
Paying Agent shall not act in accordance with any instructions (i) which are not
authorized by, or in violation of the provisions of, this Indenture or (ii) for
which the Note Paying Agent has not received reasonable indemnity. Receipt of
such instructions shall not be a condition to the exercise by the Note Paying
Agent of its express duties hereunder, except where this Indenture provides that
the Note Paying Agent is permitted to act only following and in accordance with
such instructions.

          SECTION 6.14. Performance of Duties. The Trust Collateral Agent shall
                        ---------------------
have no duties or responsibilities except those expressly set forth in this
Indenture and the other Basic Documents to which the Trust Collateral Agent is a
party or as directed by the Controlling Party in accordance with this Indenture.
The Trust Collateral Agent shall not be required to take any discretionary
actions hereunder except at the written direction and with the indemnification
of the Controlling Party. The Trust Collateral Agent shall, and hereby agrees
that it will, perform all of the duties and obligations required of it under the
Sale and Servicing Agreement.

          SECTION 6.15. Limitation on Liability. Neither the Trust Collateral
                        -----------------------
Agent nor any of its directors, officers, employees and agents shall be liable
for any action reasonably taken or omitted to be taken by it or them hereunder,
or in connection herewith, except that the Trust Collateral Agent shall be
liable for its negligence, bad faith or willful misconduct; nor shall the Trust
Collateral Agent be responsible for the validity, effectiveness, value,
sufficiency or enforceability against the Issuer of this Indenture or any of the
Collateral (or any part thereof). Notwithstanding any term or provision of this
Indenture, the Trust Collateral Agent shall incur no liability to the Issuer or
the Issuer Secured Parties for any action taken or omitted by the Trust
Collateral Agent in connection with the Collateral, except for the negligence,
bad faith or willful misconduct on the part of the Trust Collateral Agent, and,
further, shall incur no liability to the Issuer Secured Parties except for
negligence, bad faith or willful misconduct in carrying out its duties to the
Issuer Secured Parties. Subject to Section 6.16, the Trust Collateral Agent
shall be protected and shall incur no liability to any such party in
conclusively relying upon the accuracy, acting in reliance upon the contents,
and assuming the genuineness of any notice, demand, certificate, signature,
instrument or other document reasonably believed by the Trust Collateral Agent
to be genuine and to have been duly executed by the appropriate signatory, and
(absent actual knowledge to the contrary) the Trust Collateral Agent shall not
be required to make any independent investigation with respect thereto. The
Trust Collateral Agent shall at all times be free independently to establish to
its reasonable satisfaction, but shall have no duty to independently verify, the
existence or nonexistence of facts that are a condition to the exercise or
enforcement of any right or remedy hereunder or under any of the Basic
Documents. The Trust Collateral Agent may consult with counsel, and shall not be
liable for any action reasonably taken or omitted to be taken by it hereunder in
good faith and in accordance with the advice of such counsel. The Trust
Collateral Agent shall not be under any obligation to exercise any of the
remedial rights or powers vested in it by this Indenture or to follow any
direction from the Controlling Party unless it shall have received security or

                                       51

<PAGE>

indemnity satisfactory to the Trust Collateral Agent against the costs, expenses
and liabilities which might be incurred by it.

          SECTION 6.16. Reliance Upon Documents. In the absence of negligence,
                        -----------------------
bad faith or willful misconduct on its part, the Trust Collateral Agent shall be
entitled to rely on any communication, instrument, paper or other document
reasonably believed by it to be genuine and correct and to have been signed or
sent by the proper Person or Persons and shall have no liability in acting, or
omitting to act, where such action or omission to act is in reasonable reliance
upon any statement or opinion contained in any such document or instrument.

          SECTION 6.17. Successor Trust Collateral Agent.
                        --------------------------------

          (a)  Merger. Any Person into which the Trust Collateral Agent may be
               ------
converted or merged, or with which it may be consolidated, or to which it may
sell or transfer its trust business and assets as a whole or substantially as a
whole, or any Person resulting from any such conversion, merger, consolidation,
sale or transfer to which the Trust Collateral Agent is a party, shall (provided
it is otherwise qualified to serve as the Trust Collateral Agent hereunder) be
and become a successor Trust Collateral Agent hereunder and be vested with all
of the title to and interest in the Collateral and all of the trusts, powers,
discretions, immunities, privileges and other matters as was its predecessor
without the execution or filing of any instrument or any further act, deed or
conveyance on the part of any of the parties hereto, anything herein to the
contrary notwithstanding, except to the extent, if any, that any such action is
necessary to perfect, or continue the perfection of, the security interest of
the Issuer Secured Parties in the Collateral; provided that any such successor
shall also be the successor Trustee under Section 6.9.

          (b)  Resignation. The Trust Collateral Agent and any successor Trust
               -----------
Collateral Agent may resign under this Indenture at any time upon 30 days prior
written notice by so notifying the Issuer and the Insurer; provided that the
Trust Collateral Agent shall not so resign unless it shall also resign as
Trustee hereunder; provided, however that such resignation shall not be
                   --------  -------
effective until a successor Trust Collateral Agent shall have accepted
appointment as successor Trust Collateral Agent and a successor Trustee shall
have accepted appointment as successor Trustee.

          (c)  Removal. The Trust Collateral Agent may be removed by the
               -------
Controlling Party at any time (and should be removed at any time that the
Trustee has been removed), with or without cause, by an instrument or concurrent
instruments in writing delivered to the Trust Collateral Agent, the Issuer
Secured Parties and the Issuer. A temporary successor may be removed at any time
to allow a successor Trust Collateral Agent to be appointed pursuant to
subsection (d) below. Any removal pursuant to the provisions of this subsection
(c) shall take effect only upon the date which is the latest of (i) the
effective date of the appointment of a successor Trust Collateral Agent and the
acceptance in writing by such successor Trust Collateral Agent of such
appointment and of its obligation to perform its duties hereunder in accordance
with the provisions hereof, and (ii) receipt by the Controlling Party of an
Opinion of Counsel to the effect described in Section 3.6.

          (d)  Acceptance by Successor.  The Controlling Party shall have the
               -----------------------
sole right to appoint each successor Trust Collateral Agent. Every temporary or
permanent successor

                                       52

<PAGE>

Trust Collateral Agent appointed hereunder shall execute, acknowledge and
deliver to its predecessor and to each Issuer Secured Party and the Issuer an
instrument in writing accepting such appointment hereunder and the relevant
predecessor shall execute, acknowledge and deliver such other documents and
instruments as will effectuate the delivery of all Collateral to the successor
Trust Collateral Agent, whereupon such successor, without any further act, deed
or conveyance, shall become fully vested with all the estates, properties,
rights, powers, duties and obligations of its predecessor. Such predecessor
shall, nevertheless, on the written request of either Issuer Secured Party or
the Issuer, execute and deliver an instrument transferring to such successor all
the estates, properties, rights and powers of such predecessor hereunder. In the
event that any instrument in writing from the Issuer or an Issuer Secured Party
is reasonably required by a successor Trust Collateral Agent to more fully and
certainly vest in such successor the estates, properties, rights, powers, duties
and obligations vested or intended to be vested hereunder in the Trust
Collateral Agent, any and all such written instruments shall, at the request of
the temporary or permanent successor Trust Collateral Agent, be forthwith
executed, acknowledged and delivered by the Trustee or the Issuer, as the case
may be. The designation of any successor Trust Collateral Agent and the
instrument or instruments removing any Trust Collateral Agent and appointing a
successor hereunder, together with all other instruments provided for herein,
shall be maintained with the records relating to the Collateral and, to the
extent required by applicable law, filed or recorded by the successor Trust
Collateral Agent in each place where such filing or recording is necessary to
effect the transfer of the Collateral to the successor Trust Collateral Agent or
to protect or continue the perfection of the security interests granted
hereunder.

               (e) Notice to the Rating Agency. The Controlling Party shall give
                   ---------------------------
Notice to the Rating Agency of any change in the Trust Collateral Agent within 5
days of such change.

               SECTION 6.18. Compensation. The Trust Collateral Agent shall not
                             ------------
be entitled to any compensation for the performance of its duties hereunder
other than its portion of the Trustee Fee.

               SECTION 6.19. Representations and Warranties of the Trustee and
                             -------------------------------------------------
the Trust Collateral Agent. Each of the Trust Collateral Agent and the Trustee
--------------------------
represents and warrants to the Issuer and to each Issuer Secured Party as
follows:

               (a) Due Organization. The Trustee and the Trust Collateral Agent
                   ----------------
is a national banking association, duly organized, validly existing and in good
standing under the laws of the United States and is duly authorized and licensed
under applicable law to conduct its business as presently conducted.

               (b) Corporate Power. The Trustee and the Trust Collateral Agent
                   ---------------
has all requisite right, power and authority to execute and deliver this
Indenture and each of the other Basic Documents to which it is a party and to
perform all of its duties as the Trustee or Trust Collateral Agent, as the case
may be, hereunder.

               (c) Due Authorization. The execution and delivery by the Trust
                   -----------------
Collateral Agent and the Trustee of this Indenture and the other Basic Documents
to which it is a party, and the performance by the Trust Collateral Agent and
the Trustee of its duties hereunder and thereunder, have been duly authorized by
all necessary corporate proceedings which are

                                       53

<PAGE>

required for the valid execution and delivery by the Trust Collateral Agent or
the Trustee, or the performance by the Trust Collateral Agent or the Trustee, of
this Indenture and such other Basic Documents.

               (d) Valid and Binding Indenture. Each of the Trustee and the
                   ---------------------------
Trust Collateral Agent has duly executed and delivered this Indenture and each
other Basic Document to which it is a party, and each of this Indenture and each
such other Basic Document constitutes the legal, valid and binding obligation of
the Trustee and the Trust Collateral Agent, enforceable against the Trustee and
the Trust Collateral Agent in accordance with its terms, except as (i) such
enforceability may be limited by bankruptcy, insolvency, reorganization and
similar laws relating to or affecting the enforcement of creditors' rights
generally and (ii) the availability of equitable remedies may be limited by
equitable principles of general applicability.

               (e) No Conflict. The execution, delivery and performance by the
                   -----------
Trustee and the Trust Collateral Agent of each Basic Document to which it is a
party and compliance by the Trustee and the Trust Collateral Agent with all of
the provisions hereof and thereof do not and will not contravene any law or
regulation of the United States of America governing the banking or trust
----------
services of the Trustee and the Trust Collateral Agent or any order of any
Governmental Authority binding upon the Trustee and the Trust Collateral Agent,
or contravene the provisions of, or constitute a default by the Trustee and the
Trust Collateral Agent under, or result in the creation of any Lien upon the
Collateral under its corporate charter or by-laws or any indenture, mortgage,
contract or other agreement or instrument to which the Trustee and the Trust
Collateral Agent is a party or by which the Trustee and the Trust Collateral
Agent or any of its property is bound or effected.

               (f) Litigation. There are no proceedings pending or, to the
                   ----------                           -------
knowledge of the Trustee or the Trust Collateral Agent, threatened against the
Trustee or the Trust Collateral Agent before any Governmental Authority which
individually or in the aggregate would impair the ability of the Trustee or the
Trust Collateral Agent to perform its obligations under this Agreement or any
other Basic Document or which question the validity of this Agreement or any
other Basic Document or any action taken or to be taken pursuant hereto or
thereto. The Trustee or the Trust Collateral Agent is not in default with
respect to any order of any Governmental Authority binding upon the Trustee or
the Trust Collateral Agent, the default under which would affect adversely the
ability of the Trustee or the Trust Collateral Agent to perform its obligations
under this Agreement or any other Basic Document.

               SECTION 6.20. Waiver of Setoffs. The Trustee and the Trust
                             -----------------
Collateral Agent hereby expressly waives any and all rights of setoff that the
Trustee or the Trust Collateral Agent may otherwise at any time have under
applicable law with respect to any Trust Account and agrees that amounts in the
Trust Accounts shall at all times be held and applied solely in accordance with
the provisions hereof.

               SECTION 6.21. Control by the Controlling Party. Unless otherwise
                             --------------------------------
specifically set forth herein, the Trustee and the Trust Collateral Agent shall
comply with notices and instructions given by the Issuer only if accompanied by
the prior written consent of the Controlling Party, except that if any Event of
Default shall have occurred and be continuing, the Trustee and the Trust
Collateral Agent shall act upon and comply with notices and instructions given
by the Controlling Party alone in the place and stead of the Issuer.

                                       54

<PAGE>

                                  Article VII.

                         Noteholders' Lists and Reports
                         ------------------------------

               SECTION 7.1. Issuer To Furnish To Trustee Names and Addresses of
                            ---------------------------------------------------
Noteholders. The Issuer will furnish or cause to be furnished to the Trustee (a)
-----------
not more than five days after the earlier of (i) each Record Date and (ii) three
months after the last Record Date, a list, in such form as the Trustee may
reasonably require, of the names and addresses of the Holders as of such Record
Date, and (b) at such other times as the Trustee may request in writing, within
30 days after receipt by the Issuer of any such request, a list of similar form
and content as of a date not more than 10 days prior to the time such list is
furnished; provided, however, that so long as the Trustee is the Note Registrar,
no such list shall be required to be furnished. The Trustee or, if the Trustee
is not the Note Registrar, the Issuer shall furnish to the Insurer in writing on
an annual basis on each March 31 and at such other times as the Insurer may
request a copy of the list.

               SECTION 7.2. Preservation of Information; Communications to
                            ----------------------------------------------
Noteholders. The Trustee shall preserve, in as current a form as is reasonably
-----------
practicable, the names and addresses of the Holders contained in the most recent
list furnished to the Trustee as provided in Section 7.1 and the names and
addresses of Holders received by the Trustee in its capacity as Note Registrar.
The Trustee may destroy any list furnished to it as provided in such Section 7.1
upon receipt of a new list so furnished.

               SECTION 7.3. Reports by Issuer.
                            -----------------

               (a) The Issuer shall:

               (i)   file with the Trustee, within 10 days after the Issuer is
          required to file the same with the Commission, copies of the annual
          reports and copies of the information, documents and other reports (or
          copies of such portions of any of the foregoing as the Commission may
          from time to time by rules and regulations prescribe) which the Issuer
          may be required to file with the Commission pursuant to Section 13 or
          15(d) of the Exchange Act;

               (ii)  file with the Trustee and the Commission in accordance with
          rules and regulations prescribed from time to time by the Commission
          such additional information, documents and reports with respect to
          compliance by the Issuer with the conditions and covenants of this
          Indenture as may be required from time to time by such rules and
          regulations; and

               (iii) supply to the Trustee such summaries of any information,
          documents and reports required to be filed by the Issuer pursuant to
          clauses (i) and (ii) of this Section 7.3(a) as may be required by
          rules and regulations prescribed from time to time by the Commission.

               (b) Unless the Issuer otherwise determines, the fiscal year of
the Issuer shall end on December 31 of each year.

                                       55

<PAGE>

               (c) The Trustee shall not have any duty or obligation with
respect to any reports or other information delivered to it pursuant to this
Section 7.3.

                                 Article VIII.

                      Accounts, Disbursements and Releases
                      ------------------------------------

               SECTION 8.1. Collection of Money. Except as otherwise expressly
                            -------------------
provided herein, the Trustee may demand payment or delivery of, and shall
receive and collect, directly and without intervention or assistance of any
fiscal agent or other intermediary, all money and other property payable to or
receivable by the Trust Collateral Agent pursuant to this Indenture and the Sale
and Servicing Agreement. The Trustee shall apply all such money received by it,
or cause the Trust Collateral Agent to apply all money received by it as
provided in this Indenture and the Sale and Servicing Agreement. Except as
otherwise expressly provided in this Indenture or in the Sale and Servicing
Agreement, if any default occurs in the making of any payment or performance
under any agreement or instrument that is part of the Trust Property, the
Trustee may take such action as may be appropriate to enforce such payment or
performance, including the institution and prosecution of appropriate
proceedings. Any such action shall be without prejudice to any right to claim a
Default or Event of Default under this Indenture and any right to proceed
thereafter as provided in Article V.

               SECTION 8.2. Release of Trust Property.
                            -------------------------

               (a) Subject to the payment of its fees and expenses pursuant to
Section 6.7, the Trust Collateral Agent may, and when required by the Issuer and
the provisions of this Indenture shall, execute instruments to release property
from the lien of this Indenture, in a manner and under circumstances that are
not inconsistent with the provisions of this Indenture. No party relying upon an
instrument executed by the Trust Collateral Agent as provided in this Article
VIII shall be bound to ascertain the Trust Collateral Agent's authority, inquire
into the satisfaction of any conditions precedent or see to the application of
any monies.

               (b) The Trust Collateral Agent shall, at such time as: (i) there
are no Notes outstanding, (ii) all sums due the Trustee pursuant to Section 6.7
have been paid, (iii) the Note Policy has expired in accordance with its own
terms and (iv) all amounts due to the Insurer under the Insurance Agreement or
the other Basic Documents have been paid in full, release any remaining portion
of the Trust Property that secured the Notes from the lien of this Indenture and
release to the Issuer or any other Person entitled thereto any funds then on
deposit in the Trust Accounts and the Spread Account. The Trustee shall release
property from the lien of this Indenture pursuant to this Section 8.2(b) only
upon receipt of an Issuer Request accompanied by an Officer's Certificate and an
Opinion of Counsel.

               SECTION 8.3 Opinion of Counsel. The Trust Collateral Agent shall
                           ------------------
receive at least seven days' notice when requested by the Issuer to take any
action pursuant to Section 8.2(a), accompanied by copies of any instruments
involved, and the Trustee shall also require as a condition to such action, an
Opinion of Counsel, stating the legal effect of any such action, outlining the
steps required to complete the same, and concluding that all conditions
precedent to the taking of such action have been complied with and such action

                                       56

<PAGE>

will not materially and adversely impair the security for the Notes or the
rights of the Noteholders in contravention of the provisions of this Indenture;
provided, however, that such Opinion of Counsel shall not be required to express
an opinion as to the fair value of the Trust Property. Counsel rendering any
such opinion may rely, without independent investigation, on the accuracy and
validity of any certificate or other instrument delivered to the Trustee in
connection with any such action.

                                  ARTICLE IX.

                             Supplemental Indentures
                             -----------------------

          SECTION 9.1. Supplemental Indentures Without Consent of Noteholders.
                       ------------------------------------------------------

          (a) Without the consent of the Holders of any Notes but with prior
written notice to the Rating Agency and with the consent of the Insurer (unless
an Insurer Default shall have occurred and be continuing), as evidenced to the
Trustee, the Issuer and the Trustee, when authorized by an Issuer Order, at any
time and from time to time, may enter into one or more written indentures
supplemental hereto, for any of the following purposes:

          (i)   to correct or amplify the description of any property at any
     time subject to the lien of this Indenture, or better to assure, convey and
     confirm unto the Trust Collateral Agent any property subject or required to
     be subjected to the lien of this Indenture, or to subject to the lien of
     this Indenture additional property;

          (ii)  to evidence the succession, in compliance with the applicable
     provisions hereof, of another person to the Issuer, and the assumption by
     any such successor of the covenants of the Issuer herein and in the Notes
     contained;

          (iii) to add to the covenants of the Issuer, for the benefit of the
     Holders of the Notes, or to surrender any right or power herein conferred
     upon the Issuer;

          (iv)  to convey, transfer, assign, mortgage or pledge any property to
     or with the Trust Collateral Agent;

          (v)   to cure any ambiguity, to correct or supplement any provision
     herein or in any supplemental indenture which may be inconsistent with any
     other provision herein or in any supplemental indenture or to make any
     other provisions with respect to matters or questions arising under this
     Indenture or in any supplemental indenture; provided, however, that such
     action shall not, as evidenced by an Opinion of Counsel, adversely affect
     the interests of the Holders of the Notes;

          (vi)  to evidence and provide for the acceptance of the appointment
     hereunder by a successor trustee with respect to the Notes and to add to or
     change any of the provisions of this Indenture as shall be necessary to
     facilitate the administration of the trusts hereunder by more than one
     trustee, pursuant to the requirements of Article VI.

                                       57

<PAGE>

               The Trustee is hereby authorized to join in the execution of any
such supplemental indenture and to make any further appropriate agreements and
stipulations that may be therein contained.

               (b) The Issuer and the Trustee, when authorized by an Issuer
Order, may, also without the consent of any of the Holders of the Notes (unless
the Holders of the Notes constitute the Controlling Party) but with prior notice
to the Rating Agency by the Issuer and with the prior written consent of the
Controlling Party, as evidenced to the Trustee, enter into an indenture or
indentures supplemental hereto for the purpose of adding any provisions to, or
changing in any manner or eliminating any of the provisions of, this Indenture
or of modifying in any manner the rights of the Holders of the Notes under this
Indenture; provided, however, that such action shall not, as evidenced by an
Opinion of Counsel, adversely affect in any material respect the interests of
any Noteholder.

               SECTION 9.2. Supplemental Indentures with Consent of Noteholders.
                            ---------------------------------------------------
The Issuer and the Trustee, when authorized by an Issuer Order, also may, with
prior notice to the Rating Agency, with the prior written consent of the Insurer
(unless an Insurer Default shall have occurred and be continuing) and with the
consent of the Holders of not less than a majority of the Outstanding Amount of
the Notes, by Act of such Holders delivered to the Issuer and the Trustee, enter
into a written indenture or indentures supplemental hereto for the purpose of
adding any provisions to, or changing in any manner or eliminating any of the
provisions of, this Indenture or of modifying in any manner the rights of the
Holders of the Notes under this Indenture; provided, however, that, subject to
the express rights of the Insurer under the Basic Documents, no such
supplemental indenture shall, without the consent of the Holder of each
Outstanding Note affected thereby:

         (i)   change the date of payment of any installment of principal of or
               interest on any Note, or reduce the principal amount thereof, the
               interest rate thereon or the Redemption Price with respect
               thereto, change the provision of this Indenture relating to the
               application of collections on, or the proceeds of the sale of,
               the Trust Property to payment of principal of or interest on the
               Notes, or change any place of payment where, or the coin or
               currency in which, any Note or the interest thereon is payable;

         (ii)  impair the right to institute suit for the enforcement of the
               provisions of this Indenture requiring the application of funds
               available therefor, as provided in Article V, to the payment of
               any such amount due on the Notes on or after the respective due
               dates thereof (or, in the case of redemption, on or after the
               Redemption Date);

         (iii) reduce the percentage of the Outstanding Amount of the Notes, the
               consent of the Holders of which is required for any such
               supplemental indenture, or the consent of the Holders of which is
               required for any waiver of compliance with certain provisions of
               this Indenture or certain defaults hereunder and their
               consequences provided for in this Indenture;

                                       58

<PAGE>

        (iv)   modify or alter the provisions of the proviso to the definition
               of the term "Outstanding";

        (v)    reduce the percentage of the Outstanding Amount of the Notes
               required to direct the Trustee to direct the Issuer to sell or
               liquidate the Trust Property pursuant to Section 5.4;

        (vi)   modify any provision of this Section except to increase any
               percentage specified herein or to provide that certain additional
               provisions of this Indenture or the Basic Documents cannot be
               modified or waived without the consent of the Holder of each
               Outstanding Note affected thereby;

        (vii)  modify any of the provisions of this Indenture in such manner as
               to affect the calculation of the amount of any payment of
               interest or principal due on any Note on any Payment Date
               (including the calculation of any of the individual components of
               such calculation) or to affect the rights of the Holders of Notes
               to the benefit of any provisions for the mandatory redemption of
               the Notes contained herein; or

        (viii) permit the creation of any lien ranking prior to or on a parity
               with the lien of this Indenture with respect to any part of the
               Trust Property or, except as otherwise permitted or contemplated
               herein or in any of the Basic Documents, terminate the lien of
               this Indenture on any property at any time subject hereto or
               deprive the Holder of any Note of the security provided by the
               lien of this Indenture.

               The Trustee may determine whether or not any Notes would be
adversely affected by any supplemental indenture upon receipt of an Opinion of
Counsel to that effect and any such determination shall be conclusive upon the
Holders of all Notes, whether theretofore or thereafter authenticated and
delivered hereunder. The Trustee shall not be liable for any such determination
made in good faith.

               Promptly after the execution by the Issuer and the Trustee of any
supplemental indenture pursuant to this Section, the Trustee shall mail to the
Holders of the Notes to which such amendment or supplemental indenture relates a
notice setting forth in general terms the substance of such supplemental
indenture. Any failure of the Trustee to mail such notice, or any defect
therein, shall not, however, in any way impair or affect the validity of any
such supplemental indenture.

               SECTION 9.3 Execution of Supplemental Indentures. In executing,
                           ------------------------------------
or permitting the additional trusts created by, any supplemental indenture
permitted by this Article IX or the modifications thereby of the trusts created
by this Indenture, the Trustee shall be entitled to receive, and subject to
Sections 6.1 and 6.2, shall be fully protected in relying upon, an Opinion of
Counsel (and, if requested, an Officer's Certificate) stating that the execution
of such supplemental indenture is authorized or permitted by this Indenture. The
Trustee may, but shall not be obligated to, enter into any such supplemental
indenture

                                       59

<PAGE>

that affects the Trustee's own rights, duties, liabilities or immunities under
this Indenture or otherwise.

               SECTION 9.4. Effect of Supplemental Indenture. Upon the execution
                            --------------------------------
of any supplemental indenture pursuant to the provisions hereof, this Indenture
shall be and be deemed to be modified and amended in accordance therewith with
respect to the Notes affected thereby, and the respective rights, limitations of
rights, obligations, duties, liabilities and immunities under this Indenture of
the Trustee, the Issuer and the Holders of the Notes shall thereafter be
determined, exercised and enforced hereunder subject in all respects to such
modifications and amendments, and all the terms and conditions of any such
supplemental indenture shall be and be deemed to be part of the terms and
conditions of this Indenture for any and all purposes.

               SECTION 9.5. [Reserved].
                             --------

               SECTION 9.6. Reference in Notes to Supplemental Indentures. Notes
                            ---------------------------------------------
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article IX may, and if required by the Issuer shall, bear a
notation as to any matter provided for in such supplemental indenture. If the
Issuer shall so determine, new Notes so modified as to conform, in the opinion
of the Issuer, to any such supplemental indenture may be prepared and executed
by the Issuer and authenticated and delivered by the Trustee in exchange for
outstanding Notes.

                                   ARTICLE X.

                               Redemption of Notes
                               -------------------

               SECTION 10.1. Redemption.
                             ----------

               (a) The Notes are subject to redemption in whole, but not in
part, at the direction of the Seller pursuant to Section 11.1(a) of the Sale and
Servicing Agreement, on any Payment Date on which the Seller or the Servicer,
acting on behalf of and at the direction of the Seller, exercises its option to
make all required payments on the Notes and retain the Trust Property. The
Servicer or the Issuer shall furnish the Insurer prior written notice of such
redemption. If the Notes are to be redeemed pursuant to this Section 10.1(a),
the Servicer or the Issuer shall furnish notice of such election to the Trustee
not later than 35 days prior to the Redemption Date and the Issuer shall deposit
with the Trustee in the Note Payment Account, the Redemption Price of the Notes
five Business Days prior to the Redemption Date whereupon all such Notes shall
be due and payable on the Redemption Date upon the furnishing of a notice
complying with Section 10.2.

               (b) In the event that the assets of the Trust are sold pursuant
to Section 9.1 of the Trust Agreement, all amounts on deposit in the Note
Payment Account shall be paid to the Noteholders up to the Outstanding Amount of
the Notes and all accrued and unpaid interest thereon. If amounts are to be paid
to Noteholders pursuant to this Section 10.1(b), the Servicer or the Issuer
shall furnish written notice of such event to the Trustee not later than 45 days
prior to the Redemption Date whereupon all such amounts shall be payable on the
Redemption Date.

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<PAGE>

               SECTION 10.2. Form of Redemption Notice.
                             -------------------------

               (a) Notice of redemption supplied to the Trustee by the Servicer
under Section 10.1(a) shall be given by the Trustee by facsimile or by
first-class mail, postage prepaid, transmitted or mailed prior to the applicable
Redemption Date to each Holder of Notes of record, as of the close of business
on the date which is four Business Days prior to the applicable Redemption Date,
at such Holder's address appearing in the Note Register.

               All notices of redemption shall state:

               (i)   the Redemption Date;

               (ii)  the Redemption Price;

               (iii) that the Record Date otherwise applicable to such
          Redemption Date is not applicable and that payments shall be made only
          upon presentation and surrender of such Notes and the place where such
          Notes are to be surrendered for payment of the Redemption Price (which
          shall be the office or agency of the Issuer to be maintained as
          provided in Section 3.2); and

               (iv)  that interest on the Notes shall cease to accrue on the
          Redemption Date.

               Notice of redemption of the Notes shall be given by the Trustee
in the name and at the expense of the Issuer. Failure to give notice of
redemption, or any defect therein, to any Holder of any Note shall not impair or
affect the validity of the redemption of any other Note.

               (b) Prior notice of redemption under Section 10.1(b) is not
required to be given to Noteholders.

               SECTION 10.3. Notes Payable on Redemption Date. The Notes to be
                             --------------------------------
redeemed shall, following notice of redemption as required by Section 10.2 (in
the case of redemption pursuant to Section 10.1(a) or (b)), on the Redemption
Date become due and payable at the Redemption Price and (unless the Issuer shall
default in the payment of the Redemption Price) no interest shall accrue on the
Redemption Price for any period after the date to which accrued interest is
calculated for purposes of calculating the Redemption Price.

                                  ARTICLE XI.

                                  Miscellaneous
                                  -------------

               SECTION 11.1. Compliance Certificates and Opinions, etc.
                             -----------------------------------------

               (a) Upon any application or request by the Issuer to the Trustee
or the Trust Collateral Agent to take any action under any provision of this
Indenture, the Issuer shall furnish to the Trustee or the Trust Collateral
Agent, as the case may be, and to the Insurer if the application or request is
made to the Trust Collateral Agent (i) an Officer's Certificate stating that all
conditions precedent, if any, provided for in this Indenture relating to the

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<PAGE>

proposed action have been complied with, and (ii) an Opinion of Counsel stating
that in the opinion of such counsel all such conditions precedent, if any, have
been complied with.

               Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:

                     (1) a statement that each signatory of such certificate or
               opinion has read or has caused to be read such covenant or
               condition and the definitions herein relating thereto;

                     (2) a brief statement as to the nature and scope of the
               examination or investigation upon which the statements or
               opinions contained in such certificate or opinion are based;

                     (3) a statement that, in the opinion of each such
               signatory, such signatory has made such examination or
               investigation as is necessary to enable such signatory to
               express an informed opinion as to whether or not such covenant
               or condition has been complied with; and

                     (4) a statement as to whether, in the opinion of each such
               signatory such condition or covenant has been complied with.

               (b) (i) Prior to the deposit of any Collateral or other property
or securities with the Trust Collateral Agent that is to be made the basis for
the release of any property or securities subject to the lien of this Indenture,
the Issuer shall, in addition to any obligation imposed in Section 11.1(a) or
elsewhere in this Indenture, furnish to the Trust Collateral Agent and the
Insurer an Officer's Certificate certifying or stating the opinion of each
person signing such certificate as to the fair value (within 90 days of such
deposit) to the Issuer of the Collateral or other property or securities to be
so deposited.

               (ii)  Whenever the Issuer is required to furnish to the Trust
          Collateral Agent and the Insurer an Officer's Certificate certifying
          or stating the opinion of any signer thereof as to the matters
          described in clause (i) above, the Issuer shall also deliver to the
          Trust Collateral Agent and the Insurer an Independent Certificate as
          to the same matters, if the fair value to the Issuer of the securities
          to be so deposited and of all other such securities made the basis of
          any such withdrawal or release since the commencement of the
          then-current fiscal year of the Issuer, as set forth in the
          certificates delivered pursuant to clauses (i) above and this clause
          (ii), is 10% or more of the Outstanding Amount of the Notes; provided,
          that such a certificate need not be furnished with respect to any
          securities so deposited, if the fair value thereof to the Issuer as
          set forth in the related Officer's Certificate is less than $25,000 or
          less than 1% of the Outstanding Amount of the Notes.

               (iii) Other than with respect to the release of any Purchased
          Receivables or Liquidated Receivables, whenever any property or
          securities are to be released from the lien of this Indenture, the
          Issuer shall also furnish to the Trust Collateral Agent and the
          Insurer an Officer's Certificate certifying or stating the opinion of
          each person signing such certificate as to the fair value (within 90
          days of such release) of the property or securities proposed to be
          released and stating that in the opinion of

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<PAGE>

     such person the proposed release will not impair the security under this
     Indenture in contravention of the provisions hereof.

          (iv) Whenever the Issuer is required to furnish to the Trustee and the
     Insurer an Officer's Certificate certifying or stating the opinion of any
     signer thereof as to the matters described in clause (iii) above, the
     Issuer shall also furnish to the Trust Collateral Agent and the Insurer an
     Independent Certificate as to the same matters if the fair value of the
     property or securities and of all other property other than Purchased
     Receivables and Liquidated Receivables, or securities released from the
     lien of this Indenture since the commencement of the then current calendar
     year, as set forth in the certificates required by clause (iii) above and
     this clause (iv), equals 10% or more of the Outstanding Amount of the
     Notes; provided, that such certificate need not be furnished in the case of
     any release of property or securities if the fair value thereof as set
     forth in the related Officer's Certificate is less than $25,000 or less
     than 1% of the then Outstanding Amount of the Notes.

          (v)  Notwithstanding Section 2.10 or any other provision of this
     Section, the Issuer may (A) collect, liquidate, sell or otherwise dispose
     of Receivables as and to the extent permitted or required by the Basic
     Documents and (B) make cash payments out of the Trust Accounts and the
     Spread Account as and to the extent permitted or required by the Basic
     Documents.

          SECTION 11.2. Form of Documents Delivered to Trustee. In any case
                        --------------------------------------
where several matters are required to be certified by, or covered by an opinion
of, any specified Person, it is not necessary that all such matters be certified
by, or covered by the opinion of, only one such Person, or that they be so
certified or covered by only one document, but one such Person may certify or
give an opinion with respect to some matters and one or more other such Persons
as to other matters, and any such Person may certify or give an opinion as to
such matters in one or several documents.

          Any certificate or opinion of an Authorized Officer of the Issuer may
be based, insofar as it relates to legal matters, upon a certificate or opinion
of, or representations by, counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his or her certificate or
opinion is based are erroneous. Any such certificate of an Authorized Officer or
Opinion of Counsel may be based, insofar as it relates to factual matters, upon
a certificate or opinion of, or representations by, an officer or officers of
the Servicer, the Seller or the Issuer, stating that the information with
respect to such factual matters is in the possession of the Servicer, the Seller
or the Issuer, unless such counsel knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations with respect to
such matters are erroneous.

          Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.

          Whenever in this Indenture, in connection with any application or
certificate or report to the Trustee, it is provided that the Issuer shall
deliver any document as a condition of the granting of such application, or as
evidence of the Issuer's compliance with

                                       63

<PAGE>

any term hereof, it is intended that the truth and accuracy, at the time of the
granting of such application or at the effective date of such certificate or
report (as the case may be), of the facts and opinions stated in such document
shall in such case be conditions precedent to the right of the Issuer to have
such application granted or to the sufficiency of such certificate or report.
The foregoing shall not, however, be construed to affect the Trustee's right to
conclusively rely upon the truth and accuracy of any statement or opinion
contained in any such document as provided in Article VI.

               SECTION 11.3. Acts of Noteholders.
                             -------------------

               (a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given or taken
by Noteholders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Noteholders in person or by agents
duly appointed in writing; and except as herein otherwise expressly provided
such action shall become effective when such instrument or instruments are
delivered to the Trustee, and, where it is hereby expressly required, to the
Issuer. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "Act" of the
Noteholders signing such instrument or instruments. Proof of execution of any
such instrument or of a writing appointing any such agent shall be sufficient
for any purpose of this Indenture and (subject to Section 6.1) conclusive in
favor of the Trustee and the Issuer, if made in the manner provided in this
Section.

               (b) The fact and date of the execution by any person of any such
instrument or writing may be proved in any customary manner of the Trustee.

               (c) The ownership of Notes shall be proved by the Note Register.

               (d) Any request, demand, authorization, direction, notice,
consent, waiver or other action by the Holder of any Notes shall bind the Holder
of every Note issued upon the registration thereof or in exchange therefor or in
lieu thereof, in respect of anything done, omitted or suffered to be done by the
Trustee or the Issuer in reliance thereon, whether or not notation of such
action is made upon such Note.

               SECTION 11.4. Notices, etc. to Trustee, Issuer and Rating Agency.
                             --------------------------------------------------
Any request, demand, authorization, direction, notice, consent, waiver or Act of
Noteholders or other documents provided or permitted by this Indenture to be
made upon, given or furnished to or filed with:

               (a) The Trustee by any Noteholder or by the Issuer shall be
sufficient for every purpose hereunder if personally delivered, delivered by
overnight courier or mailed first-class and shall be deemed to have been duly
given upon receipt to the Trustee at its Corporate Trust Office, or

               (b) The Issuer by the Trustee or by any Noteholder shall be
sufficient for every purpose hereunder if personally delivered, delivered by
facsimile or overnight courier or mailed first class, and shall be deemed to
have been duly given upon receipt to the Issuer addressed to: TFC Automobile
Receivables Trust 2002-1, in care of Wilmington Trust Company, Rodney Square
North, 1100 North Market Street, Wilmington, DE 19890-0001

                                       64

<PAGE>

Attention: Corporate Trust Administration, or at any other address previously
furnished in writing to the Trustee by Issuer. The Issuer shall promptly
transmit any notice received by it from the Noteholders to the Trustee.

          (c)  The Insurer by the Issuer or the Trustee shall be sufficient for
any purpose hereunder if in writing and mailed by first-class mail personally
delivered or telexed or telecopied to the recipient as follows:

          To the Insurer:               Radian Asset Assurance Inc.
                                        335 Madison Avenue
                                        New York, NY 10017-4605

                                        Attention: Chief Risk Officer

                                        Telecopy No.: (212) 682-5377
                                        Telephone No.:  (212) 983- 3100

          (In each case in which notice or other communication to the Insurer
          refers to an Event of Default, a claim on the Note Policy or with
          respect to which failure on the part of the Insurer 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
          General Counsel and the Head-Financial Guaranty Group, and shall be
          marked to indicate "URGENT MATERIAL ENCLOSED.

Notices required to be given to the Rating Agency by the Issuer, the Trustee or
the Owner Trustee shall be in writing, personally delivered, delivered by
overnight courier or first class or via facsimile to Standard & Poor's Ratings
Services, 55 Water Street, New York, NY 10041, Attention: Asset Backed
Surveillance Department, Fax No: (212) 412-0224, or at such other address as
shall be designated by written notice to the other parties.

          SECTION 11.5. Notices to Noteholders; Waiver. Where this Indenture
                        ------------------------------
provides for notice to Noteholders of any event, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed, first-class, postage prepaid to each Noteholder affected by such
event, at his address as it appears on the Note Register, not later than the
latest date, and not earlier than the earliest date, prescribed for the giving
of such notice. In any case where notice to Noteholders is given by mail,
neither the failure to mail such notice nor any defect in any notice so mailed
to any particular Noteholder shall affect the sufficiency of such notice with
respect to other Noteholders, and any notice that is mailed in the manner herein
provided shall conclusively be presumed to have been duly given.

          Where this Indenture provides for notice in any manner, such notice
may be waived in writing by any Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Noteholders shall be filed with the Trustee but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such a waiver.

                                       65

<PAGE>

          In case, by reason of the suspension of regular mail service as a
result of a strike, work stoppage or similar activity, it shall be impractical
to mail notice of any event to Noteholders when such notice is required to be
given pursuant to any provision of this Indenture, then any manner of giving
such notice as shall be satisfactory to the Trustee shall be deemed to be a
sufficient giving of such notice.

          Where this Indenture provides for notice to the Rating Agency, failure
to give such notice shall not affect any other rights or obligations created
hereunder, and shall not under any circumstance constitute a Default or Event of
Default.

          SECTION 11.6. Alternate Payment and Notice Provisions. Notwithstanding
                        ---------------------------------------
any provision of this Indenture or any of the Notes to the contrary, the Issuer
may enter into any agreement with any Holder of a Note providing for a method of
payment, or notice by the Trustee or the Note Paying Agent to such Holder, that
is different from the methods provided for in this Indenture for such payments
or notices, provided that such methods are reasonable and consented to by the
Trustee (which consent shall not be unreasonably withheld). The Issuer will
furnish to the Trustee a copy of each such agreement and the Trustee will cause
payments to be made and notices to be given in accordance with such agreements.

          SECTION 11.7. [Reserved].
                         --------

          SECTION 11.8. Effect of Headings and Table of Contents.  The Article
                        ----------------------------------------
and Section headings herein and the Table of Contents are for convenience only
and shall not affect the construction hereof.

          SECTION 11.9. Successors and Assigns. All covenants and agreements in
                        ----------------------
this Indenture and the Notes by the Issuer shall bind its successors and
assigns, whether so expressed or not. All agreements of the Trustee in this
Indenture shall bind its successors. All agreements of the Trust Collateral
Agent in this Indenture shall bind its successors.

          SECTION 11.10. Separability. In case any provision in this Indenture
                         ------------
or in the Notes shall be invalid, illegal or unenforceable, the validity,
legality, and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.

          SECTION 11.11. Benefits of Indenture. Nothing in this Indenture or in
                         ---------------------
the Notes, express or implied, shall give to any Person, other than the parties
hereto and their successors hereunder, and the Noteholders, and the Owner
Trustee and any other party secured hereunder, and any other person with an
ownership interest in any part of the Trust Property, any benefit or any legal
or equitable right, remedy or claim under this Indenture.

          SECTION 11.12. Legal Holidays. In any case where the date on which any
                         --------------
payment is due shall not be a Business Day, then (notwithstanding any other
provision of the Notes or this Indenture) payment need not be made on such date,
but may be made on the next succeeding Business Day with the same force and
effect as if made on the date an which nominally due, and no interest shall
accrue for the period from and after any such nominal date.

                                       66

<PAGE>

          SECTION 11.13. Governing Law. THIS INDENTURE SHALL BE CONSTRUED IN
                         -------------
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, INCLUDING SECTION 5-1401 OF
THE GENERAL OBLIGATION LAW BUT OTHERWISE WITHOUT REFERENCE TO ITS CONFLICT OF
LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES
HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

          SECTION 11.14. Counterparts. This Indenture may be executed in any
                         ------------
number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.

          SECTION 11.15. Recording of Indenture. If this Indenture is subject to
                         ----------------------
recording in any appropriate public recording offices, such recording is to be
effected by the Issuer and at its expense accompanied by an Opinion of Counsel
(which may be counsel to the Trust or any other counsel reasonably acceptable to
the Trustee and the Insurer) to the effect that such recording is necessary
either for the protection of the Noteholders or any other person secured
hereunder or for the enforcement of any right or remedy granted to the Trustee
or the Trust Collateral Agent under this Indenture or the Sale and Servicing
Agreement.

          SECTION 11.16. Trust Obligation. No recourse may be taken, directly or
                         ----------------
indirectly, with respect to the obligations of the Issuer, the Seller, the
Servicer, the Owner Trustee, the Trust Collateral Agent or the Trustee on the
Notes or under this Indenture or any certificate or other writing delivered in
connection herewith or therewith, against (i) the Insurer, the Seller, the
Servicer, the Trust Collateral Agent, the Trustee or the Owner Trustee in its
individual capacity, (ii) any owner of a beneficial interest in the Issuer or
(iii) any partner, owner, beneficiary, agent, officer, director, employee or
agent of the Insurer, the Seller, the Servicer, the Trust Collateral Agent, the
Trustee or the Owner Trustee in its individual capacity, any holder of a
beneficial interest in the Issuer, the Seller, the Trust Collateral Agent, the
Servicer, the Owner Trustee or the Trustee or of any successor or assign of the
Seller, the Servicer, the Trust Collateral Agent, the Trustee or the Owner
Trustee in its individual capacity, except as any such Person may have expressly
agreed (it being understood that the Trustee, the Trust Collateral Agent and the
Owner Trustee have no such obligations in their individual capacity) and except
that any such owner or beneficiary shall be fully liable, to the extent provided
by applicable law, for any unpaid consideration for stock, unpaid capital
contribution or failure to pay any installment or call owing to such entity. For
all purposes of this Indenture, in the performance of any duties or obligations
of the Issuer hereunder, the Owner Trustee shall be subject to, and entitled to
the benefits of, the terms and provisions of the Trust Agreement.

          SECTION 11.17. No Petition. The Trustee and the Trust Collateral
                         -----------
Agent, by entering into this Indenture, and each Noteholder, by accepting a
Note, hereby covenant and agree that they will not at any time institute against
the Seller or the Issuer, or join in any institution against the Seller or the
Issuer of, any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings, or other proceedings under any United States Federal or
state bankruptcy or similar law in connection with any obligations relating to
the Notes, this Indenture or any of the Basic Documents.

                                       67

<PAGE>

          SECTION 11.18. Inspection. The Issuer agrees that, on reasonable prior
                         ----------
notice, it will permit any representative of the Trustee, the Insurer and the
Holders of Notes evidencing not less than 25% of the Outstanding Amount thereof
(for purpose of this Section 11.18 only, the principal amount of Notes
Outstanding held by Persons that are affiliates may be aggregated for purposes
of satisfying the 25% threshold), during the Issuer's normal business hours, to
examine all the books of account, records, reports, and other papers of the
Issuer, at the Issuer's expense, to make copies and extracts therefrom, to cause
such books to be audited by independent certified public accountants, and to
discuss the Issuer's affairs, finances and accounts with the Issuer's officers,
employees, and independent certified public accountants, all at such reasonable
times and as often as may be reasonably requested; provided, however, that if
                                                   --------  -------
the Insurer is the Controlling Party, any expenses of the Noteholders incurred
in connection with this Section 11.18 shall be borne by the Noteholders and not
the Issuer. The Trustee, the Insurer and the Noteholders referenced above, shall
and shall cause its representatives to hold in confidence all such information
except to the extent disclosure may be required by law (and all reasonable
applications for confidential treatment are unavailing) and except to the extent
that the Trustee may reasonably determine that such disclosure is consistent
with its Obligations hereunder.

          SECTION 11.19. Limitation of Liability. It is expressly understood and
                         -----------------------
agreed by the parties hereto that (a) this Indenture 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, (b) 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, (c) 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 Indenture and by any person
claiming by, through or under them and (d) 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 Indenture or any related documents.

                            [Signature Page Follows]

                                       68

<PAGE>

          IN WITNESS WHEREOF, the Insurer, the Issuer, the Trustee and the Trust
Collateral Agent have caused this Indenture to be duly executed by their
respective officers, hereunto duly authorized, all as of the day and year first
above written.

                                        TFC AUTOMOBILE RECEIVABLES TRUST 2002-1

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

                                        By:_______________________________
                                           Name:
                                           Title:

                                        WELLS FARGO BANK MINNESOTA, NATIONAL
                                        ASSOCIATION, not in its individual
                                        capacity but solely as Trustee and Trust
                                        Collateral Agent

                                        By:_______________________________
                                           Name:
                                           Title:

                                        RADIAN ASSET ASSURANCE INC.

                                        By:_______________________________
                                           Name:
                                           Title:

<PAGE>

                                                                       EXHIBIT A

                                 [Form of Note]
REGISTERED                                                         $[__________]
No. A - 1

                       SEE REVERSE FOR CERTAIN DEFINITIONS
                                                          CUSIP No. [__________]

     THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
     AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS OR "BLUE SKY'
     LAWS. THE HOLDER HEREOF, BY PURCHASING ANY NOTE, AGREES FOR THE BENEFIT OF
     THE ISSUER THAT SUCH NOTE IS BEING ACQUIRED FOR ITS OWN ACCOUNT AND NOT
     WITH A VIEW TO DISTRIBUTION AND MAY BE RESOLD, PLEDGED OR TRANSFERRED ONLY
     TO (1) THE ISSUER (UPON REDEMPTION THEREOF OR OTHERWISE), (2) TO A PERSON
     THE TRANSFEROR REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS
     DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE
     REQUIREMENTS OF RULE 144A, OR (3) IN A TRANSACTION OTHERWISE EXEMPT FROM
     THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, ANY APPLICABLE
     SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
     JURISDICTION, IN EACH SUCH CASE, IN COMPLIANCE WITH THE INDENTURE AND ALL
     APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
     JURISDICTION.

     UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
     DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR
     ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE
     ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
     REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE
     TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
     REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE
     OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
     OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

     THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN.
     ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY
     BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.

                    TFC AUTOMOBILE RECEIVABLES TRUST 2002-1

                            4.23% ASSET BACKED NOTES

                                      A-1

<PAGE>

          TFC Automobile Receivables Trust 2002-1, a business trust organized
and existing under the laws of the State of Delaware (herein referred to as the
"Issuer"), for value received, hereby promises to pay to Cede & Co., the
principal sum of $[__________], such amount payable on each Payment Date in an
amount equal to the aggregate amount, if any, on such Payment Date payable from
the Note Payment Account in respect of principal on the Notes pursuant to
Section 3.1 of the Indenture and Section 5.8 of the Sale and Servicing Agreement
until the Note Balance is equal to zero; provided, however, that the entire
unpaid principal amount of this Note shall be due and payable on the
[___________] Payment Date (the "Final Scheduled Payment Date"). This Note shall
bear interest from the Closing Date until the principal of this Note is paid (or
made available for payment) at the rate per annum shown above (the "Interest
Rate"). Interest on this Note shall be paid as provided in Section 3.1 of the
Indenture and Section 5.8 of the Sale and Servicing Agreement. Interest on this
Note shall accrue and be calculated on the basis of a 360-day year consisting of
twelve 30-day months. Interest on this Note shall be paid on each Payment Date
in an amount equal to the product of (i) one-twelfth (or, in the case of the
first Payment Date only, a fraction, the numerator of which is equal to the
number of days in the initial Interest Period and the denominator of which is
equal to 360) of the Interest Rate and (ii) the principal amount of this Note
outstanding on the preceding Payment Date (after giving effect to all payments
of principal made on the preceding Payment Date) or, in the case of the first
Payment Date only, on the Closing Date. Such principal of and interest on this
Note shall be paid in the manner specified on the reverse hereof.

          The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Note shall be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.

          The Notes are entitled to the benefits of a financial guaranty
insurance policy (the "Note Policy") issued by Radian Asset Assurance Inc. (the
"Insurer"), pursuant to which the Insurer has irrevocably and unconditionally
guaranteed payments of the Noteholders' Interest Payment Amount on each Payment
Date and the Noteholders' Principal Payment Amount on the Final Scheduled
Payment Date, all as more fully set forth in the Indenture.

          For purposes of federal income, state and local income and franchise
and any other income taxes, the Issuer will treat the Notes as indebtedness of
the Issuer and hereby instructs the Trustee to treat the Notes as indebtedness
of the Issuer for federal and state tax reporting purposes.

          Each Noteholder, by acceptance of this Note, covenants and agrees that
no recourse may be taken, directly or indirectly, with respect to the
obligations of the Issuer, the Owner Trustee or the Trustee on the Notes or
under the Indenture or any certificate or other writing delivered in connection
therewith, against (i) the Insurer, the Seller, the Servicer, the Trustee, the
Trust Collateral Agent or the Owner Trustee in its individual capacity, (ii) any
owner of a beneficial interest in the Issuer or (iii) any owner, beneficiary,
agent, officer, director or employee of the Insurer, the Seller, the Servicer,
the Trustee, the Trust Collateral Agent or the Owner Trustee in its individual
capacity, any holder of a beneficial interest in the Issuer, the Seller, the
Servicer, the Trust Collateral Agent, the Owner Trustee or the Trustee or of any
successor or assign of the Seller, the Servicer, the Trustee, the Trust

                                      A-2

<PAGE>

Collateral Agent or the Owner Trustee in its individual capacity, except as any
such Person may have expressly agreed (it being understood that the Trustee, the
Trust Collateral Agent and the Owner Trustee have no such obligations in their
individual capacity) and except that any such owner or beneficiary shall be
fully liable, to the extent provided by applicable law, for any unpaid
consideration for stock, unpaid capital contribution or failure to pay any
installment or call owing to such entity.

          Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.

          Unless the certificate of authentication hereon has been executed by
the Trustee whose name appears below by manual signature, this Note shall not be
entitled to any benefit under the Indenture referred to on the reverse hereof,
or be valid or obligatory for any purpose.

                                      A-3

<PAGE>

          IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer as of the date set
forth below.

                                     TFC AUTOMOBILE RECEIVABLES
                                        TRUST 2002-1

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

                                     By: _______________________________________
                                          Name:
                                          Title:

Date: [_____], 2002

                                      A-4

<PAGE>

                     TRUSTEE'S CERTIFICATE OF AUTHENTICATION

          This is one of the Notes designated above and referred to in the
within-mentioned Indenture.

Date: [_______], 2002                      WELLS FARGO BANK MINNESOTA, NATIONAL
                                           ASSOCIATION, not in its individual
                                           capacity but solely as Trustee

                                           By___________________________________
                                                     Authorized Signatory

                                      A-5

<PAGE>

                                 REVERSE OF NOTE

          This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its 4.23% Asset Backed Notes (herein called the "Notes"), all
issued under an Indenture dated as of March 19, 2002 (such indenture, as
supplemented or amended, is herein called the "Indenture"), among the Insurer,
the Issuer and Wells Fargo Bank Minnesota, National Association, as trustee and
trust collateral agent (the "Trustee", which term includes any successor Trustee
under the Indenture, and the "Trust Collateral Agent", which term includes any
successor Trust Collateral Agent under the Indenture), to which Indenture and
all indentures supplemental thereto reference is hereby made for a statement of
the respective rights and obligations thereunder of the Insurer, the Issuer, the
Trustee, the Trust Collateral Agent and the Holders of the Notes. The Notes are
subject to all terms of the Indenture. All terms used in this Note that are
defined in the Indenture, as supplemented or amended, shall have the meanings
assigned to them in or pursuant to the Indenture, as so supplemented or amended.

          The Notes are and will be equally and ratably secured by the
collateral pledged as security therefor as provided in the Indenture.

          Principal of the Notes will be payable on each Payment Date in an
amount described on the face hereof. "Payment Date" means the 15th day of each
month, or, if any such date is not a Business Day, the next succeeding Business
Day, commencing [______], 2002.

          As described above, the entire unpaid principal amount of this Note
shall be due and payable on the earlier of the Final Scheduled Payment Date and
the Redemption Date, if any, pursuant to Section 10.1(a) or 10.1(b) of the
Indenture. Notwithstanding the foregoing, the entire unpaid principal amount of
the Notes shall be due and payable (i) on the date on which an Insurance
Agreement Indenture Cross Default shall have occurred and the Insurer shall have
delivered to the Trustee a written notice specifying that an Insurance Agreement
Indenture Cross Default constituting an Event of Default under the Indenture has
occurred or (ii) if an Insurer Default shall have occurred and be continuing, on
the date on which an Event of Default shall have occurred and be continuing and
the Trustee or the Holders of the Notes representing a majority of the
Outstanding Amount of the Notes have declared the Notes to be immediately due
and payable in the manner provided in Section 5.2 of the Indenture. All
principal payments on the Notes shall be made pro rata to the Noteholders
entitled thereto.

          Payments of interest on this Note due and payable on each Payment
Date, together with the installment of principal, if any, to the extent not in
full payment of this Note, shall be made by wire transfer in immediately
available funds to the Person whose name appears as the Holder of this Note on
the Note Register as of the close of business on the related Record Date. Such
payments shall be wired to the Person entitled thereto to the account of such
Person as it appears on the Note Register as of the applicable Record Date
without requiring that this Note be submitted for notation of payment. Any
reduction in the principal amount of this Note effected by any payments made on
any Payment Date shall be binding upon all future Holders of this Note and of
any Note issued upon the registration of transfer hereof or in exchange hereof
or in lieu hereof, whether or not noted hereon. If funds are expected to be
available, as provided in the Indenture, for payment in full of the then

                                      A-6

<PAGE>

remaining unpaid principal amount of this Note on a Payment Date, then the
Trustee, in the name of and on behalf of the Issuer, will notify the Person who
was the Holder hereof as of the Record Date preceding such Payment Date by
notice mailed prior to such Payment Date and the amount then due and payable
shall be payable only upon presentation and surrender of this Note at the
Trustee's principal Corporate Trust Office or at the office of the Trustee's
agent appointed for such purposes located in Minneapolis, Minnesota; provided,
however, that such presentation and surrender shall be waived with respect to
any Noteholder upon satisfaction by the Noteholder of the indemnity requirements
set forth in the Indenture (and not rescinded).

          The Issuer shall pay interest on overdue installments of interest at
the Interest Rate to the extent lawful.

          As provided in the Indenture, the Notes may be redeemed pursuant to
Section 10.1(a) of the Indenture, in whole, but not in part, at the option of
the Seller on any Payment Date on or after the date on which the Pool Balance is
less than or equal to 15% of the Original Pool Balance.

          As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note Register
upon surrender of this Note for registration of transfer at the office or agency
designated by the Issuer pursuant to the Indenture, (i) duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Trustee duly executed by, the Holder hereof or his attorney duly authorized in
writing, with such signature guaranteed by an "eligible guarantor institution"
meeting the requirements of the Note Registrar which requirements include
membership or participation in Securities Transfer Agents Medallion Program
("Stamp") or such other "signature guarantee program" as may be determined by
the Note Registrar in addition to, or in substitution for, Stamp, all in
accordance with the Exchange Act, and (ii) accompanied by such other documents
as the Trustee may require, and thereupon one or more new Notes of authorized
denominations and in the same aggregate principal amount will be issued to the
designated transferee or transferees. No service charge will be charged for any
registration of transfer or exchange of this Note, but the transferor may be
required to pay a sum sufficient to cover any tax or other governmental charge
that may be imposed in connection with any such registration of transfer or
exchange. Each Noteholder, by acceptance of a Note, covenants and agrees to
treat the Notes as indebtedness for federal, state and local income and
franchise tax purposes.

          Each Noteholder and each Note Owner, by acceptance of a Note or an
interest therein, covenants and agrees that by accepting the benefits of the
Indenture that such Noteholder or Note Owner, as applicable, will not at any
time institute against the Seller or the Issuer, or join in any institution
against the Seller or the Issuer, of any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings, or other proceedings, under
any United States Federal or state bankruptcy or similar law in connection with
any obligations relating to the Notes, the Indenture or the Basic Documents.

          Each purchaser of this Note or an interest therein will be deemed to
have represented that either (a) it is not a Benefit Plan and is not acting on
behalf of or investing the assets of a Benefit Plan or (b) the transferee's
purchase and holding of such interest will be, or result in, a prohibited
transaction which is not exempted by application of a statute,

                                      A-7

<PAGE>

regulation, or an administrative exemption, such as a U.S. Department of Labor
Prohibited Transaction Class Exemption.

                  Prior to the due presentment for registration of transfer of
this Note, the Issuer, the Trustee and the Insurer and any agent of the Issuer,
the Trustee or the Insurer may treat the Person in whose name this Note (as of
the day of determination or as of such other date as may be specified in the
Indenture) is registered as the owner hereof for all purposes, whether or not
this Note be overdue, and neither the Issuer, the Trustee nor any such agent
shall be affected by notice to the contrary.

                  The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Issuer and the rights of the Holders of the Notes under the
Indenture at any time by the Issuer with the consent of the Insurer and of the
Holders of Notes representing a majority of the Outstanding Amount of all Notes
at the time Outstanding. The Indenture also contains provisions permitting the
Holders of Notes representing specified percentages of the Outstanding Amount of
the Notes, on behalf of the Holders of all the Notes, to waive compliance by the
Issuer with certain provisions of the Indenture and certain past defaults under
the Indenture and their consequences. Any such consent or waiver by the Holder
of this Note shall be conclusive and binding upon such Holder and upon all
future Holders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof whether or not notation
of such consent or waiver is made upon this Note. The Indenture also permits the
Trustee to amend or waive certain terms and conditions set forth in the
Indenture without the consent of Holders of the Notes issued thereunder.

                  The term "Issuer" as used in this Note includes any successor
to the Issuer under the Indenture.

                  The Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of the Trustee and
the Holders of Notes under the Indenture.

                  The Notes are issuable only in definitive form in
denominations as provided in the Indenture, subject to certain limitations
therein set forth.

                  This Note and the Indenture shall be construed in accordance
with the laws of the State of New York, without reference to its conflict of law
provisions, and the obligations, rights and remedies of the parties hereunder
and thereunder shall be determined in accordance with such laws.

                  No reference herein to the Indenture and no provision of this
Note or of the Indenture shall alter or impair the obligation of the Issuer,
which is absolute and unconditional, to pay the principal of and interest on
this Note at the times, place, and rate, and in the coin or currency herein
prescribed.

                  Anything herein to the contrary notwithstanding, except as
expressly provided in the Indenture or the Basic Documents, neither Wilmington
Trust Company in its individual capacity, any owner of a beneficial interest in
the Issuer, nor any of their respective beneficiaries, agents, officers,
directors, employees or successors or assigns shall

                                      A-8

<PAGE>

be personally liable for, nor shall recourse be had to any of them for, the
payment of principal of or interest on, or performance of, or omission to
perform, any of the covenants, obligations or indemnifications contained in this
Note or the Indenture, it being expressly understood that said covenants,
obligations and indemnifications have been made by the Issuer for the sole
purposes of binding the interests of the Issuer in the assets of the Issuer. The
Holder of this Note by the acceptance hereof agrees that except as expressly
provided in the Indenture or the Basic Documents, in the case of an Event of
Default under the Indenture, the Holder shall have no claim against any of the
foregoing for any deficiency, loss or claim therefrom; provided, however, that
nothing contained herein shall be taken to prevent recourse to, and enforcement
against, the assets of the Issuer for any and all liabilities, obligations and
undertakings contained in the Indenture or in this Note.

                                      A-9

<PAGE>

                                   ASSIGNMENT

Social Security or Taxpayer I.D. or other identifying number of
assignee: ____________
                  FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto

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

-------------------------------------------------------------------------------
                         (name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints __________________________, attorney, to transfer said Note on the
books kept for registration thereof, with full power of substitution in the
premises.

Dated: ________________                         ___________________________*

                                                Signature Guaranteed:

Dated: ________________                         ____________________________

_______________________
*NOTICE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatever.

                                      A-10<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]

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00038-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00038-of-00352.parquet"}]]