Document:

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                                                                    EXHIBIT 10.4

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                               PSNH FUNDING LLC 2,

                                    AS ISSUER

                                       AND

                              THE BANK OF NEW YORK,

                                   AS TRUSTEE

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

                           FEE AND INDEMNITY AGREEMENT

                          DATED AS OF JANUARY 30, 2002

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

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                                TABLE OF CONTENTS

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                                                                            PAGE
<S>                                                                         <C>
Section 1.  Payment of Fees and Expenses of Trustee; Paying Agent
            and Registrar................................................     1

Section 2.  Indemnity and Contribution...................................     1

Section 3.  Payment......................................................     4

Section 4.  Notices......................................................     4

Section 5.  Survival of Agreements.......................................     5

Section 6.  Nonpetition Covenant.........................................     5

Section 7.  Counterparts.................................................     6

Section 8.  GOVERNING LAW................................................     6

Section 9.  Non-Consolidation............................................     6
</TABLE>
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      FEE AND INDEMNITY AGREEMENT dated as of January 30, 2002 (as amended or
restated from time to time, the "Agreement"), among PSNH Funding LLC 2, as
Issuer (the "Issuer") under the Indenture (the "Indenture") of even date
herewith, and THE BANK OF NEW YORK, as Trustee under the Indenture (the
"Trustee"). All capitalized terms used herein and not otherwise defined herein
shall have the meanings attributed to them in the Indenture.

      Section 1. Payment of Fees and Expenses of Trustee; Paying Agent and
Registrar.

            (a) Subject to Section 3 hereof, the Issuer hereby covenants and
agrees to pay to the Trustee (or any successor trustee) from time to time
reasonable compensation for its services under the Indenture and to reimburse it
for its reasonable expenses incurred in connection therewith, it being
understood that the Trustee shall have no recourse against the Bonds or the
payments thereon and proceeds thereof, for payment of such amounts. Subject to
the provisions of the Indenture, the Trustee shall have a lien against the RRB
Property to secure payment of such amounts to the extent provided in the Statute
or the finance order issued pursuant thereto. The Issuer's obligations to make
payments of such amounts to the Trustee shall be subject to the priorities set
forth in Section 8.02 of the Indenture.

            (b) Subject to Section 3 hereof, the Issuer further covenants and
agrees to pay, or cause to be paid, from time to time to each Paying Agent and
Registrar reasonable compensation for its services and to reimburse it for its
reasonable expenses incurred in connection with such service, it being
understood that no Paying Agent or Registrar shall have any recourse against the
Bonds or the payments thereon and proceeds thereof, for payment of such amounts.
The appointment of any Paying Agent or Registrar Authorized shall be subject to
the approval of the Issuer.

            (c) In addition, subject to Section 3 hereof, the Issuer covenants
and agrees to reimburse the Trustee for any tax incurred other than through
gross negligence, bad faith or willful misconduct on the part of the Trustee,
arising out of or in connection with the acceptance or administration of the
Collateral under the Indenture (other than any tax attributable to the Trustee's
compensation for serving as such), including any costs and expenses incurred in
contesting the imposition of any such tax.

            (d) Notwithstanding anything herein to the contrary, but subject to
the provisions of Section 3 hereof, if the Trustee shall have entered into a fee
agreement in writing with the Issuer with respect to the Trustee's compensation
for services under the Indenture, the terms of such fee agreement shall control
and the provisions of this Agreement shall not entitle the Trustee to greater
compensation than that due and owing pursuant to such fee agreement.

      Section 2. Indemnity and Contribution.

            (a) Subject to Section 2(b), the Issuer hereby covenants and agrees
to indemnify, defend and hold harmless the Trustee, the Bondholders, the State
of New Hampshire, the
<PAGE>
Treasurer of the State of New Hampshire, agencies of the State of New Hampshire
and any of their respective affiliates, officials, officers, directors,
employees, consultants, counsel and agents (the "Indemnified Persons") from and
against any and all losses, claims, actions, suits, taxes (other than taxes
payable by such Indemnified Person attributable to income or gain received by
such Indemnified Person in connection with the transactions contemplated in the
Indenture), damages, expenses (including, without limitation, reasonable legal
fees and expenses) and liabilities (including liabilities under state or federal
securities laws) of any kind and nature whatsoever (collectively, "Expenses"),
to the extent that such Expenses arise out of or are imposed upon or asserted
against such Indemnified Persons with respect to the execution, delivery or
performance of the Indenture or the transactions contemplated thereby, the
failure of the Issuer or any other Person (other than the Indemnified Person
being indemnified) to perform its obligations hereunder or under any of the
Basic Documents, or otherwise in connection with the Basic Documents or the
transactions contemplated thereby; provided, however, that the Issuer is not
required to indemnify any Indemnified Person for any Expenses that result from
the willful misconduct or gross negligence of such Indemnified Person and
provided further, that it is understood and agreed that the Bondholders may only
exercise their rights and remedies hereunder through the Trustee and no
Bondholder shall have any right to pursue any cause of action to enforce its
rights and remedies hereunder except through the Trustee. The obligations of the
Issuer to indemnify the Indemnified Persons as provided herein shall survive the
termination, satisfaction or discharge of the Indenture and the resignation or
removal of the Trustee. The Indemnified Persons are entitled to the benefit of
this Agreement and shall have the right to enforce the provisions hereof.
Subject to the provisions of the Indenture, the Indemnified Persons shall have a
lien against the RRB Property to secure payment of such Expenses to the extent
provided in the Statute or the finance order issued pursuant thereto. The
Issuer's obligations to make payments of such Expenses shall be subject to the
priorities set forth in Section 8.02 of the Indenture.

            (b) The Issuer shall not be required to indemnify an Indemnified
Person for any amount paid or payable by such Indemnified Person pursuant to
Section 2(a) in the settlement of any action, proceeding or investigation
without the written consent of the Issuer, which consent shall not be
unreasonably withheld. Promptly after receipt by an Indemnified Person of notice
of its involvement in any action, proceeding or investigation, such Indemnified
Person shall, if a claim for indemnification in respect thereof is to be made
against the Issuer under Section 2(a), notify the Issuer in writing of such
involvement. Failure by an Indemnified Person to so notify the Issuer shall
relieve the Issuer from the obligation to indemnify and hold harmless such
Indemnified Person under Section 2(a), only to the extent that the Issuer
suffers actual prejudice as a result of such failure. With respect to any
action, proceeding or investigation brought by a third party for which
indemnification may be sought under Section 2(a), the Issuer shall be entitled
to assume the defense of any such action, proceeding or investigation. Upon
assumption by the Issuer of the defense of any such action, proceeding or
investigation, the Indemnified Person shall have the right to participate in
such action or proceeding and to retain its own counsel. The Issuer shall be
entitled to appoint counsel of the Issuer's choice at the Issuer's

                                      -2-
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expense to represent the Indemnified Person in any action, proceeding or
investigation for which a claim of indemnification is made against the Issuer
under Section 2(a) (in which case the Issuer shall not thereafter be responsible
for the fees and expenses of any separate counsel retained by the Indemnified
Person except as set forth below); provided however, that such counsel shall be
reasonably satisfactory to the Indemnified Person. Notwithstanding the Issuer's
election to appoint counsel to represent the Indemnified Person in an action,
proceeding or investigation, the Indemnified Person shall have the right to
employ separate counsel (including local counsel), and the Issuer shall bear the
reasonable fees, costs and expenses of such separate counsel if (i) the use of
counsel chosen by the Issuer to represent the Indemnified Person would present
such counsel with a conflict of interest, (ii) the actual or potential
defendants in, or targets of, any such action include both the Indemnified
Person and the Issuer and the Indemnified Person shall have reasonably concluded
that there may be legal defenses available to it that are different from or
additional to those available to the Issuer, (iii) the Issuer shall not have
employed counsel reasonably satisfactory to the Indemnified Person to represent
the Indemnified Person within a reasonable time after notice of the institution
of such action or (iv) the Issuer shall authorize the Indemnified Person to
employ separate counsel at the expense of the Issuer. Notwithstanding the
foregoing, the Issuer shall not be obligated to pay for the fees, costs and
expenses of more than one separate counsel for the Indemnified Persons (in
addition to local counsel). The Issuer will not, without the prior written
consent of the Indemnified Person, settle or compromise or consent to the entry
of any judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification may be sought under Section 2(a)
(whether or not the Indemnified Person is an actual or potential party to such
claim or action ) unless such settlement, compromise or consent includes an
unconditional release of the Indemnified Person from all liability arising out
of such claim, action, suit or proceeding. Indemnification under Section 2(a)
shall include reasonable fees and out-of-pocket expenses of investigation and
litigation (including reasonable attorneys' fees and expenses), except as
otherwise provided in this Agreement.

            (c) If the indemnity provided in Section 2(a) is unavailable to or
insufficient to hold harmless an Indemnified Person for any reason, the Issuer
and such Indemnified Person agree to contribute to the aggregate Expenses to
which the Issuer and such Indemnified Person may be subject in such proportion
as is appropriate to reflect the relative benefits received by the Issuer and
such Indemnified Person, respectively, from the offering of the Bonds; provided,
however, that in no case shall any Indemnified Person be responsible for any
amount in excess of the fees or other amounts received by such Indemnified
Person in connection with the Basic Documents and the issuance of the Bonds. If
the allocation provided by the immediately preceding sentence is unavailable for
any reason, the Issuer and the Indemnified Person shall contribute in such
proportion as is appropriate to reflect not only such relative benefits but also
the relative fault of the Issuer and such Indemnified Person, respectively, in
connection with the actions or omissions giving rise to such Expenses as well as
any other relevant equitable considerations; provided, however, that in no case
shall any Indemnified Person be responsible for any amount in excess of the fees
or other amounts received by such

                                      -3-
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Indemnified Person in connection with the Basic Documents and the issuance of
the Bonds. The Issuer and the Indemnified Persons agree that it would not be
just and equitable if contribution were determined by pro rata allocation or any
other method of allocation which does not take account of the equitable
considerations referred to above.

      Section 3. Payment. All amounts owed by the Issuer to the Trustee, any
Paying Agent or any Registrar under the Indenture shall be paid to the Trustee,
any Paying Agent or any Registrar, as appropriate, pursuant to the Indenture or,
if a fee agreement or fee schedule has been provided to the Issuer, payment
shall be made in accordance with said agreement or schedule, or if not otherwise
provided, such amount shall be paid directly to the Trustee, any Paying Agent or
any Registrar, as appropriate, until the Issuer is otherwise notified in writing
by the Trustee, such Paying Agent or such Registrar; provided however, that
notwithstanding anything to the contrary in this Agreement or in any fee
agreement or fee schedule, each of the parties to this Agreement agrees that the
Issuer's obligations to make payments to it shall be subject to the priorities
set forth in Section 8.02 of the Indenture and the Issuer shall have no
obligation to make any payment except to the extent consistent with Section 8.02
of the Indenture. The Issuer hereby irrevocably directs the Trustee to pay such
amounts from monies on deposit in the Collection Account as provided pursuant to
Section 8.02 of the Indenture.

      Section 4. Notices. Unless otherwise specifically provided herein, all
notices, directions, consents and waivers required under the terms and
provisions of this Agreement shall be in English and in writing, and any such
notice, direction, consent or waiver may be given by United States mail, courier
service, facsimile transmission or electronic mail (confirmed by telephone,
United States mail or courier service in the case of notice by facsimile
transmission or electronic mail) or any other customary means of communication,
and any such notice, direction, consent or waiver shall be effective when
delivered, or if mailed, three days after deposit in the United States mail with
proper postage for ordinary mail prepaid,

      if to the Issuer, to:

                  PSNH Funding LLC 2
                  c/o Public Service Company of New Hampshire

                  if prior to April 1, 2002:

                  1000 Elm Street
                  Manchester, NH 03101

                  if on or after April 1, 2002:

                  780 North Commercial Street
                  Manchester, NH 03101

                  Facsimile:  (860) 665-5457

                                      -4-
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                  Telephone:  (860) 665-3258
                  E-Mail:     shoopra@nu.com (email)

                  with a copy to:

                  Public Service Company of New Hampshire
                  c/o Northeast Utilities Service Company

                  if by U.S. Mail:

                  P.O. Box 270
                  Hartford, CT  06141-0270

                  if by courier:

                  107 Selden Street
                  Berlin, CT  06037

                  Attention:  Assistant Treasurer - Finance
                  Facsimile:  (860) 665-5457
                  Telephone:  (860) 665-3258
                  E-Mail:     shoopra@nu.com

      if to the Trustee, to:

                  The Bank of New York
                  5 Penn Plaza
                  16th Floor
                  New York, NY 10001
                  Attention: ABS Unit
                  Facsimile:  (212) 328-7623
                  Telephone:  (212) 328-7549

      Section 5. Survival of Agreements. This Agreement shall terminate upon
the payment and discharge of all Bonds; provided, however, that the agreements
of the Issuer and the Trustee set forth in Section 2 and Section 6 hereof shall
survive the termination of this Agreement or the resignation or removal of the
Trustee.

      Section 6. Nonpetition Covenant. Notwithstanding any prior termination of
this Agreement, but subject to the New Hampshire Public Utilities Commission's
right to order the sequestration and payment of revenues arising with respect to
the RRB Property notwithstanding any bankruptcy, reorganization or other
insolvency proceedings with respect to the debtor, pledgor or transferor of the
RRB Property pursuant to the Statute, the Trustee agrees that it shall not,
prior to the date which is one year and one day after the termination of the
Indenture with respect to the Issuer, acquiesce, petition or otherwise invoke or
cause the Issuer to invoke the process of any court or government

                                      -5-
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authority for the purpose of commencing or sustaining a case against the Issuer
under any federal or state bankruptcy, insolvency or similar law, appointing a
receiver, liquidator, assignee, trustee, custodian, sequestrator or other
similar official of the Issuer or any substantial part of the property of the
Issuer, or ordering the winding up of the affairs of or the liquidation of the
Issuer.

      Section 7. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be an original and all of which taken together
shall constitute one and the same agreement.

      Section 8. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW HAMPSHIRE 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 9. Non-Consolidation. The parties hereby acknowledge and agree
that the Issuer and Public Service Company of New Hampshire shall not be
substantively consolidated, and that Public Service Company of New Hampshire
shall have no liability or obligation of any kind with respect to this
Agreement; provided, however, that this provision shall not be interpreted to
relieve Public Service Company of New Hampshire of its obligations to indemnify
the Issuer pursuant to any other Basic Document, including without limitation
with respect to amounts paid by the Issuer to persons indemnified by it under
this Agreement, to the extent the Issuer would otherwise be entitled to
indemnification with respect to such amounts under such other Basic Document.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                      -6-
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      IN WITNESS WHEREOF, the Issuer and the Trustee have caused this Agreement
to be duly executed by duly authorized officers, all as of the day and year
first above written.

                                        PSNH FUNDING LLC 2,
                                         as Issuer

                                        By:  /s/ Randy A. Shoop
                                             Name:   Randy A. Shoop
                                             Title:  President

                                        THE BANK OF NEW YORK,
                                         as Trustee

                                        By:  /s/ Daniel Rothman
                                             Name:   Daniel Rothman
                                             Title:  Assistant Treasurer

                                      -S-1-<PAGE>

                                                                    Exhibit 10.1

                           CHANGE OF CONTROL AGREEMENT

     THIS CHANGE OF CONTROL AGREEMENT ("Agreement") is made as of July 3, 2001,
between THE FINANCE COMPANY ("Finance" or "Employer"), a wholly owned subsidiary
of TFC Enterprises, Inc. ("TFCEI") and RONALD G. TRAY ("Employee").

                                   RECITALS:

     A.  The parties are entering into this Agreement under the assumption that
it is possible that at some future date there may be a Change of Control in
Finance.

     B.  It is the parties express agreement and understanding that the
provisions of this Agreement will not take effect unless there is a Change of
Control in Finance as defined in Section 13 of this Agreement.

                                   AGREEMENT

     1.  Employment.  Finance hereby employs Employee and Employee hereby
accepts employment, upon the terms and conditions set forth in this Agreement.

     2.  Term.  Subject to the provisions for extension or earlier termination
as provided below, the term of this Agreement shall commence upon a "Change of
Control" (as defined in Section 13) and continue for five (5) years.

     3. Compensation.

         3.1 For all services rendered by Employee under this Agreement, Finance
shall pay Employee a base salary at the following rates per calendar year
commencing on the date of the Change of Control:

                  Calendar Year        Yearly Salary
                  -------------        -------------

                      2001               $206,000
                      2002               $220,400
                      2003               $235,800
                      2004               $252,300
                      2005               $270,000
                      2006               $288,900

     Base salary shall be payable in equal semi-monthly installments (pro rated
for partial periods).
<PAGE>

         3.2 In the event the existing CEO ceases to be employed and Employee
assumes the CEO's duties, the Employee's base salary for each of the years
remaining in this Agreement will increase by Fifty Thousand dollars ($50,000).
If this should occur during a calendar year, the amount will be prorated over
the number of full months remaining in the year.

         3.3 In addition to Employee's base salary, an Executive Profit Sharing
Plan at the rate of 1.0% of the net pre-tax earnings of Finance and its
subsidiaries during each calendar year of the duration of this Agreement shall
be paid Employee as hereinafter provided. A copy of the current Executive Profit
Sharing Plan is attached hereto as Attachment A and is incorporated by
reference. Finance and its successors and assigns agree to abide by this
Executive Profit Sharing Plan. The term "net pre-tax earnings" as used in this
Agreement shall mean the consolidated net pre-tax earnings of Finance and its
subsidiaries. In computing net pre-tax earnings, no deductions shall be taken or
allowances made for (i) federal or state income taxes paid or accrued, or for
(ii) Executive Profit Sharing Plans paid by Finance to Employee, as the
President of Finance, pursuant to this Agreement and to any other employees who
participate in the Executive Finance Profit Sharing Plan. Executive Profit
Sharing Plan due Employee during each year of the term of this Agreement shall
be finally determined as of, and shall accrue and become vested on, December 31,
of each year. The Executive Profit Sharing Plan provided in this Section 3.2
shall be payable as follows:

             3.3.1  As soon as the annual audited financial statements prepared
by Finance's independent public accountants are available, Employee's Executive
Profit Sharing Plan for the preceding fiscal year will be finally determined.
Upon Finance's final determination of Employee's Executive Profit Sharing Plan,
it shall be paid promptly to him. It is the parties express agreement that
Employee is a salaried exempt and executive employee and accordingly, the
Employee's Executive Profit Sharing Plan is not subject to the Fair Labor
Standard Act and/or its equivalent embodied in the Virginia Code at (S) 40.1-29.

             3.3.2  In the event that Employee resigns at any time during the
life of this Agreement, Employee will not be entitled to any Executive Profit
Sharing Plan or any pro rated portion thereof not yet calculated.

         3.4 Nothing in Sections 3.1 or 3.3 above is to be interpreted as
restricting or limiting the power of the Board of Directors to authorize and
direct giving any Finance employee, from time to time, such additional
compensation, Executive Profit Sharing Plans or other incentives as the Board
may deem appropriate.

     4. Duties. Employee is engaged as President of Finance. Employee shall
retain the "same or equivalent employment." "Same or equivalent employment"
shall mean employment with the same or equivalent position, employment benefits,
pay and other terms and conditions of employment. Factors to consider may
include whether there are substantially similar duties and responsibilities,
which must entail substantially equivalent skill, effort, responsibility and
authority; the same type of appointment work schedule, status and tenure; the
same employment benefits made available to the Employee (e.g. life insurance,
health benefits, retirement coverage, and leave accrual). If Employee is elected
or appointed an officer or director of TFCEI and/or its subsidiaries, Employee
will serve in such capacity without further compensation except out-of- pocket
expenses not otherwise reimbursed by Finance.

                                       2
<PAGE>

     5.  Extent of Services.  Employee shall devote Employee's full time, best
efforts, attention and energies to the business of Finance and its affiliates,
and shall not, without prior consent of Finance's CEO or Board of Directors or
Finance's successor, directly or indirectly engage in any other business
activity which materially interferes with Employee's performance of Employee's
duties hereunder.  This shall not be construed as preventing Employee from
investing Employee's assets in such form or manner as will not require
substantial time on the part of Employee in the affairs of the entities in which
such investments are made, will not detract from the operation of Finance and
are not reasonably expected to cause conflicts of interest to arise.

     6.  Disclosure of Confidential Information and Consent Not to Compete.
Employee recognizes and acknowledges that the identities of Finance's customers,
business or financial contracts, agreements, techniques, practices, plans or
other "trade secrets," such as may exist from time to time, are a valuable,
special and unique asset of Finance's business.

         6.1 Employee hereby agrees Employee will not, during or for a period of
two (2) years after the term of Employee's employment, disclose Finance's trade
secrets or any part thereof not of public record or generally known otherwise to
any unaffiliated person, firm, corporation, association or other entity without
Finance's prior consent unless such disclosure is required by law or
governmental regulation(s). Employee hereby further agrees that, during and for
a period of two (2) years after the term of this Agreement, Employee will not
use any of Finance's trade secrets, directly or indirectly, for Employee's or
any third party's benefit or use in any business endeavor not affiliated with
Finance. In the event of a breach or threatened breach by Employee of the
provisions of this Section, Finance shall be entitled to an injunction, without
the necessity of posting bond, restraining Employee from disclosing, in whole or
in part, Finance's trade secrets, or from utilizing them for Employee's benefit
or that of any unaffiliated person, firm, corporation, association or other
entity to whom such information, in whole or in part, has been disclosed or is
threatened to be disclosed. Nothing herein shall be construed as prohibiting
Finance from pursuing any other remedies available to it for such breach or
threatened breach, including the recovery of damages.

         6.2 Employee agrees that, subsequent to the termination of Employee's
employment for whatever reason, Employee will not, directly or indirectly,
individually or as an owner, employee, partner, officer, director or
stockholder, advisor, consultant or independent contractor, compete against
Employer in the Employer's market areas pursuant to the following schedule.

               a) If Employee is terminated within the first two years of this
               Agreement taking effect, Employee will not compete for a period
               of three years.

               b) If Employee is terminated at any time after the first two
               years of this Agreement taking effect, the period of Employee's
               covenant not to compete will not exceed the remaining period left
               in the Agreement's pay out period.  It is understood that at the
               end of this Agreement or payout period, Employee will not be
               subject to a covenant not-to-compete.

                                       3
<PAGE>

             6.2.1  For purposes of this Agreement, "compete" means to be
employed by or to provide services to any entity that is in the business of
financing sub prime motor vehicles. The term "sub prime" shall be governed by
the industry definition. For purposes of this Agreement, "market areas," means
those areas set out in Attachment B to this Agreement. Employee acknowledges
that this Agreement is reasonable based upon Employee's position with Employer,
is not an unreasonable restraint, and will not affect Employee from being
employed in a job of equivalent pay and benefits.

         6.3 Employee agrees that for a period of three (3) years from the
termination of employment, for whatever reason, Employee will not directly or
indirectly, individually or as owner, employee, officer, director or
stockholder, advisor, consultant, or independent contractor solicit any person
employed by Employer.

         6.4 Employee and Employer agree that in case of a breach of the
provisions contained in Section 6 of this Agreement, damages will be difficult,
if not impossible, to ascertain. Accordingly, Employer and Employee, through a
process of arms length negotiation, have established a sum and liquidated
damages for each separate violation in the amount of $10,000. A violation for
purposes of this Agreement is each occurrence of Employee purchasing a contract
as defined in Paragraph 6.2.1. By signing this Agreement, Employee acknowledges
that this amount is not a penalty, that the amount is reasonable, and that
Employee is waiving any right to contest the reasonableness of the amount of
liquidated damages or that the liquidated damages are against public policy.

         6.5 Employee agrees that if Employee violates the provisions of Section
6 of this Agreement, that in addition to the relief authorized in this
Agreement, the Employer will also be entitled to actual damages to the extent
that the actual damages can be established and exceed the amount of liquidated
damages, any and all equitable relief, including an injunction without the
necessity of posting a bond, and the Employer's costs of litigation, including
attorney's fees and costs.

     7. Expenses. Upon the presentation of an itemized accounting and the
submission of supporting vouchers, Employee shall be promptly reimbursed for all
reasonable and necessary expenses incurred by him in the promotion of the
business of Finance and its affiliates. Finance shall furnish Employee an
automobile for Employee's personal and business use and shall pay all reasonable
expenses for the operation and maintenance of said automobile for business
purposes and gasoline for personal purposes within a 50-mile radius of the
Employee's office.

     8. Benefits. Finance will continue to provide employee any such other
benefits as he now has and that may be additionally approved for Finance's
employees generally or its senior executives. Finance agrees that it will
maintain Employee's health benefits, both employee cost and benefits, at its
current level or an equivalent level. A copy of the current health insurance
plan is attached hereto as Attachment C. Employee shall be entitled each year to
a vacation of four (4) weeks during which time Employee's compensation shall
continue in full. Said vacation may be taken incrementally unless otherwise
directed by the CEO.

                                       4
<PAGE>

     9. Disability. If Employee is unable to perform Employee's duties hereunder
by reason of medical incapacity for a consecutive period of not more than six
(6) months, Employee shall be entitled to Employee's regular compensation
(including Executive Profit Sharing Plans and all other elements thereof) during
the period of such incapacity. In the event that such medical incapacity exceeds
six (6) consecutive months in duration, Employee's base salary and Executive
Profit Sharing Plan payable under this Agreement may, after the initial six (6)
consecutive months period, be reduced by fifty percent (50%), provided
Employee's full base salary and Executive Profit Sharing Plan shall be
reinstated subject to the terms of this Agreement upon Employee's return to
employment and to the discharge of Employee's full duties hereunder.
Notwithstanding anything herein to the contrary, Finance may terminate this
Agreement at anytime after Employee shall be unable to perform Employee's
duties, for whatever cause, for a continuous period of more than twelve (12)
months or for a total of 275 business days during any rolling 18-month period,
and all obligations of Finance hereunder shall cease upon any such termination.
In addition, any such Executive Profit Sharing Plan actually paid to Employee
pursuant to Section 3.2 and this Section 9 shall be deemed to vest on the last
day of the month that is the sixth month in which Employee has suffered a
medical incapacity. It is expressly agreed by the parties that any amounts owed
to Employee in salary, Executive Profit Sharing Plans and benefits during the
disability period will be offset by any payments made to Employee under the
Finance's disability policy.

     10. Termination

         10.1. For Cause. Notwithstanding any other provision of this Agreement,
Finance reserves the right to terminate Employee's employment, without notice,
for cause and such termination shall not constitute a breach of this Agreement
by Finance. As used herein, any one or more of the following shall constitute
cause: (i) fraud, misappropriation, embezzlement or similar wrongful acts to or
against Finance or its affiliates; (ii) conviction of a felony or engaging in
conduct involving moral turpitude, provided such conviction or conduct is
reasonably expected to affect Finance's, TFCEI's or its subsidiaries' ability to
engage in their businesses or is reasonably expected to materially affect the
good name of Finance, TFCEI and/or its subsidiaries; (iii) unless medically
incapacitated, Employee is demonstrably unable, or Employee is grossly negligent
in the performance of Employee's office and such other duties as may be assigned
to him by the CEO or Finance Board from time to time after Employee has been
provided with 30 days written notice and an opportunity to cure the problem(s);
or (iv) Employee's violation of any provision of this Agreement. In the event of
termination of this Agreement pursuant to provisions (i), (ii) or (iv) of this
Subsection, Employee shall be entitled to only such unpaid base salary as shall
have accrued as of the date of Employee's termination, together with any
Executive Profit Sharing Plans that would become payable on such date had
Finance's fiscal year then terminated. If Employee is terminated pursuant to
provision (iii) of this Subsection in addition to Employee's Executive Profit
Sharing Plan payments, Employee will also be entitled to a payment of an
additional six (6) months salary and the payment of COBRA for six (6) months.
These payments shall be made to Employee at the time Finance distributes payroll
checks to its other Employees.

                                       5
<PAGE>

         10.2. Not For Cause. Employee, pursuant to the terms of the Agreement,
may at any time upon the giving of 30-days notice be terminated not for cause.
If Employee is terminated not for cause, Employee shall be entitled to all
compensation, benefits and bonuses due and owing pursuant to Section 3 of this
Agreement for the remainder of this Agreement. Such payments shall be paid to
Employee as all salary, bonus and profit sharing payments are made to Finance's
employees.

         10.3. Constructive Discharge. If Employee is ready, willing and able to
work and Finance, for whatever reason, does not utilize the services of Employee
for substantially the same professional duties for a total period of ninety (90)
days during the life of this Agreement or elects to transfer Employee outside
the Hampton Roads Virginia area and Employee is unable to transfer for any
reason, Employee will be entitled to all salary, Executive Profit Sharing Plans,
and benefits as provided in Section 10.2 of this Agreement.

         10.4. Excise Tax Under Section 4999. Employee understands that the
payments Employee receives under this or other agreements, individually or
combined, may be subject to an excise tax pursuant to Section 4999 of the
Internal Revenue Code. Accordingly, if at any time, it is determined that any
payments to Employee under this Agreement would be subject to such excise tax,
the payments to Employee under this Agreement shall be reduced by any amount
sufficient to eliminate the excise tax but only if the result is to give the
Employee a larger after-tax return than if such payments were not reduced. The
Employee shall have the right to designate which payments shall be reduced.

     11. Death During Employment.

         11.1 If Employee dies during the term of Employee's employment, Finance
shall pay to Employee's estate the compensation (including Executive Profit
Sharing Plans) which would otherwise be accrued by him through the end of the
month in which Employee's death occurs. In addition, the Company will pay
Employee's estate the Executive Profit Sharing Plan's payments for an additional
six-month period following Employee's death. The Executive Profit Sharing Plan
payable hereunder shall be payable through the month of Employee's death
calculated on an unaudited basis.

         11.2 Finance reserves the right to insure the life of Employee for all
or any part of the payments which it anticipates would be payable pursuant to
Section 11.1; however, no benefits payable to Employee's survivors or estate
under any group life insurance program provided by Finance shall be deemed to be
any part of the payments due under Section 11.1 above.

     12. Arbitration. Any controversy or claim arising out of, or relating to
this Agreement, or any breach thereof, shall be settled by arbitration in
accordance with the rules then pertaining of the American Arbitration
Association or other alternative dispute resolution means the parties may then
agree upon, and judgment upon the award rendered may be entered in any court
having jurisdiction hereof and the parties. In the event that Employee's
employment is finally determined to have been not for cause, constructive
discharge or without notice and an opportunity to cure as provided in Section
10.1(iii), Employee shall be paid any and all payments due and owing, pursuant
to Section 10.1(iii), 10.2 or 10.3, as the case may be.

                                       6
<PAGE>

     13. Change of Control. A "Change of Control" of TFCEI shall be deemed to
have occurred upon the happening of any of the following events:

         13.1 The acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act)
of 30% or more of either the then outstanding shares of common stock of TFCEI or
Finance or the combined voting power of the then outstanding voting securities
of TFCEI or Finance entitled to vote generally in the election of directors, but
excluding, for this purpose, any such acquisition by TFCEI or any of its
subsidiaries, or any employee benefit plan (or related trust) of the Company, or
any corporation with respect to which, following such acquisition, more than 50%
of, respectively, the then outstanding shares of common stock of such
corporation and the combined voting power of the then outstanding voting
securities of such corporation entitled to vote generally in the election of
directors is then beneficially owned, directly or indirectly, by all or
substantially all of the individuals and entities who were the beneficial
owners, respectively, of the common stock and voting securities of TFCEI
immediately prior to such acquisition in substantially the same proportion as
their ownership, immediately prior to such acquisition, of then outstanding
shares of common stock of TFCEI or the combined voting power of the then
outstanding voting securities of TFCEI entitled to vote generally in the
election of directors, as the case may be;

         13.2 Approval by TFCEIs' shareholders of a reorganization, merger or
consolidation of TFCEI, in each case, with respect to which all or substantially
all of the individuals and entities who were the respective beneficial owners of
the common stock and voting securities of TFCEI immediately prior to such
reorganization, merger or consolidation do not, following such reorganization,
merger or consolidation, beneficially own, directly or indirectly, more than 50%
of, respectively, the then outstanding shares of common stock or the combined
voting power of the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the corporation
resulting from such reorganization, merger or consolidation, or of a complete
liquidation or dissolution of TFCEI or of the sale or other disposition of all
or substantially all of the assets of TFCEI.

     14. Notices. Any notice required or permitted to be given under this
Agreement shall be sufficient if in writing, and personally or electronically
delivered or if sent by certified mail to Employee's residence in the case of
Employee, or to its principal office in the case of Finance.

     15. Waiver of Breach. The waiver by either party of a breach of any
provision of this Agreement by the other party shall not operate or be construed
as a waiver of any subsequent breach by the waiving party.

     16. Assignment. The rights and obligations of Employee under this Agreement
shall inure to the benefit of and shall be binding upon the successors and
assigns of Finance; however, no assignment of rights, powers or benefits by
Employee shall be binding upon Finance without the consent of the Board of
Directors.

     17. Affiliated Entities. Any business entity which is fifty-one percent
(51%) or more owned by Finance or TFCEI shall be deemed to be an "affiliate" for
purposes of this Agreement.

                                       7
<PAGE>

     18. Entire Agreement. This Agreement contains the entire agreement of the
parties. It may not be changed orally but only an agreement in writing signed by
the party against whom enforcement of any waiver, change, modification,
extension or discharge is sought. Furthermore, this Agreement supercedes any
prior severance agreements between Employee and Finance.

            IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first above written.

(Corporate Seal)                      THE FINANCE COMPANY

ATTEST:
                                      By:______________________________________
________________________                 Robert S. Raley, Chairman of the Board

                                      EMPLOYEE

                                      _________________________________________
                                      Ronald G. Tray

                                       8
<PAGE>

                                  ATTACHMENT A

                         EXECUTIVE PROFIT SHARING PLAN

          In addition to Employee's base salary, at a stipulated percentage of
the net pre-tax earnings of THE Finance Company (TFC) and its subsidiaries
during each fiscal year shall be paid Employee as hereinafter provided.
Employee's percentage will be determined, prior to the beginning of any fiscal
year, by the Chief Executive Officer of TFC.  The term "net pre-tax earnings"
shall mean the consolidated net pre-tax earnings of TFC and its subsidiaries.
In computing net pre-tax earnings, no deductions shall be taken or allowances
made for (i) federal or state income taxes paid or accrued, or for (ii)
Executive Profit Sharing Plans paid by TFC to Employee, pursuant to this plan
and to any other Employees who participate in this plan.  Executive Profit
Sharing Plan payments due Employee during any year shall be finally determined
as of, December 31, of each year.  The Executive Profit Sharing Plan shall be
payable as follows:

          As soon as the annual audited financial statements prepared by TFC's
independent public accountants are available, Employee's Executive Profit
Sharing Plan for the preceding fiscal year will be finally determined.  Upon
TFC's final determination of Employee's Executive Profit Sharing Plan, it shall
be paid promptly to Employee.

          In the event Employee is no longer employed, for any reason, by TFC at
the time the final determination of the amount due Employee, Employee will not
be entitled to any Executive Profit Sharing Plan payments or any pro-rated
portion thereof.

                                       9
<PAGE>

                                  ATTACHMENT B

          For purposes of Section 6.2.1 of this Agreement, the term "Market
Areas" is defined as the states in which Finance currently does business in and
any other other states that Finance enters prior to the termination of
Employee's employment.  Currently, Finance does business in the following
states:

          Arizona
          California
          Colorado
          Florida
          Georgia
          Hawaii
          Indiana
          Kansas
          Kentucky
          Louisiana
          Maine
          Mississippi
          North Carolina
          Oklahoma
          South Carolina
          Texas
          Virginia
          Washington

                                       10

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