Document:

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                                                                    EXHIBIT 10.5

                                                                  EXECUTION COPY

                              PURCHASE AGREEMENT

                                    between

                              THE FINANCE COMPANY
                                   as Seller

                                      and

                          TFC WAREHOUSE CORPORATION I
                                 as Purchaser

                           Dated as of June 28, 2001

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                               Table of Contents
                                                                            Page
                                                                            ----
                                   ARTICLE I

                                  DEFINITIONS

     Section 1.1    General................................................   1
     Section 1.2    Specific Terms.........................................   1
     Section 1.3    Certain References.....................................   1

                                  ARTICLE II

             CONVEYANCE OF THE CONTRACTS AND THE OTHER COLLATERAL

    Section 2.1     Conveyance of the Contracts and the other Collateral...   2

                                  ARTICLE III

                              CONDITIONS OF SALE

    Section 3.1     Conditions Precedent to the Initial Conveyance.........   3
    Section 3.2     Conditions Precedent to All Sales......................   5

                                  ARTICLE IV

                        REPRESENTATIONS AND WARRANTIES

    Section 4.1     Representations and Warranties of the Seller...........   5
    Section 4.2     Representations and Warranties of the Purchaser........  10
    Section 4.3     Indemnification........................................  11

                                   ARTICLE V

                            COVENANTS OF THE SELLER

    Section 5.1     Protection of Title of the Purchaser...................  12
    Section 5.2     Other Liens or Interests...............................  15
    Section 5.3     Costs and Expenses.....................................  15
    Section 5.4     Financial Covenant.....................................  15

                                  ARTICLE VI

                                  REPURCHASES

    Section 6.1     Repurchase of sold Contracts Upon Breach of Warranty...  15
    Section 6.2     Reassignment of Purchased Contracts....................  15
    Section 6.3     Waivers................................................  16

                                  ARTICLE VII

                                 MISCELLANEOUS

    Section 7.1     Liability of the Seller................................  16
    Section 7.2     Merger or Consolidation of the Seller or the Purchaser.  16

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     Section 7.3     Limitation on Liability of the Seller and Others.......  17
     Section 7.4     Amendment..............................................  17
     Section 7.5     Notices................................................  17
     Section 7.6     Merger and Integration.................................  17
     Section 7.7     Severability of Provisions.............................  18
     Section 7.8     Intention of the Parties...............................  18
     Section 7.9     Governing Law..........................................  18
     Section 7.10    Counterparts...........................................  18
     Section 7.11    Nonpetition Covenant...................................  18
     Section 7.12    Binding Effect; Assignability..........................  18
     Section 7.13    No Proceedings.........................................  19
     Section 7.14    Conflicting Directives of Lender and Insurer...........  19
     Section 7.15    Third Party Beneficiaries..............................  19

                                       ii
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                              PURCHASE AGREEMENT
                              ------------------

     THIS PURCHASE AGREEMENT, dated as of June 28, 2001 (this "Agreement"),
between The Finance Company, a Virginia corporation, as seller (the "Seller"),
and TFC Warehouse Corporation I, a Delaware corporation, as purchaser (the
"Purchaser").

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

     WHEREAS, the Purchaser has agreed to purchase from the Seller from time to
time, and the Seller has agreed to sell to the Purchaser from time to time,
certain Contracts and other Collateral (in each case, as hereinafter defined)
related thereto on the terms set forth herein.

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

                                   ARTICLE I

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

     Section 1.1   General.  The specific terms defined in this Article include
                   -------
the plural as well as the singular.  Words herein importing a gender include the
other gender. References herein to "writing" include printing, typing,
lithography, and other means of reproducing words in visible form. References to
agreements and other contractual instruments include all subsequent amendments
thereto or changes therein entered into in accordance with their respective
terms and not prohibited by this Agreement or the Loan Agreement (as hereinafter
defined). References herein to Persons include their successors and assigns
permitted hereunder or under the Loan Agreement. The terms "include" or
"including" mean "include without limitation" or "including without limitation".
The words "herein", "hereof" and "hereunder" and other words of similar import
refer to this Agreement as a whole and not to any particular Article, Section or
other subdivision, and Article, Section, Schedule and Exhibit references, unless
otherwise specified, refer to Articles and Sections of and Schedules and
Exhibits to this Agreement.

     Section 1.2   Specific Terms. Whenever used in this Agreement, capitalized
                   --------------
terms used and not otherwise defined herein shall have the meanings set forth in
Appendix A to the Warehouse and Security Agreement, dated as of June 28, 2001,
among TFC Warehouse Corporation I, The Finance Company, Westside Funding
Corporation and Wells Fargo Bank Minnesota, National Association.

     Section 1.3   Certain References.   All references to the Principal
                   ------------------
Balance of a Contract as of a Purchase Date shall refer to the close of business
on such day.
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                                  ARTICLE II

                          CONVEYANCE OF THE CONTRACTS
                           AND THE OTHER COLLATERAL
                           ------------------------

     Section 2.1   Conveyance of the Contracts and the other Collateral.

     (a) Subject to the terms and conditions of this Agreement, on and after the
date of this Agreement, the Seller hereby agrees to (i) sell, transfer, assign,
and otherwise convey, from time to time, to the Purchaser, without recourse
(except to the extent specifically provided herein), and the Purchaser hereby
agrees to purchase, all right, title and interest of the Seller in and to
certain Contracts and the other Collateral with respect thereto originated by
Approved Dealers of the Seller and (ii) transfer, or cause the deposit, into the
Collection Account of all amounts received by the Seller on account of such
Contracts on and after Cut-Off Date related to such Contracts, in each case, not
later than on the Business Day following the receipt thereof. It is the
intention of the Seller and the Purchaser that the sales, transfers,
assignments, conveyances and contributions contemplated by this Agreement shall
constitute sales of such Contracts and other Collateral with respect thereto
from the Seller to the Purchaser, conveying good title thereto free and clear of
any Liens, and such Contracts and other Collateral with respect thereto shall
not be part of the Seller's estate in the event of the filing of a bankruptcy
petition by or against the Seller under any bankruptcy or similar law.

     (b) The Seller shall on any Business Day (each a "Purchase Date") deliver
to the Purchaser a notice in the form of a computer print-out, tape or other
form acceptable to the Purchaser (each such notice, a "Request Notice")
identifying all outstanding Eligible Contracts and other Collateral with respect
thereto originated or purchased subsequent to the immediately preceding Purchase
Date and owned by the Seller on the current Purchase Date, which are to be
purchased by and sold to the Purchaser on such Purchase Date. Without limitation
of the foregoing, each Request Notice shall, inter alia, (a) enable the
                                             ----- ----
Purchaser to identify all Contracts to be sold on the immediately succeeding
Purchase Date by the Seller to the Purchaser and (b) set forth the Purchase
Price for the sold Contracts referred to therein. Each delivery of a Request
Notice shall be accompanied by an updated Schedule of Contracts, which schedule
shall be attached hereto as Schedule A and made a part hereof. Each schedule so
                            ----------
delivered shall supersede any prior schedules so delivered.

     (c) The price paid for sold Contracts and other Collateral related thereto
shall be the Purchase Price. Such Purchase Price shall be paid by means of an
immediate cash payment to the Seller by wire transfer on the applicable Purchase
Date to an account designated by the Seller on or before such Purchase Date or
by means of proper accounting entries being entered upon the accounts and
records of the Seller and the Purchaser on the applicable Purchase Date. On each
Purchase Date, the sold Contracts and the other Collateral related thereto shall
be assigned to the Purchaser, and on such Purchase Date the Purchaser shall pay
the Purchase Price for such Contracts and the other Collateral related thereto.
To the extent that the Purchase Price for sold Contracts is less than the
aggregate Outstanding Principal Balance of such Contracts, the shortfall shall
be deemed to have been contributed by the Seller to the capital of the Purchaser
on the applicable Purchase Date.

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     (d) On and after each Purchase Date hereunder, the Purchaser shall own the
sold Contracts and the other Collateral related thereto which have been
identified as being sold to the Purchaser under this Section 2.1 and the Seller
                                                     -----------
shall not take any action inconsistent with such ownership and shall not claim
any ownership interest in such sold Contracts and other Collateral.

     (e) Until the occurrence of a Servicer Termination Event and the
replacement of the Seller as Servicer pursuant to the terms of the Servicing
Agreement, the Seller, as Servicer, shall conduct the servicing, administration
and collection of the Contracts transferred hereunder and shall take, or cause
to be taken, all such actions as may be necessary or advisable to service,
administer and collect such sold Contracts, from time to time, all in accordance
with the terms of the Loan Agreement and the Servicing Agreement. In accordance
with the Custodial Agreement, certain documents relating to Contracts sold
hereunder shall be delivered to and held in trust by the Collateral Agent for
the benefit of the Purchaser and its assignees, and the Purchaser hereby
instructs the Seller to so deliver such documents to the Collateral Agent. Such
delivery to the Collateral Agent of such documents and the possession thereof by
the Collateral Agent is at the will of the Purchaser and its assignees and in a
custodial capacity for their benefit only.

     (f) With respect to any Contract, the Seller shall deliver to the
Collateral Agent on behalf of the Purchaser and any assignee thereof the related
Contract File in the manner set forth in Section 2 of the Custodial Agreement.
                                         ---------
                                  ARTICLE III

                              CONDITIONS OF SALE
                              ------------------

     Section 3.1   Conditions Precedent to the Initial Conveyance.  The initial
                   ----------------------------------------------
conveyance hereunder is subject to the condition precedent that the Purchaser
shall have received on or before the date of the initial conveyance under this
Agreement, in form and substance satisfactory to the Purchaser:

          (i)  an Assignment executed by the Seller and setting forth the
     Contracts to be sold on the date of the initial conveyance under this
     Agreement;

          (ii) a copy of resolutions duly adopted by the members of the Seller
     approving this Agreement, the Assignments and the other documents to be
     delivered by it hereunder and the transactions and matters contemplated
     hereby and thereby, certified by the Seller's Secretary or Assistant
     Secretary or by such other person so authorized by the Seller's articles of
     incorporation or by-laws;

          (iii) the articles of incorporation, as amended, of the Seller,
     certified by the Secretary of State of Virginia, dated as of a recent date
     prior to the date hereof;

          (iv) a good standing certificate for the Seller issued by the
     Secretary of State of Virginia, dated not earlier than 30 days prior to the
     date hereof;

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          (v) a copy of the Seller's articles of incorporation, as amended,
     certified by its Secretary or Assistant Secretary or by such other person
     as is authorized to do so by its articles of incorporation or by-laws;

          (vi) a certificate of the Secretary or Assistant Secretary or by such
     other person as is authorized to do so by the articles of incorporation or
     by-laws of the Seller certifying the names and true signatures of the
     officers authorized on its behalf to sign this Agreement, the Assignments,
     and the other documents to be delivered by it hereunder (on which
     certificate the Purchaser may conclusively rely until such time as the
     Purchaser shall receive from the Seller a revised certificate meeting the
     requirements of this subsection) and certifying that all representations
     and warranties made by the Seller in this Agreement are true and correct in
     all material respects;

          (vii) copies of proper financing statements (on Form UCC-1) naming the
     Seller as the assignor of the sold Contracts and the other Collateral
     related thereto and the Purchaser as assignee, or other similar instruments
     or documents, in form and substance sufficient for filing under the UCC or
     any comparable law of any and all jurisdictions as may be necessary or, in
     the opinion of the Purchaser or any assignee thereof, desirable to perfect
     the Purchaser's ownership interest in all sold Contracts and the other
     Collateral related thereto;

          (viii) copies of properly executed termination statements or
     statements of release (on Form UCC-3) or other similar instruments or
     documents, if any, in form and substance satisfactory for filing under the
     UCC or any comparable law of any and all jurisdictions as may be necessary
     or, in the opinion of the Purchaser and its assigns, desirable to release
     all security interests and similar rights of any Person in the sold
     Contracts and other Collateral related thereto previously granted by the
     Seller;

          (ix) certified copies of requests for information or copies (on Form
     UCC-11) (or a similar search report certified by a party acceptable to the
     Purchaser and any assignee thereof), dated a date reasonably near and prior
     to the date of such initial conveyance, listing all effective financing
     statements and other similar instruments and documents which name the
     Seller (under its present name and any previous name) as debtor and which
     are filed in the jurisdictions in which filings are to be made pursuant to
     subsections (vii) and (viii) above, together with copies of such financing
     -----------------     ------
     statements, none of which, except those filed pursuant to subsections (vii)
                                                               -----------------
     and (viii), above, shall cover any sold Contracts or other Collateral
         ------
     related thereto;

          (x) any necessary third party consents to the closing of the
     transactions contemplated hereby, in the form and substance satisfactory to
     the Purchaser and its assignees; and

          (xi) one or more favorable opinions of Weil, Gotshal & Manges and
     Williams, Mullen, Clark, Dobbins P.C., counsel to the Seller, in form and
     substance satisfactory to the Purchaser and its assignees, with respect to
     such matters as the Purchaser or any assignee thereof may reasonably
     request.

                                       4
<PAGE>

      Section 3.2  Conditions Precedent to All Sales.  The obligation of the
                   ---------------------------------
Purchaser to pay for each sold Contract and the other Collateral related thereto
on each Purchase Date (including the initial Purchase Date) shall be subject to
the further conditions precedent that on such Purchase Date:

     (a)  The following statements shall be true:

          (i) the representations and warranties of the Seller contained in
     Section 4.1 shall be correct on and as of such Purchase Date, before
     -----------
     and after giving effect to the conveyance to take place on such Purchase
     Date and to the application of proceeds therefrom, as though made on and as
     of such date; and

          (ii) the Seller is in compliance in all material respects with each of
     its covenants and other agreements set forth herein.

     (b)  The Purchaser shall have received an Assignment, dated the date of
such Purchase Date, executed by the Seller, listing each Contract being sold on
such Purchase Date and designating each such Contract as an Eligible Contract.

     (c)  The Seller shall have delivered to the Collateral Agent on behalf of
the Purchaser and any assignee thereof the related Contract File in the manner
set forth in Section 2 of the Custodial Agreement.

     (d)  The Seller shall have taken such other action, including delivery of
approvals, consents, opinions, documents and instruments to the Purchaser, as
the Purchaser or any assignee thereof may reasonably request.

     (e)  The Seller shall have taken all steps necessary under all applicable
law in order to assign to the Purchaser the Seller's perfected security interest
in the Financed Vehicle securing such Contract and, upon the sale of such
Contract from the Seller to the Purchaser, there shall exist in favor of the
Purchaser, a valid, subsisting and enforceable first priority perfected security
interest in the Financed Vehicle securing such Contract, and such security
interest is and shall be prior to all other liens upon and security interests in
such Financed Vehicle that now exist or may hereafter arise or be created
(except, as to priority, for any tax liens or mechanic's liens that may arise
after the applicable Purchase Date).

     (f)  There shall have been no material adverse change in the condition
(financial or otherwise), business, or results of operations of the Seller since
the preceding Purchase Date.

                                  ARTICLE IV

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

     Section 4.1   Representations and Warranties of the Seller.  The Seller
                   --------------------------------------------
makes the following representations and warranties, on which the Purchaser
relies in purchasing the sold Contracts and the other Collateral related thereto
and in granting a security interest in the Contracts and the other Collateral
related thereto to the Collateral Agent, for the benefit of the

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<PAGE>

Lender, the Hedge Counterparty and the Insurer, under the Loan Agreement. Such
representations are made as of the execution and delivery of this Agreement and
as of each additional time specified in the Schedule of Representations, and
shall survive the sale, transfer and assignment or contribution of the sold
Contracts and the other Collateral related thereto hereunder and the grant of a
security interest to the Collateral Agent, for the benefit of the Lender, the
Hedge Counterparty and the Insurer, under the Loan Agreement.

     (a)  Schedule of Representations. The representations and warranties made
          ---------------------------
by the Seller, as seller hereunder, with respect to any Contract and as set
forth on the Schedule of Representations are true and correct as of the date of
the Assignment with respect to such Contract.

     (b)  Organization and Good Standing. The Seller has been duly incorporated
          ------------------------------
and is validly existing as a corporation in good standing under the laws of the
Commonwealth of Virginia, with power and authority to own its properties and to
conduct its business as such properties are currently owned and such business is
currently conducted, and had at all relevant times and now has power, authority
and legal right to acquire and own the sold Contracts and the other Collateral
related thereto and to transfer the sold Contracts and the other Collateral
related thereto to the Purchaser and to enter into and perform its obligations
under this Agreement.

     (c)  Due Qualification.  The Seller is duly qualified to do business as a
          -----------------
foreign corporation in good standing, and has obtained all necessary licenses
and approvals, in all jurisdictions in which the ownership or lease of its
property or the conduct of its business requires such qualification, licenses
and/or approvals.

     (d)  Power and Authority. The Seller has the power and authority to execute
          -------------------
and deliver this Agreement, the Loan Agreement and the other Loan Documents to
which it is a party and to carry out its terms and their terms, respectively;
the Seller has full power and authority to sell and assign the sold Contracts
and other Collateral related thereto to be sold and assigned to the Purchaser
hereunder and has duly authorized such sale and assignment to the Purchaser by
all necessary corporate action and the execution, delivery and performance of
this Agreement, the Loan Agreement and the Loan Documents to which it is a party
have been duly authorized by the Seller by all necessary corporate action.

     (e)  Valid Sale; Binding Obligations. This Agreement, the Loan Agreement,
          -------------------------------
each Assignment and the Loan Documents to which the Seller is party have been
and will be duly executed and delivered by the Seller, and this Agreement shall
effect a valid sale, transfer and assignment of the sold Contracts and the other
Collateral related thereto, enforceable against the Seller and creditors of and
purchasers from the Seller, and this Agreement, the Loan Agreement and such Loan
Documents shall constitute legal, valid and binding obligations of the Seller
enforceable in accordance with their respective terms, except as enforceability
may be limited by bankruptcy, insolvency, reorganization, conservatorship,
receivership, liquidation or other similar laws affecting the enforcement of
creditors' rights generally and by equitable limitations on the availability of
specific remedies, regardless of whether such enforceability is considered in a
proceeding in equity or at law.

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<PAGE>

     (f)  No Violation. The consummation of the transactions contemplated by
          ------------
this Agreement and the other Loan Documents to which it is a party, and the
fulfillment of the terms of this Agreement and the other Loan Documents to which
it is a party, shall not conflict with, result in any breach of any of the terms
and provisions of, or constitute (with or without notice or lapse of time) a
default under, articles of incorporation or by-laws of the Seller, or any
indenture, agreement, mortgage, deed of trust or other instrument to which the
Seller is a party or by which it is bound or any of its properties are subject,
or result in the creation or imposition of any lien upon any of its properties
pursuant to the terms of any such indenture, agreement, mortgage, deed of trust
or other instrument, other than this Agreement, or violate any law, order, rule
or regulation applicable to the Seller of any court or of any federal or state
regulatory body, administrative agency or other governmental instrumentality
having jurisdiction over the Seller or any of its properties.

     (g)  No Proceedings. There are no proceedings or investigations pending or,
          --------------
to the Seller's knowledge, threatened against the Seller before any court,
regulatory body, administrative agency or other tribunal or governmental
instrumentality having jurisdiction over the Seller or its properties (i)
asserting the invalidity of this Agreement or any of the other Loan Documents to
which it is a party, (ii) seeking to prevent the consummation of any of the
transactions contemplated by this Agreement or any of the other Loan Documents
to which it is a party, (iii) seeking any determination or ruling that could
have a Material Adverse Effect on the performance by the Seller of its
obligations under, or the validity or enforceability of, this Agreement or any
of the other Loan Documents to which it is a party or (iv) that could have a
material adverse effect on the sold Contracts.

     (h)  No Consents. The Seller is not required to obtain the consent of any
          -----------
other party or any consent, license, approval or authorization, or registration
or declaration with, any governmental authority, bureau or agency in connection
with the execution, delivery, performance, validity or enforceability of this
Agreement except those which may have been obtained and except where failure to
obtain the same could not have a Material Adverse Effect upon the rights of the
Purchaser hereunder.

     (i)  Approvals. All approvals, authorizations, orders or other actions of
          ---------
any person, corporation or other organization, or of any court, governmental
agency or body or official, required in connection with the execution and
delivery by the Seller of this Agreement and the consummation of the
transactions contemplated hereby (including the sale, transfer and assignment of
sold Contracts to the Purchaser) have been or will be taken or obtained on or
prior to the date hereof or the applicable Purchase Date except where failure to
obtain the same could not have a Material Adverse Effect upon the rights of the
Purchaser hereunder.

     (j)  Chief Executive Office. The chief executive office of the Seller is
          ----------------------
located at 5425 Robin Hood Rd., Suite 101-B, Norfolk, VA 23513. The Seller has
not been known by any name other than The Finance Company and is not known by
any trade names other than those listed on Schedule C hereto.
                                           ----------

     (k)  Solvency. The Seller is solvent and will not become insolvent after
          --------
giving effect to the transactions contemplated by this Agreement and the Loan
Documents. The Seller,

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<PAGE>

after giving effect to the transactions contemplated by this Agreement and the
Loan Documents, will have an adequate amount of capital to conduct its business
in the foreseeable future.

     (l)  Accounting Treatment. For accounting purposes, the Seller will treat
          --------------------
the sale or absolute assignment of each sold Contract pursuant to this Agreement
as a sale or absolute assignment of the Seller's full right, title and ownership
interest in such sold Contracts to the Purchaser; it being understood that
Advances to the Purchaser under the Loan Agreement secured by the sold Contracts
will be treated as debt on the consolidated financial statements of the Seller.

     (m)  Compliance With Laws. The Seller has complied and will comply in all
          --------------------
material respects with all applicable laws, rules, regulations, judgments,
agreements, decrees and orders with respect to its business and properties.

     (n)  Taxes. The Seller has filed on a timely basis all tax returns
          -----
(including, without limitation, foreign, federal, state, local and otherwise)
required to be filed, is not liable for taxes payable by any other Person and
has paid or made adequate provisions for the payment of all taxes, assessments
and other governmental charges due from the Seller. No tax lien or similar
adverse claim has been filed, and no claim is being asserted, with respect to
any such tax, assessment or other governmental charge. Any taxes, fees and other
governmental charges payable by the Seller in connection with the execution and
delivery of this Agreement and the Loan Documents and the transactions
contemplated hereby or thereby have been paid or shall have been paid if and
when due at or prior to the related Purchase Date.

     (o)  Request Notices. Each Request Notice is accurate in all material
          ---------------
respects.

     (p)  Assignments.  Each Assignment is accurate in all material respects.
          -----------

     (q)  No Liens, Etc. The Contracts and other Collateral related thereto to
          -------------
be sold and assigned to the Purchaser hereunder are owned by the Seller free and
clear of any Lien or restrictions on transferability and the Seller has the full
right, corporate power and lawful authority to assign, transfer and pledge the
same and interests therein, and upon transfer hereunder the Purchaser will have
acquired good and marketable title to and a valid and perfected ownership
interest in the sold Contracts and other Collateral related thereto, free and
clear of any adverse claim or restrictions on transferability. No effective
financing statement or other instrument similar in effect covering all or any
part of the sold Contracts and other Collateral related thereto is on file in
any recording office, except such as may have been filed in favor of the Lender
as "Secured Party" or "Assignee" or except as shall be released upon purchase of
such sold Contracts and other Collateral by the Purchaser.

     (r)  Information True and Correct.  All information heretofore or hereafter
          ----------------------------
furnished by or on behalf of the Seller to the Purchaser in connection with this
Agreement or any transaction contemplated hereby is and will be true and
complete in all material respects and does not and will not omit to state a
material fact necessary to make the statements contained therein not misleading.

     (s)  ERISA Compliance. The Seller is in compliance with ERISA and has not
          ----------------
incurred and does not expect to incur any liabilities (except for premium
payments arising in the

                                       8
<PAGE>

ordinary course of business) to the Pension Benefit Guaranty Corporation (or any
successor thereto) under ERISA.

     (t)  No Material Adverse Effect; No Default. (i) The Seller is not a party
          --------------------------------------
to any indenture, loan or credit agreement or any lease or other agreement or
instrument or subject to any charter or corporate restriction that could have,
and no provision of applicable law or governmental regulation is reasonably
likely to have, a material adverse effect on the condition (financial or
otherwise), business, operations, results of operations or properties of the
Seller, or could have such an effect on the ability of the Seller to carry out
its obligations under this Agreement and the other Loan Documents to which the
Seller is a party and (ii) the Seller is not in default under or with respect to
any contract, agreement, lease or other instrument to which the Seller is a
party and which is material to the Seller's condition (financial or otherwise),
business, operations or properties, and the Seller has not delivered or received
any notice of default thereunder.

     (u)  Financial Statements. The unaudited balance sheets of the Seller as at
          --------------------
April 30, 2001 and the related statements of income for the fiscal periods ended
on such date, heretofore furnished to Lender and the Insurer, are complete and
correct in all material respects and fairly present the financial condition of
the Seller as at said date (subject to normal year-end audit adjustments), all
in accordance with GAAP. On said date, the Seller had no material contingent
liabilities, liabilities for taxes, unusual or anticipated losses from any
unfavorable commitments, except as referred to or reflected in said balance
sheet as at said date. Since April 30, 2001, there has been no Material Adverse
Change.

     (v)  Investment Company Status. The Seller is not an "investment company"
          -------------------------
or an "affiliated person" of, or "promoter" or "principal underwriter" for, an
"investment company," as such terms are defined in the Investment Company Act of
1940, as amended. The consummation of the transactions contemplated by this
Agreement and the other Loan Documents to which the Seller is a party will not
violate any provision of such Act or any rule, regulation or order issued by the
Securities and Exchange Commission thereunder.

     (w)  No Shared Obligations. There is not now, nor will there be at any time
          ---------------------
in the future, any agreement or understanding between the Seller and the
Purchaser (other than as expressly set forth herein or in the other Loan
Documents) providing for the allocation or sharing of obligations to make
payments or otherwise in respect of any taxes, fees, assessments or other
governmental charges.

     (x)  Representation and Warranties True and Correct.  Each of the
          ----------------------------------------------
representations and warranties of the Seller contained in this Agreement and the
other Loan Documents to which it is a party is true and correct in all material
respects and the Seller hereby makes each such representation and warranty to,
and for the benefit of, the Purchaser as if the same were set forth in full
herein.

     (y)  Intent of Seller. The Seller has not transferred any interest in any
          ----------------
Contract (or the other Collateral related thereto) to the Purchaser with any
intent to hinder, delay or defraud any of the Seller's creditors.

                                       9
<PAGE>

     (z)  Consideration. The Seller has received fair consideration and
          -------------
reasonably equivalent value in exchange for the sale of the sold Contracts
hereunder.

     Section 4.2   Representations and Warranties of the Purchaser.  The
                   -----------------------------------------------
Purchaser makes the following representations and warranties, on which the
Seller relies in selling, assigning, transferring and conveying sold Contracts
and the other Collateral related thereto to the Purchaser hereunder.  Such
representations are made as of the execution and delivery of this Agreement, but
shall survive the sale, transfer and assignment of sold Contracts and the other
Collateral related thereto hereunder and the grant of a security interest in
sold Contracts by the Purchaser under the Loan Agreement.

     (a)  Organization and Good Standing. The Purchaser has been duly
          ------------------------------
incorporated and is validly existing and in good standing as a corporation under
the laws of the State of Delaware, with the power and authority to own its
properties and to conduct its business as such properties are currently owned
and such business is currently conducted, and had at all relevant times, and
has, full power, authority and legal right to acquire and own the sold Contracts
and the other Collateral related thereto, and to grant a security interest in
the sold Contracts and the other Collateral related thereto to the Collateral
Agent, for the benefit of the Lender, the Hedge Counterparty and the Insurer,
pursuant to the Loan Agreement.

     (b)  Due Qualification. The Purchaser is duly qualified to do business as a
          -----------------
foreign corporation in good standing, and has obtained all necessary licenses
and approvals in all jurisdictions in which the ownership or lease of its
property or the conduct of its business requires such qualification, licenses
and/or approvals.

     (c)  Power and Authority.  The Purchaser has the power, authority and legal
          -------------------
right to execute and deliver this Agreement and to carry out the terms hereof
and to acquire the sold Contracts and the other Collateral related thereto
hereunder; and the execution, delivery and performance of this Agreement and all
of the documents required pursuant hereto have been duly authorized by the
Purchaser by all necessary action.

     (d)  No Consent Required. The Purchaser is not required to obtain the
          -------------------
consent of any other Person, or any consent, license, approval or authorization
or registration or declaration with, any governmental authority, bureau or
agency in connection with the execution, delivery or performance of this
Agreement and the other Loan Documents to which it is a party, except for such
as have been obtained, effected or made and except where failure to obtain the
same could not have a Material Adverse Effect upon the rights of the Purchaser
hereunder.

     (e)  Binding Obligation. This Agreement constitutes a legal, valid and
          ------------------
binding obligation of the Purchaser, enforceable against the Purchaser in
accordance with its terms, subject, as to enforceability, to applicable
bankruptcy, insolvency, reorganization, conservatorship, receivership,
liquidation or other similar laws affecting the enforcement of creditors' rights
generally and by equitable limitations on the availability of specific remedies,
regardless of whether such enforceability is considered in a proceeding in
equity or at law.

     (f)  No Violation. The execution, delivery and performance by the Purchaser
          ------------
of this Agreement, the consummation of the transactions contemplated by this
Agreement and

                                       10
<PAGE>

the other Loan Documents to which it is a party and the fulfillment of the terms
of this Agreement and the other Loan Documents to which it is a party do not and
will not conflict with, result in any breach of any of the terms and provisions
of, or constitute (with or without notice or lapse of time) a default under, the
certificate of incorporation or by-laws of the Purchaser, or conflict with or
breach any of the terms or provisions of, or constitute (with or without notice
or lapse of time) a default under, any indenture, agreement, mortgage, deed of
trust or other instrument to which the Purchaser is a party or by which the
Purchaser is bound or to which any of its properties are subject, or result in
the creation or imposition of any lien upon any of its properties pursuant to
the terms of any such indenture, agreement, mortgage, deed of trust or other
instrument (other than the Loan Agreement), or violate any law or, to the best
of its knowledge any order, rule or regulation, applicable to the Purchaser or
its properties, of any federal or state regulatory body, any court,
administrative agency, or other governmental instrumentality having jurisdiction
over the Purchaser or any of its properties.

     (g)  No Proceedings. There are no proceedings or investigations pending,
          --------------
or, to the knowledge of the Purchaser, threatened against the Purchaser before
any court, regulatory body, administrative agency, or other tribunal or
governmental instrumentality having jurisdiction over the Purchaser or its
properties: (i) asserting the invalidity of this Agreement or any of the other
Loan Documents to which it is a party, (ii) seeking to prevent the consummation
of any of the transactions contemplated by this Agreement or any of the other
Loan Documents to which it is a party, (iii) seeking any determination or ruling
that could have a Material Adverse Effect on the performance by the Purchaser of
its obligations under, or the validity or enforceability of, this Agreement or
any of the other Loan Documents to which it is a party or (iv) that may
adversely affect the federal or state income tax attributes of, or seeking to
impose any excise, franchise, transfer or similar tax upon, the transfer and
acquisition of the sold Contracts and the other Collateral related thereto
hereunder or the grant by the Purchaser of a security interest in the sold
Contracts and the other Collateral related thereto to the Collateral Agent, for
the benefit of the Lender, the Hedge Counterparty and the Insurer, pursuant to
the Loan Agreement.

     (h)  Consideration. The Purchaser has given fair consideration and
          -------------
reasonably equivalent value in exchange for the sale of the sold Contracts
hereunder.

     In the event of any breach of a representation and warranty made by the
Purchaser hereunder, the Seller covenants and agrees that the Seller will not
take any action to pursue any remedy that it may have hereunder, in law, in
equity or otherwise, until a year and a day have passed since all obligations of
the Purchaser under the Loan Agreement and any other Loan Document have been
paid in full. The Seller and the Purchaser agree that damages will not be an
adequate remedy for a breach of this covenant and that this covenant may be
specifically enforced by the Purchaser.

     Section 4.3   Indemnification.
                   ---------------

     (a)  The Seller shall defend, indemnify and hold harmless the Purchaser,
the Collateral Agent, the Backup Servicer, the Lender, the Hedge Counterparty
and the Insurer from and against any and all costs, expenses, losses, damages,
claims, and liabilities, arising out of or

                                       11
<PAGE>

resulting from any breach of any of the Seller's representations and warranties
and covenants contained herein.

     (b)  The Seller will defend and indemnify the Purchaser, the Collateral
Agent, the Backup Servicer, the Lender, the Hedge Counterparty and the Insurer
against any and all costs, expenses, losses, damages, claims and liabilities
arising out of or resulting from any action taken by it in respect of any
portion of the sold Contracts or the other Collateral related to a sold Contract
other than in accordance with this Agreement or the Loan Agreement.

     (c)  The Seller agrees to pay, and shall defend, indemnify and hold
harmless the Purchaser, the Collateral Agent, the Backup Servicer, the Lender,
the Hedge Counterparty and the Insurer from and against, any taxes that may at
any time be asserted against the Purchaser, the Collateral Agent, the Backup
Servicer, the Lender, the Hedge Counterparty or the Insurer with respect to the
transactions contemplated in this Agreement, including, without limitation, any
sales, gross receipts, general corporation, tangible or intangible personal
property, privilege, or license taxes and costs and expenses in defending
against the same, arising by reason of the acts to be performed by the Seller
under this Agreement and imposed against such Persons.

     (d)  The Seller shall defend, indemnify, and hold harmless the Purchaser,
the Collateral Agent, the Backup Servicer, the Lender, the Hedge Counterparty
and the Insurer from and against any and all costs, expenses, losses, claims,
damages, and liabilities to the extent that such cost, expense, loss, claim,
damage, or liability arose out of, or was imposed upon the Purchaser, the
Collateral Agent, the Backup Servicer, the Lender, the Hedge Counterparty and
the Insurer through the negligence, willful misfeasance, or bad faith of the
Seller in the performance of its duties under this Agreement or by reason of
reckless disregard of the Seller's obligations and duties under this Agreement.

     (e)  The Seller shall indemnify, defend and hold harmless the Purchaser,
the Collateral Agent, the Backup Servicer, the Lender, the Hedge Counterparty
and the Insurer from and against any loss, liability or expense imposed upon, or
incurred by, the Purchaser, the Collateral Agent, the Backup Servicer, the
Lender, the Hedge Counterparty or the Insurer as result of the failure of any
sold Contract, or the sale or financing of the related Financed Vehicle, to
comply with all requirements of applicable law.

     Indemnification under this Section 4.3 shall include reasonable fees and
                                -----------
expenses of counsel and expenses of litigation. The indemnity obligations
hereunder shall be in addition to any obligation that the Seller may otherwise
have under applicable law or any other Loan Document and shall survive the
termination of this Agreement and the other Loan Documents.

                                   ARTICLE V

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

     Section 5.1   Protection of Title of the Purchaser.
                   ------------------------------------

     (a) On or prior to the date hereof, the Seller shall have filed or caused
to be filed UCC-1 financing statements, executed by the Seller as seller or
debtor, naming the

                                       12
<PAGE>

Purchaser as purchaser or secured party, naming the Collateral Agent, as
assignee and describing the sold Contracts and the other Collateral being sold
by it to the Purchaser as collateral, with the office of the Secretary of State
of each of the Commonwealth of Virginia and the State of Delaware and in such
other locations as the Purchaser or the Lender shall have required. From time to
time thereafter, the Seller shall execute and file such financing statements and
cause to be executed and filed such continuation statements, all in such manner
and in such places as may be required by law (or deemed desirable by the
Purchaser or any assignee thereof) to fully perfect, preserve, maintain and
protect the interest of the Purchaser under this Agreement, and the security
interest of the Collateral Agent, for the benefit of the Lender the Hedge
Counterparty and the Insurer, under the Loan Agreement, in the sold Contracts
and the other Collateral related thereto, as the case may be, and in the
proceeds thereof. The Seller shall deliver (or cause to be delivered) to the
Purchaser, the Collateral Agent, the Backup Servicer and the Lender file-stamped
copies of, or filing receipts for, any document filed as provided above, as soon
as available following such filing. In the event that the Seller fails to
perform its obligations under this subsection, the Purchaser or the Collateral
Agent may perform such obligations, at the expense of the Seller, and the Seller
hereby grants to the Purchaser and the Collateral Agent an irrevocable power of
attorney and license to take any and all steps in order to perform such
obligations in the Seller's or in its own name, as applicable, and on behalf of
the Seller, as are necessary or desirable, in the determination of the Purchaser
or the Collateral Agent or any assignee thereof.

     (b)  On or prior to each Purchase Date hereunder, the Seller shall have
taken all steps required under applicable law in order to obtain and assign
outright to the Purchaser a first priority perfected security interest in each
Financed Vehicle securing the Contracts being transferred to the Purchaser on
such Purchase Date. On or prior to each Purchase Date hereunder, the Seller
shall have taken all steps required under applicable law in order for the
Purchaser to grant to the Collateral Agent, for the benefit of the Lender, the
Hedge Counterparty and the Insurer, a first priority perfected security interest
in the Purchaser's first priority perfected security interest in each of the
Financed Vehicles securing the Contracts being transferred to the Purchaser on
such Purchase Date and from time to time thereafter, the Seller shall take all
such actions as may be required by law (or deemed desirable by the Lender) to
fully preserve, maintain and protect the Purchaser's first priority perfected
security interest in each of the Financed Vehicles and the Collateral Agent's
first priority perfected security interest in the Purchaser's first priority
perfected security interest in such Financed Vehicle. Upon the occurrence of an
Event of Default under the Loan Agreement, the Lender and (provided that no
Insurer Default shall have occurred and be continuing) the Insurer may instruct
the Seller to take all additional steps, if any, as are necessary or desirable,
in the determination of the Lender or the Insurer to create and/or maintain
perfection of the security interest in the Financed Vehicle related to each sold
Contract on behalf of the Purchaser and to create and/or maintain perfection of
the security interest in the security interest of the Purchaser in the Financed
Vehicle related to each sold Contract on behalf of the Collateral Agent,
including having a notation of the Purchaser's and/or the Collateral Agent's
security interest recorded on such Financed Vehicle's certificate of title and,
if the Seller fails to take all such steps, the Lender or the Insurer may take
such steps at the sole expense of the Seller, and the Seller hereby grants to
the Collateral Agent an irrevocable power of attorney and license to take any
and all such steps in the Seller's or its own name, as applicable, and on behalf
of the Seller, as are necessary or desirable, in the determination of the Lender
and, as applicable, the Insurer to create and/or maintain perfection of

                                       13
<PAGE>

such security interests of the Purchaser and the Collateral Agent (including, if
required under applicable law, with respect to any such Financed Vehicles,
having a notation of the Purchaser's and/or the Collateral Agent's lien recorded
on such Financed Vehicle's certificate of title).

     (c)  The Seller shall not change its name, identity, corporate structure or
jurisdiction of incorporation in any manner that would or could make any
financing statement or continuation statement filed by the Seller (or by the
Purchaser on behalf of the Seller) in accordance with paragraph (a) above
                                                      -------------
seriously misleading within the meaning of the UCC, unless the Seller shall have
given the Purchaser, the Collateral Agent, the Backup Servicer, the Lender and
the Insurer at least 60 days prior written notice thereof, and shall promptly
file appropriate amendments to all previously filed financing statements and
continuation statements.

     (d)  The Seller shall give the Purchaser, the Collateral Agent, the Backup
Servicer, the Lender and the Insurer at least 60 days prior written notice of
(i) any relocation of its chief executive office or (ii) any change in the
jurisdiction of its incorporation if, as a result of such relocation or change
in jurisdiction of organization, the applicable provisions of the UCC would
require the filing of any amendment of any previously filed financing or
continuation statement or of any new financing statement. The Seller shall at
all times maintain each office from which it services Contracts and its chief
executive office within the United States of America.

     (e)  The Seller shall maintain its computer systems so that, from and after
the time of sale or contribution under this Agreement of sold Contracts to the
Purchaser and the grant of a security interest in such sold Contracts by the
Purchaser to the Collateral Agent, the Seller's master computer records
(including archives) that shall refer to a sold Contract indicate clearly that
such sold Contract has been pledged under the Loan Agreement. Indication of the
Collateral Agent's security interest in a sold Contract shall be deleted from or
modified on the Seller's computer systems when, and only when, such sold
Contract shall be (i) transferred from the ownership of the Purchaser in
connection with any Securitization or otherwise, (ii) paid off by the related
Obligor, (iii) liquidated by the Servicer, or (iv) purchased by the Seller in
accordance with Section 6.1 or 6.2 hereof.
                -----------    ---

     (f)  If at any time the Seller shall propose to sell, grant a security
interest in, or otherwise transfer any interest in motor vehicle contracts to
any prospective purchaser, lender or other transferee, the Seller shall give to
such prospective purchaser, lender, or other transferee computer tapes, records,
or print-outs (including any restored from archives) that, if they shall refer
in any manner whatsoever to any sold Contract sold or contributed hereunder
shall indicate clearly that such sold Contract has been so sold or contributed
to the Purchaser and is subject to a security interest in favor of the
Collateral Agent.

     (g)  With respect to each sold Contract, if a Lien Certificate for the
related Financed Vehicle showing the Seller named as a secured party is not in
the possession of the Seller on the Purchase Date related to such sold Contract,
proper application for such Lien Certificate shall have been made with the
appropriate Registrar of Titles by the applicable Dealer on or before such
Purchase Date and the Seller shall take all steps necessary in order to obtain
such Lien Certificate as promptly as possible and shall, upon receipt of such
Lien Certificate, promptly deliver such Lien Certificate to the Collateral
Agent.

                                       14
<PAGE>

     Section 5.2   Other Liens or Interests.  Except for the conveyances
                   ------------------------
hereunder, the Seller will not sell, pledge, assign or transfer to any other
Person, or grant, create, incur, assume or suffer to exist any lien on the sold
Contracts, the other Collateral or any interest therein, and the Seller shall
defend the right, title, and interest of the Purchaser and the Collateral Agent
in and to the sold Contracts and the other Collateral related thereto against
all claims of third parties claiming through or under the Seller.

     Section 5.3   Costs and Expenses.  The Seller shall pay all reasonable
                   ------------------
costs and disbursements in connection with the performance of its obligations
hereunder and the Loan Documents to which it is a party.

     Section 5.4   Financial Covenant.  Seller shall not permit its Tangible
                   ------------------
Net Worth, at any time, calculated as of the close of Seller's then most
recently concluded fiscal quarter and commencing with the quarter commencing on
April 1, 2001, to be less than the sum of (i) $38,000,000 plus (ii) 50% of the
net earnings (after taxes) of Seller for the period commencing on April 1, 2001
and ending at the end of Seller'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 Seller for any period shall be less than zero, the
amount calculated pursuant to clause (ii) in the immediate preceding sentence
for such period shall be zero.

                                  ARTICLE VI

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

     Section 6.1   Repurchase of sold Contracts Upon Breach of Warranty.  Upon
                   ----------------------------------------------------
the occurrence of a Seller Repurchase Event, the Seller shall, unless such
Seller Repurchase Event shall have been cured in all material respects,
repurchase the sold Contract or the sold Contracts related to the occurrence of
such Seller Repurchase Event from the Purchaser within two (2) Business Days of
the discovery by or notice (from any Person) to the Seller of such Seller
Repurchase Event for the Release Price of such Contract. On the date of such
purchase, in satisfaction of the payment to the Borrower of such Release Price,
the Seller shall, on behalf of the Borrower, deliver such Release Price to the
Collateral Agent for deposit into the Collection Account in accordance with
Section 2.07(b) of the Loan Agreement and Section 4.02(a) of the Servicing
---------------                           ---------------
Agreement. Notwithstanding any other provision of this Agreement or the Loan
Agreement to the contrary, the obligation of the Seller under this Section shall
not terminate upon a termination of the Seller as Servicer under the Loan
Agreement and shall be performed in accordance with the terms hereof
notwithstanding the failure of the Servicer or the Purchaser to perform any of
their respective obligations with respect to such sold Contract under the Loan
Agreement. The Seller hereby acknowledges the pledge of the Purchaser's rights
under this Agreement to Collateral Agent, for the benefit of the Lender, the
Hedge Counterparty and the Insurer, pursuant to the Loan Agreement and that each
of the Collateral Agent, the Lender and (provided that no Insurer Default shall
have occurred and be continuing) the Insurer shall have the right to enforce
directly against the Seller the Seller's repurchase obligations under this
Section 6.1 and the Seller's indemnity obligations under Section 4.3.
-----------                                              -----------

     Section 6.2   Reassignment of Purchased Contracts.  Upon deposit in the
                   -----------------------------------
Collection Account of the price paid to the Purchaser for any sold Contract
repurchased by the

                                       15
<PAGE>

Seller under Section 6.1, the Purchaser shall (and shall request the Lender to)
             -----------
take such steps as may be reasonably requested by the Seller, at the expense of
the Seller, in order to assign to the Seller all of the Purchaser's and the
Collateral Agent's right, title and interest in and to such sold Contract and
all security and documents and all other Collateral conveyed to the Purchaser
and the Collateral Agent, for the benefit of the Lender, the Hedge Counterparty
and the Insurer, directly relating thereto, without recourse, representation or
warranty. Such assignment shall be a sale and assignment outright, and not for
security. If, following the reassignment of a sold Contract, in any enforcement
suit or legal proceeding, it is held that the Seller may not enforce any such
sold Contract on the ground that it shall not be a party in interest or a holder
entitled to enforce the sold Contract, the Purchaser shall, at the expense of
the Seller, take such steps as the Seller, deems reasonably necessary to enforce
the sold Contract, including bringing suit in the Purchaser's name.

     Section 6.3   Waivers.  No failure or delay on the part of the Purchaser
                   -------
or any assignee thereof, in exercising any power, right or remedy under this
Agreement shall operate as a waiver thereof, nor shall any single or partial
exercise of any such power, right or remedy preclude any other or future
exercise thereof or the exercise of any other power, right or remedy.

                                  ARTICLE VII

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

     Section 7.1   Liability of the Seller.  The Seller shall be liable in
                   -----------------------
accordance herewith only to the extent of the obligations in this Agreement
specifically undertaken by the Seller and its representations and warranties
hereunder.

     Section 7.2   Merger or Consolidation of the Seller or the Purchaser.  Any
                   ------------------------------------------------------
corporation or other entity (i) into which the Seller or the Purchaser may be
merged or consolidated, (ii) resulting from any merger or consolidation to which
the Seller or the Purchaser is a party or (iii) succeeding to the business of
the Seller or the Purchaser (in the case of the Purchaser, which corporation has
a certificate of incorporation containing provisions relating to limitations on
business and other matters substantively identical to those contained in the
Purchaser's certificate of incorporation), provided that in any of the foregoing
cases such corporation shall execute an agreement of assumption to perform every
obligation of the Seller or the Purchaser, as the case may be, under this
Agreement and, whether or not such assumption agreement is executed, shall be
the successor to the Seller or the Purchaser, as the case may be, hereunder
(without relieving the Seller or the Purchaser of its responsibilities
hereunder, if it survives such merger or consolidation) without the execution or
filing of any document or any further act by any of the parties to this
Agreement.

     Notwithstanding the foregoing, neither the Seller nor the Purchaser shall
merge or consolidate with any other Person or permit any other Person to become
the successor to the Purchaser's business without the prior written consent of
the Lender and, provided that no Insurer Default shall have occurred and be
continuing, the Insurer. The Seller or the Purchaser shall promptly inform the
other party, the Collateral Agent, the Backup Servicer, the Lender and the
Insurer of such merger, consolidation or purchase and assumption.
Notwithstanding the foregoing, as a condition to the consummation of the
transactions referred to in clauses (i), (ii)

                                       16
<PAGE>

and (iii) above, (x) immediately after giving effect to such transaction, no
representation or warranty made pursuant to Sections 4.1 or 4.2 or covenant made
                                            ------------    ---
pursuant to Section 4.3, shall have been breached in any material respect (for
            -----------
purposes hereof, such representations and warranties shall speak as of the date
of the consummation of such transaction), (y) the Seller or the Purchaser, as
applicable, shall have delivered to Lender and, provided that no Insurer Default
shall have occurred and be continuing, the Insurer 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 7.2 and that all
                                                  -----------
conditions precedent, if any, provided for in this Agreement relating to such
transaction have been complied with, and (z) the Seller or the Purchaser, as
applicable, shall have delivered to the Lender and, provided that no Insurer
Default shall have occurred and be continuing, the Insurer 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 security interest of
the Lender in the sold Contracts and the other Collateral related thereto and
reciting the details of the filings or (B) no such action shall be necessary to
preserve and protect such interest.

     Section 7.3   Limitation on Liability of the Seller and Others.  The
                   ------------------------------------------------
Seller and any director, officer, employee or agent of the Seller may rely in
good faith on the advice of counsel respecting any matters arising under this
Agreement.  The Seller shall not be under any obligation to appear in, prosecute
or defend any legal action that is not incidental to its obligations under this
Agreement, the Loan Agreement or the Loan Documents to which it is a party.

     Section 7.4   Amendment.  This Agreement (including each Exhibit and
                   ---------
Schedule hereto other than Schedule A) may be amended by the Seller and the
Purchaser only with the prior written consent of the Lender and, so long as no
Insurer Default shall have occurred and be continuing, the Insurer.

     Section 7.5   Notices.  All demands, notices and communications to the
                   -------
Seller or the Purchaser hereunder shall be in writing, personally delivered, or
sent by telecopier (subsequently confirmed in writing), reputable overnight
courier or mailed by certified mail, return receipt requested, and shall be
deemed to have been given upon receipt (a) in the case of the Seller at the
following address: 5425 Robin Hood Rd., Suite 101-B, Norfolk, VA  23513,
Attention: Ronald G. Tray, Facsimile No.: (757) 858-4093 or such other address
as shall be designated by the Seller in a written notice delivered to the
Purchaser and (b) in the case of the Purchaser at the following address: 5425
Robin Hood Rd., Suite 101-B, Norfolk, VA  23513, Attention: Ronald G. Tray,
Facsimile No.: (757) 858-4093 or such other address as shall be designated by a
party in a written notice delivered to the other party.

     Section 7.6   Merger and Integration.  Except as specifically stated
                   ----------------------
otherwise herein, this Agreement, the Loan Agreement and the other Loan
Documents set forth the entire understanding of the parties relating to the
subject matter hereof and thereof, and all prior understandings, written or
oral, are superseded by this Agreement, the Loan Agreement and the Loan
Documents.  This Agreement may not be modified, amended, waived or supplemented
except as provided herein.

                                       17
<PAGE>

     Section 7.7   Severability of Provisions.  If any one or more of the
                   --------------------------
covenants, provisions or terms of this Agreement shall be for any reason
whatsoever held invalid, then such covenants, provisions or terms shall be
deemed severable from the remaining covenants, provisions or terms of this
Agreement and shall in no way affect the validity or enforceability of the other
provisions of this Agreement.

     Section 7.8   Intention of the Parties.  The execution and delivery of
                   ------------------------
this Agreement shall constitute an acknowledgment by the Seller and the
Purchaser that they intend that each assignment and transfer herein contemplated
constitutes a sale and assignment outright, and not for security, of the sold
Contracts and the other Collateral related thereto conveying good title thereto
free and clear of any liens, from the Seller to the Purchaser, and that the sold
Contracts and the other Collateral related thereto shall not be a part of the
Seller's estate in the event of the bankruptcy, reorganization, arrangement,
insolvency or liquidation proceeding, or other proceeding under any federal or
state bankruptcy or similar law, or the occurrence of another similar event, of,
or with respect to, the Seller.  In the event that any or all such assignments
and transfers are determined to be made as security for a loan made by the
Purchaser to the Seller (or are otherwise determined not to be sales and
assignments outright or contributions of capital), the parties intend that the
Seller shall have granted to the Purchaser a security interest in all right,
title and interest in and to the sold Contracts and the other Collateral
conveyed pursuant to Section 2.1, and that this Agreement shall constitute a
                     -----------
security agreement under applicable law.

     Section 7.9   Governing Law.  THIS AGREEMENT SHALL,  IN ACCORDANCE WITH
                   -------------
SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK, BE
GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO ANY
CONFLICTS OF LAW PRINCIPLES THEREOF.

     Section 7.10  Counterparts.  For the purpose of facilitating the execution
                   ------------
of this Agreement and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and all of which counterparts shall constitute but
one and the same instrument. Delivery of an executed counterpart of a signature
page to this Agreement by facsimile shall be effective as delivery of a manually
executed counterpart of this Agreement.

     Section 7.11  Nonpetition Covenant.  Until one year and one day after the
                   --------------------
latest Advance by the Lender and all other Secured Obligations under the Loan
Agreement shall be repaid in full, the Seller shall not petition or otherwise
invoke the process of any court or government authority for the purpose of
commencing or sustaining a case against the Purchaser under any federal or state
bankruptcy, insolvency or similar law or appointing a receiver, liquidator,
assignee, trustee, custodian, sequestrator or other similar official of the
Purchaser or any substantial part of its property, or ordering the winding up or
liquidation of the affairs of the Purchaser.

     Section 7.12  Binding Effect; Assignability.
                   -----------------------------

                                       18
<PAGE>

     (a)  This Agreement shall be binding upon and inure to the benefit of the
Seller, the Purchaser and their respective successors and assigns; provided,
                                                                   --------
however, that the Seller may not assign its rights or obligations hereunder or
-------
any interest herein without the prior written consent of the Lender and, so long
as no Insurer Default shall have occurred and be continuing, the Insurer. The
Purchaser may assign all of its rights hereunder to an assignee, and such
assignee shall have all rights of the Purchaser under this Agreement (as if such
assignee were the Purchaser hereunder); provided, however, that any such
                                        --------  -------
assignment shall require the prior written consent of the Lender and, so long as
no Insurer Default shall have occurred and be continuing, the Insurer.

     (b)  This Agreement shall create and constitute the continuing obligation
of the parties hereto in accordance with its terms, and shall remain in full
force and effect until such time, when all of the sold Contracts are collected
in full; provided, however, that rights and remedies with respect to any breach
         --------  -------
of any representation and warranty made by the Seller pursuant to Article IV
hereof and the provisions of Article V and Section 7.11 shall be continuing and
                                           ------------
shall survive any termination of this Agreement.

     Section 7.13  No Proceedings.   Each of the Seller and the Purchaser
                   --------------
agrees not to institute against, or join any other person in instituting
against, the Lender any bankruptcy, reorganization, arrangement, insolvency,
liquidation or similar proceeding for one year and a day after the amounts owing
under this Agreement and all other credit agreements executed by the Lender have
been paid in full.

     Section 7.14  Conflicting Directives of Lender and Insurer. With respect
                   --------------------------------------------
to any instruction, declaration, consent or other direction to be given by the
Lender and the Insurer under this Agreement, if the respective instructions,
declarations, consents or other directions of the Lender and the Insurer
conflict with one another, then, so long as no Insurer Default shall have
occurred and be continuing, the instruction, declaration, consent or other
direction of the Insurer shall be determinative; provided, that, if any Insurer
                                                 --------
Default shall have occurred and be continuing, the instruction, declaration,
consent or other direction of the Lender shall be determinative.

     Section 7.15  Third Party Beneficiaries.  Each of the parties hereto
                   -------------------------
hereby acknowledges that the Purchaser intends to assign all of its rights and
benefits, but none of its obligations or burdens, under this Agreement to the
Lender and the Seller hereby consents to such assignment.  Each of the Insurer
and the Lender shall be a third party beneficiary of, and shall be entitled to
enforce the Purchaser's rights and remedies under, this Agreement to the same
extent as if it were a party hereto.  The Hedge Counterparty shall also be an
intended third-party beneficiary of this Agreement.

                                       19
<PAGE>

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

                              THE FINANCE COMPANY,

                              as Seller

                              By:_______________________________
                                 Name:
                                 Title:

                              TFC WAREHOUSE CORPORATION I,
                              as Purchaser

                              By:_______________________________
                                 Name:
                                 Title:

                    [Signature Page to Purchase Agreement]
<PAGE>

                                                                       EXHIBIT A

                              FORM OF ASSIGNMENT

     ASSIGNMENT, dated as of ___________ between The Finance Company (the
"Seller") and TFC Warehouse Corporation I (the "Purchaser").

     1.   We refer to the Purchase Agreement (the "Purchase Agreement") dated as
          of June 28, 2001 between the Seller and the Purchaser. All provisions
          of the Purchase Agreement are incorporated herein by reference. All
          capitalized terms used herein and not defined herein shall have the
          meanings set forth in the Purchase Agreement.

     2.   The Seller does hereby sell, transfer, assign and otherwise convey to
          the Purchaser, without recourse (except to the extent specifically
          provided in the Purchase Agreement), and the Purchaser hereby
          purchases, all right, title and interest of Seller in and to the sold
          Contracts identified on Annex A hereto and the other Collateral
          related thereto (including, without limitation, the Seller's security
          interest in each Financed Vehicle related to each such sold Contract)
          pursuant to the Purchase Agreement.

     3.   The Seller does hereby represent and warrant that the sold Contracts
          identified in Annex A hereto are Eligible Contracts.

     4.   The Seller does hereby remake the representations and warranties set
          forth in Section 4.1 of the Purchase Agreement with full force and
          effect as if the same were made as of the date hereof and fully set
          forth herein.

     IN WITNESS WHEREOF, the parties have caused this Assignment to be executed
by their respective officers thereunto duly authorized, as of the date first
above written.

                              THE FINANCE COMPANY,
                              as Seller

                              By:_______________________________
                                 Name:
                                 Title:

                              TFC WAREHOUSE CORPORATION I,
                              as Purchaser

                              By:_______________________________
                                 Name:
                                 Title:

                                   Exh. A-1
<PAGE>

                                    ANNEX A
                                (TO ASSIGNMENT)

                                   Exh. A-2
<PAGE>

                                                                      SCHEDULE A

                             SCHEDULE OF CONTRACTS

                                   Sch. A-1
<PAGE>

                                                                      SCHEDULE B

         REPRESENTATIONS AND WARRANTIES OF THE SELLER WITH RESPECT TO
            CONTRACTS NOTED AS ELIGIBLE CONTRACTS ON ANY ASSIGNMENT
            -------------------------------------------------------

     The following representations and warranties are made with respect to only
the Contracts which are designated as being Eligible Contracts on an Assignment
delivered by the Seller to the Purchaser.

          1.   Characteristics of Contracts. Each Contract (A) was originated
               ----------------------------
     pursuant to either the Military Finance Program or the Auto Centers Program
     by a Dealer for the retail sale of a Financed Vehicle in the ordinary
     course of such Dealer's business in accordance with the Underwriting
     Guidelines (which policies shall not be amended thereafter without the
     consent of the Lender and, so long as no Insurer Default shall have
     occurred and be continuing, the Insurer, such consent not to be
     unreasonably withheld), and such Dealer had all necessary licenses and
     permits to originate Contracts in the state where such Dealer was located,
     was fully and properly executed by the parties thereto, was purchased by
     TFC from such Dealer under an existing Dealer Agreement or pursuant to a
     Dealer Assignment, was validly assigned by such Dealer to TFC pursuant to
     the Dealer Agreement or the Dealer Assignment, was validly assigned by TFC
     to the Borrower pursuant to the Purchase Agreement, and was validly pledged
     by the Borrower to the Collateral Agent, for the benefit of the Lender, the
     Hedge Counterparty and the Insurer, pursuant to the Loan Agreement, (B)
     contains customary and enforceable provisions such as to render the rights
     and remedies of the holder thereof adequate for realization against the
     collateral security, (C) is a Contract which provides for level Scheduled
     Contract Payments (provided that the payment in the first monthly
     collection period and the payment in the final monthly collection period of
     the Contract may be minimally different from the normal period and level
     payment) which, if made when due, shall fully amortize the Amount Financed
     over the original term, (D) provides for, in the event that the related
     Contract is prepaid, a prepayment that fully pays the Principal Balance of
     such related Contract and includes accrued but unpaid interest through the
     date of prepayment in an amount at least equal to the Annual Percentage
     Rate, (E) has not been amended or rewritten, or collections with respect to
     which deferred or waived, other than as expressly permitted pursuant to
     clause (J) below and as evidenced in the Contract Documents relating
     thereto, (F) has an original term of eleven (11) to sixty (60) months, (G)
     that has been acquired by TFC and, on the related Funding Date for such
     Contract, is not a Delinquent Contract and, on such date or at any time
     thereafter, is not an Over-60 Contract, a Repossessed Contract or a
     Liquidated Contract, and the related Obligor does not have other Contracts
     owing to TFC that are Delinquent Contracts, Over-60 Contracts, Repossessed
     Contracts or Liquidated Contracts, (H) has an Annual Percentage Rate of not
     less than 9.9%, (I) has a remaining Principal Balance of not more than
     $25,000, (J) has not been extended beyond its original term, except in
     keeping with TFC's Deferment Policy, a copy of which is attached as Exhibit
     S hereto, which allows for up to two, one-month deferments in any twelve
     month period not to exceed up to four, one-month deferments over the life
     of a monthly-pay contract, (K) was purchased through an Approved Dealer,
     (L) is due from a U.S. citizen in the case of a Contract that was

                                   Sch. B-1
<PAGE>

     originated pursuant to the Military Finance Program and a U.S. resident in
     the case of a Contract that was originated pursuant to the Auto Centers
     Program and is denominated in U.S. dollars, (M) is secured by a Financed
     Vehicle and a valid first priority perfected security interest is in effect
     with respect to such Financed Vehicle, (N) is owned solely by the Borrower
     free and clear of any lien, claim, or other encumbrance, excluding liens
     that will be released no later than the applicable Funding Date, (O) with
     respect to the related security interest in the related Financed Vehicle is
     perfected and with clear legal right of repossession, (P) was secured by a
     vehicle with Total Loss Protection coverage or covered by an Insurance
     Policy, and naming TFC and its assigns as loss payee on the date the loan
     was purchased from an Approved Dealer by TFC, (Q) meets, in all material
     respects, all applicable requirements of federal, state, and local laws and
     regulations, (R) is not subject to any right of setoff by the Obligor, (S)
     will be clearly marked in the books and records of TFC and the Borrower, as
     applicable, as being sold to the Borrower, and pledged by the Borrower to
     the Collateral Agent, (T) will not, as a result of the addition of such
     Contract to the pool of Eligible Contracts, cause the percentage of
     Eligible Contracts (by Aggregate Principal Balance as of any date of
     determination) originated by any one Dealer to exceed 10% (it being
     understood that commonly owned dealerships shall be considered as one
     Dealer for the purposes of such calculation), (U) will not, as a result of
     the addition of such Contract to the pool of Eligible Contracts, cause the
     percentage of Eligible Contracts (by Aggregate Principal Balance as of any
     date of determination) with Obligors located in any one State to exceed
     30%, (V) will not, as a result of the addition of such Contract to the pool
     of Eligible Contracts, cause the percentage of Eligible Contracts (by
     Aggregate Principal Balance as of any date of determination) that were
     originated pursuant to the Auto Centers Program to exceed 30% of the
     Aggregate Principal Balance of all Eligible Contracts, and (W) was
     originated on an applicable Form of Contract.

          2.  No Fraud or Misrepresentation. Each Contract (A) was originated by
              -----------------------------
     a Dealer, (B) was sold by the Dealer to TFC, (C) was sold by TFC to the
     Borrower and (D) was pledged by the Borrower to the Collateral Agent
     without any fraud or misrepresentation in any case.

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

                                   Sch. B-2
<PAGE>

     complied at the time it was originated or made in all material respects and
     now complies in all material respects with all applicable legal and
     regulatory requirements.

          4.  Binding Obligation. Each Contract represents the genuine, legal,
              ------------------
     valid and binding payment obligation of the Obligor thereon, enforceable by
     the holder thereof in accordance with its terms, except (A) as
     enforceability may be limited by bankruptcy, insolvency, reorganization or
     similar laws affecting the enforcement of creditors' rights generally and
     by equitable limitations on the availability of specific remedies,
     regardless of whether such enforceability is considered in a proceeding in
     equity or at law and (B) as such Contract may be modified by the
     application after the applicable Funding Date of the Soldiers' and Sailors'
     Civil Relief Act of 1940, as amended; and all parties to each Contract had
     full legal capacity to execute and deliver such Contract and all other
     documents related thereto and to grant the security interest purported to
     be granted thereby.

          5.  No Government, Corporate or Fleet Obligor. No Contract is due from
              -----------------------------------------
     the United States of America or any state or from any agency, department or
     instrumentality of the United States of America or any state. All of the
     Contracts are due from Obligors who are natural persons or, if any Obligor
     is not a natural person, (a) such entity is an obligor with respect to five
     or fewer financed vehicles and (b) the related Contract or Contracts have
     the benefit of the personal guaranty of a natural person or persons. No
     Contract has been included in a "fleet" sale (i.e., a sale to any single
                                                   ---
     Obligor of more than five Financed Vehicles).

          6.  Obligor Bankruptcy. At the applicable Funding Date, no Obligor had
              ------------------
     been the subject of a current bankruptcy proceeding.

          7.  Contract Schedule. The information set forth in each Contract
              -----------------
     Schedule has been produced from the Electronic Ledger and was true and
     correct in all material respects, with respect to each Contract, as of the
     close of business on the Funding Date of such Contract.

          8.  Marking Records. By the Funding Date with respect to each
              ---------------
     Contract, TFC will have caused the portions of the Electronic Ledger
     relating to such Contract to be clearly and unambiguously identified to
     show that such Contract has been sold to the Borrower by TFC pursuant to
     the Purchase Agreement and pledged by the Borrower to the Collateral Agent
     in accordance with the terms of the Loan Agreement.

          9.  Adverse Selection. No selection procedures adverse to the Lender,
              -----------------
     the Hedge Counterparty or the Insurer were utilized in selecting the
     Contracts from those contracts owned by TFC or the Borrower.

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

          11. One Original. There is only one original executed copy of each
              ------------
     Contract.

                                   Sch. B-3
<PAGE>

          12. Contract Files Complete. There exists a Contract File pertaining
              -----------------------
     to each Contract and such Contract File contains the related Contract
     Documents including, without limitation, (a) a fully executed original of
     the Contract and (b) no later than 120 days after the Funding Date for such
     Contract, the original Lien Certificate for such Contract. Each of such
     documents which is required to be signed by the Obligor has been signed by
     the Obligor in the appropriate spaces. All blanks on any form described in
     clauses (a) and (b) above have been properly filled in and each form has
     otherwise been correctly prepared. Notwithstanding the above, a copy of the
     complete Contract File for each Contract, which fulfills the documentation
     requirements of the Underwriting Guidelines as in effect at the time of
     purchase has been delivered to the Collateral Agent by TFC, on behalf of
     the Borrower by the related Funding Date.

          13. Contracts in Force. No Contract has been satisfied, subordinated
              ------------------
     or rescinded, and the Financed Vehicle securing each such Contract has not
     been released from the lien of the related Contract in whole or in part. No
     terms of any Contract have been waived, altered or modified in any respect
     since its origination, except as expressly permitted pursuant to paragraph
     1(J) above by instruments or documents identified in the Contract File. No
     Contract has been modified as a result of application of the Soldiers' and
     Sailors' Civil Relief Act of 1940, as amended.

          14. Lawful Assignment. No Contract was originated in, or is subject to
              -----------------
     the laws of, any jurisdiction the laws of which would make unlawful, void
     or voidable the sale, transfer and assignment of such Contract under the
     Purchase Agreement or the pledge thereof pursuant to this Loan Agreement or
     pursuant to transfers of the Note. The Borrower has not entered into any
     agreement with any account debtor that prohibits, restricts or conditions
     the assignment of any portion of the Contracts.

          15. Good Title. No Contract has been sold, transferred, assigned or
              ----------
     pledged by TFC to any Person other than the Borrower; immediately prior to
     the conveyance of the Contracts to the Borrower pursuant to the Purchase
     Agreement, TFC was the sole owner thereof and had good and indefeasible
     title thereto, free of any Lien; provided, however, that, with respect to
                                      --------  -------
     each Previously Financed Contract subject to a Lien in favor of an Other
     Lender, such Lien shall be released by such Other Lender simultaneously
     with the conveyance of such Contract to the Borrower pursuant to the
     Purchase Agreement. Upon execution and delivery of the applicable
     Assignment by TFC, the Borrower shall have good and indefeasible title to
     and will be the sole owner of such Contracts, free of any Lien, other than
     the Lien of the Collateral Agent, for the benefit of the Lender, the Hedge
     Counterparty and the Insurer. No Dealer has a participation in, or other
     right to receive, proceeds of any Contract. TFC has not taken any action to
     convey any right to any Person that would result in such Person having a
     right to payments received under the related Insurance Policies or the
     related Dealer Agreements or Dealer Assignments or to payments due under
     such Contracts.

          16. Security Interest in Financed Vehicle. Each Contract creates or
              -------------------------------------
     will create a valid, binding and enforceable first priority security
     interest in favor of TFC in the Financed Vehicle. The Lien Certificate and
     original certificate of title for each Financed Vehicle show, or if a new
     or replacement Lien Certificate is being applied for with

                                   Sch. B-4
<PAGE>

     respect to such Financed Vehicle the Lien Certificate will be received
     within 120 days of the applicable Funding Date, and will show TFC named as
     the original secured party under each Contract as the holder of a first
     priority security interest in such Financed Vehicle. With respect to each
     Contract for which the Lien Certificate has not yet been returned from the
     Registrar of Titles, TFC has received written evidence from the related
     Dealer that such Lien Certificate showing TFC or the Collateral Agent as
     first lienholder has been applied for and (i) TFC's security interest has
     been validly assigned to the Borrower pursuant to the Purchase Agreement
     and (ii) the Borrower's security interest has been validly pledged to the
     Collateral Agent pursuant to the Loan Agreement. Immediately after the
     sale, transfer and assignment thereof by TFC to the Borrower, each Contract
     will be secured by an enforceable and perfected first priority security
     interest in the Financed Vehicle in favor of the Borrower as secured party,
     which security interest is prior to all other Liens upon and security
     interests in such Financed Vehicle which now exist or may hereafter arise
     or be created (except, as to priority, for any lien for taxes, labor or
     materials affecting a Financed Vehicle arising subsequent to the applicable
     Funding Date). Immediately after the pledge of a security interest therein
     by the Borrower to the Collateral Agent, for the benefit of the Lender, the
     Hedge Counterparty and the Insurer, each Contract will be secured by an
     enforceable and perfected first priority security interest in the Financed
     Vehicle in favor of the Collateral Agent as secured party, for the benefit
     of the Lender, the Hedge Counterparty and the Collateral Agent, which
     security interest is prior to all other Liens upon and security interests
     in such Financed Vehicle which now exist or may hereafter arise or be
     created (except, as to priority, for any lien for taxes, labor or materials
     affecting a Financed Vehicle arising subsequent to the applicable Funding
     Date). As of the applicable Funding Date, there were no Liens or claims for
     taxes, work, labor or materials affecting a Financed Vehicle which are or
     may be Liens prior or equal to the Liens of the related Contract.

          17. All Filings Made. All filings (including UCC filings) required to
              ----------------
     be made by any Person and actions required to be taken or performed by any
     Person in any jurisdiction to give the Collateral Agent a first priority
     perfected security interest in the Contracts and the proceeds thereof and
     the other Collateral have been made, taken or performed.

          18. No Impairment. Neither TFC nor the Borrower has done anything to
              -------------
     convey any right to any Person that would result in such Person having a
     right to payments due under the Contract or otherwise to impair the rights
     of the Lender, the Hedge Counterparty or the Insurer in any Contract or the
     proceeds thereof.

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

          20. No Default. As of the applicable Funding Date, no Contract was in
              ----------
     default and no condition existed or event occurred that constituted a
     default, breach, violation or event permitting acceleration under the terms
     of any Contract, and no continuing condition that with notice or the lapse
     of time would constitute a default, breach, violation or event permitting
     acceleration under the terms of any Contract has arisen, and

                                   Sch. B-5
<PAGE>

     there has been no waiver of any of the foregoing. As of the applicable
     Funding Date, no Financed Vehicle had been repossessed.

          21. No Defenses. As of the applicable Funding Date, no right of
              -----------
     rescission, setoff, counterclaim or defense has been asserted or threatened
     with respect to any Contract.

          22. Insurance. At the time of origination of each Contract, the
              ---------
     related Financed Vehicle was covered by an Insurance Policy which was (i)
     in an amount at least equal to the lesser of, excluding any deductible, (a)
     its maximum insurable value or (b) the principal amount due from the
     Obligor under the related Contract, (ii) naming TFC and its successors and
     assigns as loss payee and (iii) insuring against loss and damage due to
     fire, theft, transportation, collision and other risks generally covered by
     either a physical loss and damage Insurance Policy or the combination of
     TFC's Total Loss Protection and GAP coverage. No Financed Vehicle is
     insured under a policy of force-placed insurance on the applicable Funding
     Date.

          23. Certain Characteristics of Contracts. (i) No Contract was more
              ------------------------------------
     than 30 days past due as of the applicable Funding Date; (ii) no funds have
     been advanced by TFC, the Borrower, the Servicer, any Dealer, or anyone
     acting on behalf of any of them in order to cause any Contract to qualify
     under subclause (i) of this clause 23; (iii) the Principal Balance of each
     Contract set forth in the related Contract Schedule is true and correct as
     of the applicable Funding Date.

          24. Allotment Processor. As of the Closing Date, Fort Knox National
              -------------------
     Bank ("FKNB") has been directed by TFC, and evidence of FKNB's
            ----
     acknowledgment has been received to directly transfer to the Collection
     Account all amounts received by it in respect of the Contracts pursuant to
     TFC's allotment processor program.

          25. No Bulk Product.  None of the Contracts constitute Bulk Product.
              ---------------

          26. No Civilian Finance Contracts. None of the Contracts were
              -----------------------------
     originated under the Civilian Finance Program.

                                   Sch. B-6
<PAGE>

                                                                      SCHEDULE C
                             TRADE NAMES OF SELLER
                             ---------------------

Old Dominion Acceptance
Old Dominion Acceptance, Inc.

(used in the conduct of TFC's business in the following States: Alaska, Arizona,
California, Minnesota, Nebraska, Nevada, New Hampshire, New Mexico, New York,
Oklahoma, Pennsylvania, Texas and Washington)

                                   Sch. C-1<PAGE>

                                                                   Exhibit 10.6

                                                                 EXECUTION COPY

                              SERVICING AGREEMENT

                           Dated as of June 28, 2001

                                     among

                              THE FINANCE COMPANY
                                 as Servicer,

                          TFC WAREHOUSE CORPORATION I
                                  as Borrower

               WELLS FARGO BANK MINNESOTA, NATIONAL ASSOCIATION,
       as Backup Servicer, Collateral Agent and Securities Intermediary

                      WELLS FARGO FINANCIAL AMERICA, INC.
                             As Successor Servicer

                         WESTSIDE FUNDING CORPORATION
                                   as Lender
<PAGE>

                               Table of Contents

<TABLE>
<CAPTION>
                                                                                                   Page
                                                                                                   ----
                                                ARTICLE I
                                               DEFINITIONS
     <S>                                                                                               <C>

     Section 1.01  Defined Terms.....................................................................   2

                                               ARTICLE II
                                         APPOINTMENT OF SERVICER

     Section 2.01  Appointment, Retention and Termination of Servicer................................   2

                                               ARTICLE III
                                ADMINISTRATION AND SERVICING OF CONTRACTS

     Section 3.01    Duties of Servicer..............................................................   3
     Section 3.02    Collection and Allocation of Contract Payments; Modifications of Contracts......   4
     Section 3.03    Realization upon Contracts......................................................   7
     Section 3.04    Maintenance of Security Interests...............................................   8
     Section 3.05    Servicing Fee; Servicing Expenses...............................................   9
     Section 3.06    Annual Statement as to Compliance; Notice of Servicer Termination Event.........  10
     Section 3.07    Annual Independent Certified Public Accountants' Report; Required Audit Reports.  11
     Section 3.08    Access to Certain Documentation and Information Regarding Contracts.............  12
     Section 3.09    Servicer Expenses...............................................................  12
     Section 3.10    Appointment of Subservicer......................................................  13
     Section 3.11    Delegation of Duties............................................................  13
     Section 3.12    Insurance.......................................................................  13
     Section 3.13    Enforcement of Prohibition on Transfer of Vehicle...............................  14
     Section 3.14    Title, Conservation and Disposition of Financed Vehicle.........................  14
     Section 3.15    Fidelity Bond...................................................................  14
     Section 3.16    Application of Collections......................................................  15
     Section 3.17    Servicer's Certificate..........................................................  15
     Section 3.18    Purchase of Receivables Upon Breach of Covenant.................................  15
     Section 3.19    Monthly Duties of Backup Servicer and Successor Servicer........................  16

                                               ARTICLE IV
                                            ACCOUNTS; REPORTS

     Section 4.01    Establishment of Collection Account and Reserve Account.........................   18
     Section 4.02    Deposits into and Withdrawals from Accounts.....................................   21
     Section 4.03    Reports.........................................................................   23
     Section 4.04    Securities Accounts.............................................................   23
</TABLE>

                                       i
<PAGE>

                                   ARTICLE V
                                 THE SERVICER

<TABLE>
<S>                                                                                                                          <C>
     Section 5.01    Representations and Warranties........................................................................  24
     Section 5.02    Covenants of the Servicer.............................................................................  26
     Section 5.03    Liability of the Servicer; Indemnities of Servicer....................................................  27
     Section 5.04    Limitation on Resignation of the Servicer.............................................................  30
     Section 5.05    Rights of the Lender and the Insurer in Respect of the Servicer.......................................  30
     Section 5.06    Merger or Consolidation of, or Assumption of the Obligations of, the Servicer or the Collateral Agent.  30
     Section 5.07    Limitation on Liability of Servicer, Collateral Agent and Others......................................  32

                                                             ARTICLE VI
                                                             THE POLICY

     Section 6.01    Claims under Policy...................................................................................  32
     Section 6.02    Preference Claims.....................................................................................  33
     Section 6.03    Surrender of Policy...................................................................................  34

                                                             ARTICLE VII
                                                       DEFAULT AND TERMINATION

     Section 7.01    Servicer Termination Event............................................................................  34
     Section 7.02    Consequences of a Servicer Termination Event..........................................................  36
     Section 7.03    Consequences of an Insurance Agreement Event of Default...............................................  36
     Section 7.04    Appointment of Successor..............................................................................  37
     Section 7.05    Waiver of Past Defaults...............................................................................  39
     Section 7.06    Additional Termination Requirements...................................................................  40

                                                         ARTICLE VIII
                                     TERMINATION OF BACKUP SERVICER AND SUCCESSOR SERVICER

     Section 8.01    Termination of Backup Servicer........................................................................  41
     Section 8.02    Termination of Successor Servicer.....................................................................  41

                                                             ARTICLE IX
                                                      MISCELLANEOUS PROVISIONS

     Section 9.01    Amendment.............................................................................................  41
     Section 9.02    Successors and Assigns................................................................................  42
     Section 9.03    No Partnership........................................................................................  42
     Section 9.04    Governing Law.........................................................................................  42
     Section 9.05    Notices...............................................................................................  42
     Section 9.06    Article and Section Headings; Severability of Provisions; Counterparts................................  44
     Section 9.07    Miscellaneous.........................................................................................  44
     Section 9.08    Costs; Expenses.......................................................................................  44
     Section 9.09    Third-Party Beneficiaries.............................................................................  44
</TABLE>

                                      ii
<PAGE>

<TABLE>
     <S>                                                                                                                        <C>
     Section 9.10    Conflicting Directives of Lender and Insurer; Limitation on Rights of Insurer in Case of Insurer Default.  45
     Section 9.11    No Proceedings...........................................................................................  45
     Section 9.12    Acknowledgement of Dual Capacity.........................................................................  45
</TABLE>

SCHEDULE 1     Prior Names, Trade Names, Fictitious
               Names and "Doing Business As" Names

EXHIBIT A      Allowable Delinquency Policy
EXHIBIT B      Charge-Off Policy
EXHIBIT C      Servicer's Certificate
EXHIBIT D      Form of Deficiency Notice
EXHIBIT E      Credit and Collection Policies and Procedures

                                      iii
<PAGE>

     THIS SERVICING AGREEMENT (the "Agreement"), dated as of June 28, 2001,
is entered into by and among THE FINANCE COMPANY ("TFC"), a Virginia corporation
                                                   ---
having an address at 5425 Robin Hood Rd., Suite 101-B, Norfolk, Virginia  23513,
TFC WAREHOUSE CORPORATION I (the "Borrower"), a Delaware corporation having an
                                  --------
address at 5425 Robin Hood Road, Suite 101-B, Norfolk, Virginia  23513, Wells
Fargo Bank Minnesota, National Association, a national banking association
("Wells Fargo" and, in its capacity as backup servicer, the "Backup Servicer"
  -----------                                                ---------------
and, in its capacity as collateral agent, the "Collateral Agent" and, in its
                                               ----------------
capacity as securities intermediary, the "Securities Intermediary") having an
                                          -----------------------
address at Sixth Street and Marquette Avenue, Minneapolis, Minnesota  55479,
WELLS FARGO FINANCIAL AMERICA, INC., a Pennsylvania corporation (the "Successor
                                                                      ---------
Servicer") having an address at 59 Skyline Drive, Suite 1700, Lake Mary Florida
--------
32746, and WESTSIDE FUNDING CORPORATION, a Delaware corporation having as its
address: c/o AMACAR Group, L.L.C., 6525 Morrison Boulevard, Suite 318,
Charlotte, North Carolina  28211 (the "Lender").
                                       ------

                             PRELIMINARY STATEMENT

          WHEREAS, the Borrower will purchase from TFC from time to time certain
Contracts pursuant to a Purchase Agreement and the related Assignments;

          WHEREAS, the Borrower shall be the owner of such Contracts;

          WHEREAS, the Lender has agreed to provide interim financing to the
Borrower, secured by a pledge of such Contracts to the Collateral Agent, for the
benefit of the Lender, the Hedge Counterparty and the Insurer, pursuant to the
Warehouse and Security Agreement, dated as of June 28, 2001 (the "Loan
                                                                  ----
Agreement"), by and among the Lender, the Borrower, TFC and the Collateral
---------
Agent, as the same may be amended, supplemented or otherwise modified from time
to time in accordance with the terms thereof;

          WHEREAS, the Borrower and the Lender desire to have the Servicer
service and administer such Contracts subject to the terms and conditions of
this Agreement, and the Servicer desires to service and administer such
Contracts;

          WHEREAS, the Borrower and the Lender desire to have Wells Fargo act as
Backup Servicer for the Contracts pursuant to this Agreement and Wells Fargo
desires to act as Backup Servicer; and

          WHEREAS, the Collateral Agent has agreed to hold certain original
documents relating to each Contract pursuant to the Custodial Agreement and to
perform certain other duties as set forth in this Agreement and the Loan
Agreement.

          NOW THEREFORE, in consideration of the mutual agreements contained
herein, the parties hereto agree as follows:
<PAGE>

                                   ARTICLE I

                                  DEFINITIONS

     Section 1.01   Defined Terms.  Whenever used in this Agreement, capitalized
                    -------------
terms used and not otherwise defined herein shall have the meanings set forth in
Appendix A to the Warehouse and Security Agreement, dated as of June 28, 2001,
among TFC Warehouse Corporation I, The Finance Company, Westside Funding
Corporation and Wells Fargo Bank Minnesota, National Association.

                                  ARTICLE II

                            APPOINTMENT OF SERVICER

     Section 2.01   Appointment, Retention and Termination of Servicer.
                    --------------------------------------------------

          (a)  The managing, servicing, administering and making collections on
the Contracts shall be conducted by the Person so designated from time to time
as Servicer in accordance with this Agreement.  TFC is hereby designated, and
TFC hereby covenants and agrees to act as, Servicer under this Agreement for an
initial term, commencing on the Closing Date and ending on September 30, 2001,
which term shall be extendible by the Lender and, provided that no Insurer
Default shall have occurred and be continuing, the Insurer for successive
quarterly terms ending on each successive December 31, March 31, June 30 and
September 30, until the Total Outstanding Advances, all accrued and unpaid
interest thereon and all other Secured Obligations have been paid in full;
provided, however, that upon the occurrence of an Insurance Agreement Event of
--------  -------
Default or a Servicer Termination Event, such term shall only be extendible by
the Lender and, as applicable, the Insurer for successive monthly terms ending
on the last day of such successive calendar month.  Each notice of any such
extension (each, a "Servicer Extension Notice") shall be delivered by the Lender
                    -------------------------
to the Borrower, the Servicer, the Backup Servicer, the Successor Servicer and
the Insurer; provided, however, that, so long as no Insurer Default shall have
             --------  -------
occurred and be continuing, the delivery of any Servicer Extension Notice shall
require the consent of the Insurer; provided, further, that the Insurer shall be
                                    --------  -------
deemed to have consented to the delivery by the Lender of any Servicer Extension
Notice unless the Insurer shall have informed the Lender in writing of its
failure so to consent, no later than the second Business Day preceding the date
on which term of the Servicer would expire in the absence of such delivery.  The
Servicer hereby agrees that, as of the date hereof and upon its receipt of any
such Servicer Extension Notice, the Servicer shall become bound, for the initial
term described above and for the duration of the term covered by such Servicer
Extension Notice, to continue as the Servicer subject to and in accordance with
the other provisions of this Agreement.  The Borrower agrees that if as of the
fifteenth day prior to the last day of any term of the Servicer the Borrower
shall not have received any Servicer Extension Notice from the Lender and, as
applicable, the Insurer, the Borrower will, within five days thereafter, give
written notice of such non-receipt to the Insurer, the Lender, the Backup
Servicer, the Servicer, the Successor Servicer or any other successor Servicer,
and the Servicer's term shall not be extended unless a Servicer Extension Notice
is received on or before the last day of such term.

                                       2
<PAGE>

          (b)  Each of TFC, in the case of clause (i) below, and Borrower, in
                                           ----------
the case of clause (ii) below, hereby agree that upon the designation of a
            -----------
successor Servicer hereunder or the assumption by the Successor Servicer of the
Servicer's duties and responsibilities in accordance with Section 8.01, (i) TFC
                                                          ------------
will terminate its activities as Servicer hereunder in accordance with Section
                                                                       -------
7.02 and, in any case, in a manner which the Insurer and the Lender reasonably
----
determine will facilitate the transition of the performance of such activities
to such successor Servicer or the Successor Servicer, as the case may be, and
TFC shall cooperate with and assist such successor Servicer or the Successor
Servicer, as the case may be, and (ii) such successor Servicer or the Successor
Servicer shall, without any further action by the Borrower or such successor
Servicer or the Successor Servicer, be appointed as the Borrower's agent and
attorney-in-fact for the purpose of exercising such power and authority as is or
may from time to time be designated to the Servicer hereunder or under any other
Loan Document.

          (c)  TFC acknowledges that the other parties hereto have relied,
subject to Section 2.01(a), on TFC's agreement to act as Servicer hereunder in
           ---------------
making their decision to execute and deliver this Agreement, the Loan Agreement,
the Note and the other Loan Documents.  Accordingly, TFC agrees that it will not
resign as Servicer except as permitted pursuant to Section 5.04.
                                                   ------------

                                  ARTICLE III

                   ADMINISTRATION AND SERVICING OF CONTRACTS

     Section 3.01   Duties of Servicer.  The Servicer, for the benefit of the
                    ------------------
Borrower, the Insurer and the Lender, shall manage, service, administer and make
collections on the Contracts, and perform the other actions required by the
Servicer under this Agreement, the Loan Agreement and the other Loan Documents,
in accordance with all applicable federal, state or local laws and regulations
and with the degree of skill, care and diligence of prudent lenders in the
industry for the servicing of comparable assets, but in no event with less
skill, care and diligence than the Servicer exercises with respect to all
comparable assets that it services for itself or others; provided, however, that
                                                         --------  -------
the Servicer shall not materially change its servicing standards and procedures
without the prior written consent of the Lender and, so long as no Insurer
Default shall have occurred and be continuing, the Insurer unless such changes
are required by legal statutes as evidenced by an Opinion of Counsel (such
standards and procedures, the "Servicing Standard").  The Servicer's duties
                               ------------------
shall include, without limitation, collection and posting of all payments,
responding to inquiries of Obligors on Contracts, investigating delinquencies,
sending invoices to Obligors, as appropriate, reporting any required tax
information to Obligors, monitoring the Contracts and the other Collateral as
provided in this Agreement, the Loan Agreement and the other Loan Documents,
preparing and delivering Contract Schedules and Contract Files in accordance
with this Agreement, the Loan Agreement and the other Loan Documents, accounting
for Collections and furnishing statements and reports to the Lender and the
Insurer in accordance with this Agreement, the Loan Agreement and the other Loan
Documents and performing the other duties specified herein and therein.  The
Servicer shall also administer and enforce all rights and responsibilities of
the holder of the Contracts provided for in the Dealer Agreements, the Dealer
Assignments and the Insurance Policies, to the extent that such Dealer
Agreements, Dealer Assignments and Insurance Policies relate to the Contracts,
the Financed Vehicles or the Obligors (provided, however, that any
                                       --------  -------

                                       3
<PAGE>

successor Servicer, as successor to the Servicer, shall not be liable for
any amounts owed to any Dealer under such Dealer Agreements or Dealer
Assignments, including, but not limited to, participations and reserves). Except
to the extent otherwise required pursuant to this Agreement, the Servicer shall
follow the Required Standard of Care in performing its duties as Servicer. To
the extent consistent with the Required Standard of Care and the following
sentence, the Servicer shall have full power and authority, acting alone, to do
any and all things in connection with management, servicing, administration and
collection that it may deem necessary or desirable, including, without
limitation, executing and delivering on behalf of itself and the Borrower, any
and all instruments of satisfaction or cancellation, or partial or full release
or discharge, and all other comparable instruments, with respect to the
Contracts or any Financed Vehicle securing such Contracts. The Servicer is
authorized to release Liens on Financed Vehicles granted pursuant to the related
Contract, (i) if the debt secured thereby has been fully paid, (ii) in order to
collect insurance proceeds with respect thereto, and/or (iii) to liquidate such
Financed Vehicles in accordance with the Required Standard of Care; provided,
                                                                    --------
however, that to the extent any such release relates to a settlement with an
-------
Obligor in which the Obligor is required to pay an amount less than the
Principal Balance (together with any accrued interest) on the related Contract
in exchange for such instrument, the Servicer shall execute and deliver such
necessary instruments only to the extent such execution and delivery (i) is in
the ordinary course of the Servicer's business, (ii) is not done on a wholesale
basis and (iii) would, in the good faith business judgement of the Servicer,
maximize the return to the Lender with respect to the related Contract. The
Servicer is hereby authorized to commence, in its own name or in the name of the
Borrower or the Lender, a legal proceeding to enforce a Contract pursuant to
Section 3.03 or to commence or participate in any other legal proceeding
------------
(including a bankruptcy proceeding) relating to or involving a Contract, an
Obligor or a Financed Vehicle. If the Servicer shall commence or participate in
any such legal proceeding in its own name, the Borrower or the Lender, as the
case may be, shall thereupon be deemed to have automatically assigned, solely
for the purpose of commencing or participating in any such proceeding as a party
or claimant, such Contract to the Servicer and the Servicer is authorized and
empowered by the Borrower or the Lender, as the case may be, to execute and
deliver in the Servicer's name any notices, demands, claims, complaints,
responses, affidavits or other documents or instruments in connection with any
such proceeding. If in any enforcement suit or legal proceeding it shall be held
that the Servicer may not enforce a Contract on the ground that it shall not be
a real party in interest or a holder entitled to enforce such Contract, the
Borrower shall, at the Servicer's expense and direction, take steps to enforce
such Contract, including bringing suit in the name of the Borrower or the
Lender, as the case may be. The Borrower shall, or the Lender, as the case may
be, upon the written request of the Servicer, furnish the Servicer with any
powers of attorney and other documents reasonably necessary or appropriate to
enable the Servicer to carry out its servicing and administrative duties
hereunder.

     Section 3.02   Collection and Allocation of Contract Payments;
                    -----------------------------------------------
Modifications of Contracts.
--------------------------

          (a)  The Servicer (including any successor to the Servicer) shall
manage, service, administer and make collections on the Contracts, and perform
the other obligations of the Servicer under this Agreement, the Loan Agreement
and the other Loan Documents in accordance with the terms hereof and thereof,
and agrees that it shall carry out its duties and obligations hereunder and
under the other Loan Documents in accordance with the

                                       4
<PAGE>

following standards of care (the "Required Standard of Care"): (i) in the event
                                  -------------------------
that the Servicer is TFC, the Servicer's written credit and collection policies
and procedures as in effect on the date hereof, a copy of which is annexed
hereto as Exhibit E, and as may be amended from time to time in accordance with
the Loan Documents (with the prior consent of the Lender and, provided that no
Insurer Default shall have occurred and be continuing, the Insurer), in
accordance with the Servicing Standard; (ii) in the event that the successor to
the Servicer is the Successor Servicer, the Successor Servicer's standard and
customary procedures for its owned and third-party serviced motor vehicle retail
installment sale contracts and its written credit and collection policies and
procedures as in effect on the date hereof, and (iii) in the event that the
successor to the Servicer is not the Successor Servicer, the higher of the
customary and usual procedures of financial institutions which service
comparable motor vehicle retail installment sale contracts and such servicer's
standard and customary procedures for the servicing of comparable motor vehicle
retail installment sale contracts. In addition, the Servicer will cooperate with
any successor to the Servicer upon any assumption by such successor to the
Servicer (including, without limitation, the Successor Servicer) of the
servicing of Contracts under this Agreement, in order to enable such successor
to the Servicer to carry out the duties and obligations of the Servicer
hereunder, under the Loan Agreement and under the other Loan Documents, and will
take all such other actions as may be reasonably requested by such successor to
the Servicer from time to time as may be necessary or reasonably desirable to
effect such transfer of servicing duties and obligations. Subject to Section
                                                                     -------
3.16, the Servicer is authorized in its discretion to waive any prepayment
----
charge, late payment charge or any other similar fees that may be collected in
the ordinary course of servicing any Contract. The Servicer shall allocate
Collections relating to principal and interest in accordance with the terms of
the related Contracts.

          (b) The Servicer may grant payment extensions on, or other
modifications or amendments to, a Contract only in accordance with the terms set
forth in this Section 3.02(b).  The Servicer may at any time agree to (i) a
modification or amendment of a Contract in order to change the Obligor's regular
due date to a date within 30 days in which such due date occurs, (ii) a
modification or amendment of a Contract in order to re-amortize the Scheduled
Contract Payments on the Contract in accordance with the Allowable Delinquency
Policy or the Deferment Policy; or (iii) change the delinquency classification
of any Contract in accordance with the Allowable Delinquency Policy; provided,
                                                                     --------
however, that no such change shall extend the maturity date of any Contract for
-------
more than two calendar months in any 12 month period; and, provided, further,
                                                           --------  -------
that the Servicer shall not grant with respect to any Contract, extensions
and/or deferrals (pursuant to the Allowable Delinquency Policy, a copy of which
is attached as Exhibit A to this Agreement, or the Deferment Policy) which total
more than four calendar months in the aggregate, for such Contract.
Notwithstanding anything in the foregoing to the contrary, the Servicer shall
not agree to any extension, amendment or deferral with respect to any Contract
in respect of which payments are scheduled to be made on other than a monthly
basis.

          (c) The Servicer shall use its best efforts to direct Obligors to send
payments in respect of the Contracts, (x) by direct debit of the Obligor's bank
account to the Collection Account or (y) by check, to be made directly to one or
more Post Office Boxes; provided, however, that if any successor Servicer shall
assume all of the rights and obligations of the outgoing Servicer, it may also
direct Obligors to make payments in respect of the Contracts to local branch
offices of any successor Servicer or a bank account owned by or otherwise

                                       5
<PAGE>

controlled by the Lender.  Prior to the making of an Access Denial Election (as
defined in the Standby Processing Agreement), TFC, acting as the bailee of the
Lender, the Collateral Agent and the Insurer, shall have access to the mail,
checks and other items directed to the Post Office Boxes and shall process such
items in accordance with the requirements of this Agreement, the Loan Agreement
and the other Loan Documents.  Immediately upon the effectiveness of an Access
Denial Election, TFC's right of access to the Post-Office Boxes and their
contents shall terminate and, instead, the P.O. Box Owner, acting as the bailee
of the Lender, the Collateral Agent, the Hedge Counterparty and the Insurer,
shall thereafter have unrestricted and exclusive access to the mail, checks and
other items directed to the Post Office Boxes and shall process such items in
accordance with the requirements of the Standby Processing Agreement.

          (d)  Prior to the Funding Date for any Advance, the Servicer will
issue coupon books or monthly statements to the Obligors (other than Obligors
under Contracts with respect to which automatic allotment is then in effect)
under the Contracts to be funded on such Funding Date which provide for such
Obligors to forward their remittances to (i) one of the Post Office Boxes or
(ii) to such other address as the Lender and, so long as no Insurer Default
shall have occurred and be continuing, the Insurer shall direct, in each of
cases (i) and (ii), in accordance with the applicable requirements of the Loan
Documents, and the Servicer will continue, not less often than every three
months, to so notify those Obligors who have failed to forward remittances to
the Post Office Boxes, except as permitted under Section 3.02(c).
                                                 ---------------

          (e)  Notwithstanding the Standby Processing Agreement, or any of the
provisions of this Agreement relating to the Standby Processing Agreement, the
Servicer shall remain obligated and liable to the Borrower, the Collateral
Agent, the Lender, the Hedge Counterparty and the Insurer for servicing and
administering the Contracts and the other Collateral in accordance with the
provisions of this Agreement, the Loan Agreement and the other Loan Documents
without diminution of such obligation or liability by virtue thereof.

          (f)  In the event of a termination of the Servicer pursuant to Article
VII hereof, the Successor Servicer or any other successor to the Servicer shall
assume all of the rights and obligations of the outgoing Servicer under the
Standby Processing Agreement subject to the terms hereof.  In such event, the
Successor Servicer or any other successor to the Servicer shall, except as
provided herein, be deemed to have assumed all of the outgoing Servicer's
interest in the Standby Processing Agreement and to have replaced the outgoing
Servicer as a party to the Standby Processing Agreement to the same extent as if
the Standby Processing Agreement had been assigned to the Successor Servicer or
such other successor to the Servicer, except that the outgoing Servicer shall
not thereby be relieved of any liability or obligations on the part of the
outgoing Servicer to the Standby Processing Agreement.  The outgoing Servicer
shall, upon request of the Lender or, so long as no Insurer Default shall have
occurred and be continuing, the Insurer, but at the expense of the outgoing
Servicer, deliver to the Successor Servicer or such other successor to the
Servicer all documents and records relating to each such Standby Processing
Agreement and otherwise use its best efforts to effect the orderly and efficient
transfer of the Standby Processing Agreement to the Successor Servicer or such
other successor to the Servicer.

                                       6
<PAGE>

     Section 3.03   Realization upon Contracts.
                    --------------------------

          (a)  Consistent with the Required Standard of Care, the Servicer shall
use its best efforts to repossess (or otherwise comparably convert the ownership
of) and liquidate any Financed Vehicle securing a Contract with respect to which
the Servicer has determined that payments thereunder are not likely to be
resumed, as soon as is practicable after default on such Contract but in no
event later than the date on which a Contract has become a Liquidated Contract
(other than in the case of Financed Vehicles where neither the Financed Vehicle
nor the Obligor can be physically located by the Servicer using procedures
consistent with the Required Standard of Care) and other than in the case of an
Obligor who is subject to a bankruptcy proceeding); provided, however, that the
Servicer may elect not to repossess a Financed Vehicle within such time period
if in accordance with the Required Standard of Care it determines that the net
proceeds ultimately recoverable with respect to such Contract would be increased
by forbearance.  The Servicer is authorized to follow such customary practices
and procedures as it shall deem necessary or advisable, consistent with the
Required Standard of Care which practices and procedures may include reasonable
efforts to realize upon any recourse to Dealers, the sale of the related
Financed Vehicle at public or private sale, the submission of claims under an
Insurance Policy and other actions, including entering into settlements with
Obligors, by the Servicer in order to realize upon such a Contract.  The
foregoing is subject to the provision that, in any case in which the Financed
Vehicle shall have suffered damage, the Servicer shall not expend funds in
connection with any repair or towards the repossession of such Financed Vehicle
unless it shall determine in its good faith business judgment that such repair
and/or repossession shall increase the proceeds of liquidation of the related
Contract by an amount greater than the amount of such expenses.  All amounts
received upon liquidation of a Financed Vehicle shall be remitted directly by
the Servicer to the Collection Account without deposit into any intervening
account as soon as practicable, but in no event later than one (1) Business Day
after receipt thereof.  The Servicer shall be entitled to recover all reasonable
expenses incurred by it in the course of repossessing and liquidating a Financed
Vehicle.  The Servicer shall recover such reasonable expenses based on the
information contained in the Servicer's Certificate delivered on the related
Determination Date.  The Servicer shall pay on behalf of the Borrower any
personal property taxes assessed on repossessed Financed Vehicles.  The Servicer
shall be entitled to reimbursement of any such tax from Net Liquidation Proceeds
with respect to such Contract.

          (b)  If the Servicer elects to commence a legal proceeding to enforce
a Dealer Agreement or Dealer Assignment, the act of commencement shall be deemed
to be an automatic assignment from the Borrower and the Lender to the Servicer
of the rights under such Dealer Agreement and Dealer Assignment for purposes of
collection only. If, however, in any enforcement suit or legal proceeding it is
held that the Servicer may not enforce a Dealer Agreement or Dealer Assignment
on the grounds that it is not a real party in interest or a Person entitled to
enforce the Dealer Agreement or the Dealer Assignment, the Borrower or the
Lender, as the case may be, in each case at the Borrower's expense, shall take
such steps as the Servicer deems reasonably necessary to enforce the Dealer
Agreement or Dealer Assignment, including bringing suit in its name or the name
of the Borrower, the Lender and/or the Borrower for the benefit of the Lender.
All amounts recovered shall be remitted directly by the Servicer to the
Collection Account without deposit into any intervening account as soon as
practicable, but in no event later than one (1) Business Day after receipt
thereof.

                                       7
<PAGE>

          (c)  The Servicer agrees that prior to delivering any repossessed
Finance Vehicle for sale to any dealer, it shall make such filings and effect
such notices as are necessary under the UCC to preserve the Borrower's or the
Collateral Agent's ownership interest (or security interest, as the case may be)
in such repossessed Financed Vehicle delivered for sale to dealers.

          (d)  In the event that any Contract becomes a Liquidated Contract
during any Collection Period, on (and after) the Determination Date related to
such Collection Period, the Principal Balance of such Contract shall be deemed
to be zero for the purpose of determining the outstanding Aggregate Principal
Balance of the Contracts.  For clarity, such deemed reduction in the Aggregate
Principal Balance of the Contracts shall not constitute a release by the
Collateral Agent of its right, title and interest to such Liquidated Contract.

     Section 3.04   Maintenance of Security Interests.
                    ---------------------------------

          (a)  The Servicer shall take such steps as are necessary to maintain
perfection of the first priority security interest created by the Loan Agreement
and the other Loan Documents.  At any time and from time to time, the Servicer
shall, or shall cause the Borrower to, promptly and duly execute and deliver, or
will promptly cause to be executed and delivered, such further instruments and
documents and take such further actions as are necessary (or as are reasonably
requested by the Lender or, so long as no Insurer Default shall have occurred
and be continuing, the Insurer) for the purpose of obtaining or preserving the
full benefits of the Lender, the Hedge Counterparty and the Insurer under the
Loan Agreement and the other Loan Documents and of their respective rights and
powers therein granted, including, without limitation, the filing of any
financing or continuation statements under the UCC in effect in any jurisdiction
with respect to the Liens created by the Loan Agreement and the other Loan
Documents or the taking of any other action necessary to preserve the status of
the Collateral Agent's Liens on the Collateral as first priority perfected
Liens.  A photographic or other reproduction of the Loan Agreement and/or any
other Loan Document, as applicable, shall be sufficient as a financing statement
for filing in any jurisdiction.  The Borrower also hereby authorizes the
Collateral Agent to file any such financing or continuation statement without
the signature of the Borrower to the extent permitted by applicable law.

          (b)  Consistent with the Required Standard of Care, this Agreement,
the Loan Agreement and the other Loan Documents, the Servicer shall take such
steps on behalf of the Borrower and the Lender as are necessary to maintain
perfection of the first priority security interest created by each Contract in
the related Financed Vehicle, including obtaining the execution by the Obligors
and the recording, registering, filing, re-recording, re-filing and re-
registering of all security agreements, financing statements and continuation
statements as are necessary to maintain the security interest under the
respective Contracts. The Borrower hereby authorizes the Servicer, and the
Servicer agrees, consistent with the Required Standard of Care, to take any and
all steps necessary (i) to re-perfect such security interest in the name of
Borrower as necessary because of the relocation of a Financed Vehicle or for any
other reason or, (ii) if the security interest granted pursuant to a Contract
are insufficient without a notation on the related Financed Vehicle's
certificate of title or without fulfilling any additional administrative
requirements under the laws of the state in which the Financed Vehicle is
located, to perfect a security interest in the related Financed Vehicle in favor
of the Borrower or the Collateral Agent,

                                       8
<PAGE>

for the benefit of the Lender, the Hedge Counterparty and the Insurer. The
Servicer hereby agrees that Servicer's designation as the secured party on the
certificate of title is in its capacity as agent of the Borrower and the
Collateral Agent (for the benefit of the Lender, the Hedge Counterparty and the
Insurer), solely for purposes of providing perfection of the security interest
therein.

          (c)  Upon the occurrence of an Insurance Agreement Event of Default or
a Servicer Termination Event, the Lender and, if no Insurer Default shall have
occurred and be continuing, the Insurer may instruct the Collateral Agent and
the Servicer to take or cause to be taken such action as may, in the opinion of
the Lender and, if no Insurer Default shall have occurred and be continuing, the
Insurer, be necessary to perfect or re-perfect the security interests in the
Financed Vehicles securing the Contracts in the name of the Collateral Agent by
amending the title documents of such Financed Vehicles or by such other
reasonable means as may, in the opinion of the Lender and, if no Insurer Default
shall have occurred and be continuing, the Insurer be necessary or prudent.  TFC
hereby agrees to pay all expenses related to such perfection or re-perfection
and to take all action necessary therefor.  In addition, prior to the occurrence
of an Insurance Agreement Event of Default or a Servicer Termination Event, the
Lender and, if no Insurer Default shall have occurred and be continuing, the
Insurer may instruct the Servicer to take or cause to be taken such action as
may, in the opinion of the Lender and, if no Insurer Default shall have occurred
and be continuing, the Insurer be necessary to perfect or re-perfect the
security interest in the Financed Vehicles underlying the Contracts in the name
of the Collateral Agent, including by amending the title documents of such
Financed Vehicles or by such other reasonable means as may, in the opinion of
the Lender and, if no Insurer Default shall have occurred and be continuing, the
Insurer be necessary or prudent; provided, however, that if the Insurer or the
Lender, as applicable, requests that the title documents be amended prior to the
occurrence of an Insurance Agreement Event of Default or a Servicer Termination
Event, the out-of-pocket expenses of the Servicer in connection with such action
shall be reimbursed to the Servicer, by the Insurer or the Lender, as
applicable.  TFC and the Borrower each hereby appoints the Collateral Agent as
its attorney-in-fact, to take any and all steps required to be performed by TFC
or the Borrower, as applicable, pursuant to this Section 3.04(c), including
                                                 ---------------
execution of certificates of title or any other documents in the name and stead
of TFC or the Borrower, as applicable, and the Collateral Agent hereby accepts
such appointment.

     Section 3.05   Servicing Fee; Servicing Expenses.
                    ---------------------------------

          (a)  On each Payment Date, the Servicer shall be entitled to receive
the Servicing Fee together with reimbursable amounts for the related Collection
Period pursuant to Section 3.05(b) pursuant to Section 3.03(b) of the Loan
                   ---------------             ---------------
Agreement.  The Servicer shall be required to pay all expenses incurred by it in
connection with its activities under this Agreement (including taxes imposed on
the Servicer, expenses incurred in connection with distributions and reports
made by the Servicer to the Lender or the Insurer and all other fees and
expenses of the Borrower not payable or reimbursable pursuant to Section
                                                                 -------
3.05(b), except taxes levied or assessed against the Borrower, and claims
-------
against the Borrower in respect of indemnification, which taxes and claims in
respect of indemnification against the Borrower are expressly stated to be for
the account of TFC).

                                       9
<PAGE>

          (b)  To the extent that other reimbursable expenses are not recovered
pursuant to Section 3.05(a), the Servicer will be entitled to be reimbursed from
            ---------------
amounts on deposit in the Collection Account with respect to a Collection Period
for amounts previously deposited in the Collection Account but later determined
by the Servicer to have resulted from mistaken deposits or postings or checks
returned for insufficient funds.  The amount to be reimbursed hereunder shall be
paid to the Servicer on the related Payment Date pursuant to Section 3.03(b) of
                                                             ---------------
the Loan Agreement upon certification by the Servicer of such amounts and the
provision of such information to the Lender and, so long as no Insurer Default
shall have occurred and be continuing, the Insurer as may be necessary in the
opinion of the Lender and/or the Insurer to verify the accuracy of such
certification.  In the event that the Lender and/or the Insurer, as applicable,
has not received evidence satisfactory to it of the Servicer's entitlement to
reimbursement pursuant to this Section, the Lender and/or the Insurer, as
applicable, shall give the Collateral Agent notice to such effect, following
receipt of which the Collateral Agent shall not make a payment to the Servicer
in respect of such amount pursuant to Section 3.03(b) of the Loan Agreement, or
                                      ---------------
if the Servicer prior thereto has been reimbursed pursuant to Section 3.03(b) of
                                                              ---------------
the Loan Agreement, the Collateral Agent shall withhold such amounts from
amounts otherwise payable to the Servicer on the next succeeding Payment Date.

     Section 3.06   Annual Statement as to Compliance; Notice of Servicer
                    -----------------------------------------------------
Termination Event.
-----------------

          (a)  The Servicer shall deliver to the Lender, the Successor Servicer,
the Backup Servicer and the Insurer, on or before (i) the earlier to occur of
(A) the tenth day prior to the date on which the first Securitization occurs
after the Effective Date, and (B) December 31, 2001 (the "Initial Statement
                                                          -----------------
Date"), and (ii) on or before December 31 of each year after 2001 (each such
----
date, a "Statement Date"), an Officer's Certificate of a Responsible Officer of
         --------------
the Servicer, dated as of the date of delivery thereof, stating that (x) a
review of the activities of the Servicer during the 12-month period ending on
such Statement Date (or, in the case of the first such certificate, from the
Effective Date to the Initial Settlement Date) and of its performance under this
Agreement, the Loan Agreement and the other Loan Documents has been made under
such officer's supervision, and (y) to the best of such officers' knowledge,
based on such review, the Servicer has fulfilled all its obligations under this
Agreement, the Loan Agreement and the other Loan Documents throughout such
period or, if there has been a default in the fulfillment of any such
obligation, specifying each such default known to such officers and the nature
and status thereof.

          (b)  The Servicer, shall deliver to the Lender, the Successor
Servicer, the Backup Servicer, the Collateral Agent, and the Insurer, promptly
after having obtained knowledge thereof, but in no event later than two (2)
Business Days thereafter, written notice (in a certificate of a Responsible
Officer of the Servicer) of any event which with the giving of notice or lapse
of time, or both, would become a Servicer Termination Event. The Borrower or the
Servicer shall deliver to the Lender, the Successor Servicer, the Backup
Servicer, the Collateral Agent, the Insurer, the Servicer or the Borrower (as
applicable) promptly after having obtained knowledge thereof, but in no event
later than two (2) Business Days thereafter, written notice (in a certificate of
a Responsible Officer of the Borrower or the Servicer, as applicable) of any
event which with the giving of notice or lapse of time, or both, would become a
Funding Termination Event or a Trigger Event.

                                       10
<PAGE>

          (c)  The Successor Servicer shall deliver or cause to be delivered to
the Lender and the Insurer on or before April 30 (or 120 days after the end of
the Successor Servicer's fiscal year, if other than December 31) of each year,
beginning on April 30, 2002, copies of any amendments, modifications, revisions
or supplements to its operations manual entitled "Wells Fargo Financial Consumer
                                                  ------------------------------
Auto Receivables Loan Servicing Operations Summary".  Upon the occurrence and
--------------------------------------------------
continuation of a Trigger Event or a Funding Termination Event while TFC is
acting as Servicer or a Servicer Termination Event, if so requested by the
Lender or the Insurer, the Successor Servicer shall deliver or cause be
delivered any amendments, modifications, revisions or supplements to such
operations manual, to the Lender and the Insurer at such times as deemed
necessary by the Lender or the Insurer in the exercise their discretion, which
delivery shall take place within 10 Business Days after the Lender's or the
Insurer's, as applicable, request therefor.

     Section 3.07   Annual Independent Certified Public Accountants' Report;
                    --------------------------------------------------------
Required Audit Reports.
----------------------

          (a)  The Servicer shall cause a nationally recognized firm of
independent certified public accountants acceptable to the Lender and, so long
as no Insurer Default shall have occurred and be continuing, the Insurer
("Independent Accountants"), which may also render other services to the
Servicer, to deliver to the Borrower, the Lender, the Insurer, the Collateral
Agent, the Hedge Counterparty and the Backup Servicer on or before the Statement
Date of each year a report, addressed to the Servicer, the Backup Servicer, the
Lender, the Insurer, the Collateral Agent and the Borrower, summarizing the
results of certain procedures with respect to certain documents and records
relating to the servicing of the Contracts during the preceding calendar year
(or, in the case of the first such report, during the period from the Effective
Date to the Initial Statement Date). The procedures to be performed and reported
upon by the Independent Accountants shall be such procedures as shall reasonably
be required by the Lender and the Insurer (provided no Insurer Default has
occurred and is continuing) consistent with industry practice.  Such report will
also indicate that the firm of Independent Accountants is independent of the
Servicer within the meaning of the Code of Professional Ethics of the American
Institute of Certified Public Accountants.  In the event such accounting firm
requires the Collateral Agent to agree to the procedures to be reported on by
such accounting firm in any report delivered pursuant to this Section 3.07(a),
                                                              ---------------
the Servicer shall direct the Collateral Agent in writing to so agree.  It is
understood and agreed that the Collateral Agent will deliver such letter of
agreement in conclusive reliance upon the direction of the Servicer, and that
the Collateral Agent will not make any independent inquiry or investigation as
to, and shall have no obligation or liability with respect to, the sufficiency,
validity or correctness of such procedures.

          (b)  The Servicer shall cause Independent Accountants to deliver to
the Lender, the Borrower, the Insurer, the Collateral Agent, the Hedge
Counterparty and the Backup Servicer on or before 30 days after the calendar
quarters ending March 31, June 30, September 30 and December 31 of each year,
commencing on September 30, 2001, a report, summarizing the results of certain
procedures with respect to a post-funding review of the Servicer's compliance
with its stated underwriting policies and verification of certain
characteristics of the Contracts as of each Funding Date that occurred during
such calendar quarter; provided, however, that such reports may be delivered
                       --------  -------
with such lesser frequency as the Lender and (so long as no Insurer Default
shall have occurred and be continuing) the Insurer, may, in their

                                       11
<PAGE>

respective discretion, consent to. The procedures to be performed and reported
upon by the Independent Accountants shall be such procedures as shall reasonably
be required by the Lender and, so long as no Insurer Default has occurred and is
continuing, the Insurer consistent with industry practice. Such report will also
indicate that the firm of Independent Accountants is independent of the Servicer
within the meaning of the Code of Professional Ethics of the American Institute
of Certified Public Accountants. All fees related to such reports and procedures
are payable by TFC.

          (c)  As soon as practical, but not later than 30 days after the due
date for the second monthly Servicer's Certificate, the Servicer shall cause
Independent Accountants to deliver to the Borrower, the Lender, the Insurer, the
Collateral Agent, the Hedge Counterparty and the Backup Servicer a report
summarizing the results of certain procedures with respect to the accuracy of
the first and second monthly Servicer's Certificates in relation to the
Servicer's records and files and the degree of the Servicer's compliance with
deadlines for cash remittances to the Collection Account.  If such review
indicates a high degree of accuracy in the monthly Servicer's Certificates and a
high degree as determined by each of the Lender and the Insurer in its
respective discretion of compliance with remittance requirements, such firm will
perform the same procedures on a quarterly basis.  If the review of the monthly
Servicer's Certificates for the first and second Collection Periods indicate a
low degree of accuracy in the reporting or adherence to remittance requirements,
such procedures will continue at a frequency rate determined by the Lender and
the Insurer, until such time as a high degree of accuracy as determined by each
of the Lender and, so long as no Insurer Default has occurred and is continuing,
the Insurer in its respective discretion has been obtained.  All fees related to
such reports and procedures are payable by TFC.  The procedures to be performed
and reported upon by the Independent Accountants shall be such procedures as
shall reasonably be required by the Lender and the Insurer (provided no Insurer
Default has occurred and is continuing) consistent with industry practice.  Such
report will also indicate that the firm of Independent Accountants is
independent of the Servicer within the meaning of the Code of Professional
Ethics of the American Institute of Certified Public Accountants.

     Section 3.08   Access to Certain Documentation and Information Regarding
                    ---------------------------------------------------------
Contracts.  The Servicer shall provide to representatives of the Borrower, the
---------
Backup Servicer, the Collateral Agent, the Lender and the Insurer, reasonable
access to the documentation (including any computer tapes or files) regarding
the Contracts.  The Servicer shall provide to federal, state and local
regulatory agencies, and their respective examiners, access to the documentation
(including any computer tapes or files) regarding the Contracts required by
applicable regulations of such agencies.  Such access shall be afforded without
charge, but only upon reasonable and prior written request and during normal
business hours at the offices of the Servicer designated by it.  Nothing in this
Section 3.08 shall derogate from the obligation of the Servicer to observe any
------------
applicable law prohibiting disclosure of information regarding the Obligors and
the failure of the Servicer to provide access as provided in this Section 3.08
                                                                  ------------
as a result of such obligation shall not constitute a breach of this Section.

     Section 3.09   Servicer Expenses. The Servicer shall be required to pay all
                    -----------------
expenses incurred by it in connection with its activities hereunder, including
fees and disbursements of independent accountants, taxes imposed on the Servicer
and expenses incurred in connection

                                       12
<PAGE>

with distributions and reports to the Lender and the Insurer, and shall be
reimbursed for such expenses solely to the extent expressly provided herein.

     Section 3.10   Appointment of Subservicer.  The Servicer may at any time
                    --------------------------
appoint a subservicer to perform all or any portion of its obligations as
Servicer hereunder; provided, however, that (i) the Lender and the Insurer
(provided no Insurer Default has occurred and is continuing) shall have approved
such appointment in writing; (ii) the Servicer shall remain obligated and be
liable to the Borrower and the Lender for the servicing and administering of the
Contracts in accordance with the provisions hereof without diminution of such
obligation and liability by virtue of the appointment of such subservicer and to
the same extent and under the same terms and conditions as if the Servicer alone
were servicing and administering the Contracts; and (iii) the agreement with the
subservicer provides that it may be terminated by any successor Servicer
(including the Successor Servicer) if the Servicer that had entered into such
subservicing agreement is terminated as Servicer hereunder. The fees and
expenses of the subservicer shall be as agreed between the Servicer and its
subservicer from time to time and none of the Borrower, the Lender nor the
Insurer shall have any responsibility therefor.

     Section 3.11   Delegation of Duties.  The Servicer may at any time perform
                    --------------------
through sub-contractors the specific duties of (i) repossession of Financed
Vehicles, and (ii) pursuing the collection of deficiency balances on defaulted
Contracts, in each case without the consent of the Borrower, the Lender or the
Insurer.  The Servicer may also perform other specific duties through such sub-
contractors in accordance with its customary servicing policies and procedures
as in effect on the date hereof, without the prior consent of the Borrower, the
Lender or the Insurer; provided, however, that such prior consent of the
                       --------  -------
Borrower, the Lender and (so long as no Insurer Default shall have occurred and
be continuing) the Insurer shall be required if such customary servicing
policies and procedures shall be altered after the date hereof.  No such
delegation or sub-contracting of duties by the Servicer shall relieve the
Servicer of its responsibility with respect to such duties.  Any sub-contractor
engaged by the Servicer pursuant to this Section 3.11 shall (i) have all
                                         ------------
licenses and permits necessary to perform such specific duties, (ii) be a Person
experienced in the performance of such specific duties, and (iii) not have been
subject to any litigation, civil or criminal penalty, or other similar action,
except to the extent reasonable and ordinary for a Person engaging in activities
similar to such specific duties.

     Section 3.12   Insurance.
                    ---------

          (a)  The Servicer shall require, in accordance with the Required
Standard of Care, that each Financed Vehicle be initially insured by the related
Obligor under the Insurance Policies referred to in Paragraph 22 of Schedule B
to the Purchase Agreement.  Each Contract requires the Obligor to initially
obtain such physical loss and damage insurance, naming TFC and its successors
and assigns as additional insureds.  If the Servicer shall determine that an
Obligor has failed to obtain or maintain either a physical loss and damage
Insurance Policy or the combination of TFC's Total Loss Protection and GAP
coverage covering the related Financed Vehicle which satisfies the conditions
set forth in such Paragraph 22 (including during the repossession of such
Financed Vehicle) the Servicer, in accordance with the Required Standard of
Care, shall enforce the rights of the holder of the Contract under the Contract
and require the Obligor to obtain such total loss coverage insurance in
accordance with such standards of care.

                                       13
<PAGE>

          (b)  The Servicer may sue to enforce or collect upon the Insurance
Policies in its own name or as agent of the Borrower and the Collateral Agent,
for the benefit of the Lender, the Hedge Counterparty and the Insurer.  If the
Servicer elects to commence a legal proceeding to enforce an Insurance Policy,
the act of commencement shall be deemed to be an automatic assignment of the
rights of the Collateral Agent and the Borrower under such Insurance Policy to
the Servicer for purposes of collection only.  If, however, in any enforcement
suit or legal proceeding it is held that the Servicer may not enforce an
Insurance Policy on the grounds that it is not a real party in interest or a
holder entitled to enforce the Insurance Policy, the Collateral Agent and/or the
Borrower, as applicable, at the Servicer's expense, shall take such steps as the
Servicer deems reasonably necessary to enforce such Insurance Policy, including
bringing suit in its name or the name of the Collateral Agent or the Borrower.
Any amounts collected by the Servicer under an Insurance Policy shall be
remitted directly by the Servicer to the Collection Account without deposit into
any intervening account as soon as practicable, but in no event later than one
(1) Business Day after receipt thereof; provided, however, that such amounts so
                                        --------  -------
to be remitted shall exclude amounts applied to the repair of a related Financed
Vehicle that has been repossessed, in connection with the sale of such Financed
Vehicle pursuant to Section 3.03, if, in the good faith business judgment of the
                    ------------
Servicer, application of those amounts to such repair shall increase the
proceeds of liquidation of the related Contract by sum greater than those
amounts so applied.  Any cost incurred by the Servicer in maintaining any such
insurance shall not, for the purpose of calculating the outstanding balance of
any Contract under the Loan Agreement or any other Loan Document, be added to
the unpaid Principal Balance of the related Contract, notwithstanding that the
terms of such Contract so permit.

     Section 3.13   Enforcement of Prohibition on Transfer of Vehicle.  The
                    -------------------------------------------------
Servicer will, to the extent it has knowledge of any sale or Lien, or
prospective sale or Lien, by any Obligor of the related Financed Vehicle
(whether by sale or by contract of sale, and whether or not the Obligor remains
or is to remain liable under the Contract), exercise or cause to be exercised
its rights to accelerate the maturity of such Contract under the terms thereof.

     Section 3.14   Title, Conservation and Disposition of Financed Vehicle.  In
                    -------------------------------------------------------
the event that any Financed Vehicle is repossessed by the Servicer, the Servicer
shall conserve and protect each such Financed Vehicle for the Collateral Agent,
for the benefit of the Lender, the Hedge Counterparty and the Insurer, solely
for the purpose of its prompt disposition and sale.  The disposition of any such
Financed Vehicle shall be carried out by the Servicer at such price and upon
such terms and conditions as the Servicer shall determine in accordance with the
Required Standard of Care and with a view to maximizing the net present value
recovery from such disposition.  The Servicer shall deposit the proceeds of any
such disposition into the Collection Account not later than one (1) Business Day
after receipt thereof for distribution as Collections on the next succeeding
Payment Date in accordance with the Loan Agreement, including any such net
proceeds which are in excess of the applicable unpaid Principal Balance.

     Section 3.15   Fidelity Bond.  The Servicer or such successor servicer that
                    -------------
is performing the servicing duties of the Servicer (unless the successor
servicer is the Successor Servicer), has obtained, and shall continue to
maintain in full force and effect, a fidelity bond of a type and in such amount
as is customary for servicers engaged in the business of servicing automobile
receivables.

                                       14
<PAGE>

     Section 3.16   Application of Collections.    All Collections for the
                    --------------------------
Collection Period shall be applied by the Servicer as follows:

          (a)  with respect to each Simple Interest Contract (other than a
Purchased Contract), payments by or on behalf of the Obligor shall be applied to
interest and principal in accordance with the Simple Interest Method and (b)
with respect to each Rule of 78s Contract and each Actuarial Contract, (in each
case other than a Purchased Contract), payments by or on behalf of the Obligor
shall be applied to interest and principal in accordance with the Actuarial
Method.

     Section 3.17   Servicer's Certificate.   No later than 12:00 p.m., New York
                    ----------------------
City time, on each Determination Date, the Servicer shall deliver, or cause to
be delivered, to the Lender, the Insurer, the Borrower, the Collateral Agent,
the Successor Servicer and the Backup Servicer, in a computer-readable format
acceptable to each such Person, a Servicer's Certificate executed by a
Responsible Officer or agent of the Servicer containing among other things, (i)
all information necessary to enable the Collateral Agent to make any withdrawal
and deposit required by Section 4.02, to give any notice required by Section
                        ------------                                 -------
4.02 and to make the allocations to required to be made on the next Payment Date
----
pursuant to Section 3.03(b) of the Loan Agreement, (ii) all information to be
            ---------------
provided to Lender, the Borrower and the Insurer specified by Exhibit C and
(iii) a listing of all Contracts repurchased by the Servicer or by the Seller on
the related Deposit Date and each Contract which became a Liquidated Contracts
or which was paid in full during the related Collection Period shall be
identified by account number (as set forth in the Contracts Schedule).  In
addition to the information set forth in the preceding sentence, the Servicer's
Certificate shall also contain the following information: (a) the Deferral Rate,
the Delinquency Ratio and the Net Realized Loss Rate for each Monthly Static
Pool for such Determination Date; (b) whether to the knowledge of the Servicer
any Trigger Event or Funding Termination Event has occurred as of such
Determination Date; (c) whether to the knowledge of the Servicer a Servicer
Termination Event has occurred; and (d) such other information reasonably
requested by the Insurer or the Lender.  The Servicer shall deliver to the
Lender, the Insurer, the Borrower, the Collateral Agent, the Successor Servicer
and the Backup Servicer a hard copy of any such Servicer's Certificate upon
request of such Person.

     Section 3.18   Purchase of Receivables Upon Breach of Covenant.   Upon
                    -----------------------------------------------
discovery by any of the Servicer, the Successor Servicer, the Borrower or an
Authorized Officer of the Collateral Agent or the Backup Servicer of a breach of
any of the covenants set forth in Sections 3.04(a) or (b) or 5.02, the party
                                  ----------------    ---    ----
discovering such breach shall give prompt written notice to the others, the
Lender and the Insurer; provided, however, that the failure to give any such
                        --------  -------
notice shall not affect any obligation of the Servicer under this Section 3.18.
As of the last day of the month following the month of its discovery or receipt
of notice of any breach of any covenant set forth in Sections 3.04(a) or (b) or
                                                     ----------------    ---
5.02 which materially and adversely affects the interests of the Lender or the
----
Insurer in any Contract (including any Liquidated Contract) or the related
Financed Vehicle, the Servicer shall, unless such breach and the resulting
Material Adverse Effect shall have been cured in all material respects, purchase
from the Borrower the Contract affected by such breach for the Release Price of
such Contract.  On the date of such purchase, in satisfaction of the payment to
the Borrower of such Release Price, the Servicer shall, on behalf of the
Borrower, deposit such Release Price into the Collection Account in accordance
with Section 2.07(c) of the Loan Agreement and Section 4.02(a) hereof.  In
     ---------------                           ---------------
consideration of and

                                       15
<PAGE>

simultaneously with the purchase of the Contract, the Borrower and the
Collateral Agent shall perform such acts and execute such assignments,
termination statements and other documents as may reasonably be requested by the
Servicer in order to effect such purchase, it being understood that the
preparation of any such documents and the payment of any costs associated
therewith (including any required filing fees) shall be undertaken by the
Servicer. The Collateral Agent shall notify the Lender and the Insurer promptly,
in writing, of any failure by the Servicer to so repurchase any Contract to the
extent the Collateral Agent has actual knowledge of such failure. It is
understood and agreed that the obligation of the Servicer to purchase any
Contract (including any Liquidated Contract) with respect to which such a breach
has occurred and is continuing shall, if such obligation is fulfilled,
constitute the sole remedy against the Servicer for such breach available to the
Insurer, the Lender or the Collateral Agent under this Agreement; provided,
                                                                  --------
however, that the Servicer shall indemnify the Lender, the Insurer, the Hedge
-------
Counterparty, the Collateral Agent, and the Backup Servicer (and their
respective directors, officers, employees and agents) against all costs,
expenses, losses, damages, claims and liabilities, including reasonable fees and
expenses of counsel, which may be asserted against or incurred by any of them as
a result of third party claims arising out of the events or facts giving rise to
such breach.

     Section 3.19   Monthly Duties of Backup Servicer and Successor Servicer.
                    --------------------------------------------------------

          (a)  On or before the Determination Date for each month, and on any
other date at the direction of the Lender and (so long as no Insurer Default
shall have occurred and be continuing) the Insurer, the Servicer shall deliver
or cause to be delivered to the Backup Servicer, the Successor Servicer and upon
its written request therefor, the Lender and the Insurer, electronic media
acceptable to each of the Backup Servicer, the Successor Servicer, the Insurer
and the Lender, as applicable, containing the information set forth in Exhibit C
hereto with respect to the Contracts as of the related Accounting Date for each
such Contract, together with all other information necessary for preparation of
the Servicer's Certificate relating to the immediately succeeding Determination
Date and necessary to determine the application of collections as provided in
Section 3.16 (any such delivery, a "Section 3.19(a) Delivery").  The Backup
------------                        ------------------------
Servicer shall use such electronic media to review each Servicer's Certificate
delivered pursuant to Section 3.17 of this Agreement and shall:
                      ------------

               (i)    confirm that such Servicer's Certificate is complete on
     its face;

               (ii)   load the electronic media, and confirm that such
     electronic media is in a readable form;

               (iii)  confirm based on the recalculation of the numbers set
     forth in the Servicer's Certificate, comparison to the data provided on the
     electronic media, that the Aggregate Principal Balance of Eligible
     Contracts, the Available Funds, the Servicing Fee, the fees payable
     pursuant to clause second of Section 3.03(b) of the Loan Agreement hereof,
                                  ---------------
     the Monthly Interest Payment Amount, the Monthly Principal Payment Amount,
     the Interest Carryover Shortfall, the Additional Principal Payment Amount
     and the other required payments under the Loan Agreement are accurate;

               (iv)   confirm the Deficiency Claim Amount, if any; and

                                       16
<PAGE>

               (v)    confirm based on the recalculation of the numbers set
     forth in the Servicer's Certificate and comparison to the data provided on
     the electronic media that the Deferral Rate, Delinquency Ratio, Net
     Realized Loss Rate and Delinquent Contracts are accurate.

          (b)  On or before 12:00 p.m., New York City time, on the Business Day
preceding each Payment Date, the Backup Servicer shall deliver or cause to be
delivered to the Insurer, the Lender, the Servicer, the Successor Servicer and
the Collateral Agent a certificate, in form and substance satisfactory to the
Insurer and the Lender, signed by an Authorized Officer, stating that (i) the
Backup Servicer has loaded the electronic media as described in Section
                                                                -------
3.19(a)(ii) on its hardware, (ii) a review of the Servicer's Certificate for the
-----------
related Determination Date has been made under such Authorized Officer's
supervision, and (iii) to such Authorized Officer's knowledge, (x) the
electronic media is in readable form; (y) the data on the electronic media tie
to the related Servicer's Certificate resulting in no discrepancies between
them; and (z) the Servicer's Certificate does not contain any errors.  If the
preceding statements cannot be made in the affirmative, the applicable
Authorized Officer shall state the nature of any and all anomalies,
discrepancies and errors, and indicate all actions it is currently taking with
the Servicer to reconcile and/or correct the same.

          (c)  In the event that the Backup Servicer reports any anomalies,
discrepancies and errors such as those described in Section 3.19(b) above, the
                                                    ---------------
Backup Servicer shall request that the Servicer reconcile such discrepancies and
correct such errors prior to 12 p.m., New York City time, on the Business Day
preceding the related Payment Date, but in the absence of a reconciliation, the
Servicer's Certificate shall control for the purpose of calculations and
payments with respect to the related Payment Date.  If the Backup Servicer and
the Servicer are able to reconcile all discrepancies and correct all errors with
respect to the Servicer's Certificate prior to 5:00 p.m., New York City time, on
the Business Day preceding the related Payment Date, the Servicer's Certificate
shall be immediately restated by the Servicer and delivered to each of the
Backup Servicer, the Collateral Agent, the Lender and the Insurer by the close
of business of the Servicer on such day, which restated certificate shall be
deemed to be the Servicer's Certificate for the Determination Date and the
related Payment Date.

          (d)  If the Backup Servicer and the Servicer are unable to reconcile
all discrepancies and correct all errors, with respect to a Servicer Certificate
by 5:00 p.m., New York City time, on the Business Day preceding the related
Payment Date, the Servicer shall cause the Independent Accountants, at the
Servicer's expense, to audit the Servicer's Certificate and, prior to the fifth
Business Day, but in no event later than the eighth calendar day, of the
following month, reconcile the discrepancies.  The effect, if any, of such
reconciliation shall be reflected in the Servicer's Certificate for such next
succeeding Determination Date.

          (e)  Upon the occurrence and continuation of a Trigger Event or a
Funding Termination Event while TFC is acting as Servicer or upon a Servicer
Termination Event while TFC is acting as Servicer, if so requested by the
Insurer, the Backup Servicer shall cause the Independent Accountants, at TFC's
expense, to perform certain agreed upon procedures with regard to the electronic
media most recently delivered to the Backup Servicer and the related Servicer's
Certificate to provide third party confirmation of items specified similar to
those specified in Sections 3.19(a) and (b) above, as deemed necessary by the
                   ----------------     ---
Insurer or the Lender in

                                       17
<PAGE>

the exercise of their sole discretion. The Backup Servicer, at TFC's expense,
shall cause such agreed upon procedures to be applied to electronic media
delivered under this Section 3.19 in the future, if so requested by the Insurer
                     ------------
or the Lender from time to time, provided, however, that the Insurer or the
                                 --------  -------
Lender shall not demand such additional third party confirmations if and to the
extent that no fewer than three such additional third party confirmations are
deemed by the Insurer or the Lender, in the exercise of their sole discretion,
to indicate a high degree of accuracy with respect to the related Servicer's
Certificate; and the agreed upon procedures specified in this subsection (e) may
be applied in the future, if so requested by the Insurer or the Lender, upon the
occurrence and confirmation of a subsequent Trigger Event, subsequent Insurance
Agreement Event of Default, subsequent Funding Termination Event or subsequent
Servicer Termination Event while TFC is acting as Servicer.

          (f) Upon the occurrence of a Funding Termination Event or Servicer
Termination Event, if so requested by the Insurer, the Lender or the Backup
Servicer, the Successor Servicer from amounts available under clause second of
                                                                     ------
Section 3.03(b) of the Loan Agreement and with the full cooperation of the
--------------
Servicer, shall perform a test conversion of the Servicer's servicing system for
the Contracts on a sample of Contracts as described in Section 7.03(a) hereof.
                                                       ---------------

          (g) Other than the duties specifically set forth in this Agreement,
the Backup Servicer shall have no obligations hereunder, including without
limitation to supervise, verify, monitor or administer the performance of the
Servicer.  The Backup Servicer shall have no liability for any actions taken or
omitted by the Servicer (except to the extent such Person had been acting as
Servicer).  The Backup Servicer shall have no duties or obligations hereunder
other than those expressly set forth in this Agreement and the other Loan
Documents to which the Backup Servicer is a party, and no implied duties or
obligations shall be read into this Agreement against the Backup Servicer.
Except for reports, information or other documents provided to the Backup
Servicer pursuant to the specific provisions in this Agreement, any reports,
information or other documents provided to the Backup Servicer or the Collateral
Agent are for informational purposes only and such parties' receipt of any such
information shall not constitute constructive notice of any information
contained therein or determinable from any information contained therein,
including the Borrower's or the Servicer's compliance with any of its covenants,
representations or warranties hereunder.

          (h)  Any fees payable to the Backup Servicer shall be paid out of
Collections as part of the Administration Fee pursuant to the terms of Section
                                                                       -------
3.03(b) of the Loan Agreement.  Any applicable transition fees payable to the
-------
Successor Servicer if the Successor Servicer becomes the Servicer (in an amount
not to exceed $70,000) shall be paid out of Collections pursuant to the terms of
Section 3.03(b) of the Loan Agreement.
---------------

                                  ARTICLE IV

                               ACCOUNTS; REPORTS

     Section 4.01   Establishment of Collection Account and Reserve Account.
                    -------------------------------------------------------

                                       18
<PAGE>

          (a)  The Servicer, for the benefit of the Lender, the Hedge
Counterparty and the Insurer, shall establish and maintain in the name of the
Collateral Agent an Eligible Account (the "Collection Account"), bearing a
                                           ------------------
designation clearly indicating that the funds deposited therein are held for the
benefit of the Lender, the Hedge Counterparty and the Insurer. The Collection
Account shall initially be established with the Collateral Agent.

          (b)  The Borrower, for the benefit of the Lender, the Hedge
Counterparty and the Insurer, shall establish and maintain in the name of the
Collateral Agent an Eligible Account (the "Reserve Account"), bearing a
                                           ---------------
designation clearly indicating that the funds deposited therein are held for the
benefit of the Lender, the Hedge Counterparty and the Insurer.  The Reserve
Account shall initially be established with the Collateral Agent.

          (c)  Funds on deposit in the Collection Account and the Reserve
Account shall be invested by the Collateral Agent (or any custodian with respect
to funds on deposit in any such account) in Permitted Investments selected in
writing by the Servicer (pursuant to standing instructions or otherwise),
provided that no Servicer Termination Event shall have occurred and be
continuing. In the absence of any contrary instruction, the investments that
shall be deemed to have been selected shall be the investments specified in
clause (iv) of the definition of "Permitted Investments" set forth in the Loan
Agreement. Other than as permitted by the Lender and the Insurer, funds on
deposit in the Collection Account or the Reserve Account shall be invested in
Permitted Investments that will mature so that such funds will be available at
the close of business on the Business Day immediately preceding the following
Payment Date. All Permitted Investments will be held to maturity.

          (d)  All Investment Earnings of monies deposited in the Collection
Account shall be deposited by the Collateral Agent in the Collection Account no
later than the close of business on the Business Day immediately preceding the
related Payment Date, and any loss resulting from such investments shall be
charged to the Collection Account.  All Investment Earnings of monies deposited
in the Reserve Account shall be deposited by the Collateral Agent in the Reserve
Account no later than the close of business on the Business Day immediately
preceding the related Payment Date, and any loss resulting from such investments
shall be charged to the Reserve Account.  The Servicer will not direct the
Collateral Agent to make any investment of any funds held in the Collection
Account or the Reserve Account unless the security interest granted and
perfected in such account will continue to be perfected in such investment, in
either case without any further action by any Person, and, in connection with
any direction to the Collateral Agent to make any such investment, if necessary,
the Servicer shall deliver to the Collateral Agent, the Lender and the Insurer
an Opinion of Counsel to such effect.

          (e)  If (i) the Servicer shall have failed to give investment
directions for any funds on deposit in the Collection Account or the Reserve
Account to the Collateral Agent by 12:00 p.m., New York City time (or such other
time as may be agreed by the Servicer and the Collateral Agent), on any Business
Day; or (ii) a Default or Event of Default shall have occurred and be continuing
but the Secured Obligations shall not have been declared due and payable, or, if
such amounts shall have been declared due and payable following an Event of
Default, amounts collected or receivable from the Collateral are being applied
as if there had not been such a declaration; then the Collateral Agent shall, to
the fullest extent practicable, invest and

                                       19
<PAGE>

reinvest funds in the Collection Account and the Reserve Account in one or more
Permitted Investments pursuant to paragraph (c) above.

          (f)  The Collateral Agent, for the benefit of the Lender, the Hedge
Counterparty and the Insurer, shall possess all right, title and interest in all
funds on deposit from time to time in the Collection Account and in all proceeds
thereof and all such funds, investments, proceeds and income shall be part of
the Collateral.  The Collateral Agent, for the benefit of the Lender, the Hedge
Counterparty and the Insurer, shall possess all right, title and interest in all
funds on deposit from time to time in the Reserve Account and in all proceeds
thereof and all such funds, investments, proceeds and income shall be part of
the Collateral.  Except as otherwise provided herein, the Collection Account and
the Reserve Account shall be under the sole dominion and control of the
Collateral Agent for the benefit of the Lender, the Hedge Counterparty and the
Insurer.  If, at any time, either the Collection Account or the Reserve Account
ceases to be an Eligible Account, the Servicer (in the case of the Collection
Account) or the Borrower (in the case of the Reserve Account), for the benefit
of the Lender, the Hedge Counterparty and the Insurer, shall within five
Business Days (or such longer period as to which the Lender and the Insurer may
consent) establish a new Collection Account or Reserve Account, as the case may
be, as an Eligible Account and shall transfer any cash and/or any investments to
such new Collection Account or Reserve Account.  In connection with the
foregoing, the Servicer agrees that, in the event that the Collection Account is
not an account with the Collateral Agent, the Servicer shall notify the Lender
and the Insurer in writing promptly upon the cessation of the Collection Account
to be an Eligible Account.  In connection with the foregoing, the Borrower
agrees that, in the event that the Reserve Account is not an account with the
Collateral Agent, the Borrower shall notify the Lender and the Insurer in
writing promptly upon the cessation of the Reserve Account to be an Eligible
Account.

          (g)  With respect to the Facility Account Property:

               (A)  any Facility Account Property shall be held solely in the
          Eligible Accounts; and, except as otherwise provided herein, each such
          Eligible Account shall be subject to the exclusive custody and control
          of the Collateral Agent, and the Collateral Agent shall have sole
          signature authority with respect thereto;

               (B)  any Facility Account Property that constitutes physical
          property shall be delivered to the Collateral Agent in accordance with
          paragraphs (1)(a) and (b) of the definition of "Delivery" in Section
                                                          --------     -------
          1.01 and shall be held, pending maturity or disposition, solely by the
          ----
          Collateral Agent or a financial intermediary (as such term is defined
          in Section 8-102(a)(14) of the UCC) acting solely for the Collateral
          Agent;

               (C)  any Facility Account Property that is a book-entry security
          held through the Federal Reserve System pursuant to Federal book-entry
          regulations shall be delivered in accordance with paragraph (1)(c) of
          the definition of "Delivery" in Section 1.01 and shall be maintained
                             --------     ------------
          by the Collateral Agent, pending maturity or disposition, through
          continued book-entry registration of such Facility Account Property as
          described in such paragraph; and

                                       20
<PAGE>

               (D)  any Facility Account Property that is an "uncertificated
                                                              --------------
          security" under Article 8 of the UCC and that is not governed by
          --------
          clause (C) above shall be delivered to the Collateral Agent in
          accordance with paragraph (1)(d) of the definition of "Delivery" in
                                                                 --------
          Section 1.01 and shall be maintained by the Collateral Agent, pending
          ------------
          maturity or disposition, through continued registration of the
          Collateral Agent's (or its nominee's) ownership of such security.

          Effective upon delivery of any Facility Account Property in the form
of physical property, book-entry securities or uncertificated securities, the
Collateral Agent shall be deemed to have purchased such Facility Account
Property for value, in good faith and without notice of any adverse claim
thereto.

          The Collateral Agent shall not enter into any subordination or
intercreditor agreement with respect to the Facility Account Property.

     Section 4.02   Deposits into and Withdrawals from Accounts.
                    -------------------------------------------

          (a)  If on any day the Servicer receives any Collections, the Servicer
shall deposit such Collections to the Collection Account no later than the
Business Day immediately following such receipt. Pending such deposit, such
funds shall be held by the Servicer in trust for the benefit of the Lender, the
Hedge Counterparty and the Insurer. In addition, the Servicer or the Borrower,
as applicable, shall deposit or cause to be deposited in the Collection Account
(i) each Swap Payment paid by the Hedge Counterparty pursuant to any Interest
Rate Hedging Agreement, on the date of receipt of such payment (it being
understood that the Borrower shall instruct the Hedge Counterparty pursuant to
each Interest Rate Hedging Agreement and each Interest Rate Hedging Transaction
(thereunder, to deposit each such Swap Payment into the Collection Account),
(ii) the Release Price for any Contract, the Collateral Agent's security
interest in which is released pursuant to Section 2.07(b) of the Loan Agreement,
                                          ---------------
within the time specified under Section 2.07(b) of the Loan Agreement (it being
                                ---------------
understood that the Collateral Agent shall, on the date of receipt of any such
Release Price from TFC, on behalf of the Borrower, pursuant to Section 6.1 of
                                                               -----------
the Purchase Agreement, deposit such amount in the Collection Account), (iii)
the Release Price for any Contract, the Collateral Agent's security interest in
which is released pursuant to Section 2.07(c) of the Loan Agreement, within the
                              ---------------
time specified under Section 2.07(c) of the Loan Agreement and (iv) any
                     ---------------
Prepayment Amount for any Payment Date, no later than the Deposit Date for such
Payment Date.

          (b)  On each Payment Date (and, in each case, prior to the making of
any required payments on such Payment Date pursuant to Section 3.03(b) of the
                                                       ---------------
Loan Agreement and Section 4.02(c) hereof), the Collateral Agent shall deposit
                   ---------------
in the Collection Account (i) the Reserve Account Regular Application Amount for
such Payment Date, if any, withdrawn from the Reserve Account in accordance with
Section 4.02(f) hereof, and (ii) if the Collateral Agent shall have received an
---------------
Additional Reserve Account Release Direction on such Payment Date, the
Additional Reserve Account Application Amount specified in such direction.  In
addition, in accordance with Section 6.01 hereof, the Collateral Agent shall
                             ------------
direct the Insurer (in the Notice of Claim delivered on the related Draw Date)
to deliver directly to the Collection Account, by

                                       21
<PAGE>

 wire transfer, any Policy Claim Amount paid by the Insurer in respect of
Covered Payments for such Payment Date.

          (c)  On each Payment Date, the Collateral Agent shall (based on the
Servicer's Certificate delivered by the Servicer pursuant to Section 3.17 and
                                                             ------------
the Lender Authorization delivered pursuant to Section 3.03(b) of the Loan
                                               ---------------
Agreement) withdraw all Available Funds, any Reserve Account Regular Application
Amount, any Reserve Account Additional Application Amount and any Policy Claim
Amount on deposit in the Collection Account, and apply such funds in the manner
set forth in Section 3.03(b) of the Loan Agreement.
             ---------------

          (d)  The Servicer shall not withdraw or otherwise remove, or permit
the removal by any Person other than the Collateral Agent of, any funds in the
Collection Account or the Reserve Account, other than in accordance with this
Agreement, the Loan Agreement and the other Loan Documents then in effect. The
Servicer shall not instruct the Collateral Agent to withdraw or otherwise remove
any funds in the Collection Account or the Reserve Account except as provided in
this Section 4.02. Notwithstanding anything in this clause (c) to the contrary,
     ------------                                   ----------
the Servicer shall instruct the Collateral Agent to pay to the Borrower amounts
paid into the Collection Account that are not Collections on a Contract or other
amounts required to be deposited into the Collection Account pursuant to this
Agreement or any of the other Loan Documents if the Borrower or Servicer shall
have (x) notified the Lender and the Insurer (with a copy to the Collateral
Agent, in the case of any amount to be withdrawn from the Collection Account) in
writing of the amount to be remitted to the Borrower and (y) demonstrated to the
Lender's and, so long as no Insurer Default shall have occurred and be
continuing, the Insurer's reasonable satisfaction that the amount proposed to be
removed did not constitute Collections or other amounts required to be deposited
into the Collection Account pursuant to this Agreement or any of the other Loan
Documents.

          (e)  With respect to any Determination Date, the amount required to be
on deposit in the Reserve Account shall equal the Required Reserve Account
Amount.  On each Funding Date, the Lender shall deliver to the Collateral Agent,
for deposit into the Reserve Account, the Funding Date Reserve Account Deposit,
if any, with respect to each Advance made on such Funding Date, in accordance
with Section 2.03(b) of the Loan Agreement.
     ---------------

          (f)  In the event that the Servicer's Certificate with respect to any
Determination Date shall state that the Available Funds on such Determination
Date are less than the sum of the amounts payable on the related Payment Date
pursuant to clauses first through seventh of Section 3.03(b) of the Loan
                    -----         -------    ---------------
Agreement (such deficiency being a "Deficiency Claim Amount"), then on such
                                    -----------------------
Determination Date, the Servicer shall deliver to the Collateral Agent, the
Borrower, the Lender and the Insurer, by hand delivery, telex or facsimile
transmission, a written notice in substantially the form of Exhibit D attached
hereto (a "Deficiency Notice") specifying the Deficiency Claim Amount, the
           -----------------
Reserve Account Regular Application Amount and the Policy Claim Amount for the
related Payment Date.  Such Deficiency Notice shall direct the Collateral Agent
to remit from the Reserve Account the Reserve Account Regular Application Amount
for deposit in the Collection Account on such Payment Date.

                                       22
<PAGE>

          (g)  Any Deficiency Notice shall be delivered by 12:00 p.m., New York
City time, on the related Determination Date.  The amounts distributed pursuant
to a Deficiency Notice shall be deposited by the Collateral Agent into the
Collection Account.

          (h)  To the extent that, on any Payment Date after giving effect to
the payments required to be made on such Payment Date pursuant to clauses first
                                                                          -----
through eleventh of Section 3.03(b) of the Loan Agreement, the Reserve Account
        --------    ---------------
Available Amount exceeds the Required Reserve Account Amount for such Payment
Date, the Collateral Agent shall withdraw from the Reserve Account an amount
equal to such excess and pay such amount to the Borrower pursuant to clause
twelfth of Section 3.03(b) of the Loan Agreement on such Payment Date.
-------    ---------------

          (i)  The Insurer shall at any time, and from time to time, with
respect to a Payment Date, have the option to deliver amounts to the Collateral
Agent for deposit into the Collection Account (an "Insurer Optional Deposit")
for any of the following purposes: (i) to provide funds in respect of the
payment of fees or expenses of any provider of services to the Borrower with
respect to such Payment Date; (ii) to provide funds to the extent that without
such amount a draw would be required to be made on the Policy or (iii) after the
Termination Date, (as defined in the Policy) to provide funds sufficient to
enable the Collateral Agent to pay the aggregate amount of principal and accrued
interest outstanding on Covered Advances.

     Section 4.03   Reports.
                    -------

          (a)  Upon discovery by the Servicer of any Contract ceasing to be an
Eligible Contract, if a Borrowing Base Deficiency exists or will result
therefrom, the Servicer shall deliver (or shall cause the Borrower to deliver)
to the Lender and the Insurer a Borrowing Base Deficiency Notice no later than
12:00 p.m., New York time, on the Business Day immediately succeeding such
discovery.

          (b)  The Servicer shall deliver to the Lender and the Insurer and/or
permit the Lender and/or the Insurer to inspect any property, books, valuations,
records, audits or other information as the Lender or the Insurer may request
upon reasonable prior notice.

     Section 4.04   Securities Accounts.   The Collateral Agent agrees that the
                    -------------------
Collection Account and the Reserve Account held by it hereunder shall each be
maintained as a "securities account" as defined in the UCC as in effect in New
York, and Wells Fargo Bank Minnesota, National Association hereby agrees to act
as a "securities intermediary" for the Collateral Agent as the "entitlement
holder" (as defined in Section 8-102(a)(7) of the UCC) with respect to each such
account.  The parties hereto agree that the Collection Account and the Reserve
Account shall be governed by the laws of the State of New York, and regardless
of any provision in any other agreement, the "securities intermediary's
jurisdiction" (within the meaning of Section 8-110 of the UCC) shall be the
State of New York.  The Securities Intermediary acknowledges and agrees that (a)
each item of property (whether investment property, financial asset, security,
instrument or cash) credited to the Collection Account and the Reserve Account
shall be treated as a "financial asset" within the meaning of Section 8-
102(a)(9) of the UCC and (b) notwithstanding anything to the contrary, if at any
time the Securities Intermediary shall receive any order from the Collateral
Agent directing transfer or redemption of any financial asset

                                       23
<PAGE>

relating to the Collection Account or the Reserve Account, the Securities
Intermediary shall comply with such entitlement order without further consent by
TFC, the Borrower, the Lender, the Hedge Counterparty, the Insurer or any other
person. In the event of any conflict of any provision of this Section 4.04 with
any other provision of this Agreement or any other agreement or document, the
provisions of this Section 4.04 shall prevail.

                                   ARTICLE V

                                 THE SERVICER

     Section 5.01   Representations and Warranties. As of the Effective Date and
                    ------------------------------
each Certification Date, the Servicer represents and warrants to the Lender, the
Insurer, the Hedge Counterparty, the Backup Servicer and the Collateral Agent
that:

          (a)  (i) As of any Certification Date relating to a Contract, such
Contract was an Eligible Contract and (ii) each Contract included as an Eligible
Contract in any Contract Schedule, Servicer's Certificate or other information
provided to the Lender by the Servicer or any calculation of the Borrowing Base
made by the Servicer is (or was) as of the date of such schedule, tape, report,
other information or calculation, an Eligible Contract.

          (b)  The Servicer is a corporation duly incorporated, validly existing
and in good standing under the laws of the Commonwealth of Virginia and has the
power, authority and all licenses necessary to own its assets and to transact
the business in which it is presently engaged (which includes servicing
Contracts on behalf of third parties and itself), and is duly qualified and in
good standing under the laws of each jurisdiction where its servicing of the
Contracts requires such qualification.

          (c)  The Servicer has the power, authority and legal right to make,
deliver and perform this Agreement, the Loan Agreement and each other Loan
Document to which it is a party and all of the transactions contemplated hereby
and thereby, and has taken all necessary action to authorize the execution,
delivery and performance of this Agreement, the Loan Agreement and each other
Loan Document to which it is a party.  This Agreement, the Loan Agreement and
each other Loan Document to which the Servicer is a party constitutes the legal,
valid and binding obligation of the Servicer, enforceable against the Servicer
in accordance with their respective terms except as the enforceability hereof
and thereof may be limited by bankruptcy, insolvency, moratorium, reorganization
and other similar laws of general application affecting creditors' rights
generally and by general principles of equity (whether such enforceability is
considered in a proceeding in equity or at law).  No consent of any other party
and no consent, license, approval or authorization of, or registration or
declaration with, any governmental authority, bureau or agency is required in
connection with the execution, delivery or performance by the Servicer of this
Agreement, the Loan Agreement or any other Loan Document to which it is a party,
or the validity or enforceability of this Agreement, the Loan Agreement or any
such Loan Document or the Contracts, other than such as have been met or
obtained.

          (d)  The execution, delivery and performance of this Agreement, the
Loan Agreement and each other Loan Document to which the Servicer is a party and
all other

                                       24
<PAGE>

agreements and instruments executed and delivered or to be executed and
delivered pursuant hereto or thereto will not violate any provision of any
existing law or regulation or any order or decree of any court, regulatory body
or administrative agency or the articles of incorporation or by-laws of the
Servicer or any mortgage, indenture, contract or other agreement to which the
Servicer is a party or by which the Servicer or any property or assets of the
Servicer may be bound.

          (e)  No litigation or administrative proceeding of or before any
court, tribunal or governmental body is presently pending or, to the knowledge
of the Servicer, threatened against the Servicer or any properties of the
Servicer or with respect to this Agreement, the Loan Agreement or any other Loan
Document which, if adversely determined, could have a Material Adverse Effect on
the business, assets or financial condition of the Servicer or which would draw
into question the validity of this Agreement, the Loan Agreement or any other
Loan Document to which the Servicer is a party, or any of the other applicable
documents forming part of the Collateral.

          (f)  No injunction, writ, restraining order or other order of any
nature adversely affects the Servicer's performance of its obligations under
this Agreement, the Loan Agreement or any other Loan Document to which the
Servicer is a party.

          (g)  The Servicer has filed (on a consolidated basis or otherwise) on
a timely basis all tax returns (including, without limitation, all foreign,
federal, state, local and other tax returns) required to be filed, is not liable
for taxes payable by any other Person and has paid or made adequate provisions
for the payment of all taxes, assessments and other governmental charges due
from the Servicer. No tax lien or similar adverse claim has been filed, and no
claim is being asserted, with respect to any such tax, assessment or other
governmental charge. Any taxes, fees and other governmental charges payable by
the Servicer in connection with the execution and delivery of this Agreement,
the Loan Agreement and the other Loan Documents and the transactions
contemplated hereby or thereby have been paid or shall have been paid if and
when due.

          (h)  The chief executive office of the Servicer is at 5425 Robin Hood
Road, Suite 101B, Norfolk, Virginia  23513.  The locations where the Servicer
keeps its books and records, including all computer tapes and records relating
to the Collateral are: its chief executive office; 5425 Robin Hood Road, Suite
101A, Norfolk, Virginia  23513; 441 Wadsworth Blvd., Suite 122, Lakewood, CO
80226; 4767 E. Camp Lowell Drive, Tuscon, AZ 85712; 1270 E. Garvey Avenue North,
Suite 200, Covina, CA 91724; and 16480 Harbor Boulevard, Suite 205, Fountain
Valley, CA 92708.

          (i)  The Servicer's legal name is as set forth in this Agreement; the
Servicer has not changed its name since its formation; the Servicer does not
have trade names, fictitious names, assumed names or "doing business as" names
other than as disclosed on Schedule 1 hereto.
                           ----------

          (j)  The information, reports, financial statements, exhibits and
schedules furnished in writing by or on behalf of the Servicer to the Lender,
the Collateral Agent or the Insurer in connection with the negotiation,
preparation or delivery of this Agreement, the Loan

                                       25
<PAGE>

Agreement and the other Loan Documents or included herein or therein or
delivered pursuant hereto or thereto are true and correct in every material
respect, or (in the case of projections) are based on reasonable estimates, on
the date as of which such information is stated or certified. There is no fact
known to a Responsible Officer of the Servicer that, after due inquiry, could
have a Material Adverse Effect that has not been disclosed herein, in the Loan
Agreement or in the other Loan Documents or in a report, financial statement,
exhibit, schedule, disclosure letter or other writing furnished to the Lender,
the Collateral Agent or the Insurer for use in connection with the transactions
contemplated hereby or thereby.

          (k)  No Servicer Termination Event has occurred and is continuing.

          (l)  Each of the Contracts was underwritten and is being serviced in
conformance with the Underwriting Guidelines and the Servicing Agreement;
provided that any Contract that was purchased from an Approved Dealer prior to
--------
the date on which the Underwriting Guidelines became effective was underwritten
in conformance with TFC's standard underwriting procedures and systems that were
effective at the time of origination of such Contract.

          (m)  The Servicer is in compliance with ERISA and has not incurred and
does not expect to incur any liabilities (except for premium payments arising in
the ordinary course of business) to the Pension Benefit Guaranty Corporation (or
any successor thereto) under ERISA.

          (n)  There is not now, nor will there be at any time in the future,
any agreement or understanding between the Servicer and the Borrower (other than
as expressly set forth in the Loan Documents) providing for the allocation or
sharing of obligations to make payments or otherwise in respect of any taxes,
fees, assessments or other governmental charges.

     Section 5.02   Covenants of the Servicer.  The initial Servicer covenants
                    -------------------------
and agrees with the Lender that, so long as any Advance is outstanding and until
the termination of this Servicing Agreement:

          (a)  The Servicer will, to the extent necessary, maintain separate
records on behalf of and for the benefit of the Lender, the Hedge Counterparty
and the Insurer, will act in accordance with instructions and directions,
delivered in accordance with the terms hereof, from the Lender and, if no
Insurer Default should have occurred and be continuing, the Insurer in
connection with its servicing of the Contracts hereunder, and will ensure that,
at all times when it is dealing with or in connection with the Contracts in its
capacity as Servicer, it holds itself out as Servicer, and not in any other
capacity.

          (b)  The Servicer shall, to the extent required by applicable law,
disclose all material transactions associated with this transaction in
appropriate regulatory filings and public announcements.  The annual separate
financial statements of TFC shall disclose the effects of the transactions
contemplated by the Purchase Agreement as a sale and/or contribution of
Contracts and other Collateral.

          (c)  Except as otherwise provided herein or in any other Loan
Document, the Servicer shall not (i) sell, assign (by operation of law or
otherwise) or otherwise dispose of, or

                                       26
<PAGE>

create or suffer to exist any lien adverse claim upon or with respect to, any
Contract, any Collections related thereto or any other Collateral related
thereto, or upon or with respect to any account to which any Collections of any
Contract are sent, or assign any right to receive income in respect thereof or
(ii) create or suffer to exist any lien adverse claim upon or with respect to
any of the Servicer's assets.

          (d)  If the Servicer receives any Collections, the Servicer will remit
such Collections to the Collection Account within one (1) Business Day of the
Servicer's receipt thereof.

          (e)  The Servicer shall not permit its Tangible Net Worth, at any
time, calculated as of the close of the Servicer's then most recently concluded
fiscal quarter and commencing with the quarter commencing on April 1, 2001, to
be less than the sum of (i) $38,000,000 plus (ii) 50% of the net earnings (after
taxes) of the Servicer for the period commencing on April 1, 2001 and ending at
the end of the Servicer'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 the Servicer for any period shall be less than zero, the amount
calculated pursuant to clause (ii) in the immediate preceding sentence for such
period shall be zero.

          (f)  The Servicer covenants as to the Contracts, that: (i) the
Financed Vehicle securing each Contract shall not be released in whole or in
part from the security interest granted by the Contract, except upon payment in
full of the Contract or as otherwise contemplated herein; (ii) the Servicer
shall do nothing to impair the rights of the Collateral Agent, the Insurer, the
Hedge Counterparty or the Lender in the Contracts, the Dealer Agreements, the
Dealer Assignments, the Insurance Policies or the other Collateral; (iii) the
Servicer shall not extend or otherwise amend the terms of any Contract, except
in accordance with Section 3.02; (iv) the Servicer shall not (A) 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 Contracts except for the Lien in favor of the Collateral
Agent for the benefit of the Lender, the Hedge Counterparty and the Insurer, the
Lien imposed by the Loan Agreement in favor of the Collateral Agent for the
benefit of the Lender, the Hedge Counterparty and the Insurer, and the
restrictions on transferability imposed by this Agreement, the Loan Agreement
and the other Loan Documents or (B) sign or file under the UCC of any
jurisdiction any financing statement which names TFC, the Borrower or the
Servicer as a debtor, or sign any security agreement authorizing any secured
party thereunder to file such financing statement, with respect to the
Contracts, except in each case any such instrument solely securing the rights
and preserving the Lien of the Collateral Agent, for the benefit of the Lender,
the Hedge Counterparty and the Insurer; and (v) the Servicer (including any
successor to the Servicer) shall manage, service, administer and make
collections on the Contracts, and perform the other obligations of the Servicer
under this Agreement, the Loan Agreement and the other Loan Documents in
accordance with the Required Standard of Care. In addition, the Servicer will
cooperate with any successor to the Servicer upon any assumption by such
successor to the Servicer (including, without limitation, the Successor
Servicer) of the servicing of Contracts under this Agreement, in order to enable
such successor to the Servicer to carry out the duties and obligations of the
Servicer hereunder, under the Loan Agreement and under the other Loan Documents,
and will take all such other actions as

                                       27
<PAGE>

may be requested by such successor to the Servicer from time to time as may be
necessary or reasonably desirable to effect such transfer of servicing duties
and obligations.

     Section 5.03   Liability of the Servicer; Indemnities of Servicer.
                    --------------------------------------------------

          (a)  The Servicer shall be contractually liable in accordance herewith
only to the extent of the obligations specifically undertaken by the Servicer
under this Agreement, the Loan Agreement and the other Loan Documents to which
it is a party and the representations, warranties and covenants made by the
Servicer.

          (b)  The Servicer agrees to hold the Lender, the Successor Servicer,
the Backup Servicer, the Collateral Agent, the Insurer, the Hedge Counterparty,
the Borrower and each of their respective Affiliates, officers, directors,
agents and employees (each, an "Indemnified Party") harmless from and indemnify
                                -----------------
each Indemnified Party against all liabilities, losses, damages, judgments,
costs and expenses of any kind (including but not limited to attorneys' fees and
expenses and expenses of litigation) (collectively, "Damages") which may be
                                                     -------
imposed on, incurred by or asserted against such Indemnified Party in any suit,
action, claim or proceeding relating to or arising out of this Agreement, the
Loan Agreement or any other Loan Document to which the Servicer is a party or
based on any breach of any representation, warranty, covenant or other term of
this Agreement, the Loan Agreement or any other Loan Document to which the
Servicer is a party by the Servicer or any subservicer, the failure of the
Servicer or any subservicer to meet the Servicing Standard or Required Standard
of Care in connection with any action (or failure to act) hereunder, under the
Loan Agreement or under any other Loan Document or any negligence or willful
misconduct of the Servicer or any subservicer in connection with the performance
of its obligations under this Agreement, under the Loan Agreement or under the
other Loan Documents, except, in each case, to the extent arising from such
Indemnified Party's gross negligence or willful misconduct.

          (c)  The Servicer shall defend, indemnify and hold harmless each
Indemnified Party from and against any and all costs, expenses, losses, damages,
claims and liabilities, including reasonable fees and expenses of counsel and
expenses of litigation arising out of or resulting from the use, ownership or
operation of any Financed Vehicle;

          (d)  The Servicer (when the Servicer is TFC) shall indemnify, defend
and hold harmless each Indemnified Party from and against any taxes that may at
any time be asserted against any of such parties with respect to the
transactions contemplated in this Agreement, including any sales, gross
receipts, tangible or intangible personal property, privilege or license taxes
(but not including any federal or other income taxes, including franchise taxes
asserted with respect to, and as of the date of, the sale of the Contracts and
the other Collateral to the Borrower or the pledge thereof under the Loan
Agreement and the making of each Advance) and costs and expenses in defending
against the same, except to the extent that such costs, expenses, losses,
damages, claims and liabilities arise out of the gross negligence or willful
misconduct of such Indemnified Parties;

          (e)  The Servicer (when the Servicer is not TFC or the Successor
Servicer) shall indemnify, defend and hold harmless each Indemnified Party from
and against any taxes with respect to the sale of Contracts in connection with
servicing hereunder that may at any time

                                       28
<PAGE>

be asserted against any of such parties with respect to the transactions
contemplated in this Agreement, the Loan Agreement and the other Loan Documents
including any sales, gross receipts, tangible or intangible personal property,
privilege or license taxes (but not including any federal or other income taxes,
including franchise taxes asserted with respect to, and as of the date of, the
sale of the Contracts and the other Collateral to the Borrower or the pledge
thereof under the Loan Agreement and the making of each Advance) and costs and
expenses in defending against the same;

          (f)  The Servicer shall indemnify, defend and hold harmless each
Indemnified Party from and against any and all costs, expenses, losses, claims,
damages, and liabilities to the extent that such cost, expense, loss, claim,
damage, or liability arose out of, or was imposed upon such Indemnified Party,
by reason of the negligence, willful misfeasance, or bad faith of the Servicer
in the performance of its duties under this Agreement, the Loan Agreement or the
other Loan Documents or by reason of reckless disregard of its obligations and
duties under this Agreement, the Loan Agreement or the other Loan Documents;

          (g)  The Servicer shall indemnify, defend and hold harmless each
Indemnified Party from and against any and all costs, expenses, losses, claims,
damages and liabilities arising out of, or incurred in connection with the
acceptance or performance of the trusts and duties set forth herein and in, the
Loan Agreement or the other Loan Documents except to the extent that such cost,
expense, loss, claim, damage or liability shall be due to the willful
misfeasance, bad faith or gross negligence (except for errors in judgment) of
the Backup Servicer, the Lender, the Insurer or the Collateral Agent;

          (h)  Without limiting or being limited by the foregoing, the Servicer
shall pay on demand to each Indemnified Party any and all amounts necessary to
indemnify such Indemnified Party from and against any and all Damages resulting
from any of the following:

               (i)    the failure of Servicer to correctly report Eligible
     Contracts in any report or other information provided by the Servicer to
     the Lender, the Backup Servicer, the Collateral Agent, the Hedge
     Counterparty or the Insurer, or in any calculation of the Borrowing Base
     made by the Servicer;

               (ii)   the failure of any representation or warranty or statement
     made or deemed made by the Servicer hereunder, under the Loan Agreement or
     under any other Loan Document to have been true and correct when made;

               (iii)  the failure by the Servicer or any subservicer to comply
     with any applicable law, rule or regulation with respect to any Contract or
     related Financed Vehicle or the nonconformity of any Contract with any such
     applicable law, rule or regulation;

               (iv)   the failure to vest and maintain in favor of the Lender as
     required under this Agreement, under the Loan Agreement and under the other
     Loan Documents a valid and enforceable security interest in the Collateral
     or the failure to maintain such security interests as first priority
     perfected security interests as required under this Agreement, under the
     Loan Agreement and under the other Loan Documents;

                                       29
<PAGE>

               (v) the commingling of Collections at any time with other funds;
     and

               (vi) any defense, set-off, counterclaim, recoupment or reduction
     of liability whatsoever of any Person, arising out of or relating to any
     action (or failure to act) by the Servicer in accordance with its
     obligations hereunder.

          (i)  Indemnification under this Section shall survive the resignation
or removal of the Servicer or the termination of this Agreement, with respect to
any act (or the failure to act) by the Servicer which occurred (or failed to
occur) prior to such resignation, removal or termination and shall include fees
and expenses of counsel and expenses of litigation. If the Servicer shall have
made any indemnity payments pursuant to this Section and the Person to or on
behalf of whom such payments are made thereafter collects any of such amounts
from others, such Person shall promptly repay such amounts to the Servicer,
without interest.  Notwithstanding any other provision of this Agreement, the
indemnity obligations of the Servicer shall not terminate or be deemed released
upon the resignation or termination of TFC as the Servicer and shall survive any
termination of this Agreement.

     Section 5.04   Limitation on Resignation of the Servicer.  The Servicer
                    -----------------------------------------
shall not resign from the obligations and duties hereby imposed on it except (a)
by mutual agreement among the Servicer, the Borrower, the Backup Servicer, the
Lender and, provided that no Insurer Default shall have occurred and be
continuing, the Insurer or (b) upon determination that its duties hereunder are
no longer permissible under applicable law.  Any determination under clause (b)
above permitting the resignation of the Servicer shall be evidenced by an
Opinion of Counsel (which counsel shall be acceptable to Lender and, if no
Insurer Default shall have occurred and be continuing, the Insurer) to such
effect delivered to the Lender, the Backup Servicer, the Borrower and the
Insurer. No such resignation shall become effective until a successor Servicer
or the Successor Servicer, as the case may be, shall have assumed the Servicer's
responsibilities, duties, liabilities and obligations hereunder.  Any such
successor Servicer must be an established servicer of consumer automobile loans
and must be approved in writing by the Lender and, if no Insurer Default shall
have occurred and be continuing, the Insurer.

     Section 5.05   Rights of the Lender and the Insurer in Respect of the
                    ------------------------------------------------------
Servicer.  The Servicer shall afford the Lender, the Insurer and the Backup
--------
Servicer, upon reasonable notice, during normal business hours access to all
records maintained by the Servicer in respect of its rights and obligations
hereunder and access to officers of the Servicer responsible for such
obligations.  Upon request, the Servicer shall furnish the Lender, the Insurer
or the Backup Servicer with such information as the Servicer possesses regarding
its business, affairs, property and condition, financial or otherwise.  The
Lender shall not have any responsibility or liability for any action or failure
to act by the Servicer, and is not obligated to supervise the performance of the
Servicer under this Agreement, the Loan Agreement, any other Loan Document or
otherwise.

     Section 5.06   Merger or Consolidation of, or Assumption of the Obligations
                    ------------------------------------------------------------
of, the Servicer or the Collateral Agent.
----------------------------------------

          (a) The Servicer 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

                                       30
<PAGE>

other Person to become the successor to the Servicer's business unless, after
the merger, consolidation, conveyance, transfer, lease or succession, the
successor or surviving entity, there shall be no material adverse effect upon
the ability of the surviving entity to fulfill its duties contained in this
Agreement. Any corporation (i) into which the Servicer may be merged or
consolidated, (ii) resulting from any merger or consolidation to which the
Servicer shall be a party, (iii) which acquires by conveyance, transfer, or
lease substantially all of the assets of the Servicer, or (iv) succeeding to the
business of the Servicer, in any of the foregoing cases shall execute an
agreement of assumption to perform every obligation of the Servicer under this
Agreement and, whether or not such assumption agreement is executed, shall be
the successor to the Servicer under this Agreement without the execution or
filing of any paper or any further act on the part of any of the parties to this
Agreement, anything in this Agreement to the contrary notwithstanding; provided,
                                                                       --------
however, that nothing contained herein shall be deemed to release the Servicer
-------
from any obligation. The Servicer shall provide notice of any merger,
consolidation or succession pursuant to this Section 5.06(a) to the Lender, the
Collateral Agent and the Insurer. Notwithstanding the foregoing, the Servicer
shall not merge or consolidate with any other Person or permit any other Person
to become a successor to the Servicer's business, unless (w) the Lender and, if
no Insurer Default shall have occurred and be continuing, the Insurer shall have
consented in writing to such transaction, (x) immediately after giving effect to
such transaction, no representation or warranty made pursuant to Section 9.1
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 a
Servicer Termination Event shall have occurred and be continuing, (y) the
Servicer shall have delivered to the Collateral Agent, the Lender and the
Insurer 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 5.06(a) and that all conditions precedent, if any, provided
for in this Agreement relating to such transaction have been complied with, and
(z) TFC shall have delivered to the Collateral Agent, the Lender and the Insurer
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 security
interest of the Collateral Agent in the Contracts and the other Collateral and
reciting the details of the filings or (B) no such action shall be necessary to
preserve and protect such interest.

          (b) Any Person (i) into which the Successor Servicer, the Collateral
Agent or the Backup Servicer may be merged or consolidated, (ii) resulting from
any merger or consolidation to which the Successor Servicer, the Collateral
Agent or the Backup Servicer shall be a party, (iii) which acquires by
conveyance, transfer or lease substantially all of the assets of the Successor
Servicer, the Collateral Agent or the Backup Servicer or (iv) succeeding to the
business of the Successor Servicer, the Collateral Agent or the Backup Servicer
in any of the foregoing cases shall be the successor to the Successor Servicer,
the Collateral Agent or the Backup Servicer, as the case may be, under this
Agreement without the execution or filing of any paper or any further act on the
part of any of the parties to this Agreement, anything in this Agreement to the
contrary notwithstanding.  In the event that the resulting entity does not meet
the Resulting Entity Eligibility Criteria, the Collateral Agent, upon the
written request of the Lender and, provided that no Insurer Default shall have
occurred and be continuing, the Insurer,

                                       31
<PAGE>

shall resign. Nothing contained herein shall be deemed to release the Collateral
Agent from any obligation.

     Section 5.07   Limitation on Liability of Servicer, Collateral Agent and
                    ---------------------------------------------------------
Others.
------

          (a)  Neither TFC, the Borrower, the Collateral Agent, the Successor
Servicer, the Backup Servicer, nor any of the directors or officers or employees
or agents of any such Person shall be under any liability to the Lender or the
Insurer, except as provided in this Agreement, for any action taken or for
refraining from the taking of any action pursuant to this Agreement; provided,
                                                                     --------
however, that this provision shall not protect TFC, the Borrower, the Collateral
-------
Agent, the Successor Servicer, the Backup Servicer or any such person against
any liability that would otherwise be imposed by reason of willful misfeasance,
bad faith or negligence (excluding errors in judgment) in the performance of
duties, reckless disregard of obligations and duties under this Agreement or any
violation of law by TFC, the Borrower, the Successor Servicer, the Collateral
Agent, the Backup Servicer or such person, as the case may be; provided further,
                                                               -------- -------
however, that this provision shall not affect any liability to indemnify the
-------
Successor Servicer, the Collateral Agent, the Borrower, the Backup Servicer, the
Lender, the Hedge Counterparty and the Insurer for costs, taxes, expenses,
claims, liabilities, losses or damages paid by the Successor Servicer, the
Collateral Agent, the Backup Servicer, the Lender, the Hedge Counterparty and
the Insurer in their individual capacities.  TFC, the Successor Servicer, the
Collateral Agent, the Backup Servicer, the Borrower and any director, officer,
employee or agent of any such entity may rely in good faith on the written
advice of counsel selected by it with due care or absent manifest error or on
any document of any kind prima facie properly executed and submitted by any
Person respecting any matters arising under this Agreement.  The Collateral
Agent and the Backup Servicer shall not be required to expend or risk their 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 the
repayment of such funds or adequate written indemnity against such risk or
liability is not reasonably assured to it in writing prior to the expenditure or
risk of such funds or incurrence of financial liability.

          (b)  Notwithstanding anything herein to the contrary, the Collateral
Agent and the Backup Servicer shall not be liable for any obligation of the
Servicer contained in this Agreement, and the Lender and the Insurer shall look
only to the Servicer to perform such obligations.

                                  ARTICLE VI

                                  THE POLICY

     Section 6.01   Claims under Policy.
                    -------------------

          (a)  In the event that the Collateral Agent has received a Deficiency
Notice, or otherwise has actual knowledge or is aware of the existence of a
Deficiency Claim Amount, on any Determination Date, the Collateral Agent shall
determine on the related Draw Date whether the sum of (i) the amount of
Available Funds on such Determination Date (as stated in the Servicer's
Certificate with respect to such Determination Date) plus (ii) the Reserve
Account Application Amount, if any, available to be distributed by the
Collateral Agent pursuant to a

                                       32
<PAGE>

Deficiency Notice delivered with respect to such Payment Date plus (iii) the
amount of any Insurer Optional Deposits, would be insufficient to pay the
Covered Payments (as defined in the Policy) for the related Payment Date, then
in such event the Collateral Agent shall furnish to the Insurer no later than
12:00 p.m., New York City time, on the related Draw Date a completed Notice of
Claim in the amount of the shortfall in amounts so available to pay the Covered
Payments with respect to such Payment Date. In each Notice of Claim furnished by
the Collateral Agent to the Insurer, the Collateral Agent shall direct the
Insurer to deliver the related Policy Claim Amount, by wire transfer, directly
to the Collection Account.

          (b) Any notice delivered by the Collateral Agent to the Insurer
pursuant to Section (a) shall specify the Policy Claim Amount claimed under the
Policy and shall constitute a "Notice of Claim" under the Policy.  In accordance
                               ---------------
with the provisions of the Policy, the Insurer is required to pay to the
Collateral Agent the Policy Claim Amount properly claimed thereunder by 12:00
p.m., New York City time, on the later of (i) the fifth Business Day following
receipt on a Business Day of such Notice of Claim, and (ii) the applicable
Payment Date.  Any payment made by the Insurer under the Policy shall be applied
solely to the Covered Payments in respect of the Secured Obligations, and for no
other purpose.

          (c) The Collateral Agent shall (i) receive as attorney-in-fact of the
Lender any Policy Claim Amount from the Insurer and (ii) deposit the same in the
Collection Account for application to the Covered Payments.  Any and all Policy
Claim Amounts disbursed by the Collateral Agent from claims made under the
Policy shall not be considered payment by the Borrower or from the Reserve
Account with respect to the Secured Obligations, and shall not discharge the
obligations of the Borrower with respect thereto.  The Insurer shall, to the
extent it makes any Covered Payment with respect to the Secured Obligations,
become subrogated to the rights of the recipients of such payments to the extent
of such payments.  Subject to and conditioned upon any Covered Payment with
respect to the Secured Obligations by or on behalf of the Insurer, the Lender
shall be deemed, without further action, to have directed the Collateral Agent
to assign to the Insurer all rights to the payment of interest or principal with
respect to the Secured Obligations which are then due for payment to the extent
of all Covered Payments made by the Insurer and the Insurer may exercise any
option, vote, right, power or the like with respect to the Secured Obligations
to the extent that it has made payment pursuant to the Policy.

          (d) The Collateral Agent shall be entitled to enforce on behalf of the
Lender the obligations of the Insurer under the Policy.

     Section 6.02  Preference Claims.
                   -----------------

          (a) In the event that the Collateral Agent has received a certified
copy of a final, non-appealable order of the appropriate court that any Covered
Payment (as such term is defined in the Policy) paid on a Secured Obligation has
been avoided in whole or in part as a preference payment under applicable
bankruptcy law, the Collateral Agent shall so notify the Insurer, shall comply
with the provisions of the 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 Policy to obtain payment by the Insurer,
notify the Lender that, in the event that any such payment is so recoverable,
the Lender will be entitled to payment pursuant to the terms of the Policy.
Upon written request, the Collateral Agent shall furnish to the Insurer its
records

                                       33
<PAGE>

evidencing the Covered Payments in respect of Secured Obligations, if any, which
have been made by the Collateral Agent and subsequently recovered from the
Lender, and the dates on which such payments were made. Pursuant to the terms of
the Policy, the Insurer will make such payment on behalf of the Lender to the
receiver, conservator, debtor-in-possession or trustee in bankruptcy named in
the Final Order and not to the Collateral Agent or the Lender directly (unless
the Lender 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 Lender upon proof of such payment reasonably
satisfactory to the Insurer).

          (b) Each Notice of Claim shall provide that the Collateral Agent, on
its behalf and on behalf of the Lender, thereby appoints the Insurer as agent
and attorney-in-fact for the Collateral Agent and the Lender in any legal
proceeding with respect to the Secured Obligations.  The Collateral Agent shall
promptly notify the Insurer of any proceeding or the institution of any action
(of which a Responsible Officer of the Collateral Agent 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 Secured Obligations.  The Lender and the
Collateral Agent 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 6.01(c), the Insurer shall be subrogated to, and the Lender and the
   ---------------
Collateral Agent hereby delegate and assign, to the fullest extent permitted by
law, the rights of the Lender and the Collateral Agent 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.

     Section 6.03  Surrender of Policy.  The Lender shall surrender the Policy
                   -------------------
to the Insurer for cancellation upon the expiration of such policy in accordance
with the terms thereof.

                                  ARTICLE VII

                            DEFAULT AND TERMINATION

     Section 7.01  Servicer Termination Event.   For purposes of this Agreement,
                   --------------------------
each of the following shall constitute a "Servicer Termination Event":
                                          --------------------------

          (a) Any failure by the Servicer to deliver, or cause to be delivered,
to the Collateral Agent any proceeds or payments required to be so delivered
under the terms of this Agreement, the Loan Agreement or any of the other Loan
Documents to which it is a party (including deposits of any payments in respect
of Release Prices) that continues unremedied for a period of one (1) Business
Day after the earliest to occur of (x) the date on which written notice is
received by the Servicer from the Collateral Agent, the Lender or (unless an
Insurer Default shall have occurred and be continuing) the Insurer, (y)
discovery of such failure by a Responsible Officer of the Servicer or (z) a
period of five (5) Business Days;

                                       34
<PAGE>

          (b) Failure by the Servicer to deliver, or cause to be delivered, to
the Lender, the Collateral Agent and the Insurer the Servicer's Certificate by
the Determination Date prior to the related Payment Date that continues
unremedied for a period of one (1) Business Day or failure on the part of the
Servicer to observe its covenants and agreements set forth in Sections 5.06(a)
                                                              ----------------
or 3.19(f); or
   -------

          (c) Failure on the part of the Servicer duly to observe or perform any
other covenant, agreement or obligation (including, any financial obligation) of
the Servicer set forth in this Agreement (or, as to TFC, if TFC is the Servicer,
the Loan Agreement or any of the other Loan Documents to which it is a party),
which failure (i) would have a Material Adverse Effect on the Lender (determined
without regard to the availability of funds under the Policy), the Insurer
(unless an Insurer Default shall have occurred and be continuing) or the
Contracts, and (ii) if capable of remedy, continues unremedied for a period of
30 days after the earlier to occur of (x) the date on which written notice of
such failure, requiring the same to be remedied, shall have been received by a
Responsible Officer of the Servicer from the Collateral Agent, the Lender or the
Insurer (provided an Insurer Default shall not have occurred and be continuing)
or (y) the discovery of such failure by a Responsible Officer of the Servicer;
or

          (d) The entry of a decree or order for relief by a court or regulatory
authority having jurisdiction in respect of the Servicer in an involuntary case
under the federal bankruptcy laws, as now or hereafter in effect, or another
present or future, federal bankruptcy, insolvency or similar law, or appointing
a receiver, liquidator, assignee, trustee, custodian, sequestrator or other
similar official of the Servicer or of any substantial part of its property or
ordering the winding up or liquidation of the affairs of the Servicer or the
commencement of an involuntary case under the federal bankruptcy laws, as now or
hereinafter in effect, or another present or future federal or state bankruptcy,
insolvency or similar law and such case is not dismissed within 60 days; or

          (e) The commencement by the Servicer of a voluntary case under the
federal bankruptcy laws, as now or hereafter in effect, or any other present or
future, federal or state, bankruptcy, insolvency or similar law, or the consent
by the Servicer to the appointment of or taking possession by a receiver,
liquidator, assignee, trustee, custodian, sequestrator or other similar official
of the Servicer or of any substantial part of its property or the making by the
Servicer of an assignment for the benefit of creditors or the failure by the
Servicer generally to pay its debts as such debts become due or the admission by
the Servicer of its inability to pay its debts generally as they become due or
the taking of corporate action by the Servicer in furtherance of any of the
foregoing; or

          (f) Any representation, warranty or certification made by the
Servicer, in this Agreement, the Loan Agreement or any other Loan Documents or
any certificate, report or other writing delivered pursuant hereto or thereto
shall prove to be incorrect in any material respect as of the time when the same
shall have been made, and (i) the incorrectness of such representation, warranty
or certification has a Material Adverse Effect on the interests or rights of the
Lender (without regard to the Policy) or the Insurer in the Contracts, and, (ii)
if capable of remedy, continues unremedied for a period of 30 days after the
earlier to occur of (x) discovery thereof by a Responsible Officer of the
Servicer or (y) the delivery of written notice thereof shall have been given to
the Servicer by the Collateral Agent, the Lender or the Insurer; or

                                       35
<PAGE>

          (g) So long as an Insurer Default shall not have occurred and be
continuing and (a) there are Advances or other Secured Obligations outstanding,
(b) any amounts due to the Insurer remain unpaid or (c) the Policy has not
expired in accordance with its terms, an Insurance Agreement Event of Default
shall have occurred; or

          (h) The existence in any audit of the Servicer required to be provided
hereunder of a material exception which may have a Material Adverse Effect on
the Lender (without regard to the Policy), the Contracts or the Insurer; or

          (i) The Servicer (if TFC is the Servicer) shall fail to pay any
principal, premium or interest on any indebtedness in excess of $1,000,000 (the
"Indebtedness") 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 the Servicer 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 default or
event is to accelerate, or to 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 regularly scheduled required
prepayment) prior to the stated maturity thereof; or

          (j) The Lender and, so long as an Insurer Default shall not have
occurred and be continuing, the Insurer shall not have delivered a Servicer
Extension Notice pursuant to Section 2.01; or
                             ------------

          (k) So long as TFC is the Servicer hereunder, a Change of Control
shall have occurred; or

          (l) Any Event of Default (other than the Event of Default set forth in

Section 8.01(s) of the Loan Agreement) shall have occurred and be continuing.
---------------

     Section 7.02  Consequences of a Servicer Termination Event.   If a Servicer
                   --------------------------------------------
Termination Event shall occur and be continuing, the Collateral Agent shall, if
so directed by the Lender and, provided no Insurer Default has occurred and is
continuing, the Insurer, by notice given in writing to the Servicer, terminate
the rights and obligations of the Servicer under this Agreement subject to the
compensation, rights of reimbursement, indemnity and limitation on liability to
which the Servicer is then entitled and the rights of indemnity to which each
Indemnified Party pursuant to Sections 5.03.  Notwithstanding the foregoing, in
no event shall the Lender or Insurer be obligated to make any payment or provide
any assurances described in the immediately preceding sentence.

     Section 7.03  Consequences of an Insurance Agreement Event of Default.  If
                   -------------------------------------------------------
an Insurance Agreement Event of Default shall occur and be continuing, the
Collateral Agent shall, if so directed by Lender and, if no Insurer Default
shall have occurred and be continuing, the Insurer, by notice given in writing
to the Servicer:

                                       36
<PAGE>

          (a) direct the Servicer to deliver to the Successor Servicer or other
successor to the Servicer its Collection Records and the Servicing Records with
respect to a random sample of 100 Contracts within 15 days after demand therefor
and a computer tape containing as of the close of business on the date of demand
all of the data maintained by the Servicer in computer format in connection with
servicing such Contracts (any such delivery of such a computer tape, a "Section
                                                                        -------
7.03(a) Delivery"); and/or
----------------

          (b) terminate the rights and obligations of the Servicer under this
Agreement.

     Section 7.04  Appointment of Successor.
                   ------------------------

          (a) On and after the time the Servicer receives a notice of
termination pursuant to Sections 7.02 or 7.03, upon non-extension of the
                        ---------------------
servicing term as referred to in Section 2.01, or upon the resignation of the
                                 ------------
Servicer pursuant to Section 5.04:
                     ------------

               (i) the Successor Servicer (unless (a) the Lender and, if no
     Insurer Default shall have occurred and be continuing, the Insurer shall
     have exercised their option pursuant to Section 7.04(f) to appoint an
                                             ---------------
     alternate successor Servicer or (b) Wells Fargo Bank Minnesota, National
     Association shall not be the Backup Servicer, in which case the Person
     appointed as successor Backup Servicer shall also be appointed as successor
     Servicer) shall be the successor in all respects to the Servicer in its
     capacity as servicer under this Agreement and the transactions set forth or
     provided for in this Agreement, the Loan Agreement and the other Loan
     Documents and shall be subject to all the rights, responsibilities,
     restrictions, duties, liabilities and termination provisions relating
     thereto placed on the Servicer by the terms and provisions of this
     Agreement the Loan Agreement and the other Loan Documents except as
     otherwise stated herein or therein; and

               (ii) all authority, power, obligations and responsibilities of
     the Servicer under this Agreement, whether with respect to the Contracts or
     otherwise, automatically shall pass to, be vested in and become obligations
     and responsibilities of the Successor Servicer (or such other successor to
     the Servicer appointed by the Lender and (provided no Insurer Default shall
     have occurred and be continuing) the Insurer in their sole and absolute
     discretion pursuant to Section 7.04(f));
                            ---------------

provided, however, that any successor to the Servicer shall have (i) no
--------  -------
liability with respect to any obligation which was required to be performed by
the terminated Servicer prior to the date that such successor to the Servicer
becomes the Servicer or any claim of a third party based on any alleged action
or inaction of the terminated Servicer, (ii) no obligation to perform any
repurchase or advancing obligations, if any, of the Servicer, (iii) no
obligation to pay any taxes required to be paid by the Servicer, (iv) no
obligation to pay any of the fees and expenses of any other party involved in
this transaction (except for those of any person to whom such successor to the
Servicer delegates its duties pursuant to Section 3.11), (v) no liability or
                                          ------------
obligation with respect to any indemnification obligations of any prior servicer
including the Servicer, (vi) not been deemed to have made any of the
representations and warranties of the Servicer, and (vii) no liability to the
extent that the information necessary for servicing the Contracts in accordance

                                       37
<PAGE>

with the Required Standard of Care has not been provided to the successor
Servicer by the Servicer.

          (b) Any successor to the Servicer shall take such action, consistent
with this Agreement, as shall be necessary to effectuate any such succession.
In the event that the Successor Servicer is the Servicer, the Successor Servicer
in effectuating such succession, shall act in reasonable accordance with the
terms and conditions set forth in its operations manual entitled "Wells Fargo
                                                                  -----------
Third Party Business Assumption Guidelines".  In the event that any of the terms
------------------------------------------
or conditions set forth in its operations manual entitled "Wells Fargo Third
                                                           -----------------
Party Business Assumption Guidelines" are inconsistent with any of the Loan
------------------------------------
Documents, the terms and conditions set forth in such Loan Documents shall
govern.

          (c) If a successor to the Servicer is acting as Servicer hereunder, it
shall be subject to term-to-term servicing as referred to in Section 2.01 and to
                                                             ------------
termination under Sections 7.01 or 7.03 upon the occurrence of any Servicer
                  ---------------------
Termination Event or Insurance Agreement Event of Default applicable to it as
Servicer.

          (d) Any successor to the Servicer is authorized and empowered by this
Agreement to execute and deliver, on behalf of the terminated Servicer, as
attorney-in-fact or otherwise, any and all documents and other instruments and
to do or accomplish all other acts or things necessary or appropriate to effect
the purposes of such notice of termination, whether to complete the transfer and
endorsement of the Contracts and related documents to show the Lender as
lienholder or secured party on the related Lien Certificates, or otherwise.

          (e) The terminated Servicer agrees to cooperate with any successor to
the Servicer in effecting the termination of the responsibilities and rights of
the terminated Servicer under this Agreement, including the transfer to such
successor to the Servicer for administration by it of all cash amounts that
shall at the time be held by the terminated Servicer for deposit, or have been
deposited by the terminated Servicer, in the Collection Account or thereafter
received with respect to the Contracts and the delivery to such successor to the
Servicer of all Contract Files and Collection Records and a computer tape in
readable form as of the most recent Business Day containing all information
necessary to enable such successor to the Servicer to service the Contracts
(including, without limitation, any and all documentation concerning the related
Insurance Policies).  If requested by the Lender or the Insurer (provided no
Insurer Default has occurred and is continuing), any successor to the Servicer
shall direct the Obligors to make all payments under the Contracts directly to
such successor to the Servicer (in which event such successor to the Servicer
shall process such payments in accordance with Section 3.02), or to a Post
                                               ------------
Office Box established by such successor to the Servicer at the direction of the
Lender or the Insurer (provided no Insurer Default has occurred and is
continuing), at the terminated Servicer's expense.  The terminated Servicer
shall grant the Collateral Agent, the Backup Servicer, any successor to the
Servicer, the Lender and the Insurer (provided no Insurer Default has occurred
and is continuing) reasonable access to the terminated Servicer's premises at
the terminated Servicer's expense.

          (f) The Lender and, if no Insurer Default shall have occurred and be
continuing,  the Insurer may exercise at any time its right to appoint as
successor to the Servicer a Person other than the Person serving as successor
Servicer at the time (except that, so long as

                                       38
<PAGE>

Wells Fargo Bank Minnesota, National Association shall act as Backup Servicer,
the Backup Servicer shall not be appointed to act as a successor Servicer), and
(without limiting the Insurer's obligations under the Policy) shall have no
liability to the Backup Servicer, TFC, the Borrower, the Person then serving as
successor servicer, the Lender or any other Person if it does so.
Notwithstanding the above, if any such successor Servicer shall be legally
unable to act as Servicer, the Lender or the Insurer (provided no Insurer
Default has occurred and is continuing) may petition a court of competent
jurisdiction to appoint a successor to the Servicer. Pending appointment
pursuant to the preceding sentence, such successor Servicer shall act as
successor Servicer unless it is legally unable to do so, in which event the
outgoing Servicer shall continue to act as Servicer until a successor has been
appointed and accepted such appointment.

          (g) Any successor Servicer shall be entitled to such compensation
(whether payable out of the Collection Account or otherwise) as the Servicer
would have been entitled to under this Agreement if the Servicer had not
resigned or been terminated hereunder.  In addition, any successor Servicer
shall be entitled to reasonable transition expenses incurred in acting as
successor Servicer payable by the outgoing Servicer, and to the extent such
transition expenses have not been paid by the outgoing Servicer, such expenses
payable pursuant to this Agreement shall not exceed $70,000 in the aggregate.

          (h) Notwithstanding the Successor Servicer's becoming the successor in
all respects to the Servicer in its capacity as servicer under this Agreement
and the transactions set forth or provided for in this Agreement, the Backup
Servicer shall be required to assist the Successor Servicer in the preparation
of the Servicer's Certificate and the Successor Servicer shall deliver the
Servicer's Certificate in accordance with Section 3.17.
                                          ------------

          (i) Notwithstanding anything contained in this Agreement to the
contrary, the Successor Servicer is authorized to accept and rely on all of the
accounting records (including computer records) and work of the prior Servicer
relating to the Contracts (collectively, the "Predecessor Servicer Work
Product") without any audit or other examination thereof, and the Successor
Servicer shall have no duty, responsibility, obligation or liability for the
acts and omissions of the prior Servicer.  If any error, inaccuracy, omission or
incorrect or non-standard practice or procedure (collectively, "Errors") exist
in any Predecessor Servicer Work Product and such Errors make it materially more
difficult to service or should cause or materially contribute to the Successor
Servicer making or continuing any Errors (collectively, "Continued Errors"), the
Successor Servicer shall have no duty, responsibility, obligation or liability
for such Continued Errors; provided, however, that the Successor Servicer agrees
to use its best efforts to prevent further Continued Errors.  In the event that
the Successor Servicer becomes aware of Errors or Continued Errors, it shall,
with the prior consent of the Lender and (provided no Insurer Default has
occurred and is continuing) the Insurer, use its best efforts to reconstruct and
reconcile such data as is commercially reasonable to correct such Errors and
Continued Errors and to prevent future Continued Errors.  The Successor Servicer
shall be entitled to recover its costs thereby expended in accordance with
clause second of Section 3.03(b) of the Loan Agreement.
       ------

     Section 7.05  Waiver of Past Defaults. The Lender and the Insurer (provided
                   -----------------------
no Insurer Default has occurred and is continuing, and provided, further that
(a) there are Advances outstanding, (b) any amounts due to the Insurer remain
unpaid or (c) the Policy has not expired

                                       39
<PAGE>

 in accordance with its terms), may (but shall have no obligation to) waive any
default by the Servicer in the performance of its obligations hereunder and its
consequences. Upon any such waiver of a past default, such default shall cease
to exist, and any Servicer Termination Event arising therefrom shall be deemed
to have been remedied for every purpose of this Agreement, the Loan Agreement
and the other Loan Documents. No such waiver shall extend to any subsequent or
other default or impair any right consequent thereto.

     Section 7.06  Additional Termination Requirements.
                   -----------------------------------

          (a) In the event (i) that notice of termination of this Agreement, or
of termination of the rights and obligations of the Servicer hereunder, is
given, (ii) the Servicer resigns or is removed in accordance with Section 7.04
                                                                  ------------
or (iii) the term of the Servicer is not extended in accordance with Section
                                                                     -------
2.01(a), the Servicer covenants that all funds and Servicing Documents in its
-------
possession relating to the Contracts shall, at the option of the Lender and, if
no Insurer Default shall have occurred and be continuing, the Insurer
immediately upon receipt of notice of termination or the resignation or removal
of the Servicer, be submitted to the control of the Collateral Agent or its
designee (including, without limitation, the Successor Servicer or any other
successor Servicer) and that, on the date of termination, they will be
transferred to the Collateral Agent, Lender or its designee (including, without
limitation, the Successor Servicer or any other successor Servicer), without
prejudice to the rights, if any, of either party against the other.

          (b) Notwithstanding any termination of this Agreement, or of all or a
portion of the rights and obligations of the Servicer hereunder, the Servicer
shall not be relieved of liability for any amounts due, or responsibilities owed
the Borrower, the Backup Servicer, the Successor Servicer, the Collateral Agent,
the Insurer, the Hedge Counterparty or the Lender in respect of its obligations
hereunder while it served as the Servicer.  The Servicer forthwith upon such
termination or resignation shall (a) pay over to the Collection Account all
Collections held by it or subsequently received by it with respect to the
affected Contracts pursuant to this Agreement or pursuant to any other
agreement, letter or arrangement, (b) deliver to the Lender, the Insurer, the
Hedge Counterparty, the Successor Servicer and the Backup Servicer a full
accounting in respect of the affected Contracts, including a statement showing
the monthly payments and other amounts collected by or on behalf of it and a
statement of moneys held in trust by or on behalf of it for the payment of
taxes, insurance premiums or other charges with respect to the affected
Contracts, (c) otherwise use its best efforts to effect the orderly and
efficient transfer of servicing of the Contracts to the Successor Servicer or
other designee selected by the Lender and the Insurer pursuant to Section
                                                                  -------
7.04(f), and (d) arrange for the physical transfer and delivery to the Successor
-------
Servicer or other designee selected by the Lender and, as applicable, the
Insurer pursuant to Section 7.04(f) of all Contracts and copies thereof, all
                    ---------------
funds related thereto, and all Servicing Documents in its possession.  Any
successor Servicer hereunder shall meet the requirements and be selected in
accordance with the procedures specified in Section 7.04.  Notwithstanding any
                                            ------------
termination of this Agreement, or any termination of all the rights and
obligations of the Servicer hereunder as to all or any number of Contracts, or
any resignation of the Servicer, in any case pursuant to any provision of this
Agreement, the Servicer shall be entitled to receive all amounts accrued and
owing to it under this Agreement from the Borrower in accordance with both
Section 3.05 hereof and Section 3.03(b) of the Loan Agreement.
------------

                                       40
<PAGE>

                                  ARTICLE VIII

             TERMINATION OF BACKUP SERVICER AND SUCCESSOR SERVICER

     Section 8.01  Termination of Backup Servicer.   If (a) the Successor
                   ------------------------------
Servicer shall assume the duties of the Servicer or (b) the Backup Servicer
shall fail to duly observe or perform any of its covenants, agreements or
obligations set forth in this Agreement which failure (i) would have a Material
Adverse Effect on the Lender (determined without regard to the availability of
funds under the Policy), the Insurer (unless an Insurer Default shall have
occurred and be continuing) or the Contracts, and (ii) if capable of remedy,
continues unremedied for a period of 30 days after the earlier to occur of (x)
the date on which written notice of such failure, requiring the same to be
remedied, shall have been received by a Responsible Officer of the Backup
Servicer from the Lender or the Insurer (provided no Insurer Default shall have
occurred and be continuing) or (y) the discovery of such failure by a
Responsible Officer of the Backup Servicer, the Lender or the Insurer (provided
no Insurer Default shall have occurred and be continuing) may terminate all of
the duties of the Backup Servicer under this Agreement.  Any removal pursuant to
the provisions of this Section 8.01 shall take effect only upon the appointment
                       ------------
of a successor to the Backup Servicer and the acceptance in writing by such
successor to Backup Servicer of such appointment and of its obligation to
perform its duties hereunder in accordance with the provisions hereof.

     Section 8.02  Termination of Successor Servicer.   If the Successor
                   ---------------------------------
Servicer shall fail to duly observe or perform any of its covenants, agreements
or obligations set forth in this Agreement which failure (i) would have a
Material Adverse Effect on the Lender (determined without regard to the
availability of funds under the Policy), the Insurer or the Contracts, and (ii)
if capable of remedy, continues unremedied for a period of 30 days after the
earlier to occur of (x) the date on which written notice of such failure,
requiring the same to be remedied, shall have been received by a Responsible
Officer of the Successor Servicer from the Lender or the Insurer (provided no
Insurer Default shall have occurred and be continuing) or (y) the discovery of
such failure by a Responsible Officer of the Successor Servicer, the Lender or
the Insurer (provided no Insurer Default shall have occurred and be continuing)
may terminate all of the rights and duties of the Successor Servicer under this
Agreement.  Any removal pursuant to the provisions of this Section 8.02 shall
                                                           ------------
take effect only upon the appointment of a successor to the Backup Servicer and
the acceptance in writing by such successor to Successor Servicer of such
appointment and of its obligation to perform its duties hereunder in accordance
with the provisions hereof.

                                   ARTICLE IX

                            MISCELLANEOUS PROVISIONS

     Section 9.01  Amendment.  This Agreement may be amended or modified from
                   ---------
time to time by the parties hereto, but only by an instrument in writing signed
by each of the parties hereto and, if no Insurer Default shall have occurred and
be continuing, with the written consent of the Insurer.  In addition, the
parties hereto acknowledge that, pursuant to Section 11.04 of the Loan
                                             -------------
Agreement, any amendment to Appendix A to the Loan Agreement that shall result
                            ----------
in a

                                       41
<PAGE>

change to the definition of any term used in this Agreement shall require the
prior written consent of the Successor Servicer.

     Section 9.02  Successors and Assigns.  The provisions of this Agreement
                   ----------------------
shall be binding upon and inure to the benefit of the parties hereto and to the
benefit of their respective permitted successors and assigns.  No party may
assign any of its rights or obligations hereunder without the consent of the
other parties hereto and, unless an Insurer Default shall have occurred and be
continuing, the Insurer.

     Section 9.03  No Partnership.  Nothing herein contained shall be deemed or
                   --------------
construed to create a co-partnership or joint venture between the parties hereto
and the services of the Servicer shall be rendered as an independent contractor
and not as an agent for the Borrower or the Lender.

     Section 9.04  Governing Law.  THIS AGREEMENT SHALL, IN ACCORDANCE WITH
                   -------------
SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK, BE
GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO ANY
CONFLICTS OF LAW PRINCIPLES THEREOF.

     Section 9.05  Notices.  All demands, notices and communications relating to
                   -------
this Agreement shall be in writing and shall be deemed to have been duly given
if mailed, by registered or certified mail, return receipt requested, or by
overnight courier, or, if by other means, when received by the other party or
parties at the address shown below, or such other address as may hereafter be
furnished to the other party or parties by like notice.  Any such demand, notice
or communication hereunder shall be deemed to have been received on the date
delivered to or received at the premises of the addressee (as evidenced, in the
case of registered or certified mail, by the date noted on the return receipt).

          If to the Borrower:

          TFC Warehouse Corporation I
          5425 Robin Hood Rd.
          Suite 101-B
          Norfolk, VA  23513
          Attention: Ronald G. Tray
          Telecopier No.: (757) 858-4093
          Telephone No.:  (757) 858-1400 ext. 354

          If to the Servicer:

          The Finance Company
          5425 Robin Hood Rd.
          Suite 101-B
          Norfolk, VA  23513
          Attention: Ronald G. Tray
          Telecopier No.: (757) 858-4093
          Telephone No.:  (757) 858-1400 ext. 354

                                       42
<PAGE>

          If to the Backup Servicer:

          Wells Fargo Bank Minnesota, National Association
          Sixth Street and Marquette Avenue
          MAC N9311-611
          Minneapolis, Minnesota 55479
          Attention: Corporate Trust Services
          Telecopier No.: (612) 667-3539
          Telephone No.: (612) 667-8085

          If to the Successor Servicer:
          Wells Fargo Financial America, Inc
          59 Skyline Drive, Suite 1700
          Lake Mary, Florida 32746
          Attention:
          Telecopier No.:
          Telephone No.:

          If to the Collateral Agent:

          Wells Fargo Bank Minnesota, National Association
          Sixth Street and Marquette Avenue
          MAC N9311-611
          Minneapolis, Minnesota 55479
          Attention: Corporate Trust Services
          Telecopier No.: (612) 667-3539
          Telephone No.: (612) 667-8085

          If to the Lender:

          Westside Funding Corporation
          C/o AMACAR Group, L.L.C.
          6525 Morrison Boulevard, Suite 318
          Charlotte, North Carolina 28211
          Attention: Juliana Johnson
          Telecopier No.: (704) 365-1362
          Telephone No.: (704) 365-0569

          With a copy to:

          Westdeutsche Landesbank Girozentrale, New York Branch
          1211 Avenue of the Americas
          New York, New York 10036
          Attention: Jeffrey Kramer
          Telecopier No.: (212) 597-1423
          Telephone No.: (212) 597-8368

                                       43
<PAGE>

          If to the Insurer:

          Royal Indemnity Company
          11111 Carmel Commons Boulevard
          Charlotte, North Carolina 28226
          Attention: Tony McKenzie
          Telecopier No.: (704) 543-3566
          Telephone No.: (704) 543-3411

     Section 9.06  Article and Section Headings; Severability of Provisions;
                   ---------------------------------------------------------
Counterparts.  The article and section headings of this Agreement are for
------------
convenience only and are not to be used to interpret or define the provisions
hereof. In the event that any provision of this Agreement conflicts with
applicable law, such conflict shall not affect the other provisions of this
Agreement which can be given effect without the conflicting provision, and to
this end the provisions of this Agreement are declared to be severable. This
Agreement may be executed in counterparts, each of which shall be deemed an
original, and all counterparts shall constitute one and the same instrument.

     Section 9.07  Miscellaneous.  Each party agrees to execute and deliver such
                   -------------
instruments and take such actions as the other party shall from time to time
reasonably request to carry out the terms of this Agreement.

     Section 9.08  Costs; Expenses.
                   ---------------

          (a)  Without duplication of any amounts paid by the Borrower, the
Servicer agrees to pay as and when billed by the Lender and/or the Insurer all
of the out-of-pocket costs and expenses incurred by the Lender and/or the
Insurer in connection with the development, preparation and execution of, and
any amendment, supplement or modification to, this Agreement, the Loan Agreement
and any other Loan Document or any other documents prepared in connection
herewith or therewith, and the consummation and administration of the
transactions contemplated hereby and thereby, including without limitation (i)
all the reasonable fees, disbursements and expenses of counsel to the Lender,
and (ii) all the due diligence, inspection, testing and review costs and
expenses incurred by the Lender under this Agreement.

          (b)  Without duplication of any amounts paid by the Borrower, the
Servicer also agrees to reimburse the Lender as and when billed by the Lender
for all of the Lender's costs and expenses incurred in connection with the
enforcement or the preservation of the Lender's rights under this Agreement, the
Loan Agreement, any other Loan Document or any transaction contemplated hereby
or thereby, including without limitation the fees and disbursements of its
counsel (including all fees and disbursements incurred in any action or
proceeding between the Servicer and an Indemnified Party or between an
Indemnified Party and any third party relating hereto).

     Section 9.09  Third-Party Beneficiaries.  This Agreement will inure to the
                   -------------------------
benefit of and be binding upon the parties hereto and their respective
successors and permitted assigns. Except as may be otherwise provided in this
Agreement, no other person will have any right or obligation hereunder. The
Insurer is an express third party beneficiary of this Agreement.

                                       44
<PAGE>

     Section 9.10  Conflicting Directives of Lender and Insurer; Limitation on
                   -----------------------------------------------------------
Rights of Insurer in Case of Insurer Default.  With respect to any instruction,
--------------------------------------------
declaration, consent or other direction to be given by the Lender and the
Insurer under this Agreement, if the respective instructions, declarations,
consents or other directions of the Lender and the Insurer conflict with one
another, then, so long as no Insurer Default shall have occurred and be
continuing, the instruction, declaration, consent or other direction of the
Insurer shall be determinative; provided, that, if any Insurer Default shall
                                --------
have occurred and be continuing, the instruction, declaration, consent or other
direction of the Lender shall be determinative.

          Notwithstanding anything herein to the contrary, any provision giving
the Insurer the right to direct, appoint or consent to, approve of or take any
action under this Agreement shall be inoperative if an Insurer Default shall
have occurred and be continuing.

     Section 9.11  No Proceedings.   Each of TFC, the Servicer, the Borrower,
                   --------------
the Backup Servicer, the Successor Servicer, the Securities Intermediary and the
Collateral Agent agrees not to institute against, or join any other person in
instituting against, the Lender any bankruptcy, reorganization, arrangement,
insolvency, liquidation or similar proceeding for one year and a day after the
amounts owing under this Agreement and all other credit agreements executed by
the Lender have been paid in full.

     Section 9.12  Acknowledgement of Dual Capacity.  The parties expressly
                   ---------------------------------
acknowledge and consent to Wells Fargo Minnesota, National Association, acting
in the dual capacity of Backup Servicer and in the capacity as Collateral Agent.
Wells Fargo Bank Minnesota, National Association, may, in such dual capacity,
discharge its separate functions fully, without hindrance or regard to conflict
of interest principles, duty of loyalty principles or other breach of fiduciary
duties to the extent that any such conflict or breach arises from the
performance by Wells Fargo Bank Minnesota, National Association, of express
duties set forth in this Agreement in any of such capacities, all of which
defenses, claims or assertions are hereby expressly waived by the other parties
hereto except in the case of negligence and willful misconduct by Wells Fargo
Bank Minnesota, National Association.

                                       45
<PAGE>

          IN WITNESS WHEREOF, each party has caused this Agreement to be
executed in its name by its duly authorized officer, as of the day and year
first above written.

                                   THE FINANCE COMPANY
                                     as Servicer

                                     By:_______________________________________
                                        Name:
                                        Title:

                                   TFC WAREHOUSE CORPORATION I,
                                     as Borrower

                                     By:_______________________________________
                                        Name:
                                        Title:

                                   WELLS FARGO BANK MINNESOTA,
                                     NATIONAL ASSOCIATION, as Backup
                                     Servicer, Collateral Agent and Securities
                                     Intermediary

                                     By:____________________________________
                                        Name:
                                        Title:

                                   WELLS FARGO FINANCIAL AMERICA, INC.,
                                     as Successor Servicer

                                     By:____________________________________
                                        Name:
                                        Title:
<PAGE>

                                 WESTSIDE FUNDING CORPORATION

                                 By:  Westdeutsche Landesbank Girozentrale,
                                       New York Branch, as Administrator

                                       By:____________________________________
                                          Name:
                                          Title:

                                       By:____________________________________
                                          Name:
                                          Title:
<PAGE>

                                                                      Schedule 1

    Prior Names, Trade Names, Fictitious Names and "Doing Business As" Names

          Old Dominion Acceptance
          Old Dominion Acceptance, Inc.

          (used in the conduct of TFC's business in the following States:
          Alaska, Arizona, California, Minnesota, Nebraska, Nevada, New
          Hampshire, New Mexico, New York, Oklahoma, Pennsylvania, Texas and
          Washington)

                                      S-1
<PAGE>

                                      S-1

<PAGE>

                                                                    EXHIBIT A
                                                                    ---------

                         ALLOWABLE DELINQUENCY POLICY

                                      B-1
<PAGE>

                                                                       EXHIBIT B
                                                                       ---------

                               CHANGE-OFF POLICY

                                      B-1
<PAGE>

                                                                       EXHIBIT C
                                                                       ---------

                            SERVICER'S CERTIFICATE

                                      D-1
<PAGE>

                                                                       EXHIBIT D
                                                                       ---------

                           FORM OF DEFICIENCY NOTICE

                                    [Date]

Wells Fargo Bank Minnesota, National Association, as Collateral Agent
Sixth Street and Marquette Avenue
MAC N9311-161
Minneapolis, Minnesota 55479

Royal Indemnity Company
11111 Carmel Commons Boulevard
Charlotte, North Carolina 28226

     Re:  Servicing Agreement, dated as of June 28, 2001 (the
          "Agreement") among The Finance Company (the
           ---------
          "Servicer"), TFC Warehouse Corporation I, (the
           --------
          "Borrower"), Wells Fargo Bank Minnesota, National
           --------
          Association, as Backup Servicer and as Collateral
          Agent, Wells Fargo Financial America, Inc., as
          Successor Servicer, and Westside Funding Corporation,
                                           --------------------
          as Lender
          ---------

Ladies and Gentlemen:

          Reference is hereby made to Section 4.01 of the Agreement. Capitalized
terms not defined herein shall have the meanings ascribed thereto in the
Agreement.

          Pursuant to Section 4.01 of the Agreement, please note the following
information with respect to the Payment Date which is to occur on _____________:

     Deficiency Claim Amount:  $______________________

     Reserve Account Regular Application Amount:   $______________________

     Policy Claim Amount:      $______________________

                                      D-2
<PAGE>

          The Collateral Agent shall withdraw such Reserve Account Regular
Application Amount specified above from the Reserve Account for deposit into the
Collection Account pursuant to Section 4.02(f) of the Agreement on the next
                               ---------------
Payment Date, which is to occur on _________________.

                              Sincerely,

                              THE FINANCE COMPANY, as Servicer

                              By:___________________________
                                 Name:
                                 Title:

                                      D-3
<PAGE>

                                                                       EXHIBIT E
                                                                       ---------

                   CREDIT COLLECTION POLICIES AND PROCEDURES

                                      E-1

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